I’ve been to Washington, D.C. twice in the last two weeks to
speak with legislators and government agency representatives about the need for
a renewed public policy commitment dedicated to supporting long-term innovation in
America. This morning I gave a keynote speech at the Cybersecurity Applications
and Technologies Conference for Homeland Security (CATCH), delivering the
message that U.S. innovation and entrepreneurship, the crucial growth engines of
the U.S. economy, are at risk of stalling out. This alarming trend, if not
reversed, will create serious repercussions in America.
Without new approaches to collaboration among government institutions,
corporations, universities, and venture capitalists, U.S.
entrepreneurs will increasingly face overwhelming obstacles to success. The
freedom to fail has always been one of the greatest strengths of the American
economy. But this is now in jeopardy because a climate of risk aversion now
dominates the country’s financial institutions.
Corporate R&D budgets, new university endowment commitments to
venture capital, and new commitments by private investors to funding of
entrepreneurs are all declining in real time. The negative ripple effect from
this collectively reduced pool of risk capital is not yet evident in our
economic statistics, but it will have a profound and
negative impact on the ecosystem that has traditionally nurtured entrepreneurs
in the small business ventures that drive new job creation in America.
Part of the solution must include a
renewed and proactive effort to continue to attract, educate and retain the
world’s best scientists to pursue innovation in the United States. It is also
crucial that more venture capital be invested in efforts to pursue
breakthrough, as opposed to incremental, innovation.
Three major negative trends have put America’s innovation
ecosystem at risk. One has been
that American spending on research and development has emphasized incremental
innovation over basic research for more than two decades. Another problem is
that total U.S. R&D funding as a percentage of GDP has been declining while
other nations have increased their spending and successfully developed
coordinated technology innovation programs while also actively supporting the
commercial development of emerging companies. The recent systemic failure of
global financial institutions has exacerbated the dislocation of America’s
innovation ecosystem by severely curtailing an already diminished pool of risk
capital to fund future innovation.
is not too late to overcome these obstacles, partly because American technology
entrepreneurs remain undeterred in their pursuit of success.
For the full text of my prepared remarks, CLICK HERE.
On March 18th I will be moderating a panel on the
innovation crisis at the third annual IT Security Entrepreneurs Forum at
Stanford with Lesa Mitchell of the Ewing Marion Kauffman Foundation, Desh
Deshpande, founder and Chairman of Sycamore Networks, and Curt Carlson, CEO of SRI
International. For more information
on how to attend this important conference, CLICK HERE.
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