August 23, 2011
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FedEx Global Brand Management Director Monica Skipper shares a cost-effective way to build a bigger brand for your small business.
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Innovation is widely heralded as a driving force in the U.S. economy. But despite the many ways innovation can help the U.S. out of our current economic slump, instead innovation in the U.S. appears to be going in the wrong direction, the Brookings Institutions’ Hamilton Project reports.
While innovation has many positive effects, including raising the standard of living, advancing technology and enabling more leisure time, The Hamilton Project found that since 1973, the pace of innovation in the U.S. has slowed. There are many reasons for this slowdown, but here are the three that stood out to me.
1. Public and private sector barriers to innovation
Regulatory red tape and a patent system that moves as slowly as molasses are two governmental barriers that stymie innovation. The Hamilton Project reports that since 1990, the average time needed for a patent to be approved has nearly doubled from 18.3 months to 35.3 months (as of 2010). The added complexity of technology patents, as well as budget cuts and a short-staffed Patent and Trademark Office, are contributing to the problem. Meanwhile, private sector companies are dealing with their own internal “red tape” as they struggle to accommodate to new technologies like social media and iPads and figure out how to adjust their business models to monetize these changes.
2. Lack of federal funding for innovation
The federal government’s investment in research and development as a percentage of GDP has dropped from a high of 2.2 percent in 1964 to 1 percent today. While you might think private R&D would pick up the slack, The Hamilton Project notes that federal R&D spending sponsors “basic” research projects on topics that affect entire industries. Private R&D, in contrast, is focused on advancing the goals of an individual firm. Barcodes, fiber optics, MRI machines and GPS technology are just a few of the innovations that came out of government-funded basic research.
3. Shortage of students studying fields key to innovation
Science, technology, engineering and math (STEM) fields are the ones that lead to most commercialized innovation. However, the U.S. lags behind other nations in the percentage of college and university students studying STEM fields and earning degrees. In 2009, slightly less than 15 percent of all graduates got degrees in STEM fields; in contrast, 30 percent of South Korea’s graduates did. You might be surprised, given the prevalence of technology today, but the last time STEM degrees really saw a surge was in the 1980s when computers first became popular. In the 1990s, the share of bachelor’s degrees in STEM fields leveled off; the share of advanced degrees actually dropped.
What can you do about these issues?
You may think you can’t do anything. How can a small business owner advance innovation when government is hampered by political infighting, budget cuts and a seesawing economy? But there are a few things you can do.
First, make your voice heard
Let your representatives know that you care about issues relating to innovation, whether it’s the current efforts to reform the patent office procedures or excessive federal regulation. There are more ways than ever to keep the issues you care about in front of your legislators, so there’s no excuse for remaining silent.
Second, be a role model
Encourage young people in your community to study fields that will lead to innovation in science and technology. If you’re in a high-tech or scientific industry, be a mentor to young people, either through an organization created for that purpose or informally by starting an internship program at your business. Speak at high schools and get involved.
We small business owners are innovators ourselves. If we don’t make our opinions heard and encourage the next generation to take the lead in innovation, who will?
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DONNA WELLS 9 months ago
Great post, Anita. Agree with you recommendations for action, and would add that businesses can get an immediate innovation boost from: 1. Training their existing workforce in new technologies and skills. 2. Providing online training/assessment to job candidates who might not otherwise qualify for one of the 3 million open, unfilled jobs in the US today...largely in higher skilled roles. 3. Implementing effective innovation processes and incentives internally (See Astro Teller of Google video on this topic on YouTube). Companies that implement these tactics will boost our country's progress on innovation now, while we all continue to press for the government, patent and educational reforms that will help us in the next decade.