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INNOVATION
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DECEMBER 15, 2004
By Steve Hamm Bright Ideas for Boosting Innovation A prominent group has lots of advice on how America can renew its focus on R&D and science education to keep ahead in this global race When the Soviet Union launched Sputnik I on Oct. 4, 1957, it was a space shot heard around the world. The basketball-size satellite awakened the U.S. to the threat of Soviet technological superiority. In response, America created the National Aeronautics & Space Administration (NASA), set a goal of improving science education, and boosted government research and development spending to nearly 2% of gross domestic product by 1965. Today, federal R&D spending hovers at around 0.75% of GDP. National scientific competitiveness was barely discussed during the recent Presidential campaign. And with the country mired in an expensive war in the Middle East and suffering huge budget deficits, the subject gets low priority from the second Bush Administration. Too bad. While the country isn't in a position to embark on a new space race, plenty can be done to enhance America's edge in innovation. ERODING ABILITIES. On Dec. 15, the Washington (D.C.)-based Council on Competitiveness issued a report called "Innovate America: Thriving in a World of Challenge and Change." It warns that the U.S. risks losing its technology edge and economic vitality to emerging tigers such as China and India. The report calls for a new partnership between government, industry, and academia to stem what the group sees as an erosion of America's ability to innovate. "If we don't hit this hard, we could find ourselves losing the innovation space to other nations," says G. Wayne Clough, president of the Georgia Institute of Technology and co-chairman of the committee that prepared the report, along with IBM (IBM ) Chief Executive Samuel Palmisano. The group's prescriptions certainly are comprehensive -- touching on everything from tax policy that encourages risk-taking and improving the health-care system to immigration reform and stimulating the use of hydrogen fuel. Yes, many of the proposals are retreads of ideas that are rolled out every few years by a tech industry fretting over new competitive threats and eager to protect its perks. But just because some of the proposals have a familiar ring doesn't mean they aren't worthy of consideration. And others are fresh ideas that have the potential to make a difference without busting the budget. Among the best: • Create a Cabinet-level innovation czar and a National Innovation Prize The czar would be responsible for crafting a national strategy and evaluating the effect of policy decisions on competitiveness. "Years ago, you would have an environmental impact statement. Now, you'd have an innovation impact statement," says Kathleen Kingscott, IBM's director of innovation policy. The prize would be like the Commerce Dept.'s Malcolm Baldrige National Quality Award, which is credited with dramatically improving American product quality since it was first instituted in 1987. • Shift R&D funding priorities to encourage riskier, long-term projects Federal research funding has become too short-term and too war-related. The group calls for redirecting 20% of the Defense Dept. research budget to long-term basic science research and for channeling 3% of overall federal R&D funding to high-risk and multidisciplinary projects. • Put money in the hands of younger scientists Right now, federal research grants are typically made to senior university faculty members who tend not to be risk-takers. The group proposes creating 5,000 new fellowships annually that venturesome graduate students can take with them wherever they choose to study. "We're proposing to put the power back in the hands of young American innovators," says Deborah Wince-Smith, president of the Council on Competitiveness. • Fix the patent system Too many questionable patents are being approved. The group calls for allowing the patent office to keep its fees, rather than putting them into general revenues, and to spend the money on beefing up the staff and boosting training. Also, an improved patent database could uncover overlaps, so fewer bad patents are granted. "Over the years, quality has eroded. The patent office has been inundated, and they have been unable to keep up with demand," says Dr. Luis Proenza, president of the University of Akron and a member of the innovation committee. • Create innovation hotspots Here, the responsibility lies with states and local businesses to help build mini-Silicon Valleys, focused on such specialties as nanotechnology, biotech, and logistics. Example: the Infotonics Technology Center, established in 2001 in Rochester, N.Y., by Kodak (EK ), Corning (GLW ), and Xerox (XRX ) to foster a local optical-networking industry. These are smart ideas. Trouble is, they'll have trouble getting noticed. Their backers are realistic about the chances of effecting change -- but still hopeful. "It's difficult, but it's not impossible," says Steve Merrill, executive director for Science, Technology & Economic Policy at the National Academy of Sciences. He points out that aggressive funding of medical research began at a time of fiscal austerity in the early 1990s but was a bipartisan cause. "It's called making something a priority," he says. Making competitiveness a national priority would be easier if something occurred comparable to the Russian launch of the Sputnik to create a sense of urgency. But while the threats to America's technology edge are as real today as they were 40 years ago, they're a lot more subtle. That's unfortunate. A little bit of attention to innovation could go a long way in keeping the U.S. a leader in the 21st century.  Hamm is senior writer for BusinessWeek in New York
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