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What I Learned: Is the US an Innovation Nation?
June 2, 2008

What I learned this week ... is that Canada might have an innovation complex. Gordon Pitts writes about the "innovation breakdown" in the business section of the Globe and Mail. From this article, I started to pull together some thoughts from past conversations and presentations to see if the United States has an advantage in the business of product innovation. I have heard people say it, but is there merit to the statement or is it our own propaganda? 

Note: I apologize in advance for the use of "we" and "us" in this post to refer to the United States, I found it hard not to write it from the first person. I recognize that not all of our readers are from the US, please forgive my inability to break out of my US-centric tone. 

Necessity is the Mother of all Innovation?
It's a slight turn on the phrase, but the core thought is that an individual or company only innovates if it needs to. I am starting to think about that in two pieces, demand and reward for innovation.

Demand -
The highlighted article reminds me of a presentation by Michael Treacy speaking at the Aberdeen Group Manufacturing Summit in 2007. His presentation discussed some very interesting views on the Manufacturing industry, and at productivity numbers across countries. His statement (paraphrased from memory) was that Canada was both blessed and cursed by an abundance of natural resources. Instead of having to innovate, Canadians can simply reap the rewards of the rich land that they live in. The article discusses the abundance of gold in Canada, for example, as a detriment to selling innovation. I expect that oil-rich nations fall into this category as well. If money comes easily, then perhaps innovation is not at such a premium? I am not sure this is the full story, though, because the US has lived off the land pretty effectively as well. But there is probably a kernel of truth here.

Reward -
In order for people to invest in product innovation, they have to believe they will be rewarded. There are plenty of countries that have lack or resources, and so potentially a high need for innovation. But do they have a need to innovate or a need to prosper from innovation? If a person (or company) does not see innovation as a path to success, then I would propose that they won't invest as much of their own time and energy (and blood, sweat and tears) into it. The payoff might not be financial, it could be in other forms. Perhaps national pride and recognition can go a long way to drive innovation (the US space program might be an historical example here). But there need to be rewards for the effort, at least for most people. This is an area where I think it is clear that the US, as a capitalistic nation, has an advantage. Personal reward for success is encouraged and celebrated. It is the "American Dream" that we hear about. As an aside, the US also has the means to protect the intellectual property so that the innovator can protect the rewards gained from their efforts.

<Bold> With the Need and the Will, do they have the Means?
If a person is motivated to innovate, do they have what is necessary to be successful? I see two major items here, the right people (for the ideas, and to develop them) and the finances to take them forward.

People -
Without the right bright minds to come up with new ideas and make them work, there is no innovation. The US universities are full of some of the best and brightest from around the world, so I think that the US does well here. But clearly the US does not corner the market on intellect.

Money -
While there are many stories about the next greatest thing being developing in a garage, even those people had to live in an environment where they could support themselves and their families. Most product innovation takes access to capital. Even if an idea starts small, bringing it to market requires money. The US certainly has capital to work with. Money can be obtained from venture capitalists, "angel" investors, university partnerships, and more. Many individuals and companies, or course, lack the appropriate capital. Perhaps more, they may have capital but lack the approaches that free entrepreneurs to take risks and innovate, and do so in a way that is tied back to personal rewards.

The bottom line is that the US supports and celebrates entrepreneurs. I don't think anybody can corner the market on innovation, but I do think that an innovation culture can be fostered. The one area we might fall short on is "demand," because we are undeniably a wealthy nation. The reward systems are certainly in place, and the means (people and money) are available. So the US is well situated to innovate. It would be foolish, though, not to recognize that in today's global marketplace that the US has competition. With all these advantages in place, US companies and individuals need to take advantage of them. With these musings, next time we can get back to focusing on how companies across the globe can enable innovation and execute on their product innovation opportunities.

So those are my thoughts, I hope you found them interesting. I am not trying to promote any agenda, but I thought it might be worth starting a conversation. Let me know what you think about it.

Posted by Jim Brown on June 2, 2008 | Comments (0)