Viewpoint October 5, 2009, 4:46PM EST

The Problems with Obama's Innovation Strategy

The White House's plan for $130 billion in innovation funding is admirable but lacks detail, and here's why the money could be wasted, says Jeneanne Rae

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Recently, the Obama Administration issued A Strategy for American Innovation: Driving Towards Sustainable Growth and Quality Jobs. Reading it would inspire anyone to think that this Administration has a good handle on what needs to be done to shore up America's many weaknesses and keep the U.S. out in front in terms of economic as well as scientific leadership. It details where our country stands on important issues such as R&D investments, workforce skills, physical infrastructure, energy, and health care, among others. It puts forth a fairly clear and comprehensive vision for the results the Obama Administration wants to drive and provides a breakdown of where approximately $130 billion in government funding might be spent over the next several years to support this first-of-a-kind innovation agenda. Bravo!

Seeing a codified assessment and vision made my heart sing, but at the same time made me nervous. Not only is its lack of executional detail scary, but the rate of concurrent change called for shows a level of naivete that seriously undermines the plan's intention. If the health-care debate is any indication, I predict much of Obama's innovation funding will be wasted. Here are a few reasons why:

1. We know from studying innovation in large-scale entities such as Procter & Gamble (PG), UPS (UPS), and Kaiser Permanente and in other governments such as Finland, Japan, and South Korea that success requires that innovation have a permanent place within a large entity's structure. Working from a strategic plan and through an agreed governance structure, this type of place is where a high-level view of the problem space is developed, priorities agreed, funding dispersed, and meaningful metrics and measures show success or failure. Neither the U.S. government nor any agency within the U.S. government, with the possible exception of the Defense Advanced Research Projects Agency (DARPA), has such a place.

2. We know successful innovation requires discipline. Without it, precious money and time can be seriously squandered. This is why protocols for driving innovation at scale have been widely adopted by companies and countries alike. Without any structure to support this new U.S. innovation strategy, there is no hope this funding will be spent efficiently.

3. The current state of government contracting laws supports convention, not innovation. Currently, government awards tend to go to the typical "Beltway Bandit"-type firms that have little to no track record for innovation.

4. Moreover, scientific research funding and grants aside, there is precious little money available for discovery-related activities that would help decide what type of strategies are needed when it comes to spending the type of big bucks this plan endorses. But as the innovation strategy outlines, many of the problems America is facing are large, complex, and interrelated. Many, like education and health care with their multifaceted social aspects, are particularly hard to figure out. This leads me to contend that since the bulk of them have been sitting there unaddressed for some time that the agencies either don't know what to do or are up against political impediments that keep them from acting.