Presidential candidates miles apart on research
INNOVATION TALK:WHEN APPLE first launched the Mac, Steve Jobs noted that “innovation is not about money. It’s about the people you have, how you’re led, and how much you get it”.
At the time, he noted that IBM was spending at least a hundred times more on R&D. When Apple came up with the iPhone, the rest of the mobile handset industry – LG, Microsoft, Motorola, Nokia, RIM, Samsung, Sony and Symbian – were investing heavily in keypad and pen-stylus phones. When Apple came up with the iPad, Microsoft had already invested heavily in PC-based tablet computers.
Innovation is fundamental to sustainable economic growth. Not only does innovation create new ventures, jobs and wealth, but also it defends established ventures from withering under international competition.
Which creates more advantage for an economy: building and hosting a world leader in a particular market, or merely renting to a tenuous operation of a foreign multinational?
It seems that both US presidential candidates, Barak Obama and Mitt Romney, agree that innovation is not so much about money. In 2008, Obama pledgedto double federal funding on the basic research agencies (the NSF, NIST and DOE SC) over 2006-2016. But so far his increases have been modest: a 3.3 per cent in total federal RD funding for 2013 over 2012 figures to $141bn, which is 12 per cent up on the 2006 figure of $124bn.
Romney has pledged an immediate 5 per cent reduction in discretionary spending, other than investment in national security. As president, RD programmes unrelated to national defence will be diminished.
It seems that both candidates are unlikely to materially increase total federal spending in basic research, and in consequence there has been some disillusionment about “boom-bust” federal RD funding, which affects careers of scientific researchers.
Do the presidential candidates then believe that innovation is about people? Six of the top 10 universities worldwide (according to the 2012 QS rankings) are in the US, and 14 of the top 25. One would expect a steady stream of new ventures generated by recent graduates of the US academic system, driving employment and growth in the US economy.
Perhaps this is indeed happening, but not necessarily on US soil. American graduate entrepreneurs are increasingly under the burden of university fee debt, delaying their desire to risk joining a start-up or launch one themselves. In the period 2005-2010, the number of start-ups in the US with more than one employee decreased by more than 25 per cent, and consequently fewer jobs are being added to the economy than previously.
Meanwhile, entrepreneurship has globalised, and governments such as those of Singapore, Germany, Chile, China, India and Canada all offer incentives to attract the best and the brightest to found start-ups in their jurisdictions rather than anywhere else.
In the decade from 1995, half of Silicon Valley start-ups had an immigrant as a founder. Andy Bechtolsheim, Sun Microsystems co-founder, is from Bavaria. Former Intel chief executive Andy Grove was born in Budapest. Yahoo co-founder Jerry Yang was born in Taipei. Google co-founder Sergey Brin was born in Moscow. The founder of eBay was Parisian Pierre Omidyar. Elon Musk, founder of PayPal, Tesla (electric cars) and SpaceX (private space vehicles), was born in Pretoria. Facebook co-founder Eduardo Saverin was born in Sao Paulo.