Stanford Summit: Does America still have a lock on innovation?

The provocative questions floating around on this panel include "Who cares where innovation comes from?" and "Does the immigrant nature of Americans make them more innovative?" and "What are the dumb and smart things we are doing?"

In one exchange Bill Tai discussed his theory that innovation results from liquidity of resources of people. By keeping a free flow of capital, creating a reward system, there will continue to be innovation. Today, western capital markets are rewarding innovators in other countries. China is an example of that.

Irving Wladawsky-Berger has a great blog. He made a comment here that the news sometimes sounds like a Monty Python sketch. In the same way that Monty Python would say "spam" over and over again, the news will say a particular key word (like "illegal immigrant") over and over again. This was a funny, but I think he makes an important point.

Responding to a question about what we (in the US) do well and ways we're not smart about things in the US, the panelists had some thoughts:

Bill Tai thinks that one of the things the US could do better is to make it easier for people to come to the US. His anecdotal story is about the huge immigration population from Asia in Vancouver, Canada. He believes these people go to Canada when they can't get into the US, because it's at least close by the US.

Something Don Rippert thinks is dumb: We need to rethink about how we view and think about Intellectual Property. (Amen.) We're schizophrenic about it. On the one hand, we think it's the kernal about what makes innovation great. But, on the other hand, the only people who get rich are the lawyers. (He's right about this, though I'm not rich.)

Patents? Irving explained briefly the history about Thomas Jefferson's view that patents were important to get people to publish their inventions and you would get a monopoly in exchange for sharing their ideas with the public. That general idea has worked fairly well. But what's wrong today -- esp. in our litigious society -- is the view that "I'm going to take a patent as a weapon to get an injunction and put my competitor out of business." Instead, we must make it more of a marketplace. How do we make a better marketplace for the value of patents? That's the key question that needs to be answered. In some sense, Open Source is the response to the problem of the marketplace being broken. There's a cultural view about competition that is an issue. We need to view the competition from outside the US as a good thing. We need to go back to viewing patents as a way to put ideas in play. I'd like to hear more on this marketplace idea.

Like Bill, Netanel Jacobsson thinks that one thing that is critical for the US to stay competitive in innovation is to open up the doors for immigration, especially for students. Right now it's very difficult (as compared to pre 2001). To innovation, this is particularly bad.

Countries or firms, how do they overlap? Does it matter?

Irving: we're living in an increasingly global world. And "global" is different from "multinational". Why is IBM working in various countries? Because there are brilliant minds in China, in Haifa, in wherever. It's not just about serving the market. US companies, in principle, should have an incredible edge in this global diversity of thinking. Why? Because in IBM in the US, there are lots of people who are very diverse (e.g., lots of Indians/Chinese already working there), so it's not such a big leap. For other countries, where the culture is more homogenous, it's a tougher leap (some euro countries and Japan, for instance).

Bill Tai: The net is allowing distributed development at very low cost, customer development is happening, the business are not costing as much. You can risk money in places, whereever they are. It's not as important WHERE the business is, because they are

Don: At Accenture they view countries as where they pay taxes and where have to deal with employment law. They compete with global firms and for global clients. They have less revenues from the US as a percentage of overall firm revenues.

Audience question about Russia: does Russia have a chance?

Netanel says that Russia is an important player. Especially in Israel, where there is a large Russian immigrant population.

Don says that Russia's talent base in science and mathematics, is key. But the government has had some issues in how it's government

Irving says that Russia has gotten better in its governance issues. People are watching it carefully, but generally putting people in jail for their innovation is not a good way to grow innovation (!). For example, Irving had difficulty the last time he was in Russia because he was unable to access his blog (on typepad) and he could access Wikipedia. The lack of transparency is one of the problems in Russia. One of the great things that is changing the global governance is that countries and businesses who misbehave, they will be commented on.

{UPDATE: I got this example from Irving wrong. He provided me the following comment by email because the comments system seems to be acting funny again:

Colette, let me please make a short clarification to your very clear blog entry. My comments about not being able to access Wikipedia and my own blog applied to China, not Russia. When I was in China last December, I was surprised that I was not able to do so. I posted an entry on this subject expresing the hope that this will soon change: http://irvingwb.typepad.com/blog/2005/12/trip_to_beijing.html.

Also, regarding the need for a marketplace view of IP and patents, I posted a blog entry recently: http://irvingwb.typepad.com/blog/2006/02/patents_as_curr.html

This is an area where we are doing a lot of work in IBM.

Thanks, Irving, for the links and the clarification.}

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