Innovation Will Set America Back on Track

12/4/08

Most Americans are depressed about the economy. But if we pull back and try to rise above the clouds, there are real reasons for hope.

The combination of a “Yes We Can” administration headed to the White House, along with our country’s established leadership in innovation, has us standing at the crest of a trail that could ensure we never enter this chasm again. Let’s get back on our feet and remember what we are made of.

America is the world’s leading innovator in medicine, energy, information technology, and almost every discipline. Our research, patents, startups, and venture capital, all show a country driven to innovate, to create, and to dream the big dream for a better future.

United States’ innovation drives our everyday lives. The light bulb. The transistor. The PC. The Internet. The human genome. An innovator’s spirit cannot be doused by a few rain showers, and thrives on adversity. We are amazed by modern day dreamers and historic visionaries, including Thomas Edison, Jonas Salk, Steve Jobs, Bill Gates, and others. They, like most Americans, possessed an innate disrespect for the status quo. They defied conventional wisdom and created new industries.

America succeeds where others fail because we value creativity over conformity. We respect the hope and naïveté of the young, because sometimes they are right. We seek risk, because it makes us stretch and break new ground. We support a free market for all good ideas, and welcome the best and brightest from distant shores.

We learn from failure and don’t punish it automatically, but we do not tolerate poor performance either. We reward the risk-takers.

Try that in Germany, or Japan, or China.

We must stay on the trail of innovation, in spite of adversity. Be aware that the trail is prone to mudslides, flooding, and more. We can allow our science and education system continue to slide. We can cease to be the beacon in the world for the best ideas and people. We can accidentally suppress our innovation machine with over-regulation and bureaucracy. We can try to protect what we have instead of embracing the challenges of a global economy.

If we slip off the trail, the America we each have been blessed enough to grow up in, will die. Our productivity will fall… foreign powers will dominate our economy.

But now we have a window of opportunity to implement energy independence, protect our homeland, and create better health care. This is the moment in time to use our strengths to solve our own problems. Let’s harness innovation to solve the world’s woes, create jobs and stay competitive.

For energy alone, we need a real replacement for oil that is non-polluting and does not put other vital resources, like food, at risk. Let’s create that energy here at home, so we can depend on ourselves. In fact, in a small San Diego company, scientists from disparate disciplines, have invented “Green Crude.” It’s domestically made gasoline from algae, created with sunlight and water. Others are re-inventing the electric car, and the solar cell, and the vaccine.

President-elect Obama has it right. Stabilize the financial markets and economy, and then focus on solving the energy emergency. Get our best and brightest to focus and dream big. Then move to disease detection and prevention, and to the fundamentals of education and research. He is standing at the crest of the trail, ready to guide us. Here are some key tenets he may consider from the start:

1. Lead from the Top. President-elect Obama must rally the American innovation culture and must define the challenge. He must harness the patriotic spirit and get Americans to ask themselves how they can help, just like how John F. Kennedy articulated a vision to reach into space.

2. Depend on Ourselves for Energy. It must be a national priority to develop our own clean and domestic energy sources. Enlist the best scientists and entrepreneurs. Give government managers and universities freedom and incentives to take risks, and to provide access to funds for scale up of disruptive technology. Enlist the private sector to help set the goals and execute the plan.

3. Implement Zero Capital Gains on Start-ups: President-elect Obama has proposed it to unleash entrepreneurs to create the next great ideas. It’s the right incentive to create true breakthroughs, and it needs to be broadened to reward long-term investors in technology and to penalize short-term flippers.

4. Double Basic Science Funding: President-elect Obama’s plan to double research funding will enhance America’s competitive advantage for decades. We can’t predict which innovations will change the world, so pushing all science forward and rewarding the best thinkers is the right approach. History shows how these things play out — the replacement for oil, or the chemical that harnesses the power of the sun will likely come from a basic discovery in another field, not from applied research.

5. Provide Metrics for Regulatory Reform: Too often Congress (on both sides of the aisle) tends to get mired in the specifics of policy and loses sight of national goals. Nothing kills innovation and investment faster than regulatory uncertainty. For example, if we want to solve climate change, our government can’t ban solar power and wind farms from government owned land, as it is doing. And lower-cost personalized medicine, focused on prevention, is a fantasy if the FDA makes it cost $2 billion to approve each drug.

6. Appoint a Chief Technology Officer: As a technology evangelist, the CTO’s mission should be to track our goals and to look for regulatory errors and bureaucracy which slows things down, without slipping into “industrial policy” of picking “winning” industries.

7. Try a Tiny Step on Education of International Students: Currently we are severely undermining our own competitiveness by forcing the best and brightest in the world away from America. If these gifted people continue to go elsewhere, we lose. Let proven foreign graduate students in science hold a green card when they graduate as part of the Education bill (not an Immigration bill). We get to benefit from their expertise after investing our college resources in them. From the Manhattan Project to Apollo, we would have failed without international minds.

8. Attempt an Easy Foreign Policy Win: Energy is where we have a common interest with China. Chinese and American energy independence benefits the United States and reduces competition for oil. Our governments could work together in clean and green technology innovation for a healthier, more stable world.

9. Nurture Creative Education: Our basic education system needs fixing, but it already creates the most creative students in the world. Let’s reform it by rewarding performance and creativity and resist any movement urging “back to basics” standardization that only moves us backward.

10. Restore Global Confidence in America: Every American who has traveled in the last half decade knows the confidence and trust is lost. Let innovation become our olive branch to restore the world’s respect. We will lead the world by offering solutions to the major problems of our day — energy, terrorism, and disease.

Let’s keep on the trail of innovation. Let’s use our strengths to seize the moment and create unprecedented change. At the end of that trail is an economically re-charged America that is cleaner, healthier, and stronger.

Robert Nelsen is a co-founder and a Managing Director of ARCH Venture Partners. He focuses on biotechnology, pharmaceuticals, and nanotechnology. Follow @

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  • Krassen

    “We reward the risk-takers.”
    No argument here:
    http://www.nytimes.com/2008/11/16/opinion/16cohan.html

  • http://www.tvo.bidmc.harvard.edu Mark Chalek

    Rahm Emmanuel says: “Let’s not let a crisis go to waste.” The perfect storm of universal health care, the advent of baby boomers reaching Medicare age, the need to refinance and retool NIH and FDA, and the imperative to deliver on the promise of personalized medicine—- all roads lead to new alliances to accelerate the fruits biomedical research into products and services that improve health. VC’s, academic leaders, a new Tech Czar in DC, and forward-thinking biomed corporate leaders should embrace this opportunity.

  • BKC

    Robert,

    Staying positive and looking at silver linings is good for the immune system.

    It’s beyond tragic that the wall street financial ‘risk takers’ (cough cough, $700B payoff) are being rewarded with our tax dollars and our children’s tax dollars while they have effectively pulled the liquidity rug out from under the life science industry.

    Interestingly, China is on the path to lead in patents shortly:

    http://www.alertnet.org/thenews/newsdesk/N09397137.htm

    There is an abundance of innovation and scientific advancement in this country. Thousands of patents sit untouched at the finest research universities in the world.

    It’s a shortage of accountability, regulation and, now, liquidity… the result of an abundance of empire building and greed, that leaves the industry hanging on a cliff.

    With the adults back in charge, let’s hope we recover our national standing and honor, and importantly, hold the law breakers accountable so we can avoid such fiascos in the future.

    The culling has begun…real people, real jobs lost…promising drug therapies abandoned…therapies and human capital are being set out on the curb.

    For perspective, $10 Billion spent each month in Iraq. 10,000 $10 Million Series A financings A MONTH. Clean tech, biotech.

    NIH Budget 2007 $28B. Three months in Iraq $30B.

    It is up to us to hold those in office accountable to enact the change we need.

    Jeez.

  • ckaspereli

    In every market downturn untold numbers of projects get shelved along with any patent filings that may have emerged. People move on and work on other things, if work is available. In a recession it’s not enough merely to innovate, people have to be able to afford to buy things. Big internationals are cash wealthy for the most part and are reluctant to initiate expensive projects with an uncertain future. We need startups to pick up the slack, startups to hire people, startups to reignite innovation. We need to put money into the hands of ordinary people, not Big Banks or megalithic internationals which will just sit on it.