U.S. DEPARTMENT OF STATE /NOVEMBER 2009VOLUME 14 / NUMBER 11

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About This Issue

I

n 1943, the British academic and sinologist
Joseph Needham (1900–1995) and his teamof international collaborators began to produce
a multi-volume work that ranks among the 20th
century’s most significant academic achievements.
Entitled Science and Civilisation in China, it explored
what became known as “The Needham Question”:
Why was China, home by many measures to theworld’s leading civilization, overtaken by the West inscience and technology?
Scholars such as Dan Diner have asked similar
questions about Islamic civilization, also a global
pacesetter in one historical epoch but not today, as the
Arab Human Development Reports document withregard to one predominately Muslim part of the world.
The present or impending decline of the UnitedStates is of course a hardy perennial in the worldof ideas. We hardly lack for new books decrying
American schoolchildren’s relatively poor math andscience test scores, and these titles often then condemn this nation to the fate of Rome, Great Britain, or
really any major power whose influence declined over time.
This issue of eJournal USA explores one nexus of questions at the heart of these discussions:
What is innovation? Can governments and societies encourage innovation? How do the emergence ofsemiconductor-powered computers and Internet-based communication technologies affect the equation?
Our contributors explore these questions from a number of angles, including the influence of
culture, geography, and intellectual property rights on innovation. We also present profiles of successful
innovators from the United States, Vietnam, Venezuela, South Africa, and Belgium.
We hope you will find these essays timely, informative, and even innovative!
											eJournal USA 1— The Editors

U.S. Department of State / NOVEMBER 2009 / Volume 14 / Number 11

http://www.america.gov/publications/ejournalusa.html

Roots of Innovation
People and Places

4 What Is Innovation?
David Nordfors, Co-founder and Executive
Director, VINNOVA-Stanford ResearchCenter of Innovation Journalism
Innovation is invention plus introduction, and it
is increasingly seen as crucial for economies andgovernments alike.
8 Profile: Jeff Bigham
A computer science researcher sees a way to makethe Internet more available to the blind and visually
impaired.
9 Culture and Innovation
Rocco Leonard Martino, Founder andPresident, CyberFone Technologies
Those cultures that allow their people to dream,
innovate, and produce will be the winners in therace for economic independence.
13 Profile: Chi Huynh
A nicked pearl opens a treasure of innovation.
14 The Global Geography of Innovation
G. Pascal Zachary, Journalist, Author, andTeacher
Silicon Valley and other geographic clusters ofinnovation emerge for practical reasons.

18

Profile: Alicia Castillo Holley
Innovators with complementary skills can makethings happen.

19

Four Secrets of Innovation
Alex Soojung-Kim Pang, Research Director,
Institute for the Future
Scientists and businessmen are learning more thanever how to collaborate for innovation.

23

Profile: Rael Lissoos
An innovator combines three good products into a
new service.
Public-Private Collaboration

24

Small-Business Innovation:
A Role for Government
Charles W. Wessner, Directorof Technology, Innovation, andEntrepreneurship, National Academies
A public-private partnership helps small businesses
bring their innovations to market.

26

Innovation Index International
Rankings

eJournal USA 2

28

Government and Innovation
James P. Andrew, Senior Partner, Boston
Consulting Group
Effective governmental policies can have a very
positive impact on domestic companies’ ability toinnovate.

31

Profile: Michael Bremans
A Belgian innovator comes up with a way to make aclean profit.

32

Intellectual Property Rights andInnovation
Michael A. Gollin, Partner, Venable LLP
An effective system for protecting patents,
copyrights, and other intellectual property promotes
innovation by balancing exclusive rights withaccessibility.

35

Additional Resources

eJournal USA 3

People and Places

What Is Innovation?

© AP Images/Heidi Vogt

David Nordfors

More than half of the people in the world use cell phones; this boy in Mali charges his phone off an auto battery.

Innovation is invention plus introduction, and it isincreasingly seen as crucial for economies and governments
alike. Expanding economies no longer produce more of thesame products, but rather ever more new products withadditional value. David Nordfors is co-founder and executive
director of the VINNOVA-Stanford Research Center of
Innovation Journalism at Stanford University.

I

nnovation is today the most important driver of
economic growth. It relies upon a social climate
supporting entrepreneurship within a culture of
economic and intellectual freedom. Wise policy makers
understand the need to encourage this kind of “innovation
ecosystem.”Invention creates something new. Innovation is morethan that: It introduces something new. Innovation isinvention plus introduction. It is not easy to introduce

something new. Anybody who has had a bright idea about
how to improve his or her workplace will know this.
People say they want progress, but they resist change.
Communities and organizations are often moreresistant than the people in them. Even if all individuals inan organization want a change, the organizational culture
might not permit it.
Making innovation happen is a craft and an art;
understanding how it happens is a science. Innovation isgrounded as deeply in psychology and culture as in scienceand technology.
We are becoming better innovators, and the resulting
products, services, and processes play a growing role in
the lives of citizens across a growing swath of the globe.
Large parts of the world have moved into the innovation
economy; the rest are rapidly following.
In a traditional production-oriented economy, growthis driven by producing more of the same. Wealth has been

eJournal USA 4

about growing more wheat and building more traditional
houses and opening more traditional factories this year
than last year. In the innovation economy, growth is about
doing more new things this year than last year. That is afundamental shift, one clearly visible to people around theworld in their daily lives.
Targeting Short-Range Success
The rapid acceptance of the mobile phone illustrates
how innovation works and how it changes our global
culture. The first hand-held mobile phone call was
made in April 1973. The first cell phone networks wererolled out in Sweden and Finland only a decade later.
By the end of 2008, people had more than four billion
cellular subscriptions, according to the International
Telecommunication Union. That is more than half of thetotal world population! Compare that to literacy: The
art of writing was invented many thousands of years ago,
and it was only some decades ago that more than half theworld population became literate. Cell phones have spreada hundred times faster than literacy!
How can change happen so fast? The key lies infocusing on innovation instead of focusing on producing
more of the same.
If mobile phone business competitors were notconstantly racing to take the lead with their next
innovation, cell phones would have remained expensive,
clunky, battery-draining contraptions only for rich people.
Not many people would own them today.
Competition for the next big innovation is breaking
down traditional corporate structures. No longer dosuccessful companies separate research from businessdevelopment. Companies under pressure want to avoid
expensive research that is not buttressed by a businessplan. Investing a lot of money to develop technology that
does not contribute to revenues can bring a company toits knees. Technology development and business must
be done together. Today the technology people and themarketing people work with each other. The traditional
analytical thinking, where each group of experts thinks
within its box and sends the result to the others in theform of a report, can be replaced by “design thinking,”
where different types of experts mix, combining empathy,
creativity, and rationality to meet user needs and drive
business success.
This is increasingly the case with information
technology. Today’s computer, mobile phone, or similar

product is not expected to be on the market for more thana year or two before it is replaced. This is becoming true
even for traditional products with longer lifetimes, as in
the food and paper sectors. According to researchers at the
McKinsey & Company consulting firm, product lifetimes
are today a third of what they were 40 years ago. This too,
reflects the shift from the “more-of-the-same” economy to
the “introduction-of-something-new” economy.
Vision to Reality
While the public imagination often links innovation
to technological advance, innovative techniques havespurred improvements in such diverse fields as microloans, which enable people in developing economies tostart new low-cost businesses, new ways of organizing
companies, and new ways of learning.
The word “innovation” can refer to a novelty — a
new gadget, for example — but it can also refer to theprocess that created the novelty. This might be primarily
commercial — the “process of creating and delivering
new customer value in the market,” as suggested by
Curtis Carlson and Bill Wilmot at the contract research
institute SRI International — or driven in whole or inpart by social needs. Social innovation and commercial
innovation often drive each other. Micro-loans and opensource free software produced by nonprofit communities— for example the operating system Linux or the Firefox
Internet browser — are good examples.
Many people link innovation to the world’s wealthy
economies, but today low-cost innovation is increasing,and this makes it possible for the innovation economy toexpand to nearly every part of the globe. Little money isneeded to create new innovative services on the Internet.
Students at Stanford University started Yahoo! andGoogle with very little money. The big investments cameafter these companies were already up and running. The
threshold for setting up innovative companies in certain
fields, such as Internet services, is low. In principle, there
is enough money in many places around the world to startsuch companies.
As the Internet is spreading and communication is
improving, global markets are becoming more responsive
as well. It has become easier in traditional societies toprompt people to replace traditional tools and methods
with new ones. Innovative inexpensive water pumps, newcost-effective ways of improving traditional agriculture,
new ways of organizing the care of ill people in villages:

eJournal USA 5

Courtesy of SRI International

The People Connection

Doug Engelbart holds up his prototype computer mouse.

These are all important fields of innovation with great
promise at potentially little cost.
Consider California’s Silicon Valley — the mostsuccessful innovation ecosystem in our time, and one
highly dependent upon the cross-pollination of ideas
among its many technological and other innovations.
There, in 1968, Doug Engelbart demonstrated the first
prototype of a modern personal computer system. The
demo featured the first computer mouse the public hadseen. It introduced interactive text, videoconferencing,teleconferencing, e-mail, and hypertext. (The demo
is available on YouTube; search for “the mother of all
demos.”)Engelbart did not call the demo “a new personal
computer system.” Instead it had the peculiar title“a research center for augmenting human intellect.”Engelbart’s device was not about making smartercomputers; it was about making smarter people. What ismore, these personal computers were to be connected toeach other so that people could work together on solving
problems. They would form a collective intelligence that
could solve much more difficult problems than people
could solve without networking their computers. It was awild idea at the time. Few people understood it. With theInternet, cell phones that are small personal computers,
and social-network applications, the vision has today
become reality.

We are coming to understand that innovationand collective intelligence are a pair. An intelligent,creative person can be inventive; collectively, intelligent
communities can be innovative.
But connection alone does not suffice. The key isdissemination of information about how innovation
happens. Journalists can play an important role here.
If they convey to readers a sense of how innovation
happens, our collective understanding of the process may
increase. But if journalists do not themselves understandinnovation, they will misrepresent it in the public
discussion. One likely result would be to discourage
innovators or else encourage them in unconstructive
directions. The VINNOVA-Stanford Research Center of
Innovation Journalism at Stanford University has invitedjournalists and researchers from several countries tocome to Stanford to improve their expertise in covering
innovation. This training will help journalists increase thecollective intelligence around innovation ecosystems intheir home countries.
Innovation requires entrepreneurs, and they in turnneed a supportive environment: an innovation ecosystemof business and finance people, educators, and regulators
who together create a climate within which new andestablished businesses can innovate and thrive. In goodinnovation systems, entrepreneurs with good ideas canfind investors and partners, build their companies, andin some cases grow them from very small concerns tomultinational corporations.
In Silicon Valley, this is everybody’s dream. Innovationis the region’s main industry. In Sweden, another leading
innovation economy, there is even a government agency
dedicated to developing good innovation systems.
Tellingly, it focuses more on strengthening an innovationfriendly environment than on supporting any given
innovation.
Hidden Dangers
In more-of-the-same economies — until now thenorm in most societies — innovation, whether of products
or ideas, is not a desirable vocation. The risk of failure ishigh. It is easy to get into trouble for trying something
new. Many people would rather not try.
Dr. Ignaz Semmelweis, a Hungarian physician,discovered in 1847 that the occurrence of childbed fever

eJournal USA 6

We must bear in mind, then, that there isnothing more difficult and dangerous, ormore doubtful of success, than an attempt
to introduce a new order of things in any
state. For the innovator has for enemies all
those who derived advantages from the oldorder of things, whilst those who expect to bebenefited by the new institutions will be but
lukewarm defenders. This indifference arises
in part from fear of their adversaries who
were favored by the existing laws, and partly
from the incredulity of men who have nofaith in anything new that is not the result ofwell-established experience. Hence it is that,whenever the opponents of the new order ofthings have the opportunity to attack it, they
will do it with the zeal of partisans, whilst
the others defend it but feebly, so that it isdangerous to rely upon the latter.
Clinging to old norms and habits that stifle
innovation is no longer a recipe for political or economic
success. The society that censors the free flow of
information or prevents people — men or women, oldor young — from contributing fully to civic, social, andeconomic life is not using its full ability to compete in the
global innovation economy. Better, many understand, toencourage cultures and systems that embrace and masterinnovation. South Korea, India, and Israel are among the© AP Images/Jeff Taylor

was drastically reduced if doctors delivering babies washedtheir hands. Semmelweis managed to all but eradicate
childbed fever in clinics where previously more than 1
in 10 women had died during childbirth; he produced
statistics proving beyond doubt that hand washing had
saved their lives. But the medical community rejected his
ideas; because this discovery came before Louis Pasteur
proved the existence of germs, there were no theories
supporting Semmelweis’s results. Some doctors were
offended to be told to wash their hands. Semmelweis
managed to antagonize his colleagues, who ridiculed him.
Semmelweis lost his job and social stature.
The danger of being an innovator in the more-of-thesame economy applies also to political leaders. In his 1513
book The Prince, Nicolo Machiavelli described methods
that an aspiring prince can use to acquire the throne or an
existing prince can use to maintain his reign. Here is what
he had to say about innovators:

Virginia inventor Joe T. May displays one of his innovations, a device thatstarts his auto’s engine when his alarm clock goes off.

growing number of economies that are succeeding withthis strategy.
Mastering Change
Shifting from a traditional to an innovation economy
requires real social change, openness to new best practices,
and a commitment to developing the diverse skills
required to produce a society of innovators.
In the past, schools have taught children how tosolve known problems with known methods, a processthat encourages them to reason in established ways. Now
schools need instead to encourage children to masterchange, discover new problems, and devise new solutions.
Instead of encouraging uniformity, the innovation
economy encourages diversity and creativity. Banks andinvestors must redefine risk to appraise more accurately
the path-breaking, innovative project. Public decision
makers who focus on regulating businesses producing
more of the same need to refocus on how to reap greater
benefits by letting the new continuously replace the old.
It is all about looking at the next big thing instead of
focusing on more of the same.
Improving innovation is about increasing our creativecollective intelligence. It is a grand opportunity for all
decision makers, be they individual entrepreneurs building
businesses or political leaders running countries. n
The opinions expressed in this article do not necessarily reflect the views orpolicies of the U.S. government.

eJournal USA 7

Profile in Innovation

Jeff Bigham
A computer science researcher sees a way to make theInternet more available to the blind and visually
impaired.

F

Courtesy of Jeff Bighamor the 38
million people
around theworld who have little
or no vision, using
the Internet is a nearimpossible chore. The
best option is a “screen
reader” — softwarethat reads aloud thetext on the screen
through a computer’s
Jeff Bigham
audio speakers. But
screen readers are expensive, and many public libraries anduniversities do not want to pay the more than $1,000 tohave them installed. This means that most blind people
miss out on the joys and opportunities of the Internet.
Jeff Bigham wants to change that. Bigham, now an
assistant professor of computer science at the Universityof Rochester in New York State, has created a free,easy-to-install screen-reader application for the blind.
A blind person logs onto Bigham’s Web site — called
WebAnywhere — and from that point forward all Web
pages are read aloud. Users can tab through charts, selectforms, or instruct the service to read a page from top tobottom.
The crucial part of Bigham’s innovation is the quick
load time between the moment a user requests to hear acertain page element and when the audio actually starts to
play.

“The potential is there for big lag times between
when the user presses a button and gets speech back,”
Bigham told MIT’s Technology Review magazine. “Prettymuch everyone thought that this latency problem would
kill us.” But it hasn’t.
Bigham created an algorithm that predicts whichelements of a page a user is most likely to want to hear.
For example, after loading a news Web page such as
nytimes.com, the system might predict that the user will
read the top headline and news story. It would therefore
preemptively load audio for that portion of the Web
page. When the user eventually selects the top headline,
the audio plays instantly. A seamless, swift Web-browsing
experience for the blind replaces one that was choppy andfull of delays.
Bigham wants to change the world; he doesn’t careabout profit. That’s why he has kept his program open
source, which means that anyone -– yes, anyone — canedit the application to fix bugs and make it better.
Thanks to Bigham’s initial innovation and thesubsequent contributions of others, it’s not hard to see abright Web-surfing future for the blind.
— Ben Casnocha, author of My Start-Up Life: Whata (Very) Young CEO Learned on His Journey
Through Silicon Valley

The opinions expressed in this article do not necessarily reflect the views orpolicies of the U.S. government.

eJournal USA 8

Culture and Innovation© AP Images/Kamran Jebreili

Rocco Leonard Martino

Visitors gather around a model of an artificial island for tourists in Dubai, one place in the Gulf region that extols innovation.

Those cultures that allow their people to dream, innovate,
and produce will be the winners in the race for economic
independence. Rocco Martino is founder and president ofCyberFone Technologies and senior fellow at the Foreign
Policy Research Institute in Philadelphia, Pennsylvania.

Until the Industrial Revolution, real income forindividuals and nations was essentially flat. Overmuch of the globe, the living standard of, say, a
farmer in 1750 would not differ greatly from that of his
great-grandparent. Since the start of the 19th century,in some parts of the world this has changed. Growthand income for some nations has risen dramatically, but

for others it is still flat. Why? One answer is that newtechnologies made possible the creation, accumulation,and dissemination of ever greater wealth. A deeper
answer is that some cultures embraced knowledge andchange, and thus emerged as the fertile soil in which
innovators could take risks, pursue their dreams, and, notcoincidentally, enrich their fellow citizens. Are the nations
that lag bogged down by tradition, stultifying central
control, or a culture of bureaucratic impediments?
The United States has long been a leader in bothinnovation and its application to wealth generation.
One even might argue that the mindset was part of thenation’s DNA. One of its founders, Benjamin Franklin,
alone was responsible for inventing the lightning rod, theeJournal USA 9© AP Images

Innovation took a leap in 1946 with creation of a computer, called the ENIAC, at the University of Pennsylvania.

Franklin stove, bifocal glasses, and the flexible urinary
catheter. (Although Franklin chose not to patent theseinventions, his many other entrepreneurial activities
amply demonstrate his proclivity for making money!)In recent years, Pacific Rim economies including Hong
Kong, Singapore, Taiwan, South Korea, and Japan havedemonstrated similar skills, even as China and India
develop significant earning capability and bid for roles as
global economic leaders.
Member nations of the Organization of Petroleum
Exporting Countries (OPEC) earn vast returns for theiroil assets but mostly have neither displayed a great capacity
for innovation nor participated greatly in the global
economic expansion. Arguably these nations’ significant
oil-derived per capita income dampens incentive toinvest in new ventures or to encourage innovation.
Some regional governments seem aware of the problem,
including Dubai, with its heavy investments in creating afinancial and recreational infrastructure, and Saudi Arabia,
whose King Saud University now has 70,000 students.
In Latin America, Brazil has emerged as a leader,making significant strides in applying modern innovativetechniques internally and also for export.
The genius for innovation and its productive
application to problem solving and wealth generation
was not a U.S. invention, and its spread will continue far
beyond the nations mentioned here. Everywhere, though,the emergence of innovation-friendly climates of opinion,
habits, and ideas will be a challenge of culture, individual
initiative, and government support for new ideas.
Affecting Culture
How does culture affect innovation, and vice versa?
Culture and innovation are linked. Innovation
cannot occur in a culture that does not, cannot, or will
not support it; but once created, an innovation affects
the culture, and the two grow together. History is full of
examples that demonstrate this. In today’s Cyber Age ofpervasive communication and information technology,
this impact is pronounced.
The emergence of the smart phone — the handheld
device coupling the cell phone with computing capabilities
and Internet access — has created tools for modifying

eJournal USA 10

© Reuters/Ali Jarekji

public opinion, speeding trends, and intensifying culture
shifts. Reading habits have shifted from newspapers
and books to short bursts of instant facts or opinions.
Discussions and letters have been heavily replaced, initiallyby e-mail and now by Twitter and other micro-blogging
sites. Cyberculture has dramatically shortened the timefrom knowledge to decision and shortened dramaticallythe cycle in which knowledge is recycled to create still
more knowledge. Instant information, from anywhere toanyone, has now become a vehicle for instant impact on
opinion and motivation — and a potential opening for
manipulation. This acceleration of “knowing” can impact
education, public opinion, entertainment, mores, andcultural development.
In much of the world, cultures originally developed
among peoples dedicated primarily to feeding themselves,to the rhythms of agrarian life. Today culture often isshaped by the unique atmosphere, ways, mores, andtraditions of a group of people connected in somefashion. That connection can be education level, religious
beliefs, family linkages, ethnicity, geographic location,or nationality. And culture also is a driving force behindpersonal or group creativity.
Innovation is the art of creating something
new, whether a poem, a writing, a flowering plant,a mathematical theorem, a medical advance, or an
invention. Most recently there has been great focus ontechnology, especially information technology, as a major
catalyst for innovation. This is due in large measure to
the remarkable advances in global wealth in the past
six decades tracing back to the creation of the generalpurpose electronic computer in 1946. Linked with majoradvances in communication capability and in visualization
techniques, the computer era has spawned a significant
growth of wealth and made possible the birth of new
industries, even in locations with no previous heavyindustry capability. Examples are the microchip industriesof Singapore and Taiwan, and the software programming
developments in Ireland and the Philippines. Similar
developments have enlarged the economies of nations withexisting heavy-industry capability, such as China, India,
and Japan.
These developments built upon each other,each innovation leading logically to the next, and all
depending upon a culture that embraced knowledge andchange. Attempts have been made for centuries to findways to compute more easily and quickly. Mechanicaland electrical machines built within the industrial

King Saud University seeks to foster a culture of innovation.

capabilities of their time preceded the computer. It was
only the rise in electronic-tube stability and knowledge of
its use that made it possible to conceive and build the firstelectronic computer. Computers made satellites possible,
leading in turn to the communication revolution. And thesame knowledge and use of circuits led to television andvisualization techniques, mainly digital, that complete theinformation triad of power that has created today’s Cyber
Age.
Nor was it a coincidence that so many of the events
that led to the modern personal computer emerged in
the United States in the 1940s and the following decades,with a concentration in California’s Silicon Valley region.
There, the prevailing culture brought together people withideas and devices that could embody those ideas into aworking product.
Today we live in what New York Times columnist
Thomas Friedman calls a “flat world.” If not yet
completely flat, ours certainly is a flatter world, one where
instant communication and availability of information
bring innovation-friendly culture across nationalboundaries and empower ever larger numbers of world
citizens to create and to innovate.

eJournal USA 11

Fire in the Belly
Even in the Silicon Valley, India’s Bangalore region, or
any of the other world centers of innovation, not everyone
is an innovator. Innovators are individuals with dreams
and the strength of character to bring their dreams tofruition. This “fire in the belly” — a deep-seated personal
drive and ambition to accomplish and achieve — cannot
be created, but it can be nurtured, fostered, encouraged,
whether in technology, medicine, the arts, or agriculture.
The major steps in building the cultural climate forinnovation include expanding educational opportunities
and facilities, providing financial support for innovators,
eliminating bureaucratic impediments to recognitionof an innovation, and spending money to publicize an
innovative product.
Consider a musical composition. To assure its
success there must be educational faculties available totrain potential composers in music, financial support
for a composer to create the piece, a legal infrastructure
providing copyright protection against illegal copying, andfunding to ensure performance of the music.
Another encouraging development is that many newtechnologies lower the barriers to further innovation, avirtuous circle that holds the promise of ushering in amore global culture of innovation. Before the emergenceof cell phones and mobile smart phones, long-distancecommunication required extensive and expensive
infrastructure, beyond the ability of many poor nations
to afford. But cell phone towers are much simpler andcheaper to build than wired networks. As a result, millionsof potential innovators who might otherwise have been
isolated and bypassed are empowered to participate in thegrowing community of innovators.
The Internet
The emergence of the Internet, together withaffordable cell phone or other access in a growing part of
the world, is revolutionizing cultural development. This
does not mean that Africans, Indians, or Chinese are
becoming more like Europeans, Japanese, or Americans.
It means that more global citizens can communicate andthat one’s location is gradually becoming a less importantfactor in one’s ability to innovate.
The current cell phone population is more than half
the world population, and closing in on the total figure.
The cell phone is rapidly becoming the universal meansof communication, entertainment, source of information,and even education. Data stored in countless systems anddata banks around the world can be accessed and usedanywhere, anytime, by anyone. This dramatic shift puts
the resources of the world at everyone’s fingertips.
While earlier technologies such as radio
communicated across national boundaries — consider theCold War battles between western shortwave broadcasters
and Soviet jamming signals — the information flow is far
greater today.
Attempts to control the Internet or cellular traffic canbe only partially successful. Disclosure of information,
sharing of ideas, impetus for creation, and successful
innovation are bound to expand.
Nor should we link all innovation to technologicaladvance. Pioneers in music, literature, and dance, forexample, always will press the frontiers of their respectivearts. But all can benefit from technology as well. Many is
the composer who creates sound using special software ona personal computer. And technology aids immeasurably
in the dissemination, use, and appreciation of theircreations. No longer need a band rely upon a recordinglabel to distribute its music when YouTube or theequivalent is but a click away.
Culture and innovation, then, feed upon each otherand expand jointly together. On a global basis, there areno limits to what is possible, save one: An innovator musthave the motivation, courage, and fortitude to prevail.
Countries that encourage these individuals will advanceboth their culture and their innovation potential. Thosethat do not will lag behind.
Those nations that permit the individual to dream,
innovate, and produce will gain stature and influencein the 21st century. Overcoming hidebound traditions(although certainly not all traditions), restrictive
government, and unnecessary bureaucratic impediments
will be major factors in this race. A culture rewarding
ingenuity and success will catalyze a new and international
wave of economic growth. Globally, a tsunami is buildingthat will sweep the unprepared before it. n
See also Richard Florida, “The Rise of the Creative Class,” in the May 2008
eJournal USA, “Venture Capital Meets Hi-Tech” [http://www.america.
gov/st/econ-english/2008/May/20080513101454jmnamdeirf0.696071
8.html]The opinions expressed in this article do not necessarily reflect the views orpolicies of the U.S. government.

eJournal USA 12

Profile in Innovation

Chi Huynh
A nicked pearl opens a treasure of innovation.

A

Courtesy of Chi Huynh

fter the fall of
Saigon in 1975,
Chi Huynh
had a dream: leave hishomeland of Vietnam
and create a new life
in California. A few
years later, he packed
up his possessions anddid it. The journey to
California wasn’t easy. A
harrowing boat ride anda stint as a refugee in
Thailand were just some
Chi Huynhof the travails. Finallyreaching the shores of California marked a “spiritual
turning point” for Huynh: Having seen much ugliness in
his life, from that day forward he wanted to see and create
beauty each and every day.
Jewelry making, a craft his father had mastered in
Vietnam, seemed like the perfect way to live out thisvision. Huynh called his jewelry enterprise Galetea andbased it in Los Angeles County.
In early 2000, Huynh somewhat accidentally became
an innovator. After nicking a traditional pearl during thecarving process and exposing its mother-of-pearl center, “I
thought to myself, ‘What would happen if I grew a pearl
using gemstone beads to let the color show through?’”
he says. Doing just that would lead to his signature
innovation — the Mercy Pearl, which is the name of thepearl cultured with a gemstone bead technique. It tooktime for Huynh to fully develop his carve-by-hand Mercy
Pearl technique, but it is now considered one of the mostsignificant variations in pearl farming since the early partof the 20th century, when pearls were first cultured inJapan. And he secured a patent on the Mercy Pearl.
In 2005, to grow his operation and reconnect withhis roots, Huynh set up a pearl farm in his native Vietnam
to harvest the Mercy Pearl in the country’s coastal waters.
The oysters are first enucleated with perfectly round
gemstone beads such as turquoise, amethyst, garnet,
citrine, and opal, then left to grow for almost a year to
obtain a luxurious nacre, or exterior coating. His farmenables more production and therefore an ultimately wider
dissemination of his innovative pearl technique.
Huynh’s story shines with perseverance: from stranded
child in war-torn Vietnam to successful American jeweler.
He had a vision to bring more beauty into the world, andhe has worked tirelessly to make it happen. His story also
reveals the innovator’s mindset. Instead of just making
the last version of something a little bit better, Huynh
believes true innovators blaze new trails: “No one will takeyou seriously unless you create your own ground. This is
the difference between a good concept and a great one,
between an OK design and one that is transcendent.”— Ben Casnocha, author of My Start-Up Life: Whata (Very) Young CEO Learned on His Journey
Through Silicon Valley

The opinions expressed in this article do not necessarily reflect the views orpolicies of the U.S. government.

eJournal USA 13

The Global Geography of Innovation© AP Images

G. Pascal Zachary

Chip maker Intel Corporation in Santa Clara, California, is one of the prominent players in the Silicon Valley cluster.

Silicon Valley and other geographic clusters of innovation
emerge for practical reasons. G. Pascal Zachary is a journalist,
author, and teacher who has published articles for the WallStreet Journal and the New York Times.

W

hen a prominent financier in northern
California raised an astonishing $1 billion in
the summer of 2009 for investments in risky“green technologies,” Silicon Valley reminded the world
that, in the arena of innovation at least, geography is
destiny.
Vinod Khosla, the venture capitalist who raised themoney, embodies the critical role played by location ininventiveness and technological change. Thirty years ago,
Khosla moved from his native India to attend Stanford

University in California, where he studied business.
On graduation in 1981, he helped found an influential
computer manufacturer, Sun Microsystems. More recently,
Khosla has embraced the search for alternative energy,
applying the skills and connections of his adopted home
to a new set of problems.
Certainly other parts of the world are pursuinginnovations in alternative energy, ensuring that noone place will gain a monopoly over these emerging
technologies. Yet the ability of Silicon Valley to expand
into the development of visionary energy technologies isa reminder of the power of location: Innovations don’t
occur just anywhere, but arise most often from geographic
clusters consisting of investors, major research universities,
existing technology companies, and many engineers andscientists willing to try new things.

eJournal USA 14

“The goal there is very much to take risks that
nobody else will take,” Khosla says of his new fund.
Risk taking and reinvention are central to Silicon
Valley. For nearly a half century, the region has beenin the forefront of innovation, first in computing andelectronics, and then in software, the Internet, media, andcommunications. Every time Silicon Valley seemed readyto fade, surpassed by innovation centers elsewhere in theworld, a fresh wave of breakthroughs helped the region
maintain its top position globally.
In the 1990s, biotechnology blossomed in northern
California, partly because of the role computers playin molecular engineering and pharmaceutical research.
Early this decade, the rise of Google made the region theworld leader in search engines. More recently, Silicon
Valley spawned social-media companies such as Twitterand Facebook and open-source content movements
such as Wikipedia. And the iPod and iPhone, designed
and engineered by Apple in its Silicon Valley labs, have
revolutionized consumer electronics worldwide.
The breakthroughs produced by innovators innorthern California explain why the region receives
as much as 40 percent of the risk capital invested in
the entire United States. Include the Los Angeles andSan Diego areas, and California receives nearly half ofall venture capital some years. Getting all this money
reinforces the supremacy of the region, partly becausemoney acts as a magnet for talent from around the world.
Connecting Clusters
Even when the technical talent returns home, the pullof geography exerts a strong influence. AnnaLee Saxenian,an expert on regional innovation at the University ofCalifornia, Berkeley, has shown that innovators caneffectively shuttle back and forth between California
and other innovation clusters, some as far away as India
and Taiwan. What Saxenian calls the “new Argonauts”
essentially take advantage of a geographic hierarchy
connecting lower-cost production in Asia with highervalue activities in the United States and Europe.
Geographic clustering has a self-reinforcing logic.
Gain an edge, and it is surprisingly hard to lose it. British
historian Peter Hall has chronicled the rise of great cities
in world history and attributes their persistence, in part,to the benefits of being the first to establish dominanceand inward migration of talent. Just as Manchester Unitedor Real Madrid keep assembling top football teams year
after year, so can cities or regional clusters maintain anedge. Top talent wants to join a winner, after all, and by sodoing, leading cities or organizations stay strong.
The implication is clear: Investors look at the addressof an innovator as much as at his or her technology andrésumé. A Brazilian with a better idea for electric-car
batteries might be wise to include offices in Japan andGermany in his business plan. An Indian train designer
should budget for frequent trips to Europe. A brilliant
designer of a new microprocessor, who insists on living
in Russia, is unlikely to get funding at all; if he moves to
Silicon Valley, his cash register may quickly ring.
Fortunately for the people of the world, innovation
clusters are fairly democratically distributed. France has
important clusters in aviation, train technology, medicine,and nuclear power. Germany has been a world leader in
automotive technology for 100 years. Bangalore, India,
is a center for new software. Korea leads in design of“smart” electronic devices, from mobile phones to washingmachines that sense the size of loads and the minimum
amount of water to use. Brazil’s engineers excel indesigning commuter airplanes. Israel leads in security forcomputer networks.
Historical legacy sometimes explains why a certain
geography commands a decisive advantage in a specificfield. Nearly 20 years after the breakup of the Soviet
Union and the end of the Cold War, Russia remains theworld leader in launch technology for space travel and thecenter for the “space tourism” industry. Even the UnitedStates’ National Aeronautics and Space Administration
sometimes relies on Russian rockets to lift Americans into
space.
Government also plays an important role in theinnovation map. The French government has invested
heavily in both train and nuclear-energy technology
and, through centralized decisions, has reduced risks
and removed uncertainties for innovators, improving
their global competitiveness. U.S. spending on advanced
electronics, often for military applications, spurredcivilian innovators and partly explains why Intel has
held for decades the No. 1 position among makers of
microprocessors. And government policies that favored
domestic producers created the environment for industrial
innovations in India and aviation innovations in Brazil.

eJournal USA 15

© AP Images

President Lee Myung-bak in Daejeon, South Korea, examines a prototype vehicle powered by electric power strips in the roadway.

Not Forever
While location confers important advantages toinnovations, a favorable geography is no guarantee against
failure. “What makes a particular city, at a particulartime, suddenly become immensely creative, exceptionallyinnovative?” historian Hall asks in Cities in Civilization,
his seminal study. “Why should this spirit flower for a
few years, generally a decade or two at most, and thendisappear as suddenly as it came?”
When a city or region loses its technological edge,
the reasons may become clear only in retrospect. The
decline of Detroit’s automotive supremacy can be traced
to technical, economic, and business decisions stretchingback decades and even now poorly comprehended.
Regaining lost supremacy can be very difficult, partly
because new geographic centers of technological excellence
can and do emerge on the world stage, seemingly out of
nowhere.
Perhaps the most dramatic example in recent years is

the rise of Helsinki, Finland, as a world center for mobile
telephone technology. The success of a single company,
Nokia, elevated Finland to the front ranks of the field andturned northern Europe, notably nearby Stockholm and
Copenhagen, into a critical mobile cluster. In the 1990s,
virtually every mobile innovator in the world opened
offices in the cluster, drawing on local talent. The cluster
also gave rise to important new telecommunications
players such as Skype.
The success of Nokia — a very large innovative
company in a very small country —- has inspired manyother small countries and marginalized cities to dream offinding their own Nokias. Yet governments face difficulties
in creating clusters from scratch. The cost of overtaking
another region can be high because necessary universities
are expensive to grow and essential risk capital may be
unavailable.
In the 1970s and 1980s, dozens of cities aroundthe world tried to grow their own Silicon Valleys. Mostof these efforts ended up being exercises in industrial

eJournal USA 16

© AFP/Getty Images

given rise to one of the world’s
most innovative money-transfer
technologies, called M-PESA. Createdby the country’s dominant mobile
phone carrier, Safaricom, M-PESA
combines the technology underlying
text-messaging with the company’s
vast network of retailers who sell“units” to pay-as-you-go customers.
Through M-PESA, people send
electronic money using their phones;
recipients collect actual cash fromretailers who deduct units from therecipients’ phone.
Partly because of the successof M-PESA, Nairobi is now home
to a cluster of mobile innovators.
Google, Microsoft, and Nokia employ
A man in Nairobi, Kenya, sends money through the innovative cell phone service M-PESA.
researchers in the city, and newcompanies are forming around writing
applications for mobile phones and the Internet.
recruitment: enticing technology companies to locate
Nairobi is not yet in the class of Bangalore or
factories or even research facilities in certain places.
Shanghai, two cities of the developing world that support
Sometimes, recruitment can produce an innovation
thriving communities of innovators. Yet the fact thatcluster over time. The island nation of Singapore, forinnovation can occur even in Africa underscores a major
instance, is today the world’s leader in small-computer
shift toward what business consultant Henry Chesbroughstorage devices, after initially serving as a location for
calls “open innovation.” Knowledge spreads more quickly
low-cost manufacturers of the devices. Yet Ireland,
than ever before, and the ability of also-ran regions toanother island that attracted a large number of electronics
catch up to, or even leapfrog, traditional leaders surely has
manufacturers partly because Irish wages were low bygrown. Geography still matters greatly, but clearly not as
European standards, hasn’t given birth to an innovation.
much as before. n
Recycling Skills
Another role for government or civic associations is totake know-how and skills, which are often place specific,
and apply them to new opportunities, setting the stage fora region to reinvent itself technologically. One of Silicon
Valley’s strengths, for instance, is finding ways to recycle
older sets of technical skills or cultural norms: The electric
car and sustainable energy industries are in Silicon Valley
because people there have a lot of experience in battery
design (because of the need for batteries in computers)
and computer management of electricity grids.
The private sector remains crucial, even in places
where the potential for achieving innovation leadership
seems low. Consider the case of Kenya, which has

See also Ashlee Vance, “Not Just Semiconductors: Silicon Valley and the
Culture of Innovation,” in the May 2008 eJournal USA, “Venture Capital
Meets Hi-Tech” [http://www.america.gov/st/econ-english/2008/May/200
80512164429jmnamdeirf0.4961206.html]

The opinions expressed in this article do not necessarily reflect the views orpolicies of the U.S. government.

eJournal USA 17

Profile in Innovation

Alicia Castillo Holley
Innovators with complementary skills can make things
happen.

“I
Courtesy of Alicia Castillo Holley

f you want to go
fast, go alone; if
you want to go far,go with others,” says
an African proverb. If
there’s one thing many
innovators have incommon, it’s that they
teamed with others inorder to achieve their
dreams. Innovators
seek help of all kinds:
Alicia Castillo Holleyemotional, financial,and intellectual. They turn to partners, investors, andmentors to ask questions such as: What’s the best way
to make this product work? How can I raise money tofurther develop my idea? How do I balance my familyneeds with my research or entrepreneurship?
They turn to people like Alicia Castillo Holley.
Born in Venezuela, Castillo Holley has spent her life
co-founding nine companies and consulting withinformation technology and biotech companies in Latin
America. As a consultant, she offers mentorship, earlyfinancing, and connections.
One early client, Directory Systems, demanded
Castillo Holley’s full range of innovation-advisory
skills. Directory Systems was a company that matchedcompanies holding an excess supply of mining parts andmaterials with companies in need of such materials. Realtime inventory tracking made this a valuable matchmaking
service in the mining parts industry.

The idea was solid, but a good idea is not enough.
The innovator needs a plan to execute it successfully.
Directory Systems hired Castillo Holley to put in placea strategy, hire lawyers in Chile to expand the Latin
America operation, and build a local prototype of thematchmaking product. She did all that and, eventually,
Directory Systems was bought by a large American
medical company.
“I estimate that my involvement saved the company[Directory Systems] two to four years of work and aroundhalf a million dollars,” Castillo Holley says.
Castillo Holley succeeded because she complemented
the founders’ skill sets. They were passionate about themining industry and supply chain databases. She waspassionate about making certain business processes more
efficient and brought to bear specific Latin America
expertise the founders lacked.
To make an innovation work, oftentimes you haveto recruit the help of outsiders whose experiences andpassions complement your own. Castillo Holley says thatwhen she works with innovators, she first tries to identify
what they are passionate about. She encourages innovators
to focus on those passions and then surround themselveswith people who can help with everything else.
— Ben Casnocha, author of My Start-Up Life: Whata (Very) Young CEO Learned on His Journey
Through Silicon Valley

The opinions expressed in this article do not necessarily reflect the views orpolicies of the U.S. government.

eJournal USA 18

Four Secrets of Innovation© AP Images/John PendgraftAlex Soojung-Kim Pang

Scientist Stacey Reed works in Florida for PetroAlgae, which is taking to market technology to harvest oil from algae.

Scientists and business people are learning more than ever
how to collaborate for innovation. Alex Soojung-Kim Pangis research director at the Institute for the Future, associate
fellow at the Saïd Business School of Oxford University, andvisiting scholar at Stanford University’s history and philosophyof science and technology program.

In today’s innovation-obsessed, knowledge-intensive
global economy, it might come as a surprise that formost of their long histories, science and businesshave had almost nothing to do with each other. Had
you suggested to a silversmith working in ancient
China, a captain plying the spice trade during the Ageof Exploration, or a Quaker brewer in 18th-century
Philadelphia that science could improve commerce, hewould have looked at you as if you were crazy. Even today,

describing the relationship between science and business— and figuring out how science and industrial policy canbe designed to work to the benefit of both parties — is achallenge.
The task is made difficult by two things. First, bothscience and business are moving targets, so what works
for one may be inappropriate for the other: Vast corporate
research and development (R&D) laboratories thatdeliver incremental improvements in mature industries
are likely to sink in fast-moving emerging markets.
Second, scientific ideas and talent don’t work like othereconomic inputs: They’re hard to control and monopolize.
Consequently, the connections between science andindustry have been hard to characterize, and the economic
benefits of science harder to quantify than one might
expect.
While there are plenty of examples of scientific savantseJournal USA 19

© AP Images

made it possible for small start-ups to do cutting-edge
inventing things with commercial benefit — Galileo’s
research, and turned science into a disruptive businesstelescope and Benjamin Franklin’s lightning rod are
examples — science contributed little to business until the force beyond the control of either corporate strategy or
government policy. Examples such as PARC suggest thatbirth of the chemical and electrical industries in the 19th
companies would be better off supporting narrower,
century. These were the first fields in which scientists,
guided by the latest theories and experiments, could make applied projects than sponsoring open-ended research thatmight ultimately benefit competitors. And what’s true formore substantive contributions than craftsmen working
companies is true for countries, too: China spends far lessthrough rules of thumb or trial and error. By century’s
on research and development than the United States, but
end, a few companies — DuPont, AEG, General ElectricAmerican multinationals can’t build R&D labs in China— had created in-house research and development labs to
support new product development and solve the problems fast enough.
So we seem to be entering a new age in which science
encountered by ever-growing technological systems.
is more important for
The development
innovation than ever, butof penicillin, radar, jet
is more unpredictable andaircraft, and the atomic
harder to benefit from.
bomb during World War
In an age that values
II conclusively showed
innovation, companies
that science could be
and countries have aharnessed for competitive
harder time than everadvantage. After theencouraging and profiting
war, most big companies
from science.
created R&D labs; some,But does that mean
like the Bell Labs system,that science policy is now
employed thousands of
impossible? Certainly not,people.
and successful regions andBut even incountries have learned
this golden age ofTesla Motors workers assemble an electric-motor Roadster in Silicon Valley, aplace with long experience in battery design.
several secrets.
corporate research anddevelopment, it wasn’t
Cultural Considerations
always clear how science helped the bottom line. Labs
needed a measure of autonomy to do good research,but it was always difficult to bring discoveries back into
The first and biggest secret is that there is no simple
product lines. In some famous cases, companies sponsored linear relationship between science and business. The
paradigm-shattering research but couldn’t cash in: Xerox’s
idea that discoveries in pure science inevitably drive
Palo Alto Research Center (PARC) developed the firstadvances in applied science that lead to new technologies
personal computers, but after Xerox couldn’t figure out
and business is wrong. Moving ideas from the laboratory
what to do with them, many of PARC’s key researchers
to the living room is not a mechanical process; it’s amigrated to Apple Computer and its Macintosh project.
human one. It requires translators and intermediaries(To its credit, Xerox pounced on laser printing, developed
who can help product developers and companies seeat the same time at PARC, and made billions of dollars off the commercial potential of new ideas. It often requires
the technology.)
investors and entrepreneurs who can form organizations toIndeed, the personal computer helped drive a new
support cutting-edge research and product development.
era in both science and business innovation. Along
And it requires companies able to manufacture, distribute,with the Internet, cheap sensors, open-source software,and market new products. Many countries have invested
microfluidics used in inexpensive “lab on a chip” systems,
in universities and basic research, expecting some direct
and other technologies, the personal computer has
payoff; in fact, policy makers have to think in terms ofdriven down the cost of high-performance technology,
building infrastructures and cultures.

eJournal USA 20

© AP Images

Brazil’s President Luiz Inacio Lula, at a Petrobras plant in Rio de Janeiro, holds a sample of biodiesel, a product of science and commerce.

Well-built innovation cultures don’t just support
innovation; they give it roots. This is the second secret:
While scientific knowledge may be mobile, science-driven
business is often firmly rooted in a rich matrix of local
culture and craft skill. The smartest regions aren’t justtrying to create world-class centers for nanotechnology
or alternative energy or quantum computing; not only
can such ventures be outrageously expensive, but researchgroups organized around superstar scientists can moveaway when the next great offer comes along. Instead of
pursuing a generic model of greatness, savvy policy makers
are making more targeted bets that link cutting-edge
research with local skills.
Denmark, for example, is emerging as a leading centerfor pervasive computing. Why? Pervasive computing —which studies how computers can be made more usefulby being embedded in everyday objects — operates at
the intersection of electronics, software, psychology, andergonomics. This is a field that requires deep knowledgeof how people use technologies, and Danish scientists havefound that knowledge in the country’s world-class designcommunity.
Likewise, Silicon Valley is reinventing itself as a centerof alternative energy by building on its long experiencein battery design. It’s unsexy, but the knowledge required
to make laptops run half an hour longer gives electric
car start-up Tesla Motors a decisive advantage. For policy
makers, this suggests that it is essential to promoteindustries that draw on existing skills. Not only will thismake new companies more distinctive and harder to steal,but it can also benefit existing industries.
Beyond the Laboratory
The third secret is that translating scientificdiscoveries into products is a unique talent. Science andeJournal USA 21

business are pretty different enterprises, with different
skills and incentives. If they’re going to work together
successfully, each needs its independence. A good scientist
who is brilliant at putting together grants and researchgroups won’t automatically do well in the marketplace. For
one thing, the mental drive necessary to work for years
on intractable problems differs from the cognitive skills
necessary to build a company.
But too often we fail to recognize that new discoveries
don’t easily translate into new products. For example,
successful “green-tech” researchers are discovering thatcreating a brilliant new wind turbine design or discoveringa super-efficient photovoltaic material won’t change theworld unless you figure out how to fit these discoveries
into existing utility infrastructures, satisfy the concernsof safety regulators, drive manufacturing costs down,
and convince consumers that the pain of switching
technologies will be worth it. This kind of translational,
systems-building activity is a talent of its own, and it
requires people who can move between the worlds ofscience and business, identify opportunities, and build
networks that turn ideas into innovative technologies.
The fourth secret is that the interconnections between
science and business are growing. Until recently, sciencehas had a big impact on manufacturing and productdevelopment, but its effect on fields such as humanresources has been spottier. Now it’s starting to makeserious inroads in new areas. New tools in neuroscience— particularly brain scanning technology such asfunctional magnetic resonance imaging (fMRI) — areallowing us to see the brain as it makes decisions, looks atadvertisements, or responds to other stimuli.

The vast quantities of data generated by user activity
on Web sites such as Amazon.com are allowing scientists
to more accurately model crowd behavior and taste.
Wall Street has seen an influx of physicists and advanced
mathematicians applying arcane scientific theories tomodel financial risk. The development of new climate
models and accounting tools for assessing the costs andbenefits of sustainability programs is allowing companies
to better assess how going green will affect their bottom
line.
Finally, a few businesses are developing innovative
processes based on the way science works. The openinnovation movement, with its emphasis on sharing core
intellectual resources, encouraging collaboration between
far-flung partners, and informally rewarding contributors,
looks a lot like a scientific community.
A Complex Relationship
So the challenge for companies and countries is toinvest in businesses that combine cutting-edge science
with local cultural resources; to build links between
science and business, while letting each flourish; andto take advantage of emerging sciences that can help
industries better understand human behavior, see thelong-term impact of policy and strategy, and develop new
business processes.
The relationship between science and business wasnever simple. Today it’s becoming more complex andmultifaceted, and in the process more profitable — if you
know its secrets. n
The opinions expressed in this article do not necessarily reflect the views orpolicies of the U.S. government.

eJournal USA 22

Profile in Innovation

Rael Lissoos
An innovator combines three good products into a
new service.

S

Courtesy of Shuttleworth Foundation

ometimes
innovation
sprouts from the
combination of several
existing technologies.
Working together, they
can form something
new where the sum
is greater than theindividual parts.
Rael Lissoos madea mark on his native
South Africa taking
this very approach.
Rael Lissoos
He produced a lowcost telecom network by combining three independentpieces of innovation: cheap Wi-Fi routers, open-source
software that connects routers to form a meshed network(extending the range of single networks), and Wi-Fi phonehandsets (phones that can place calls if connected to a
Wi-Fi connection).
Lissoos set up the router-software-Wi-Fi handset
model — called “Village Telco” — in the poor townshipof Orange Farm, South Africa. First, he made sure the
Wi-Fi routers worked and Internet access flowed freely.
Then he gave Wi-Fi phone handsets to the villagers.
Ta-da! Villagers now had free access to make and receive
telephone calls.
But Lissoos is an entrepreneur, not just aphilanthropist. His company, Dabba, connected the local
village networks to the countrywide phone network.
Then he bought prepaid phone cards and sold them tovillagers in pay-as-you-go form. Because the calls originate
on his Wi-Fi phone network with costs much lower thannormal, Lissoos can undercut other phone card sellers on
price. Using the inexpensive phone card, a villager can callanyone in the country.
“What we are doing will either encourage the telecom
companies to bring their prices down, or we’ll continue
to work toward getting Dabba to reach as many people aspossible,” Lissoos said last year after being honored at the
Berlin Forum on Social Engineering for his work. “Eitherway, the right people will benefit.”
To aid expansion, Dabba has partnered with Cisco,
the Silicon Valley network manufacturer, to help roll out
new wireless networks in different parts of South Africa
and run training programs on how to configure them.
Like any innovation that disrupts existing ways of
doing business — in this case, the South African telecom
market — Dabba has riled existing mobile carriers andreceived scrutiny from the country’s communications
regulator. But new combinations of technology that lower
costs and increase access usually beat out challengers, evenwhen those challengers are mighty government regulators.
Rael Lissoos saw innovation in South Africa by
dreaming of new ways to use old things. He’s not alone.
In fact, consultant Frans Johansson wrote a book on thisstrategy titled The Medici Effect. “When you step into anintersection of fields, disciplines, or cultures,” Johansson
wrote, “you can combine existing concepts into a large
number of extraordinary new ideas.”— Ben Casnocha, author of My Start-Up Life: Whata (Very) Young CEO Learned on His Journey
Through Silicon Valley

The opinions expressed in this article do not necessarily reflect the views orpolicies of the U.S. government.

eJournal USA 23

Public-Private Collaboration

Small-Business Innovation:
A Role for Government

Courtesy of National Science Foundation

Charles W. Wessner

The three-dimensional X-ray technology used to inspect this submarine cargo was developed by a small California company with an SBIR grant.

A public-private partnership helps small businesses bring
their innovations to market. Charles Wessner is director oftechnology, innovation, and entrepreneurship at the National
Academies, which comprises groups of scientific experts thatgive advice to the federal government.

Governments around the world are committing
high-level policy attention and significant
resources to the challenge of knowledge-based
competition and growth. Success in this endeavor depends
on effectively transforming national investments inresearch into competitive products for the market.
Too often, national policy reflects a belief in a linear
process of innovation, one that assumes that more funds
for research will lead automatically to the development
and commercialization of new products for the market.
Yet real-world innovation processes are normallyincremental, with technological breakthroughs often

preceding, as well as stemming from, basic research.
Initial capital to encourage cooperation between
universities and businesses is key to this transformation.
To convert research into products, the United States does
not rely on free markets alone.
The Small Business Innovation Research (SBIR)
program offers competitively awarded U.S. government
grants to small companies and university researchers and,in so doing, signals new information about innovative
products to capital markets. A proven program, SBIR isincreasingly being adopted and adapted around the world
as a means to accelerate innovation and augment thereturn on national investments in education and research.
Complexity, Collaboration
Innovation is a complex process, often involving
cooperation among multiple participants across an
economy. Successful efforts to bring new ideas to theeJournal USA 24

Courtesy of National Aeronautics and Space Administrationlabor, and financial and consumer markets. Rules
market are most often the result of highly collaborative
governing competition also condition the operation ofprocesses that blur the lines between basic and appliedmarkets. Antitrust rules, for example, prevent participants
research and the development and commercialization
with significant market power from restricting the entry ofof new technologies. This means that to encourage
newcomers with innovative ideas.
innovation, we need to identify and remove obstacles toInnovation ecosystems are also shaped by shared social
cooperation among scientists, research administrators,
norms and value systems, especially those concerning
entrepreneurs, financiers, and other participants in theattitudes toward business failure, social mobility, andknowledge economy. And to encourage such cooperation,
entrepreneurship.
it is important to provide appropriate incentives.
Within an innovation ecosystem, specifically designed
It is useful to link cooperating participants together
programs that shape incentives for entrepreneurs to seizein an innovation ecosystem, a concept that highlights
opportunities, take risks, and collaborate with others in
the connections among the many efforts involved inbringing innovation to market. These efforts include those turning new research ideas into products for the market
are critical.
organized within, as well as collaboratively across, large
and small businesses, universities, and research institutes
From Promise to Productand laboratories. They also include business investment“angels,” state government funds, venture capital firms,
and financial markets. Innovation ecosystems themselves
Although small, innovative businesses increasingly are
can vary in size, in composition, and in their impact onrecognized as major drivers of high-technology innovation
other ecosystems.
and economic growth, they often face challenges inThis need forbringing their ideas to market.
collaboration calls for
One major challenge concerns
intermediating institutions
the availability of capital,
that successfully alignespecially at the early stages ofindividual self-interest witha technology’s development.
the broader objective ofBecause new ideas arebringing a new technology
by definition unproven,to market. In somethe knowledge that ancases, hidden or missing
entrepreneur has about his
information can preclude
or her innovation and its
successful coordination. Forcommercial potential may
example, potential sponsors
not be appreciated fully by
may not understand an
prospective investors. The
entrepreneur’s vision of aterm “valley of death” has
new commercial concept.
come to describe the periodNASA’s Glenn Research Center in Ohio awarded an SBIR grant
In other situations,of transition from when ato a small Ohio company that specializes in metalworking and heatsome individuals may be
developing technology issimulation.
motivated to free-ride on
deemed promising but too
the contributions of others
new to validate its commercial
or fail to share resources equitably with others, leading to a potential, until the time that it can attract the capital
breakdown in cooperation. Where knowledge is “slippery,” necessary for its continued development.
potential investors may not be able to recoup their capital
The presence of such information asymmetries means
in developing a new idea. In such cases, rules concerningthat inherent technological value does not lead inevitably
the protection of intellectual property can encourage theto commercialization; many good ideas perish on thecollaboration needed for innovation.
way to the market. Even capital markets in the United
Institutions are the rules that shape human behavior.
States, widely believed to be broad and deep, often fail to
These include, most generally, rules that protect property
identify promising entrepreneurial ideas and finance theirand the regulations and incentives that structure capital,transition to market.
eJournal USA 25

In 2008, venture capitalists in the United States
invested $28 billion over the course of 3,808 endeavors.
However, more than two-thirds of venture capital in the
United States was directed to firms in the later stages ofdevelopment that year, and only 5 percent of venture
funding was directed to the earliest, or “seed,” stage offunding. Market cycles can exacerbate the challenges ofobtaining early-stage capital. The financial crisis of 2009
has led venture capital investors to retrench, favoring evenmore strongly ventures closer to market over those in theearly stages of development.
SBIR Program
To help new firms cross the valley of death, theU.S. Small Business Administration initiated in 1982
its Small Business Innovation Research program. Thispublic-private partnership provides competitively awarded
innovation grants and contracts to small businesses withtechnologies that show promise and commercial potential,
thus helping them grow and develop new products that
help government agencies address a variety of national
missions.

SBIR is funded by a set-aside, or “tax,” of 2.5 percent
on the external research and development budgets of
11 U.S. government agencies. Each year these agencies
identify various research and development topics —representing scientific and technical problems related totheir missions that require innovative solutions — forpursuit by small businesses under the SBIR program.
These topics are bundled together into individual agency
solicitations — publicly announced requests for SBIR
proposals from interested small businesses — that areplaced on a Web site.
Any small business can identify a topic that it iscapable of pursuing from these solicitations and propose
a project for an SBIR grant. Each of the 11 agencies
then selects, through a two-phase competitive process,the proposals that most closely meet its selection criteria,
and it awards contracts or grants to the proposing small
businesses. Typically, about 20 percent of the proposals
submitted are accepted each year. This tough competition
weeds out weak ideas; proposals have to show technicalfeasibility and commercial potential.
The high standard of this selection mechanism meansthat being awarded an SBIR grant acts as a certificate

2009 Innovation Index Country Ranking
1. Singapore
2. South Korea
3. Switzerland
4. Iceland
5. Ireland
6. Hong Kong
7. Finland
8. United States
9. Japan
10. Sweden
11. Denmark
12. Netherlands
13. Luxembourg
14. Canada
15. United Kingdom
16. Israel
17. Austria
18. Norway

19. Germany
20. France
21. Malaysia
22. Australia
23. Estonia
24. Spain
25. Belgium
26. New Zealand
27. China
28. Cyprus
29. Portugal
30. Qatar
31. Hungary
32. Czech Republic
33. Slovenia
34. South Africa
35. Bahrain
36. Slovak Republic

Source: The Boston Consulting Group and National Association of Manufacturers

eJournal USA 26

37. Chile
38. Italy
39. Malta
40. Lithuania
41. Tunisia
42. Greece
43. Latvia
44. Thailand
45. Mauritius
46. India
47. Kuwait
48. Croatia
49. Russia
50. Saudi Arabia
51. Trinidad and Tobago
52. Poland
53. Bulgaria
54. Philippines

Continued on page 27

of quality — a positive signal to private investors of thetechnical and commercial promise of the technology.
In this way, the SBIR program helps overcome theinformation gaps between the small-business entrepreneur
and a potential financier, thus bridging the valley ofdeath and encouraging cooperation across the innovation
ecosystem.
Foreign Adoption
The U.S. innovation system is market oriented, but
its operation is strengthened by policies and programs thatprovide the initial capital necessary to encourage more
entrepreneurial participation, which creates and signals
more information for prospective investors or public
procurement agencies. The Small Business Innovation
Research program is a positive example of a competitive
program that creates new companies, provides new lowcost solutions for government missions, and generates
novel applications for government research.
Recognizing the advantages of the SBIR concept,
governments around the world are undertaking similar
programs to encourage entrepreneurship and innovation.
Finland, Sweden, and Russia have adopted SBIR-type
programs. The United Kingdom has a program similar
in concept. Following a successful pilot, the Netherlands

has expanded such a program across its government
ministries. Japan, South Korea, and Taiwan have also
adopted the SBIR concept, with varying degrees ofsuccess, as a part of their national innovation strategies.
And India has recently adopted an SBIR-type program toadvance its biotechnology sector. This level of emulation
across national innovation systems is striking and speaks
to the common challenges addressed by SBIR awards andcontracts.
While national innovation systems differ in scale
and flexibility, policy makers around the world facesimilar challenges in stimulating innovation. They haveto address the challenge of expanded global competition
by becoming more innovative and productive, whilejustifying research and development expenditures bycreating new jobs and new wealth. Innovation programs
such as SBIR can help transform these national
investments in research more effectively into competitive
products for the market. The SBIR concept has provento be highly adaptable to a variety of national innovation
systems and is an example of global best practice ininnovation policy. n
The opinions expressed in this article do not necessarily reflect the views orpolicies of the U.S. government or the National Academies.

Continued from page 26

55. Oman
56. Jordan
57. Mexico
58. Turkey
59. Lesotho
60. Kazakhstan
61. Romania
62. Costa Rica
63. Panama
64. Ukraine
65. Egypt
66. Botswana
67. Albania
68. Azerbaijan
69. Sri Lanka
70. Morocco
71. Indonesia
72. Brazil
73. Vietnam

74. Colombia
75. Armenia
76. Macedonia
77. Georgia
78. Ethiopia
79. Jamaica
80. El Salvador
81. Kyrgyz Republic
82. Honduras
83. Moldova
84. Pakistan
85. Algeria
86. Paraguay
87. Mongolia
88. Nigeria
89. Uruguay
90. Uganda
91. Burkina Faso
92. Argentina
eJournal USA 27

93. Tajikistan
94. Guatemala
95. Kenya
96. Bolivia
97. Syria
98. Nepal
99. Senegal
100. Peru
101. Namibia
102. Ecuador
103. Madagascar
104. Nicaragua105. Zambia
106. Benin
107. Cameroon
108. Venezuela
109. Burundi
110. Zimbabwe

Government and Innovation© AP Images/Rich Pedroncelli

James P. Andrew

Sacramento, California, high school senior Anthony Beanes works on a three-dimensional animation project, part of his
vocational training.

Effective governmental policies can have a positive impact
on domestic companies’ ability to innovate. Consistent
government policies that address workforce quality, thepayback from innovation, and the ease of utilizing the resultsof governmental efforts will have the biggest impact. James
P. Andrew, a senior partner and managing director in the
Chicago office of the Boston Consulting Group (BCG), leads
the firm’s innovation practice. He welcomes inquiries atandrew.james@bcg.com.

Much has been written about innovative
companies and what sets them apart. Less
obvious is the role that government canand does play to create the conditions for success.
A recent report by BCG, in conjunction with the
National Association of Manufacturers, highlights theinterdependence of government and business and themutual need for innovation leadership.
A critical driver of growth, competitiveness, andshareholder value, innovation is cited by senior executives
around the world as integral to their company’s success.
But innovation benefits countries, too. Those withthriving industries have higher incomes, a better quality oflife, and a higher standard of living than their less-robust
peers.
The need to stay one step ahead of the competitionis even more urgent in today’s global economy. The
emergence of companies from low-cost countries such as
India, China, Brazil, and Eastern Europe has transformed
the playing field. With good, cheap products flooding themarket from every corner of the globe, competing on costalone is a losing battle for most businesses. To stay in thegame, companies must differentiate themselves througheJournal USA 28

Boost the Payback© AP Images/Aijaz Rahi

Companies must be able to earna return on their innovation efforts.
If not, they’ll either stop investing or
relocate to a different state or country
where they can make more money.
Governments can help lower costs
and boost profits by enforcing strong
protection for patents, copyrights,
and other intellectual property and byproviding tax breaks, skills training,and policies that lower structural costs
related to fiscal policy, regulation, andenergy.
Research and development (R&D)
tax credits are the most common way
IBM’s Bangalore, India, headquarters holds a camp for innovative students to promote education inscience, mathematics, and engineering.
to lower innovation costs. The recent
BCG/NAM report demonstrated astrongpositive
relationshipbetween R&D tax programs
innovation: new products and services, new ways ofand national economic performance. Of the top 20
working, new ways of going to market. And governments
developed economies as measured by gross domestic
must support these innovation efforts through effective
product, 19 have R&D tax relief programs. Interestingly,
policies.
the absolute amount of the tax credit was less important.
Supporting revenue streams is also important. Most
Strengthen the Workforce
countries have policies to register and protect intellectual
property. Losing the rights to an invention or productA skilled, educated workforce is the most criticalbecause of country policy or poor enforcement is aelement of innovation success, yet finding quality talent
top issue for business executives and can lead to loss ofis an ongoing challenge for companies. Governments
revenues. Faced with this risk, companies are likely to takecan improve workforce quality by investing in effective
their innovation activities elsewhere.
education and making sure that immigration policies
support, rather than hinder, innovation.
Be Consistent
While wholesale education reform is a lengthy
process and the full impact may not be felt for many
years, some educational and workforce development
Innovation takes time and careful planning.
reforms are available much more quickly. For example,
Companies will innovate more when they can count on
better integration of academic and technical education
government support being there tomorrow and for years
in secondary schools can ensure that graduates areto come. To be effective, policies and tax benefits must
ready for work or college. When professional andbe consistent and reliable over the long haul, since sometechnical programs are aligned with industry needs andinnovation investments can take up to a decade to bearstandards, students gain industry-recognized credentials
fruit.
and companies gain skilled workers. In addition to
Other policies — such as education and workforce
education policies, less restrictive immigration policies can environment — can take even longer to come to fullstrengthen the workforce. Skilled immigrants can improve fruition. Governments must stay the course until these
the innovation climate of a country. A 2009 survey by the policies deliver results. Given how long the innovation
National Bureau of Economic Research found that statesprocess can take, consistency of support and continuity ofwith more skilled immigrants had more patents among
policies are critical.
immigrants and the native-born alike. Everyone benefited.
eJournal USA 29

Make Innovation Easier
Governments can improve the ease and efficiency ofdeveloping and commercializing ideas through researchand better access. All governments, particularly thosewith limited funds, will find it advantageous to engage inpartnerships with businesses, nonprofit organizations, andeducational institutions to increase the scale of operations
and attain greater results. Although U.S. universities
and government agencies fund a great deal of innovative
science, business executives tell us that accessing theseresources is very difficult.
Governments need to ask what companies need andhow they can help — and listen to the answers.
Promote Cluster Development
Clusters are groups of related, interdependentcompanies within the same industry that are concentrated
in a geographic area. By attracting or creating groups ofmanufacturers in specific industries, governments can help
drive innovation performance and, if they make the rightchoices, sharply improve their country’s economy. Thisapproach can be particularly effective for smaller countries
and individual states. For large countries, clusters are
relatively less important because any one cluster may be
too small on a relative basis, at least initially, to have ameaningful impact.
Although small countries can make bets in specificindustries to kick-start innovation (and growth more
broadly), such a strategy is not without risk. Concentrated
economies, no matter how successful they are for a time,

ultimately rise and fall based on the results of a limited
number of industries. Some notable recent collapses offer
cautionary tales. It’s a high-risk, high-reward policy.
Lead by Example
Vocal and visible support — in the form of R&D
funding, tax credits, policy changes, and so forth —sends the message that innovation is important. Makeinnovation a common cause, for the greater good of all.
Countries such as South Korea, China, and Singapore,
whose governments publicly and actively support
innovation, are attracting an increasing share of the world’s
innovators and innovation.
These actions closely align the mutual interestsof companies and governments, helping governments
more effectively serve their constituents. For countries
that want to encourage innovation, it’s time for all levelsof government to make innovation a top priority andprove their commitment with concrete action. The
stakes couldn’t be higher — nothing less than global
competitiveness, secure jobs for their people, and a higher
quality of life. n
See also Steve Strauss, “Government’s Role in Encouraging Small Business,”in the January 2006 eJournal USA, “Entrepreneurship and Small Business”[http://www.america.gov/st/econ-english/2008/July/20080814221735XJ
yrreP0.4618189.html]

The opinions expressed in this article do not necessarily reflect the views orpolicies of the U.S. government.

© Press Association via AP Images

Paul Nelson, left, of Allied
Vehicles in Glasgow,
Scotland, works on a
Peugeot electric auto
project supported by thegovernment.

eJournal USA 30

Profile in Innovation

Michael Bremans
A Belgian innovator comes up with a way to make aclean profit.

C

Courtesy of Michael Bremans

an you dowell by doing
good? Can asuccessful innovation
generate lots of profit
for the inventor andalso make a positive
contribution to theenvironment? For Mick
Bremans, a Belgian
innovator, the answer
is yes.
Bremans is chief
executive officer ofMichael Bremans
Ecover, which produces
domestic cleaning products made of natural plant andmineral ingredients. The products compare to othersin the industry in both quality and price; where theydiffer is their environmental friendliness. Ecover’s liquidsoaps, washing powders, and detergents do not containenvironmentally harmful phosphate or chlorine, and they
all come in recyclable polyethylene bottles.
An eco-friendly line of products appeals toenvironmentally conscious consumers, a growing subsetof the population. High appeal, of course, means highsales, which means more profit for Ecover ($15 million in2007). Everybody wins: the innovator, the consumer, andMother Nature.
The story would be different if Bremans’s products
were sub-par or more expensive. A mediocre productwith a “green” label is not enough for consumers. A
good product but one that’s more expensive will also
not succeed, despite a green label. Consumers wantcomparable quality and price and eco-friendliness. For

companies, this is not easy to do. Usually, making a
product out of nature-friendly materials costs more, which
drives up the final product price for consumers. So thegreen companies that succeed must run very efficient
operations.
Bremans, who in 2008 was named a Hero of
the Environment by Time magazine, believes that
decentralizing decision making in an organization leads tomore efficiency and more innovation.
“Innovation must live and breathe throughout themodern organization,” Bremans says. “This involves alllevels — even factory workers. Besides, who understands
flows, processes, machines, and products better than thepeople working with them on a daily basis?”
Capturing the ideas and insights of all employees may
seem obvious, but it hasn’t always been that way at Ecover.
When Bremans came on board, the setup was more
traditionally hierarchical: “When I joined Ecover, it was
primarily the research department that came up with new
ideas of what the company should be doing. Today, every
department plays a part in growing the business.”
Ecover is therefore an example of innovation not
only in the environmentally friendly products it produces,
but also in the processes that promote efficiency and costsavings.
Now in 26 countries, Ecover’s success shows that itreally is possible to do well, do good, and be innovative —all at the same time.
— Ben Casnocha, author of My Start-Up Life: Whata (Very) Young CEO Learned on His Journey
Through Silicon Valley

The opinions expressed in this article do not necessarily reflect the views orpolicies of the U.S. government.

eJournal USA 31

Intellectual Property Rights and Innovation
Michael A. Gollin© AP Images

I

Employees sort AIDS medicine at a lab in Port Elizabeth, South Africa, acountry that opposes strong patents for such medicine.

An effective system for protecting patents, copyrights, andother intellectual property promotes innovation by balancing
exclusive rights with accessibility. Michael Gollin is a partnerwith the Venable LLP law firm in Washington, D.C.,
chairman of Public Interest Intellectual Property Advisors,
and author of Driving Innovation: Intellectual Property
Strategies for a Dynamic World.

nnovation feeds on the known and converts it into
the new. Creative people successfully build old ideas
into new ones, put them into practice, and build onthem again. Innovation challenges the establishment,
creating winners and losers, and causes many ventures to
fail.
The tumultuous developments in communications
and genomics, the spread of cell phones, AIDS medicine,
popular music, and textbooks all share the fundamental
dynamics of this innovation cycle.
The United States recently announced a nationalinnovation strategy, joining a growing group of countries
seeking to harness innovation to serve their national
interest. An effective innovation strategy must focus on
the most important, but least understood, of the forces
driving innovation — the complex system of institutions,laws, and practices referred to as intellectual property(IP).
IP rights include patents, copyrights, trademarks, andtrade secrets, each of which is subject to separate laws inevery country. IP laws evolved over centuries as a tool toderive public benefits from the innovation cycle. Because
it is so tightly linked to innovation, intellectual property
holds a key to our future.
Intellectual property rights apply to innovative
endeavors as diverse as computer technology,
pharmaceuticals, agriculture, music, and publishing. IP
systems capture, channel, and shape innovation. In an
effective, well-balanced IP system, exclusive rights serve as
incentives that amplify the innate human will to create.
That exclusivity also establishes a framework forcollaboration and investment in creative ideas to pushthem out into society. But the exclusivity and control
available to creators and their investors is carefully
limited so that other people can access and build on new
products and ideas, and the innovation cycle can move
forward.

eJournal USA 32

A balanced IP system promotes innovation.
Innovative companies rely on their own IP rights, andtheir ability to steer around the rights of others. If
exclusivity is too weak or too strong, imbalances in the IP
system can limit innovation and its benefits.
Finding Balance© AP Images/Fredrik Persson

IP rights have expanded from wealthier countries
into poorer countries over the past decade. But extensive
research, debate, reform, and training about intellectual

Sweden’s Pirate Party advocates free music file-sharing and no patents.

property in recent years show no signs of leading to a
global consensus on the impact of current IP systems onhuman welfare, much less how potential reforms would
help or hurt larger society.
When Venice’s leaders passed the first patent law in1474 with 116 votes, there were 10 votes against it. In thelate 19th century, there were fierce debates about whether
countries should join the first round of international IP
treaties established at that time, and entrenched groups
argue today both for and against stronger IP rights.
The inevitable tendency of IP systems to go out ofbalance explains the intense and ongoing debates about
IP rights over the years. Patient advocates in Brazil,
South Africa, and elsewhere argue that patents on AIDS
medicines are too strong to permit fair access to existing
drugs, while drug researchers counter that weaker patents
would destroy the incentive to invest the fortunes
necessary to discover new drugs. Unlicensed software,music, and videos are downloaded freely on the Internet,
to the dismay of industry. Meanwhile, the sudden rise of
the Pirate Party in Swedish politics, with its platform of
free music file-sharing and no patents, shows that we can
not predict the future of IP rights with any confidence.
To illustrate why IP systems tend to get out ofbalance, imagine a simple society including you andme. You want free access to my innovations (with no IP
restrictions), but you want to limit my access to yours(with strong exclusivity). I want free access to yourinnovations, but I want exclusive control. If I invent a new
drug and you record a new song, you want to use my drug
and I want to listen to your song. We could try to block
each other out by keeping the innovation secret. But wewould have problems attracting investors, and we might
not innovate again.
There is an inherent conflict between our opposed
desires — for exclusivity over our own innovations and foraccess to the other person’s. We might be able to make adeal with each other; then again, we might not. The only
certain resolution makes neither of us completely happy,
but works for society: The win-win outcome is a balanced
IP system, with each of us being able to obtain limited
exclusivity as innovators, and with limited access assured
as well.
Balancing IP systems make sense in a world
with globalized innovation. For example, movies areproduced in Hollywood, Bombay (Bollywood), andNigeria (Nollywood). Hollywood producers advocate forstronger enforcement of copyright overseas because theuncontrolled duplication of hit movies undercuts theirprofits. But it is not very convincing for them to argue,in essence: “Protect my rights in your country because
it is good for me.” There is a more persuasive argument:“Support an effective, balanced system of IP rights because
it will help you.”
Indeed, I have spoken with both Indian and Nigerian
movie producers who, too, are protesting the rampant
piracy of their movies — in stores in the United States!
There is a global interest in a balanced IP system that
promotes innovation everywhere.
Whether for life-saving drugs or cultural expressions
such as music and movies, an effective IP system includes
mechanisms to balance access and exclusivity, case bycase. The legal and procedural details differ for eachtype of innovation, for each type of IP right, and in eachcountry, but the common thread is that there are ways
for innovators to gain exclusive rights, and paths for

eJournal USA 33

© AP Images/Aijaz Rahi

author may be happy to give an
open-access license to her work
on Wikipedia, but another may
choose to publish a copyrightprotected article. Innovators shouldhave that choice.
Innovation and IP laws
have always created winners andlosers and always will. This is, ofcourse, unsettling. But rather thanchoosing the winners, government’s
role should be to ensure that theIP system maintains an effectivebalance between the freedom of
an innovator to exclude others andthe freedom of others to accessthe innovation. An IP system
can provide a higher degree of
The U.S. film Spider-Man 3 opens in India; film producers in both countries want stronger foreign
individual freedom, and more
enforcement of copyright.
competition, than a centralized
system of grants, incentives, andothers to gain access to the innovations protected by those prizes awarded by governments and philanthropies.
Centralized systems can drive innovation in a particular
IP rights, including negotiation and legal proceedings.
state-sanctioned direction, but at the cost of individual
Unfortunately, these mechanisms can be very expensive
choice and flexibility.
and frustrating. Hence, companies and organizations
The inventor’s enthusiasm, the author’s pride, theworking within the system seek greater efficiency as part
entrepreneur’s confidence, competition — these are forcesof an effective IP system.
we can build on with innovators around the world. In
doing so, we must meanwhile ensure that people of all
Expressing Individual Choice
walks of life can enjoy access to the fruits of innovation
in medicine, food, information, entertainment, andIntellectual property rights can be viewed as
education. n
instruments of competitiveness and economic growth,with patenting and trademark activity linked to grossdomestic product. But IP systems can also be seen as
See also Focus On: Intellectual Property Rights, a publication of the
instruments by which innovators express individual
Bureau of International Information Programs [http://www.america.gov/
publications/books/ipr.html]
choices regarding their creations. In this light, intellectual
property contributes not only to commercial interests,
The opinions expressed in this article do not necessarily reflect the views or
but also to human development — freedom of choice
policies of the U.S. government.
in personal expression and how we lead our lives. One

eJournal USA 34

Additional Resources

Books, articles, Web sites, and films on innovation

Books and Articles
Aguirre, DeAnne, Laird Post, and Sylvia Ann Hewlett.
“The Talent Innovation Imperative.” Strategy and Business,
no. 56 (Autumn 2009): pp. 38-49.
“American Ingenuity: The Culture of Creativity That
Made a Nation Great.” U.S. News and World Report(Special Collector’s Edition) (2003): entire issue.
“America’s Young Innovators in the Arts and Sciences.”
Smithsonian (Fall 2007): entire issue.
http://www.smithsonianmag.com/issue/Fall_2007.html
Andrew, James P., Emily Stover DeRocco, and Andrew
Taylor. The Innovation Imperative in Manufacturing: How
the United States Can Restore Its Edge. National Associationof Manufacturers. March 2009.
http://www.nam.org/~/media/AboutUs/
ManufacturingInstitute/innovationreport.ashx
Andrew, James P., et al. Innovation 2009: Making Hard
Decisions in the Downturn. The Boston Consulting Group.
April 2009.
http://www.bcg.com/impact_expertise/publications/files/BCG_
Innovation_2009_Apr_2009.pdf
Andrew, James P., and Harold L. Sirkin. Payback:Reaping the Rewards of Innovation. Boston, MA: Harvard
Business School Press, 2006.
Bahree, Megha. “Citizen Voices.” Forbes (November 20,2008).
http://www.forbes.com/free_forbes/2008/1208/083.html
Berkun, Scott. The Myths of Innovation. Sebastopol, CA:
O’Reilly Media, 2007.
Bogusky, Alex M., and John Winsor. Baked-In: Creating
Products and Businesses That Market Themselves. Chicago,
IL: B2 Books, 2009.

Carroll, Kevin. The Red Rubber Ball at Work: Elevate Your
Game Through the Hidden Power of Play. New York, NY:
McGraw-Hill, 2009.
Casnocha, Ben. My Start-Up Life: What a (Very) Young
CEO Learned on His Journey Through Silicon Valley. San
Francisco, CA: Jossey-Bass, 2007.
Friedel, Robert D. A Culture of Improvement: Technology
and the Western Millennium. Cambridge, MA: MIT Press,
2007.
Gelb, Michael, and Sarah M. Caldicott. Innovate Like
Edison: The Success System of America’s Greatest Inventor.
New York, NY: Dutton, 2007.
Gollin, Michael A. Driving Innovation: Intellectual
Property Strategies for a Dynamic World. New York, NY:
Cambridge University Press, 2008.
Govindarajan, Vijay, and Chris Trimble. Ten Rules for
Strategic Innovators: From Idea to Execution. Boston, MA:
Harvard Business School Press, 2005.
Hewlett, Sylvia A., Laura Sherbin, and Karen Sumberg.
“How Gen Y and Boomers Will Reshape Your Agenda.”
Harvard Business Review, vol. 87, no. 7/8 (July-August2009): pp. 71-76.
Jeary, Tony. Strategic Acceleration: Succeed at the Speed ofLife. New York, NY: Vanguard Press, 2009.
Lewis, Elmer E. Masterworks of Technology: The Story ofCreative Engineering, Architecture, and Design. Amherst,
NY: Prometheus Books, 2004.
Marklund, Göran, Nicholas S. Vonortas, and Charles
W. Wessner, eds. The Innovation Imperative: National
Innovation Strategies in the Global Economy. Northampton,
MA: Edward Elgar Publishing Inc., 2009.

eJournal USA 35

Miller, Robert C., Bernard J. LeBoeuf, and Associates.
Developing University-Industry Relations: Pathways toInnovation From the West Coast. San Francisco, CA: JosseyBass, 2009.
Moore, Jina. “How Charities Harness Social Media for a
Social Impact.” Christian Science Monitor (September 8,2009).
http://features.csmonitor.com/innovation/2009/09/08/howcharities-harness-social-media-for-a-social-impact/
Pink, Daniel H. A Whole New Mind: Moving From theInformation Age to the Conceptual Age. New York, NY:
Riverhead Books, 2005.
Rogers, Everett M. Diffusion of Innovations. 5th ed. New
York, NY: Free Press, 2003.
Slim, Pamela. Escape From Cubicle Nation: From
Corporate Prisoner to Thriving Entrepreneur. New York,
NY: Portfolio, 2009.
Smil, Vaclav. Creating the Twentieth Century: TechnicalInnovations of 1867-1914 and Their Lasting Impact. New
York, NY: Oxford University Press, 2005.
“Special Section: Innovation and Creativity.” Success(September 2009): pp. 50-57.
“35 Innovators Under 35.” Technology Review (August
12, 2009).
http://www.technologyreview.com/article/23212/
Tucker, Robert B. Driving Growth Through Innovation:
How Leading Firms Are Transforming Their Futures. 2nded. San Francisco, CA: Berrett-Koehler Publishers, 2008.
Wessner, Charles W., ed. Innovation Policies for the
21st Century: Report of a Symposium. Committee on
Comparative Innovation Policy: Best Practice for the
21st Century. National Research Council of the National
Academies. Washington, DC: National Academies Press,
2007.
Zachary, G. Pascal. The Global Me: New Cosmopolitans
and the Competitive Edge — Picking Globalism’s Winners
and Losers. New York, NY: PublicAffairs, 2000.

Web Sites
Foreign Policy Research Institute
Program on Teaching Innovation
Addresses the history of innovation from economic,
scientific/technological, and sociological perspectives.
http://www.fpri.org/education/innovation/
Innovation and Economic Growth: Lessons From theStory of ENIAC
Audio lecture from electronics pioneer Rocco Martino
on how the computer became the catalyst for the largest
increase of international wealth in history.
http://www.fpri.org/multimedia/20090309.martino.eniac.
html
Innovation — Life, Inspired
Companion Web site to Public Broadcasting System’s
2004 television series.
http://www.pbs.org/wnet/innovation/
Innovation Timeline
Traces innovations from the invention of fire.
http://www.wired.com/culture/geekipedia/magazine/
geekipedia/innovation
Jerome and Dorothy Lemelson Center for the Study ofInvention and Innovation
Established at the National Museum of American Historyof the Smithsonian Institution to document the stories ofinnovators and their discoveries.
http://invention.smithsonian.org/home/
What Matters: Innovation
McKinsey & Company site featuring essays by researchers,
academics, journalists, policy makers, and executives on
big questions.
http://whatmatters.mckinseydigital.com/innovation

Filmography
ABC’s Nightline: If You Can’t Beat ‘Em, Blog ‘Em(2005)
http://ffh.films.com/id/12407/If_You_Cant_Beat_Em_Blog_
Em.htmSummary: Examines the blogger community, reviews
major news stories that were broken by bloggers,

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demonstrates ways in which blogging differs fromtraditional reporting methods, and presents interviews
with individuals who have used their personal blogs ininnovative ways.
Running time: 22 minutes.
Masters of Technology (2004)
http://shop.wgbh.org/product/show/10160
Producer: WGBH Boston (Public Broadcasting System)
Summary: A series of one-on-one conversation, withexceptional men and women who have made a significant
impact on technology.
Running time: Five parts, 30 minutes each.
October Sky (1999)
http://www.imdb.com/title/tt0132477
Director: Joe Johnston
Summary: The true story of Homer Hickham, a coalminer’s son who developed an interest in rocketry after
he was inspired by the Sputnik launch. With a group offriends, he experiments with rockets they build themselves,
and they are encouraged by a teacher to enter the National
Science Awards competition.
Running time: 108 minutes.

Ten9Eight: Shoot for the Moon (2009)http://ten9eight.com
Director: Mary Mazzio
Summary: Inspirational stories of several teens from lowincome communities who competed in the Oppenheimer
Funds/NFTE National Youth Entrepreneurship Challenge
2009.
Running time: 85 minutes.
They Made America (2004)
http://www.pbs.org/wgbh/theymadeamerica/
Producer: Public Broadcasting System
Summary: Profiles 12 American innovators whose ideas
and entrepreneurial spirit gave birth to commercial
milestones such as the steamboat and cultural touchstones
such as the Barbie doll.
Running time: Four parts; 60 minutes each.
The U.S. Department of State assumes no responsibility for the content andavailability of the resources listed above. All Internet links were active as ofNovember 2009.

Swiss Family Robinson (1960)
http://www.imdb.com/title/#0054357/
Director: Ken Annakin
Summary: The heroic tale of a shipwrecked family ona deserted island that uses teamwork and ingenuity toovercome the obstacles of nature and transform their new
home into a “civilized” community.
Running time: 126 minutes.

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