Customer Reviews

Innovation Nation: How America Is Losing Its Innovation Edge, Why It Matters, and What We Can Do to Get It Back

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For a book about Innovation, there is nothing Innovative about this book. The stories about Singapore, Finland and Ireland are well known and can be found in Business Week or Wall Street Journal. Yes, and well read readers will know that we are losing our innovation edge to China and India. No new information there. And, his answers are not new - use the internet, improve our education systems, entice outside talent, better offices, etc. In fact, I would even question his definition of innovation - jazz is innovative but classical music is not? He starts with the assertion that innovation is not just about technology and science and then labors onto technology and science. Further, at the end of this book, he used the "I" word so many times to emphasize his opinion, that I lost count of it. I can go on about this book, but let me leave it with this - this is the worst book on innovation that I have read. A lot of borrowing from others, a lot hype on what he will provide for solutions and then NO delivery. Don't waste your time on this book.

Acknowledging the same reality, but offering a glimmer of National hope to Thomas Friedman's "The World is Flat" thesis, John Kao lays the framework for an "Innovation Solution" toward the vision of America becoming: "...accelerant for global innovation by steering the world toward addressing the formidable range of wicked problems we face..." It is a brilliantly written, comprehensive analysis; filled with possibility and promise, even as it accepts the reality of our shortcomings and the enormity of these "Wicked Problems".

Defining innovation as, "the ability of individuals, companies, and entire nations to continuously create their desired future", Kao takes the reader on a quick trip around the globe to demonstrate how the key success factors for innovation are no longer domiciled within the U.S.A. He demonstrates how Talent, Capital, Government Investment, and the Silicon Valley concept are now everywhere - Bangalore to Singapore and Finland to Ireland. It is a shocking view of reality that will be shared by most readers who are regular travelers to countries abroad.

The author then offers his proposal: "...the United States specialize in a more comprehensive, transformational style of innovation, one that allows for placing big bets on the future, deploying its enormous resources, carrying out ambitious and mold-breaking experiments, reinventing the way we educate our young, aligning our federal, state, and local agendas, and recharging the magnetism of openness and opportunity that has historically attracted the world's talent to our shores." And, chapter by chapter he demonstrates how the components of innovation work, and how the U.S. might re-create these components as the foundation for addressing what he has called the wicked problems we face.

His chapter on "Making Talent" - it is leaving us and our educational system is broken - challenges not only the current educational system, but also the marketing of innovation and innovative educating of and to our young people. He argues that we must also continue to "Seduce Talent" from abroad thru offers of opportunities to specialize and the building of a reputation for diversity and tolerance. He shows how openness and trust are part, but only part of the environment for innovation that must be developed, and he suggests a "National Innovation Agenda" that includes the appointment of a National Innovation Advisor to the President. In all, it is a bold, but realistic approach to earn anew, America's, "...status of "indispensable nation" by using our mastery of innovation as a force for good in the world."

The book's offering is far too comprehensive to be reduced to a single review and it will be well worth your time to read the ~ 270 pages. The stories are interesting and informative, and the logic is such that you can do a bit of skimming if you are short on time. I highly recommend this book.

Dennis DeWilde, author of "The Performance Connection"

The author's book offers what may be considered by Europeans as a curiously anomalous idea: that the United States's main problems stem from insufficient innovation. Can one describe as lacking in innovation a nation that produces out-of-the-box ideas like community colleges, sending a man to the moon, Borlaug's green revolution, Internet, web browsers, CD ROM and DVD, Amazon.com - including its revolutionary introduction of reader reviews (no, I am not a paid agent for Amazon), Ebay, blogging, Apple products, and endless Nobel prize winners in biology and medicine?

Certainly, the nation's educational problem is dire. But does Kao really believe that innovation is the key to fixing the U.S.'s systematic deterioration in economy (deindustrialization), infrastructure, fiscal soundness, pension security; that clever ideas could deal with our anomalous levels of crime and violence compared with all nations of comparable GDP,political gridlock, or our degraded popular TV and entertainment media?

I might hire Kao to rev up innovation in my company if I were an industrialist, but I would not elect or appoint him to advise on public policy issues. Instead, I suggest that Kao may be a symptom of the fragmentation and willingness to settle for superficiality that has developed in the U.S. over the past 45 years.

The EU is not as flashy and exciting as the U.S. But it has evolved a civilized pattern of cooperation. It leads in environmental policy and acting on (not just writing or yelling about)global climate change. The Dollar is sinking ever lower with respect to the Euro (now trading at 1.55). Most citizens in European nations approaching or exceeding our GDP have greater security for the essentials in their lives than do a large fraction of Americans; and their industries are, by and large, outcompeting us, even buying out what remains in the U.S.

I suggest that innovation is now limited from being applied to critical areas like those I mentioned above because many educated, bright, and influential Americans in academia, politics, and business have short-range focus in their thinking. We don't seem to have much interest in looking at problems holistically, having humility, learning from history or other societies. I'm not sure which author I'd recommend instead of Kao, but I'm looking (and also writing, myself).

Between 2005-06, some 30,000 professionals left the U.S. to return to their native India; China has made encouraging the return of their educated expatriates a priority. Meanwhile, U.S. students continue to rank poorly, and innovation is increasingly becoming a government priority for other nations. In the U.S., however, we are becoming the Detroit of nations, taking the path of least resistance, basking in fading glory, and bogged down by old values and thinking. Example: The U.S. got a major 'free ride' from German immigrants in the 1940s, and mistakenly claimed their contributions as evidence of our superiority.

'Green" has become the new red, white, and blue - yet, is blocked by lack of consensus on need, impact, funding source, etc. The U.S. ranks 17th among 30 OECD nations on R&D tax incentives.

Large-firm CEOs have lately deinstitutionalized innovation, instead eg. buying upstart biotech firms with valuable technologies - innovation by M&A instead of R&D. Even more recently - deliberate outsourcing and offshoring of R&D.

Robert Solow won the Nobel Prize in economics demonstrating that as much as 80% of GDP growth comes from the introduction of new technologies. Similarly, Boston Consulting Group, in a study for BusinessWeek, found innovative companies achieved median profit-margin growth of 3.4%, vs. 0.4% for the S&P Global 1200 median. Disruptive change (eg. introducing the Sony Walkman, the PC) is much more important to boosting GDP than innovative improvement (eg. adding to Oreo's brand extensions, 'me too' drugs). Opportunities abound for disruptive innovation - addressing global warming, education, communicable diseases and cancer, energy sufficiency.

Some assorted background facts contained in "Innovation Nation:"

U.S. students rank 24th in math literacy and 26th in problem-solving ability. In 2005-06, 30,000 highly trained technology professionals left the U.S. to return to India; similar trends involve the brightest of other nations.

By 2010 experts estimate that Beijing will have the world's largest nanotech research infrastructure, with 10X as many researchers in one location as any comparable U.S. facility; the second largest will be in Shanghai.

The U.S. ranks 16th out of 17 nations in the proportion of 24-year-olds with degrees in natural science vs. other majors, according to the National Math and Science Initiative.

Intel's Barrett says a chip-making facility in Singapore is worth $1 billion more over ten years than an identical one in the U.S., largely because of more favorable tax policies.

In 2006 the Dept. of Defense identified 42 leading-edge technologies it was interested in - 20 were based outside the U.S.

Foreigners represent half of all U.S. graduate students in engineering and 40% of those in physical sciences. However, their numbers are dropping due to increasing alternatives (eg. Australia, China), increased difficulty getting visas, and rising costs in the U.S.

These are all good points to help raise awareness of the need for change. However, Kao's recommendations are too much more of the same - eg. spend more money on education.

We already spend 5.3% of GDP, vs. 1.9% for China, 3.5% Japan, 4.6% South Korea and Germany, 5.6% U.K., 7.2% Norway, and have doubled our inflation-adjusted per-pupil spending in the last 35 years - w/o improving either our drop-out rate or NAEP scores for 17-year-olds. Thus, more money for education is not the answer.

Tax policy changes would probably help. However, the biggest factor is the much lower labor costs overseas - eg. $200/month for factory workers laboring 80 hour-weeks in China. Outsourcing production work quickly takes with it the need and opportunity for factory management and engineering positions as well. Finally, skills in current areas often provide the gateway to mastering new technology - eg. TV tubes -> LCD, plasma, and OECLD flat-panel displays -> nanotubes (?), etc.

The other major problem is the U.S.'s phobia about government intervention. China, Japan, and South Korea have all had strong government leadership shaping their direction; the U.S., however, has not, and we have ended up outsourcing so many capabilities that we increasingly appear to be a "paper tiger" service economy, dominated by the finance industry (about 40% of our GNP).

The U.S. mints about 4,000 new PhDs in biological sciences each year; Singapore creates about 500/year, and is targeting 1,000 by 2015 - despite a population only 1/70th that of the U.S. Foreign recruitment (about 75% of 'Biopolis' staff are recruited from abroad) is aided by a relaxed attitude on stem-cell research. Singapore's government added environmental and water technologies as targeted areas in 2006, as well as interactive and digital media - all seen as big growth areas in Asia. Funding for high-caliber PhD students in these areas is offered if they agree to work in Singapore for at least six years - recipients don't even need to be natives.

Bottom-Line: "Innovation Nation" provides excellent examples of what other nations are doing. However, Kao grossly underestimates the difficulties in improving U.S. pupil achievement overall - we've tried for at least 35 years, with little or no impact. The basic unaddressed problem is that American pupils simply don't work hard enough, compared to their Asian peers. (Other sources also conclude that Asians, on average, rank nearly one standard deviation above average Americans on IQ tests.) Kao also errs when suggesting that impressive new projects (eg. Spain's new Guggenheim Museum) will revitalize surrounding areas - this logic has been followed thousands, if not millions, of times in the U.S., failing to make significant impact in almost every instance. Finally, Kao misses the need to point out how excessive expenditures in American health care, defense, etc. starve innovation.

This book is a must read for anyone who cares about America's economic leadership and cultural health. Kao's perspective is fascinating and his insights hit the nail on the head. As a nation, we need to reinvent innovation and get back to a world where our youth admires and aspires to serious innovators, technological leaders, business gurus and Nobel scientists, as opposed to reality TV stars.

Kao's prescription is exactly right--creating innovation hubs around the country. His estimated cost, $20 billion for 20 innovation hubs, is cheap compared to the cost of continuing to lose ground in innovation to emerging regions like Asia and Eastern Europe. Witness successful U.S. examples, such as Silicon Valley and San Diego, which Kao writes about at length.

Kao points out that achieving this audacious goal will require setting a national innovation agenda and appointing a national leader to champion the cause (á la Jim Webb with NASA and Apollo). Challenging? Yes, particularly given the current political environment. But, as Kao states, "We have no alternative but to try...We must the face the future." Agreed.

John Kao has sounded the alarm over America's atrophying ability to innovate. Through apt historical references and a no-nonsense critique of fundamentals (e.g., school curriculum, institutional cultures, etc.) he shows where America has strayed from the "engine of invention" following Sputnik and through the Apollo missions to the moon -- and how today's innovation hotbeds in Singapore, Denmark and Finland are eroding America's long-term economic viability. He also offers practical solutions (from the micro to the macro) in this provocative "long view" of a culture that was built on innovation.

The title of Thomas Friedman's most recently published book, The World Is Flat, is explained by the author in the Introduction: his use of the word "flat" refers to "the flattening forces [that] are empowering more and more individuals today to reach further, faster, deeper, and cheaper than ever before...to connect, compete, and collaborate" innovatively. John Kao has these same forces in mind when suggesting that America is losing its innovative edge in the global marketplace. "Innovation has become the new currency of global competition as one country after another races toward a new high ground where the capacity for innovation is viewed as a hallmark of national success."

Meanwhile, John Kao asserts that in the United States, "our national capacity for innovation is eroding, with deeply troubling implications for our future...In tomorrow's world, even more than today's, innovation will be the engine of progress. So unless we move to rectify this dismal situation, the United States cannot hope to remain a leader. What's at stake is nothing less than the future prosperity and security of our nation...While our competitor nations focus on educating and training engineers and inventors, our schools are turning out youngsters who are better consumers than they are creators."

What to do? Kao proposes that the United States become an "innovation nation" by making a major commitment of resources, both human and financial, to rejuvenate our innovation age. "And the obvious first step is simply to acknowledge the challenges we face at a national level. After which we must develop a compelling vision and a blueprint for action that will reinvent the way we educate our children, marshal our resources, pursue our research projects, communicate and share our discoveries, and conduct ourselves in the world community."

After first identifying the "what," Kao devotes the bulk of his attention to the "how" of achieving these and other objectives. He cites examples in the past when innovation in the U.S. unequalled (e.g. the Manhattan Project, Lockheed's "Skunk Works," and the U.S. space program's "Project Apollo") as well as examples of successful innovation initiatives in other countries, notably in China and India (of course) but also in Brazil, Denmark, Estonia, Finland, New Zealand, Singapore, and Taiwan. There is indeed what Kao characterizes as "the new geography of innovation" in a world that Friedman describes as "flat."

Kao examines the four principal driving factors behind this "global evolution," noting that the globalization of innovation and of the capital to fund it "are, in my estimation, great positives overall for both the United States and the rest of the world. But the United States must begin ratcheting up its own innovation capacity to stay ahead of the curve."

To me, one of Kao's most interesting ideas is what he calls an "Information Hub" such as the one in San Diego that demonstrates "how talent, investment, and creativity flow to places whose culture encourages the pioneer spirit, the search for open spaces, and the hunger to express itself as much by creating value in a place as through the ideas and ventures that are generated by it."

Kao proposes a BHAG for the United States (Big Hairy Audacious Goal is a term introduced by Jim Collins): to establish twenty Innovation Hubs, each devoted to solving one "wicked" problem (e.g. climate change, environmental degradation, communicable diseases, energy sufficiency, water quality and sufficiency), with initial funding of at least $20 billion. One day, he hopes, "the catalytic nature of diversity and the power of innovation on a planetary basis will unleash the full potential of human beings to better themselves and to create a world well worth living in."

Others may perhaps disagree with Kao's estimate of the nature and extent of the challenges that the United States currently faces. They may also disagree with the details of the response to those challenges that Kao recommends. However, there seems to be little doubt that innovation has not as yet become "the new currency" of U.S. participation in global competition nor is capacity for innovation as yet viewed as a "hallmark" of its national success. I agree with Kao that what's now at stake is "nothing less than the future prosperity and security of our nation."

Those who share my regard for this book are urged to check out Friedman's aforementioned book as well as Competing in a Flat World co-authored by Victor Fung, William Fung, and Yoram (Jerry) Wind. Also, Richard Ogle's Smart World, Frans Johansson's The Medici Effect, Henry Chesbrough's Open Innovation and his more recent Open Business Models, and Seeing What's Next co-authored by Clayton Christensen, Scott Anthony, and Erik Roth.

John's first-hand experience meeting business, science, and political leaders around the world shows how widespread and intense the drive for innovation has become. Americans should read this book not in fear of emerging nations' ascendancy, but in eager anticipation of the prosperity that these new collaborators will bring. If fear is warranted, it's that our own leaders will not share the foresight and commitment to innovation that is becoming the global norm.

I got this based off Zakaria'a recommendation on his show on CNN. Luckily, I was able to borrow it from a friend... so did not waste my money on it... only my time.

After struggling with the first 30-40 pages I gave up! I have an MBA, and perhaps my focus there on Entrepreneurship and the process by which new ideas develop had already exposed me to much more than what this book has on offer. The examples - and the whole writing style - seemed labored. At that point, I started skimming the book - rather than read it carefully and absorb it. But it just as futile...

Can I have my 2 hours back?