Two recent cover-stories in the weekly news magazines have counter arguments about innovation in the US. Business Week suggests that innovation is declining while Time says it’s booming.
Writing for Business Week magazine, economist Michael Mandel argues that we have just witnessed a decade of disappointment instead of an era of breakthrough products and services:
There’s growing evidence that the innovation shortfall of the past decade is not only real but may also have contributed to today’s financial crisis. Think back to 1998, the early days of the dot-com bubble. At the time, the news was filled with reports of startling breakthroughs in science and medicine, from new cancer treatments and gene therapies that promised to cure intractable diseases to high-speed satellite Internet, cars powered by fuel cells, micromachines on chips, and even cloning… With the hindsight of a decade, one thing is abundantly clear: The commercial impact of most of those breakthroughs fell far short of expectations.
…A more indirect indication of the lack of innovation lies in the wages of college-educated workers. These are the people we would expect to prosper in growing, innovative industries that need smart, creative employees. But the numbers tell a different story. From 1998 to 2007, earnings for a U.S. worker with a bachelor’s degree rose only 0.4%, adjusted for inflation. And young college graduates—who should be able to take advantage of opportunities in hot new industries—were hit by a 2.8% real decline in wages.
Writing in Time magazine, author Stephen Johnson argues that the speed with which users have extended Twitter’s platform points to a larger “truth” about American innovation:
When we talk about innovation and global competitiveness, we tend to fall back on the easy metric of patents and Ph.D.s. It turns out the U.S. share of both has been in steady decline since peaking in the early ’70s. (In 1970, more than 50% of the world’s graduate degrees in science and engineering were issued by U.S. universities.) Since the mid-’80s, a long progression of doomsayers have warned that our declining market share in the patents-and-Ph.D.s business augurs dark times for American innovation. The specific threats have changed. It was the Japanese who would destroy us in the ’80s; now it’s China and India.
But what actually happened to American innovation during that period? We came up with America Online, Netscape, Amazon, Google, Blogger, Wikipedia, Craigslist, TiVo, Netflix, eBay, the iPod and iPhone, Xbox, Facebook and Twitter itself. Sure, we didn’t build the Prius or the Wii, but if you measure global innovation in terms of actual lifestyle-changing hit products and not just grad students, the U.S. has been lapping the field for the past 20 years.
How could the forecasts have been so wrong? The answer is that we’ve been tracking only part of the innovation story.
Read the articles and let us know what you think, PSFK!
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Yes.
June 15th, 2009 at 5:14 pm
Don’t pay attention to BW at all. I’d been following BW articles for three years. I listen to their podcasts and visit their web site weekly. This year, I come to a conclusion that BW is an anti America publication. Business Week is a Pro China, Pro Asia magazine. It occurred to me if I took the same subject and put it in America, it was a problem. If I put it in Asia, it was a great idea or great potential. WTF.
Even thought today it seems half of the world is kicking and stomping us, we are down but not out. “Only a man who knows what it is like to be defeated can reach down to the bottom of his soul and come up with the extra ounce of power it takes to win when the match is even.” by Muhammad Ali.
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“America will never be destroyed from the outside. If we falter and lose our freedoms, it will be because we destroyed ourselves.” Abraham Lincoln
June 15th, 2009 at 9:45 pm
The key to both arguments is looking at age. It the younger generations that have been innovative, and it’s products for the younger generation that have been invented. The slacking in American innovation comes from the big and old….ex the car industry. A company that fails to be a changing organization is doomed to fail. Look at all the ones falling from grace in the past 6 months – a huge portion of so-called legacy brands and businesses. Too out of touch, too old, or too far away from the key consumer market that drives change?
Older, bigger companies – take this recession opportunity to step up, and get a clue, otherwise there’s a younger, cooler, more aware entreprenuer and his/her biz ready to take over.
June 17th, 2009 at 10:52 am