Is America Losing the Tech Innovation Lead?

Think about it for a few minutes. You invent something that is valuable and people want to copy it (as opposed to most patents that are worthless and flawed, or don't work). You have to defend your patent in court. The cost of that defense will bankrupt you unless you have very deep pockets and a current cash flow to go the long run.

If you did somehow win, the offender just starts another entity and does it again, and you are back in court.

Basically anybody with any clue will tell you that you have little to no protection with a patent. Google "a case against patents." If you do research, anybody can take it if they find out the details or it is leaked out by an employee. Basically it is very risky doing research and development, and the return on investment will likely be stolen from you if it is truly worth something.

The only effective way to keep "them" from taking it is to not give them the "end game" up front, or beat them to market first in full production mode.

You need a "good, better, best" approach either way and when the good is stolen you go to better with their competition and try again until you find someone who is not a thief and realizes that they can make more by not stealing your stuff.

The steps to stop this is a legal issue...and congress thinks that we don't have property rights... Our position will deteriorate until we have our rights to property protected, just like you have the right to have the Sheriff to arrest a thug who takes you stuff...

We do not live in a "free enterprise" economy. We live in an Oligopoly economy. Multiply this by 10-100 times if you have a "disruptive" technology that can put a company (GM, FORD, etc) out of business and union jobs are at stake...

I dont think that America were 'the world leaders' in technical inovation on a per capita basis at any time during the last 50years. I dont have the statistics but I do know in many of the projects that I have been involved with that the Brits with their circa 50 million population have started many of the great technological ventures. For example, Concord, Hovercraft, Shape Memory Effect, Linear Electric Motors, etc, etc....The pity is that the Brits ability at technical inovation is not matched by their ability at Marketing and financing technology. In Aerospace alone the Brits were the first with a practical VTOL Fighter (no,it wasnt invented by Martin Baker):the first commercial Jet Airliner:the first Supersonic Airliner that was the envy of the world, etc,etc.The Brits were also the first with the Industrial Revolution and much of the fruits of this were exported to America.

Again, without having the accurate statistics in front of me I would guess that the Brits, followed by the Japanese and Italians are world leaders on a per capita basis in technical innovation

Have you ever heard of the book "How the Scots Invented the Modern World: The true story of How Western Europe's poorest nation created our world & everything in it"

Amazon.com Review
"I am a Scotsman," Sir Walter Scott famously wrote, "therefore I had to fight my way into the world." So did any number of his compatriots over a period of just a few centuries, leaving their native country and traveling to every continent, carving out livelihoods and bringing ideas of freedom, self-reliance, moral discipline, and technological mastery with them, among other key assumptions of what historian Arthur Herman calls the "Scottish mentality."

It is only natural, Herman suggests, that a country that once ranked among Europe's poorest, if most literate, would prize the ideal of progress, measured "by how far we have come from where we once were." Forged in the Scottish Enlightenment, that ideal would inform the political theories of Francis Hutcheson, Adam Smith, and David Hume, and other Scottish thinkers who viewed "man as a product of history," and whose collective enterprise involved "nothing less than a massive reordering of human knowledge" (yielding, among other things, the Encyclopaedia Britannica, first published in Edinburgh in 1768, and the Declaration of Independence, published in Philadelphia just a few years later). On a more immediately practical front, but no less bound to that notion of progress, Scotland also fielded inventors, warriors, administrators, and diplomats such as Alexander Graham Bell, Andrew Carnegie, Simon MacTavish, and Charles James Napier, who created empires and great fortunes, extending Scotland's reach into every corner of the world.

Herman examines the lives and work of these and many more eminent Scots, capably defending his thesis and arguing, with both skill and good cheer, that the Scots "have by and large made the world a better place rather than a worse place."

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It would seem that it is cultural and America got some of that inventiveness. I would not say that it is "English" per se, but certain elements of culture found in England. India and many other nations have "what it take" to invent itself, but rarely are those cultures of certain political bent...

Have you noticed where a lot of the questions posted on this forum are coming from? That is where you will find the future technological innovation. If you said India, you are right. Even in this country, engineers in our companies are from India, China, Japan, etc. and are the ones coming up with new technology.

Why do American companies go offshore? It's because talent is not available here and it is cheaper to do so.

I also think our colleges and universities are at fault. American schools are country clubs compared to schools in other parts of the world. There, they concentrate on learning. Here, "can't wait for the bell to ring or Friday to roll around" means party time. Sure there are some who really apply themselves and they are the ones who succeed in life. Overall, the foreign student is better educated than the American counterpart.

As an example, I had a friend who was an engineer at Bechtel Corp. He saw me one Saturday, leveling a large planter using a water filled hose. He couldn't comprehend how I could do it. Now I didn't learn it in school, but a knowledge of basic physics was all that was necessary to accomplish my task.

Remember: "Getting to the top is easy". "Staying on top is not". The U.S. has been there and now it is time for someone else to take over the top spot. The top will likely see different countries come and go and who knows, maybe we will be on top again. I wouldn't worry about it. That's just my take on the subject.

The countries that promote free enterprise and freedom will stay on the top. Any business that now exists can be taken down...and the bigger they are, the harder they fall...

The decline had already begun when Judge Green dismantled Ma Bell and sounded the death knell for Bell Labs, but that certainly accellerated the problem. Some of the greatest R&D leaders like DuPont, GE, 3-M, Xerox, still innovate a little, but not with the verve and raw horsepower of earlier years. I hate to say it, but we need a new Bell-like or Edison-like visionary.

A truly accurate assessment. The climate for research in the US is in a sucky mode at present. Why would any intelligent US student become an engineer when they can make so much more money by being in a glamorous field like law, medicine, acting, music, etc, etc, etc. If you want talent, you have to pay for it. But given our current laws it is easier to import cheap technical labor from India, China or elsewhere. Only when American companies are forced to deal with their internal greed by being brought under regulatory controls on hiring will this nonsense be eliminated.

Ye cats and little kittens! I sure hope it can happen sooner than that. Regulatory intervention would require something like a multi-billion dollar bailout...no, wait, we've already had several of those...what WOULD it take to get intervention, then? And should it really require Congressional action?!? Given the top management of the top companies seem to be asleep at the bonus...I mean, wheel, apparently it will.

I would argue that a Ma Bell (Oligopoly/monopoly) is always ripe to fall and fail (requiring a bailout?) once the tax system stops favoring them.

1) Our income tax system favors ongoing operations, and venture capital has to come from after tax income with little or no offsetting deductions that have value. If you are not making money you cannot get a deduction of any value.

2) The central issue in modern economics is the non linear cost-volume curve coupled with a non linear demand curve based on the "shelf space" of the human mind.

The "dot.com" boom theme was to get to volume production and you own the sector, resulting in people willing to buy companies that were not producing income in hopes of creating a monopoly and future profits. We see this will Google. Once a company slides down the cost-volume curve to a high volume/market share, it becomes harder for competition to enter the market.

Then regulations are added which increase this effect. For example, if you produce 10,000 widgets (hits on searches in Google's case) and the large guy produces 1,000,000 widgets (100:1 ratio), the cost of hiring, learning, complying, capitalizing, etc for 10,000 units is about that of 1 million on the worst case and somewhat less in fairness. The start up has, say, a 10 to 100 times cost disadvantage related to the regulation, among other things, and once the regulations become heavy, that advantage to the higher volume producer becomes more pronounced and effective. When you add in all the cost advantages to volume and regulations, we end up with Ma Bell, a monopoly.

Ma Bell did research to make it look like they were good corporate stuards to help keep the illusion of the value of the monopoly to avoid anti-trust break up. They also could afford to throw money at things and internal burocrats competed to set up their own internal empires, R & D being a comfortable and stable "working" enviroment. Go to any government research lab and you will see how "make work" comes to life...

As for edison, he was not that creative. He had backers with the ability to "print" money via securities and direct creation of money from fractional reserve banks. The Fed Reserve is an illegal operation that allows anyone who has the right to money creation to dominate those who cannot. Rockerfeller, Carneigie, Morgan had this "undue" advantage, and in the case of Carneigie, he defrauded and slandered his competition, ran them out of business and took their invention out of bankrupcy. Carneigie should have been in jail, not the rich guy he ended up being. He was just another thug we now find on Wall Street who engineered their success and did little actual inventing.

If I had a $25 billion dollar low interest loan (recently vote by Congress for the auto manufacturer), I would be in the car business and GM would be out of business in 2-3 years after I start production. I doubt anybody with a brain would buy a car that got 20 mpg over one that got 100 mpg highway and 200 mpg city... The politics of the inside deal will be taken down...it is just a matter of time and will... Any "innovation" or "invention" you may have is useless unless you can own it and "capitalize" it.

Freedom is not free, and only those people willing to fight for it will get it. The Anglo-Saxons/Scotts (American founders...) were willing to fight for it out of desperation in part, and any country that is unwilling to take control of their rights will have them taken along with ownership of their creativity. The question is whether Americans are willing to fight for freedom and property rights, or are they going to wig out and go pinko...

All of which points to why I hated to say it. But Menlo Park and Bell Labs were two of the best recent models we've had for spawning creativity, no matter how the funding was obtained. And, yes, I've seen how sometimes work is created seemingly to justify itself and the workers. But sometimes even that is necessary to keep people on staff for a year so they will still be there when their next "AHA!" moment occurs. Better a year's patronage than forever lost, eh?

I think in years to come American shear in global development may decrease in %age terms but its not going to change in quantum,

Even some of the new innovations and developments in emerging worlds will be done with American money.I don't think it should be a matter of concern at all, its a natural cycle.

The thing that is never mentioned is that as the leading economy in the world the US has successfully "harvested" basic research (and researchers) from around the world. Germany, Japan and the UK have traditionally done well in this regard too. These days a sizeable portion of the discoveries are picked up by China and India and Brazil also, often with a bit of help from Multinational companies. This must affect the established big applications nations.