Tuesday, December 14, 2010

The Surprising Force Behind the Innovations Of The Last 50 Years!

If you believe that the major innovations driving our economy such as semiconductors, computers, the Internet, GPS, mobile telephony are due primarily to corporate investments in R & D and entrepreneurs, you’re dead wrong.  Fact is that the basic R & D upon which corporations and entrepreneurs add value to and grow these industries has been facilitated by Uncle Sam.flag-us  Just ask Google or Microsoft.

Yup, you and me, the taxpayers.  Hopefully those in the new congress bent on cannibalizing Federal Government will get a grasp of this fact before destroying the backbone of this nation’s innovation.

A recent cross-country road trip gave me a lot of time to evaluate Satellite Radio.  One of my favorite Newsweek columnists now has a show called GPS on CNN.   Apparently airing on satellite radio a bit earlier than broadcast,  Fareed Zakaria was interviewing four CEO’s  including Eric Schmidt of Google on a GPS show entitled “Restoring The American Dream,”  as I drove back through the Rockies.

Schmidt's point in the transcript below is about the crucial role our Federal government plays in support of research and development made sense, but you wouldn’t believe the arrogance and vitriol it enlisted online from those loathe to ever acknowledge any good things about our government.

One arrogant tea partier claimed in a post to the transcript that if he were given all that tax money he too could have invented those things!  Uh, okay.  At least this person admits the importance of R & D.  Alarmingly a 2009 Pew study revealed that only 6% of scientists affiliate with the Republican Party while 55% are Democrats.  Only 9% consider themselves conservative.

But that’s just the point.  It took all of us working through government for the “common good” to generate the resources necessary to develop those technologies and innovations.  So get over it.  Give credit where it is due.

I agree with the head of Google.  For this country to remain great, we need to continue to fund government research, often conducted through public and private universities.  We can’t permit the hubris of a few who hate government to drag this country down.

Below is a transcript of that portion of this program:

ZAKARIA: Innovation is indeed the growth engine of future. But that engine is stalled right now. Corporate America spends some on R&D, but not enough. And much of what they spend is really directed at making existing products better or working on the next product. They don't do enough basic research. …

Is there something the government can do in the legal framework, in the business -- I mean, is there something we should be doing to get more of this?

SCHMIDT: The single biggest act that the government did many years ago was the funding that is known as the DARPA, the advanced research projects agency, and other governmental programs. Those are periodically under federal budget attack for one reason or another and, yet, they are literally the start of billion dollar industries. It's important that that investment occur. and even at a time now when everyone's worried about spending money, the investments we make now in universities and research that allow these entrepreneurs to get their start, will create the employment 10, 20 years from now that we'll all be so excited about.

ZAKARIA: So you're talking about government investment. You're talking about DARPA. You're talking -- you talked about industrial policy. You really see a big role for government in jump-starting growth?

SCHMIDT: Well, people assume that somehow America's government was not involved in the world 50 years ago. Almost all of the science and technology research that we take for granted now came out of the Defense Department spending post World War II.

ZAKARIA: Let's just stop here for a second and tally up some of those government-sponsored inventions.
The semiconductor industry, for example, would not exist if not for the DOD, the Department of Defense. The Internet, well, Al Gore didn't invent it, but DARPA did, the defense agency that funds new technologies. The computer industry, for years, NASA was its main client and kept it alive and brewing. And what about GPS? I'm not talking about this show, but about the worldwide network of satellites that can tell you, within feet, where you are almost anywhere on the globe. That's powering the next waive of innovation on the web. Mobile telephony (ph), that's going to be an industry with tens of billions of dollars in revenue. And that was also a Defense Department project.

All of the CEOs I have spoken to, especially those running technology companies, say that government investment in research and development has been crucial to driving technological change.

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