Academic journal article Research-Technology Management

Our Nation Needs an Innovation Strategy

Academic journal article Research-Technology Management

Our Nation Needs an Innovation Strategy

Article excerpt

Recently another Hollywood Video store closed in my neighborhood. I searched the web for the latest news on this company and found, on their website at hollywoodvideo. com, the following message:

   Thank you for visiting hollywoodvideo.com. The company
   is in the process of exploring new ways of delivering
   entertainment to you and we anticipate that this
   website will be under new ownership shortly.

We know the story quite well. Hollywood Video could not sustain its business model. Netflix replaced them as the household name in entertainment. Hollywood Video failed to reinvent itself, and as a result new owners will come to the rescue.

Time and again, we have witnessed similar stories of obsolescence. In 2005, a colleague of mine estimated that the average life expectancy of an S&P 500 company was about 10 years, compared to 65 years when the S&P was founded. With the recent financial crisis, it's likely to be less than that today. I was fortunate to have spent 33 years with Procter & Gamble, a company that has been around for 173 years. P&G has survived because P&G has stood for Passion & Guts, along with the necessary rigor to drive change over the years. When a company, brand, or country, for that matter, loses the passion to reinvent itself and the guts to make the hard choices to lead the change, it will not long survive. Ability to operate the current businesses with professional management is no longer sufficient to sustain growth in today's global economy. To compete effectively over the long term, a corporation needs goals and an innovation strategy to deliver on those goals. Without a guiding strategy, the company wastes resources and tends to focus on short-term churn to satisfy shareholder requirements.

In this fast-moving, global economy, nations face similar challenges. Like a corporation, a nation must utilize its internal resources wisely to increase the overall GDP year after year, just as corporations pursue increases in earnings. That can result in a short-term focus that misses the big picture and strands the country economically and politically. The United States is in such a critical phase of its life cycle; our dominance has been challenged economically, demographically, technically, and politically in recent years, and the last recession has exacerbated the situation. Like Hollywood Video, the nation needs concrete goals and an innovation strategy to sustain its leadership position and maintain the standard of living for its citizens.

And like Hollywood Video, which is still figuring out what its "new ways of delivering entertainment" will look like, the United States has so far failed to create the next major industry to drive the economy in this century. The manned space program and the Star Wars program created innovations and new industries that fueled growth in the second half of the twentieth century. In the 1970s and 1980s, we declared war on cancer and HIV, sparking another round of innovation. In the 1990s and into the 2000s we had a boom in Internet businesses, mobile computing, and social networking. But no equivalent catalyst has yet emerged for twenty-first century innovation. Allocating budgets for education, science, and technology without a comprehensive, holistic innovation strategy is no longer sufficient. And we cannot rely on the private sector to lead the national innovation strategy without incentives to take the massive risks required. It is time to focus national science and technology policy to propel the economy for the next century.

So what should the U.S. innovation strategy look like? Although this discussion will ultimately require the engagement of business leaders, policy makers, educators, economists, and politicians, I'd like to suggest a few broad areas for emphasis.

Where to Play

In devising a national innovation strategy, we must pick the platforms that have the greatest potential for job creation, leverage our talents and natural resources, and fill major national and global needs. …

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