While well-intentioned and interesting, that sort of narrowly focused news coverage gives the impression that innovation is a phenomenon reserved for tech-centric unicorns whose business models (and profits) may not be obvious to casual observers. In reality, corporate innovation may have its roots in the tech sector, but it is much more broad than that and indeed has far reaching implications that are often lost to investors.
While the United States is still at the top in total investment in research and development -- spending $500 billion in 2015 -- a new Boston Consulting Group (BCG) study released Monday has made a startling finding: A couple of years ago, China quietly surpassed the U.S. in spending on the later stage of R&D that turns discoveries into commercial products.
The news that Tesla’s market value topped that of GM this week means that for the first time in the automobile era, America’s most valuable car maker is not based in Detroit. Instead, as cars become increasingly reliant on cutting-edge software and new energy technology, a Silicon Valley-based luxury electric car maker best exemplifies this convergence of the mechanical and electronic worlds.
Unfortunately, recent data shows that we are losing ground when it comes to the protection of IP and patents - consequently, we are falling behind in the innovation race. While China has long been seen as a nation which does not respect Intellectual Property and where piracy has been rampant, it appears they may have seen the error of their ways and are increasing their patent protections as we have started to undermine ours.
Speaking at the Center for Strategic and International Studies, former Department of Defense officials said it is still unclear what Trump's specific strategy is for Pentagon spending. They did say innovation will be in the mix, but the question is how it will compete with other priorities and constituencies.
It’s no secret that Cisco Systems, Samsung and SAP have recently established a presence north of the border, but now it appears that Apple, Microsoft, Google and Facebook are all also considering their options. If this tire-kicking becomes a trend, it will compromise America’s ability to remain a global leader in technology.
President Trump plans to unveil a new White House office on Monday with sweeping authority to overhaul the federal bureaucracy and fulfill key campaign promises - such as reforming care for veterans and fighting opioid addiction - by harvesting ideas from the business world and, potentially, privatizing some government functions.
In 2016, the U.S. secured a No. 4 ranking on the Global Innovation Index, boasting strength in both technological innovation and research. But not all state constituents could reasonably celebrate. In fact, some served as an anchor or, at the very least, buffer to the success of states with rapid technological growth rates.
This column examines the effects of Chinese import competition on another metric for the health of the US manufacturing sector - innovation. Firms whose industries were exposed to a greater surge of Chinese import competition from 1991 to 2007 experienced a significant decline in their patent output as well as their R&D expenditures. While politicians’ ‘obsession’ with manufacturing is primarily due to job losses, an accompanying reduction in innovation may well affect economic growth in the longer term.
What the Third Offset and its predecessors have done well is identify the strategic imperative for securing a new competitive operational edge through technology. This signaling is critical. It can reassure our allies and deter our adversaries by demonstrating the reliability of future U.S. military dominance. For innovators - whether they are government insiders, denizens of traditional and nontraditional defense industry, or other potential partners - it can serve as a clarion call for bold ideas.