Post-speech reaction: Just like Beaver Cleaver's mom used to make
President Obama is absolutely right to focus on innovation and competitiveness in his State of the Union. The United States' strength and stability depend on it, and they are both areas in which the government has a vital role to play -- as history has shown with every expansionary leap in U.S. history from the railroads to the Internet.
But there is one trap associated with this approach that the president and the country need to beware. It is the widely subscribed to notion ... often cited by politicians and op-ed writers ... that somehow there is something special, some gene in American DNA, that makes us uniquely capable when it comes to innovation. This idea is offered up like it is our ace-in-the-hole, our economic Get Out of Jail Free Card. Once we tap into this unique dimension of the U.S. character those Chinese and other Asian robots won't be able to hold a candle to us. They lack our creativity. They lack the United States system's special innovation ecology -- built around ideas like the degree to which we welcome failure and let the resulting Schumpeterian winds fill our sails propelling us onward to our next great triumph.
Now, there is certainly some truth that other societies are less welcoming to the errors which often are part of the innovative process (some have, for example, inadequate bankruptcy laws, others risk-averse cultures). And there is also truth to the idea that some societies promote conformity in creativity-suppressing ways. And of course there is considerable truth to the fact that America has been the home of some great innovation and remarkable stories of entrepreneurship that have made us a world leading economy for decades. But the reality is that the idea that the United States has somehow cornered the market on innovation is an overblown myth.
Take the most important inventions in history. Naturally many of them actually were created in other hotbeds of innovation that existed long before the United States -- whether it is the Chinese invention of gun powder or paper, or the Arabic invention of algebra or the printing press, progress somehow muddled through without the United States. If you take more modern innovations however, it is not exactly as though the United States has dominated when it came to the big ones.
For example, go to About.com and look up the top inventions researched by their readers. While it's as arbitrary as any other such list the top ten are: the telephone, the computer, television, the automobile, the cotton gin, the camera, the steam engine, the sewing machine, the light bulb, and penicillin. Of these, the phone was "invented" by Alexander Graham Bell in the United States, he was born and raised in Scotland, moved to the United States as an adult and died in Canada. And, of course, prior to his patenting of the phone, original work was done on its invention by a range of others including Innocenzo Manzetti in Italy, Charles Bourseul in France, and Johann Philipp Reis in Germany. The fathers of computing from Babbage to Turing lived in Britain. The first television was invented by a German, Paul Nipkow, and the term was coined by a Russian, Constantin Perskyi. The first self-propelled vehicle was invented by a Frenchman, Joseph Cugnot, and the first practical car by Karl Benz. The camera's origins were in France with Niepce and Daguerre. The first steam engine was developed by Thomas Savery in England and improved upon by Scotland's better-known James Watt. Sewing machine? Invented by French tailor Barthelemy Thimonnier. The light bulb? No, not Edison. Probably the first credit should go to Humphry Davy of England or Sir Joseph Wilson Swan, also of England. Penicillin? A Scots-born Englishman, Alexander Fleming.
Want to argue these? You say the car was popularized by Henry Ford or that Edison "perfected the light bulb" as Philo Farnsworth did the TV? Well, that's just the kind of imitation and replication, of incremental gain, that we often accuse "less" innovative nations of (see attacks on Japan circa 1990). Want to talk about other inventions? The European origins of the airplane? The Englishman who invented the World Wide Web? Where the cutting edge green technologies are currently being developed today?
The point is that big ideas do not happen exclusively or even predominantly in the United States. And while U.S. patents are, of course, primarily won by Americans...the point regarding the patents opens another hole in the Innovation Nation theory. The trick with innovation is not just having the idea, it's bringing it to market. This in turn means bringing it to scale. Well, for much of the past century the natural place to do both was the U.S. because of our manufacturing prowess and because we were the world's biggest market. Well, guess what? Manufacturing is now less than 20 percent of the U.S. economy and falling fast. We are losing some skill sets permanently. Biggest market? In terms of GDP, while we still have an edge, China is closing quickly and in terms of number of potential 21st Century consumers? We're not even close for many products. We're not even second or third. (India and the EU will finish ahead of us.) Investment capital? This key fuel for growth is flowing to new markets with ever greater velocity and many are homes to huge and growing pools of local money, as well.
It's these changes that are hinted at by the fact that the past decade is the first in U.S. history in which we have actually not only not created a net new job, we've lost a couple million. That fact should raise an important question in the minds of the president, Congress and all who truly want to enhance U.S. competitiveness: what happened? Was it the rise of new markets? A fall in our educational standards? The rise in the standards of others? Our failure to invest in infrastructure? The fact that as we are winding down our programs of research and development -- including, for example, the innovation driving space program -- others are starting up new ones?
The answers are likely to confound and frustrate many. The United States' only path to renewed growth and sustained leadership is via innovation and enhanced competitiveness. But we have no natural right to lead in these areas. We have no special "gene."
Indeed, the greatest threat to the U.S. economy may not be those costly, financially rickety entitlement programs most politicians are afraid of touching. Rather it may be a different kind of entitlement altogether, the sense of entitlement many Americans have to a position of global economic leadership that is vouchsafed to no nation and indeed, is regularly passed on from one era's great nation(s) to a new set of leaders in the next.
For more: Here's my reaction to the speech.