An innovation-driven economy, supportive of risk-taking, is necessary to promote breakthrough thinking and ensure economic vitality. It is far easier to protect the status quo than it is to adopt policies and practices that promote change and innovation. But in the end, it is the only way for the U.S. to sustain economic advantage in an increasing competitive global economy.
I believe the U.S. will be able to maintain its leadership position in the global marketplace, but only if it takes action to encourage and nurture innovation. Doing so will take contributions from business, government, academia and labor.
Abundance of and access to venture capital is directly linked to innovation. Although large companies and governments are a major source of innovation, many innovative products and services come from entrepreneurs supported by venture capitalists who consciously accept the risk/reward ratio. New business models and premises must be tried and companies must be allowed to fail. Risk is an important part of human nature and essential for a thriving economy. The bigger risk is providing too much stability.
Government Contributions -- Patents
Patent protection and intellectual property rights are central to innovation, ensuring that money and time invested in creating new products will be rewarded with profits. The U.S. government must continue to make patent protection a top priority in free trade talks.
At the same time, it must ensure that the U.S. legal system takes steps to curtail excessive and frivolous lawsuits which stifle innovation. As one executive said recently, throwing money at the challenge of innovation is not enough. It is not about putting gasoline in the tank, he said, but about loosening the hand brake. The litigation environment is a hand brake on innovation.
Government Contributions -- Infrastructure
Public funding creates a base for a country's research investment. The U.S. spends just under 3% of gross domestic product on research and development and federal funding has been a mainstay of discovery research.
Government can and should take on long-range, strategic projects beyond the reach of the private sector. This is especially true for novel, high-risk and exploratory research.
In addition to this, the U.S. should seek effective incentives to stimulate private sector research investment. Taxation systems can enhance growth and reward entrepreneurial risk taking. Taken together, the regulatory and infrastructure environments create a national or regional platform that can accelerate, or impede, the pace and quality of innovation.
Universities can be and often are incubators for entrepreneurs, especially in the U.S. This must be enhanced even further with internal structures to support faculty and students interested in taking ideas into the commercial realm and to help produce graduates who can lead this type of activity.
They can do so by creating venture laboratories and technology hot houses that are multi-disciplinary and include real-world interaction with industry and by realigning academic incentives to support quality research and commercialization of ideas.
In short, we need innovation education. Knowledge silos, which have been somewhat common in academia in the past, won't drive innovation. Collaborative efforts will be important.
Innovation depends on good ideas and talented people, and we need more of both.
The human dimension of innovation must include a workforce which is also flexible and mobile.
We need to be open to new ideas and people no matter where in the world they come from. Life-long learning will result in workforce flexibility and enhanced skills.
We also need to grow talent through exposure to other disciplines in collaborative programs. Deliberate steps must be taken to expand and grow the pool of technical talent.
Dr. Nance K. Dicciani is president and CEO of Honeywell Specialty Materials, a strategic business group of Honewell International. Honeywell Specialty Materials is a global leader in providing customers with high-performance specialty materials, including fluorine products; specialty films and additives; advanced fibers and composites; intermediates; specialty chemicals; electronic materials and chemicals; and technologies and materials for petroleum refining. More information can be found at www.honeywell.com/sm