Companies Not Countries

Posted on November 19, 2005  Comments (7)

Companies, Not Countries, Hold The Key to Innovation Leadership by Lester Craft:

But given the overall trend, I would argue that we are quickly heading toward an era where corporations view innovation almost strictly in terms of their own global self-interest rather than in terms of one nation or another. If this is true, then we need to adjust our thinking about America’s role as an innovation leader. When it comes to innovation and intellectual property, it may be that companies are replacing countries as the entities that make the rules.

I agree the impact of countries is declining and companies increasing. Still governments hold a great deal of power to create environments that are supportive or hostile to innovation and thereby influence where it is done.

One, of many reasons, the Untied States succeed in the last half of the 20th century was wise government support of innovation. Now other countries such as India, Singapore, China, Korea… are taking smart action also.

There is still plenty of room for government policy to influence where innovation will take place. As mentioned in my previous posts (see below) being the country that trains doctoral candidates has many benefits. If any country trains 50% of the science and engineering doctoral candidates in 2050 they will have a huge advantage in innovation. Tax policy also has an impact. Intellectual property rights also have an impact. Many factors that governments largely define (and therefore differences exist between countries in how well these factors support innovation and where investors will choose to invest) will play a role in what countries innovation flourishes in going forward: infrastructure, legal system, primary education system, health care system, financial system, funding and encouraging basis research…

I happen to side with those like Lawernce Lessig that believe we are harming the United States economy by having a government policy that too restrictive about intellectual property. I believe countries that have sufficient clout to stand up to the United States, and who have a more sensible IP policy will gain a great advantage if the United States were not to adjust policies based on the ideas of Lessig and others.

The change that I think should be made is to see the role of government as a influencer of what the future will hold rather than a dictator. The actions the United States government takes will be one factor that determines where innovation takes place (and what geographic location gains the largest economic benefit) but other countries, companies and individuals will also make decisions. It will be a much more interdependent system than in the past. And no one player will be able to dictate the action.

Google’s success is not solely due to the fact it was formed in the United States. But there are many reasons why Google, ebay, Amazon, Yahoo… are based in the United States and have lead the way in internet innovation. The challenge for the United States is to keep those comparative advantages as high as possible even though the advantages are declining and will continue to do so, in my opinion.

Related posts:

Article: Is the US Patent System Endangering American Innovation?

7 Responses to “Companies Not Countries”

  1. Curious Cat Management Improvement Blog » Blog Archive » America’s Manufacturing Future
    June 26th, 2006 @ 6:12 pm

    […] Companies Not Countries […]

  2. Curious Cat Management Improvement Blog » Blog Archive » Innovation and Research and Development
    June 29th, 2006 @ 9:52 am

    […] Companies Not Countries by curiouscat   Tags: Management, Innovation, Economics   Permalink to: Innovation and Research and Development […]

  3. Curious Cat Science and Engineering Blog » Blog Archive » Science and Engineering in Global Economics
    August 12th, 2006 @ 10:27 am

    […] The main point of The Global Race – Is America Still a Contender? by James Schultz is that the United States is too complacent: thinking its past success guarantees future success. I have stated that I believe the economic comparative advantage the USA has enjoyed due to science and technology leadership is almost certain to shrink and we should take steps to slow that decrease. Also see: Engineering Education and Innovation, The Future is Engineering, Engineers and the Economy and The Science Gap and the Economy. […]

  4. Curious Cat Management Improvement Blog » Patent Review Innovation
    August 16th, 2006 @ 12:50 pm

    “The project would apply an advisory version of the wiki approach to the patent-approval process…”

  5. The Differences Between Culture and Code
    January 5th, 2007 @ 11:51 am

    […] An excellent Lawrence Lessig speech on On Free, and the Differences between Culture and Code. I think many find it quite difficult to understand the true power behind these ideas. […]

  6. CuriousCat » Scientific Illiteracy
    February 25th, 2008 @ 3:29 pm

    International Association for the Evaluation of Educational Achievement (TIMSS), Average science scale scores of eighth-grade students, by country (2003): Singapore, Taiwan, South Korea, Hong Kong, Estonia, Japan, Hungary, Netherlands, USA…

  7. Anonymous
    July 3rd, 2008 @ 3:15 am

    We will see more and more companies emerge from non US shores. I think the US had its fair share of glory and now it’s time others can too. Just look at China and how they have grown. While they are still limited on the net due to government regulations i believe we will see more of them in the future.

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