This is an article from the New York Times (June 20,2009)
John Kao, right, a former professor at Harvard Business School, spoke this month at a meeting covering the appropriate government role in creating industries and jobs.
INNOVATION — the tricky, many-step process by which ideas become products and services — has typically been seen, studied and celebrated at the micro level, as a pursuit for entrepreneurs and clever companies.
But governments are increasingly wading into the innovation game, declaring innovation agendas and appointing senior innovation officials. The impetus comes from two fronts: daunting challenges in fields like energy, the environment and health care that require collaboration between the public and private sectors; and shortcomings of traditional economic development and industrial policies.
Innovation policy, to be sure, is an emerging discipline. It lacks crisp definitions or metrics. The most explicit embrace of it has been outside the United States, though the Obama administration is taking some initial steps. Its new budget directs the Bureau of Economic Analysis to develop statistics that “uniquely measure the role of innovation” in the economy. And the government’s new chief technology officer, Aneesh Chopra, speaks of building “innovation platforms” to spur growth.
The rising worldwide interest in innovation policy represents the search to answer an important question: What is the appropriate government role in creating industries and jobs in today’s high-technology, global economy?
That central issue animated much of the discussion at an unusual gathering earlier this month at a lodge north of San Francisco. This invitation-only affair was organized and moderated by John Kao, a former professor at Harvard Business School and founder of the Institute for Large Scale Innovation.
A few speakers covered big-think issues like climate-altering geoengineering and water-management technologies. But the main participants were innovation-policy practitioners from nine countries: Australia, Brazil, Britain, Chile, Colombia, Finland, India, Norway and Singapore.
The meeting offered a window onto the state of innovation policy — how it is being defined, and what countries are doing. Above all, innovation policy is an attempt to bring some coordination to often disparate government initiatives in scientific research, education, business incentives, immigration and even intellectual property.
“It’s about setting an agenda and helping build a portfolio of skills that let an economy and a society move forward in smarter, faster ways,” Mr. Kao said.
Yet if the reach of innovation policy is broad, the attendees agreed, it is best done with a lighter touch than industrial policies of the past, which often focused on specific companies for government support. They used metaphors like “impresario” and “orchestra conductor” to describe government’s role. The ideal, they said, is “stewardship,” not command and control.
In Britain, a national innovation agenda is beginning to take shape with policy documentsand the creation of a Department for Business, Innovation and Skills. “We’re determined not to second-guess the future by trying to pick winners and losers,” said Philip Rycroft, a senior government official overseeing innovation policy. “But we do think government can create the conditions so that new industries can rise more easily.”
Finland has long taken a comprehensive approach to innovation policy, investing in areas as varied as an outstanding national education system and high-speed Internet connections for its residents. It has also produced a power in the cellphone industry,Nokia.
But Mikko Kosonen, president of the Finnish Innovation Fund, a public investment fund, says Finland now needs an “innovation policy 2.0” to climb the economic ladder to remain competitive. “We see value migrating to software and services,” he explained.
The country has the second-fastest-aging society in the world, after Japan, and its health care costs are rising rapidly. To turn that challenge into a growth engine, Finland intends to become a global leader in developing software and services for medical monitoring and preventive health services. “We think well-being services are the next big opportunity for Finland,” said Mr. Kosonen, a former senior executive at Nokia.
Other governments are also focusing on targets of potential advantage. In Australia, the government is looking to nurture industries that arise from its harsh climate and a scattered population. So research centers are working to improve strains of drought-resistant wheat and cotton for export as adaptive technologies to cope with climate change, said Terry Cutler, who recently headed a government-appointed expert panel on innovation in Australia. And Boeing last year selected Australia as the location for a Phantom Works lab for developing unmanned aircraft, he said.
“Test flights don’t bump into things,” he said. “Sparsity can be a global competitive advantage.”
In India, the government and industry have financed research into products and services that reverse the traditional pattern of innovation flowing gradually from wealthy nations to the rest of the world, said R. A. Mashelkar, chairman of the country’s National Innovation Foundation. Early evidence of the trend, he said, includes the $2,000 Nano automobile, and low-cost drugs for tuberculosis and psoriasis.
“If you make something for the rich, the poor cannot afford it,” Mr. Mashelkar said. “But if you design for the poor, everyone can afford it.”
CLEARLY, the innovation meeting in California was a gathering of enthusiasts. One view not heard was that innovation policy itself is a mistake — government meddling in decisions best left to the marketplace — as free-market purists contend.
Lars Aukrust, executive director for innovation at the Research Council of Norway, answered that criticism by comparing a nation with a large corporation. “If you are going to run a big company,” he said, “are you going to leave it all to serendipity or make some strategic choices?”
“Innovation policy is a probability game,” Mr. Aukrust added. “You can improve the odds of success.”
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