Tuesday, November 25, 2008

My friend Dr. Amar Bhide www.bhide.net , one of the world's leading experts on entrepreneurship and innovation, has agreed to be here in Denver next January 17 to help us celebrate Ben Franklin’s 303rd birthday. This is from an interview with him in the current issue of (click here to see the complete interview) Inc. Magazine:

Amar Bhidé, a business professor at Columbia University, bubbles with optimism at a time when many Americans have plenty to worry about. In his new book, The Venturesome Economy: How Innovation Sustains Prosperity in a More Connected World (Princeton University), he describes a uniquely American form of innovation, one driven largely by the appetites of American consumers. Bhidé talked with Inc. senior editor Eric Schine about why it doesn't matter where scientific breakthroughs come from, how entrepreneurs push basic innovations forward, and why the iPod represents the triumph of the American system…

Q: (Because of the current financial crisis) are you less optimistic about America's ability to push ahead and create a vibrant, growing economy than you were when you sat down to write your book?

A: No, not at all. We have one thing that works really well, and that's innovation. In the past, many technological developments have taken place during periods of severe economic stress. During the period of high inflation and doom-and-gloom recession of the early 1980s, for instance, people were buying and learning how to use PCs. That PC revolution set the stage for the huge productivity gains of the 1990s. Even in the Great Depression, the increases in productivity were enormous, based on the diffusion of a lot of technologies that had been developed in the 1920s. I'm not wishing for a depression or a replay of the 1980s. All I am saying is that we have a buffer against the financial meltdown, and that buffer is our ability to innovate, especially in the technology sector.

Q: You write that the dire predictions of so-called techno-nationalists are misplaced. Who are these techno-nationalists, and what are they missing?

A: These are people who, in the context of trade and globalization, think that protectionism is bad, but that in order for us to survive the "onslaught of competition" from China and India, we have to crank up our technological investments so that we continuously stay ahead. These people say, let's invest more in R&D, let's invest more in basic research, let's train more engineers -- on the premise that the greater the technological lead that you have vis-à-vis other nations, the more prosperous you're going to be.

Q: And that's wrong?

A: Absolutely. The U.S. isn't locked into a winner-take-all race for scientific and technological leadership with other nations. What's more, the growth of research capabilities in China and India, and thus their share of cutting-edge research, does not reduce U.S. prosperity. My analysis suggests exactly the opposite. Advances abroad will help improve living standards in the U.S. Moreover, the benefits I identify aren't the usual ones of how prosperity abroad increases opportunities for U.S. exporters. I show how cutting-edge research developed abroad benefits domestic production and consumption.

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