In case you hadn't noted the demise of the automobile industry, paid attention to the number of electronic components built abroad, or marveled at the Grand Canyon-sized trade deficit in this country, a recent study into the innovation climate of 110 countries has spelled out the fact that the U.S. is only the eighth most innovative country in the world.
The report, produced jointly by the Boston Consulting Group (BCG), the National Association of Manufacturers (NAM), and The Manufacturing Institute (MI), looked at both the business outcomes of innovation and government’s ability to encourage and support innovation through public policy. Topping the list of the most innovative countries were, in order, Singapore, South Korea, Switzerland, Iceland, and Ireland.
The report discusses not only country performance but also what countries are and should be doing to spur innovation, including tax incentives and policies for immigration, education and intellectual property. According to the report writers, the U.S. has a lot of room to improve and needs to do so urgently.
“America needs a bold innovation strategy,” said NAM President and CEO John Engler. “U.S. manufacturing innovation leadership is at risk. We’ve fallen behind countries in East Asia and Europe. America cannot afford to lose its manufacturing innovation edge and the wealth and jobs that it generates throughout our economy.”
The report looks at the successful companies and countries for ways the U.S. can regain its position as an innovation leader. Education is crucial and government policies can play a very important role.
“A skilled, educated workforce is the most critical element of innovation success – and the hardest asset to acquire,” said co-author Emily Stover DeRocco, president of MI. “The study shows that in companies and countries alike, a high number of researchers and advanced degrees – particularly in science and engineering – are the greatest predictor of success.”
“Government can help move America up the innovation index by enacting more competitive tax, trade and workforce policies that enable U.S. manufacturers to innovate and succeed globally,” said Engler. “The report also shows the United States needs more competitive immigration and infrastructure policies to help drive innovation.”
The study names four critical factors that lead to innovation success – idea generation, structured processes, leadership, and skilled workers – and stresses that government must support these efforts through effective policies. Given President Obama's massive spending bills aimed at retooling the education, heathcare, and petroleum systems, it looks as if he may have received an advanced copy of the report. Then again, one major indictor of innovation success was having low corporate tax rates to spur economic growth; a concept that seems to have completely missed our elected representatives.
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