MIDLAND, Mich.The U.S. must encourage invention, innovation and entrepreneurship if the country is to maintain its position as the world's economic leader.
That's the message delivered recently by Timothy Nash of Northwood University, a top administrator and economics professor, writing in the May edition of the Northwood University Monthly Economic Outlook. Mr. Nash said he was prompted to write on this topic after hearing a speech by Carly Fiorina, former CEO of Hewlett-Packard Co. and current Republican presidential candidate, at the annual Michigan Chamber of Commerce dinner.
Ms. Fiorina's speech led Mr. Nash and his friends into an after-dinner discussion of the concepts of innovation and invention, he said, noting that too often today, people miss the important distinction between the two.
Invention is the creation of a good, service or process that is new and unique, Mr. Nash said. For all practical purposes, it exists for the first time.
Innovation happens when someone improves upon or makes significantly better something that has already been invented, he said. Lastly, an entrepreneur is a person who owns, organizes, manages, leads and assumes the risks and rewards of a business.
Therefore, Mr. Nash continued, the economic game-changer is an invention in the hands of the entrepreneur who successfully brings it to market.
Once invention occurs, competition and innovation will surely follow. Alexander Graham Bell invented the telephone more than 100 years ago, and look what the iPhone and the Google Droid afford us today, due largely to the process of innovation.
More than half of the most important inventions of all time came from the U.S.a country less than 250 years old with less than half of the world's population, according to Mr. Nash.
Why has the United States, and not some other country, been the engine for invention, innovation and entrepreneurship over the last 200 years? he asked. Why not Japan? Germany? China? France?
We believe it has happened in the United States because our political and economic system has historically welcomed, dare we say encouraged, business and the entrepreneurial process.
Unfortunately, business conditions in the U.S. are no longer as favorable for entrepreneurs as they once were, according to Mr. Nash, because:
c The U.S. is no longer in the Top 20 among nations for math, science and language scores;
c The regulatory burden grows every year, especially on endeavors based on complex science; and
c U.S. inventors, innovators and entrepreneurs are taxed higher than their global competitors.
America has been a beacon for invention, innovation and entrepreneurship for Americans by birth as well as for Americans by choice, he said. The question of the day is, 'Are we still that beacon?'
Certainly improving our education, regulation and tax policies would help maintain and even grow our existing but narrow lead in key patentable technologies before it is too late, Mr. Nash said.
To reach this reporter: mmoore @crain.com