In my previous post, I argued that a wide-spread belief that we are swimming in an ocean of cheap innovative ideas – solidified in a popular slogan “ideas are a dime a dozen” — is no more than a myth. Available empirical evidence strongly suggests that we are facing a growing shortage of novel ideas. Worse, the cost of getting these ideas is growing while their quality seems to be declining. Left unchanged, this trend may seriously damage American innovation.

Some folks believe we are already there. In the latest issue of Harvard Business Review, Curtis Carlson sets alarm bells ringing:

“Innovation in the United States is highly inefficient. The per capita rate of job creation from new companies has declined for decades, and only 3% of patents are ever commercialized. Most university tech-transfer and start-up incubators lose money…Most venture capital firms…lose money. All this despite the efforts of some 220 university entrepreneurial programs, 6,000 professors and instructors teaching entrepreneurship, 1,400 venture incubators, and billions of dollars a year in government investments.”  

In addition to impeding economic growth, the decline in innovation capabilities may have profound negative consequences for U.S. national security, as highlighted in a recent report, “Innovation and Security. Keeping Our Edge,” composed by the Council on Foreign Relations.

Those who think that Carlson is way too pessimistic have ammunition of their own, however. They may point to the recently released Global Innovation Index 2020, an annual ranking of the world’s innovation capacities. In this year’s list, the United States occupies a respected 3^rd place (after Switzerland and Sweden). This is the same spot the U.S. held last year and even a slight improvement over the 6^th place in 2018, 4^th in 2017, 4^th in 2016, and 5^th in 2015. Where is evidence of decline?

(As someone obsessed with indexes, I immediately remembered another ranking, the 2019 Global Health Security Index, an assessment of the health security capabilities across 195 nations. The Index specifically focused on nations’ preparedness for infectious disease outbreaks that can lead to pandemics. In an estimate that sounds like a bad joke today, the United States led the world in the overall preparedness score. It also scored the highest in a few specific categories, including Early Detection & Reporting of Epidemics.)

Folks who prefer to believe that the glass of U.S. innovation is at least half-full could refer to an unprecedented speed with which RNA-based anti-COVID-19 vaccines have been developed – along with an impressive list of fast and “frugal” innovations developed in response to the pandemic.

Their opponents take a longer-term view. They argue that virtual working environment, a necessary consequence of the increasingly popular working-from-home approach, damages social networks established in large organizations, which will inevitably have a strong negative effect on corporate innovation. (Another potential danger is the so-called “covidization” of academic research, but this topic deserves a special consideration.)  

I personally see one more troubling aspect: the lack of a strong public U.S. innovation policy. Previously, I found that there is a strong correlation between a country’s innovation potential and the level of democratic developments in this country (as assessed by the Democracy Index 2019). Although all five individual components of the Democracy Index positively correlate with innovation, the strongest correlation occurs for Functioning of Government. And yet, the above-mentioned Council on Foreign Relations’ report specifically criticized current administration for the weak role it plays in shaping the U.S. innovation policy.

One hopes that the incoming Biden administration will start paying appropriate attention to science, technology, and innovation. In the meantime, we must stop fancy ourselves with the chimera of “plentiful and cheap innovation ideas.” Quality ideas are rare and expensive, and it takes a lot of valuable resources to generate a potentially breakthrough idea. No efforts should be spared to understand how to make this process more effective and more efficient.

Check out my eBook, “We the People of the Crowd…,” a collection of stories about crowdsourcing reflecting my personal experience in working with corporate and nonprofit clients.

Image credit: Nolan Simmons on Unsplash