Posted on November 19, 2005  Comments (7)

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

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:

• Engineering Education and Innovation
• Worldwide Science and Engineering Doctoral Degree Data
• Relative Country Economic Success Relating to Science and Engineering
• Innovation and Creative Commons
• The Public Domain by Lawrence Lessig

Article: Is the US Patent System Endangering American Innovation?