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The Economist Doesn't Understand Innovation.

Posted by: Bruce Nussbaum on June 11, 2008

I recently posted on why the Presidential candidates—and the nation—need to start a conversation about designing a National Innovation Policy. It suggested a number of things we might want to consider and asked for ideas from anyone interested in the conversation.

The Economist has criticized the idea of a National Innovation Policy—and my post—in an ill-informed essay.
The article, is called “Can America Keep It’s Innovative Edge? Yes—If it Ignores the Techno-Nationalists.” The heart of the critique is that anyone advocating a government role in promoting innovation is proposing bad policy and is a techno-nationalist. The Economist is looking at innovation policy from a European point of view, where there is a tendency for governments on the Continent to pick high tech corporate champions, with little success. Moreover, heavy government regulation and high taxes undermine entrepreneurship and start-ups.

I appreciate that point of view and agree with much of it, especially the failure to create a culture of risk on the Continent. But The Economist goes on to criticize my post suggestions as “a tax-payer to-do list” of big spending. The Economist thus puts the discussion of a National Innovation Policy within an old paradigm of

conservative vs. liberal economic policies--and then comes down on the wrong side of that debate.

After all, the internet itself comes out of US military spending by ARPA on a secure system of communication with American universities. Public education (a key item on my list) is by nature tax-payer paid. Highways are paid for by the public, as are most utilities and my suggestion that the US needs a super-fast broad band network falls into a long tradition of government support for basic transportation (canals, ports) and utilities (electricity, dams).

At the same time, there are many things needed to promote innovation that do not require a big government role--or any participation at all. They include promoting research into service innovation, codifying design methodology and managment, creating better metrics for innovation and developing a discipline of innovation economics that values intangibles such as human capital, not just capital. They could use a bit of government help, especially in changing the way bureaucrats measure the economy. But not much.

The Economist is just beginning to discover innovation as a journalistic topic and it is unfortunate that it is analyzing it through the prism of an old, tired political paradigm. The readers of The Economist and deserve better. I say this as an avid reader and fan, as well as competitor.

Reader Comments


June 12, 2008 2:39 AM

The Economist is failing to see the importance that government has in supporting the CULTURE of innovation -- by investing in Education, connecting technologies (broadband access, for instance), expanding healthcare and supporting research. We have a culture of innovation in this country (as does England, although it may have forgotten) directly rooted in government funding of massive, cross-pollinating think tanks that brought together experts from across disciplines to do everything from cracking military code to launching space exploration. These are the models on which Google and Xerox Parc and any number of modern labs are based. The SF Bay Area would be an industrial backwater without the massive amounts of government war and research funding, including the GI bill that educated returning vets and money invested in early research into what became the Internet. Washington has benefited from the massive amounts of funding into the NIH as well as technology. These perhaps aren't direct methods of funding corporations. And who wants that? But funding aimed at creating a culture of information and dissemination of the same. It works at the edge. And has been massively successful over the last 60 years. Unless they are blind, how they could see anything less is beyond me.

Bob Blaich

June 14, 2008 10:45 PM

Bruce, You are right...the Economist is wrong. I have subscribed to the Eonomist for 28 years and I do not remember their ever supporting DESIGN in any form. Englands innovation and design expertise has been lacking for years. Their best products are their designers who most often re-locate to friendlier economies or work for non British companies. Why don't you suggest to them to send someone to the ID Strategy conference next year.

Bert Bobrovniczky

June 17, 2008 1:50 AM

I hope you might find this article some food for thought.
Best regards,

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Want to stop talking about innovation and learn how to make it work for you? Bruce Nussbaum takes you deep into the latest thinking about innovation and design with daily scoops, provocative perspectives and case studies. Nussbaum is at the center of a global conversation on the growing discipline of innovation and the deepening field of design thinking. Read him to discover what social networking works—and what doesn’t. Discover where service innovation is going and how experience design is shaping up. Learn which schools are graduating the most creative talent and which consulting firms are the hottest. And get his take on what the smartest companies are doing in the U.S., Asia and Europe, far ahead of the pack.

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