Innovation is necessary to preserve the American Dream in the competitive global market

Oct. 5, 2005 -- In the 21st century, the key to remaining competitive with China, India, and the rest of the world will be innovation, a national core competency that will play a critical role in the battle to preserve the American Dream.

This view is the subject of a forthcoming book written by Kenneth Harrington, managing director of the Skandalaris Center for Entrepreneurial Studies at Washington University in St. Louis, and Robert Skandalaris, founder and chairman of Noble International Ltd. While America was built by entrepreneurs, and continues its stronghold on innovation, the co-authors contend that it is no longer a forgone conclusion that America will lead the world in innovation.

"It is true that developing and formerly communist countries do not have the same systems for disseminating breakthroughs and turning them into commercial applications," they write. "These countries never developed the research networks, intellectual property rights, risk capital systems, and economic incentives necessary to sustain the momentum of innovation. Indeed, the main reason that countries like China violate intellectual property laws and focus so much on technology transfer is that they lack a system to generate innovation on its own. But they're working on it, and they're gaining fast. The race is on in the global innovation and entrepreneurship game, and the lead the United States relies upon is in jeopardy."

In Rebuilding the American Dream, scheduled for publication in late 2005, Skandalaris and Harrington maintain an optimistic view, despite the book's portentous title. "Americans owe our prosperity to innovation and entrepreneurship, to the wave after wave of new products, services, and systems that have transformed our very lives," they write. "Understand that innovation is not just discovery of a new idea or the invention of a prototype, but rather its commercialization. It is not simply an idea but the practical application of an idea that is true innovation, and it is when ideas are brought to society at large, changing existing systems, that they become revolutionary."

Ken Harrington

They cite an unprecedented surge in the rate of innovation over the past 20 years that has given rise to a momentum that innovation tends to generate. Evidence lies in a sharp increase in US patent applications and grants, exponential growth in new technologies, the spread of capitalism, and movement to information-based organizations. "More information was produced in the past 30 years than in the previous 5000," they write, "and the amount of information currently being produced is doubling every two years and accelerating."

What has been the response to this surge? Americans are enrolling in an increasing number of entrepreneurship programs nationwide. After years of implementing cost-cutting measures and more recently, outsourcing, CEOs are turning to growth and innovation to gain the competitive edge. And state governments, along with economic development concerns, have stepped up efforts to foster entrepreneurship as a means of creating economic growth.

Undercutting the very systems that support entrepreneurship, however, is a dangerous act, caution the authors. While the academic community is playing a greater role in the innovation process by expanding entrepreneurial programs and technology transfer capabilities, it is also struggling for research dollars vital for breakthroughs in science and technology.