5 Reasons Why Government Should Spend More on Innovation

The article “Innovate Better” by Fareed Zakaria in the June 13 issue of Time magazine looks at the state of business innovation in the U.S., and cites these stats and opinions:

1. Using “hard measures such as spending on research, patents and venture funding,” the U.S. doesn’t even make the top five countries internationally: according to a Boston Consulting Group report, the U.S. ranks eighth, and according to the Innovation Technology & Innovation Foundation (ITTF) it ranks sixth.

2. In a ranking of “how much a company has improved its innovation capacity from 1999 to 2009, factoring in measures like government funding for basic research, education and corporate tax policies,” the U.S. was ranked No. 40 — out of 40, according to the ITIF rankings.

3. Even though sometimes just “novel business ideas” are enough, lots of innovation requires new technology. (About those novel ideas, writes Zakaria: “Len Baker, one of the founding fathers of the Silicon Valley venture-capital industry, says, ‘My favorite example is Isaac Merritt Singer, who invented the first commercially successful sewing machine. The real benefit to society was that he was the first person to sell to women, because prior to this it was assumed that women couldn’t operate machinery. His company invented the installment plan and the trade-in. That’s innovation.’”)

4. The “ecosystem” that encourages technology development needs, Zakaria writes, “great universities, vibrant companies that devote time and energy to research and – yes – large amounts of government funding. The latter may be a controversial topic in theory, but in practice, the rise of technology was clearly fueled by government.”

5. “In the rest of the world, the role of the state is not controversial.” Zakaria cites South Korea’s development of iron and steel and shipbuilding capabilities, and China’s government-supported lead in solar panels, wind turbines, and high-speed rail (see Honqiao Railway Station, below).

A CNN television special of Zakaria interviewing top innovation experts including venture capitalist Len Baker; director of the Defense Advanced Research Projects Agency (DARPA) Regina Dugan; author of Where Good Ideas Come From: The Natural History of Innovation Steven Johnson; and Google executive chairman Eric Schmidt will be on CNN on Saturday, June 11;