More Than Just R&D...
National Innovation Policy: An Urgent U.S. Need
Kenan
Patrick Jarboe
Athena Alliance
(as published in New Technology Week, May 3, 2004)
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Over the next few weeks, both major parties and both presidential candidates
will be promoting their technology and manufacturing strategies. President
Bush has already grown fond of saying that we are in the beginnings
of an innovation economy. He is right. We are in an Information-Intangibles-Innovation
(I-Cubed) Economy where relentless and continuous improvement is needed
to stay competitive. But we don’t have a national innovation policy
to keep us on top. Yes, we have a science and technology (S&T) policy
and are fashioning a manufacturing policy. But those are not the same
as an innovation policy.
Don’t get me wrong: President Bush and Senator Kerry are pushing
needed proposals to increase funding for research and development (R&D)
and to improve math and science education. Though still important, they
would at best power a giant leap forward into the gadget-based industrial
economy of the 20th century. They are not policies for the creativity-based
information economy of the 21st.
R&D is only one part of innovation. Some innovation is technology
driven; some is not. Doing things differently can be extremely important--consider
Wal-Mart’s “big-box” marketing and “cross-docking”
logistics concepts, Dell’s build-to-order process, or Southwest
Airlines’ strategy for quicker turnaround on the ground.
Many technological innovations require organizational innovations as
well. As MIT Professor Eric Brynjolfsson’s research points out,
much of the productivity gain from new information technology comes
from concomitant innovations in organizational structures.
Even new-product development is often more the result of interactions
with customers and suppliers than of a breakthrough in the lab. 3M Corporation,
a highly sophisticated company technologically, uses a “lead-user”
process to identify and then adapt innovations that are already employed
in leading-edge and similar markets. New uses for old products, such
as teenagers morphing cell phones into music machines, and creative
new design, such as a more user-friendly web page or a more functional
layout of an airport terminal, are also key features of innovation.
As is better tasting coffee.
And employee suggestions add untold product and process innovations
to our economy outside the R&D lab. Many companies have instituted
“knowledge management” systems to capture and share the
innovative knowledge circulating within their workforce.
A 2002 RAND report on innovation, New Foundations for Growth: The
U.S. Innovation System Today and Tomorrow, summed it up:
...[W]e immediately think of scientists and engineers working sometimes on their own but most often in laboratories or R&D facilities operated by private industry, by universities, and to some extent by the government. Yet, much innovative activity occurs outside the formal precincts of R&D labs. R&D departments tend to be an artifact of large firm organization. But in all company settings much “fixing” that amounts to innovation is done on the line by employees not principally charged with the innovation task. This type of informal activity too is an element of the national innovation system.
Our
public policy often ignores these other facets of innovation.
To use a sports analogy, imagine an NFL coach who concentrates solely
on the passing game--working only with the quarterback and the wide
receivers. Granted, these are the players that produce many of the TV-highlights
plays. But as any football fan can tell you, you don’t get to
the Super Bowl if you neglect the running game, defense, the kicking
game, and special teams.
We have equated innovation only with S&T and have neglected other
parts of the game. Is S&T necessary? Yes. Is it sufficient? No.
One of the first things we need to do is figure out how well we are
doing. We need to measure differently and better. There are a lot of
data on such S&T indicators as R&D expenditures, patents, the
number of workers with technology degrees, and student math and science
test scores. But the U.S. has no organized means of collecting information
on innovation broadly. Our S&T indicators need to be expanded to
innovation indicators.
The European Union is already doing this; it will release its third
Community Innovation Survey next month. That survey will cover topics
such as the number of new or improved products introduced, new markets
developed, new processes adopted, and overall expenditures on innovation
activities--including not only R&D but also worker training and
industrial design. The Australian Bureau of Statistics conducted an
innovation survey in the mid-1990’s and is preparing a new survey
for this year that will cover technology innovation, new products, and
organizational innovations. The Organization for Economic Cooperation
and Development is in process of revising its manual for collecting
statistics on innovation.
The U.S. needs to institute its own Innovation Survey. Only when we
look at the big picture and find out where we really stand can we begin
to put together all the pieces: technology, education, creativity, organizational
innovation, workforce training. Otherwise, we will have a lopsided team
that isn’t going to win the economic Super Bowl.
If you doubt me, just ask Steve Spurrier.