Monday, March 08, 2004
America as a crucible of innovation
Seems like Tom Friedman has taken a real liking for Bangalore. Given that his other major ports of call are some strife-torn cities in the Middle East, I am not surprised. He has been posting for the past 2-3 weeks from Bangalore, on why Americans should learn to stop worrying and love outsourcing. In this particular op-ed, Friedman describes innovation as one of the reasons why America will remain ahead of the curve for some time to come. America has been the main beneficiary of the various stages of creative destruction that have taken place the past 100 years. Friedman believes America will emerge stronger from this wave of creative destruction as well, thanks to the crucible of innovation it has become.
While I'd instinctively agree with that statement, I also believe there is something structural changing, thanks to the forces of globalisation. Perhaps this time emerging economies will emerge as the main beneficiaries?? Nothing wrong with that though. A little bit of equity was long-overdue.
America is the greatest engine of innovation that has ever existed, and it can't be duplicated anytime soon, because it is the product of a multitude of factors: extreme freedom of thought, an emphasis on independent thinking, a steady immigration of new minds, a risk-taking culture with no stigma attached to trying and failing, a noncorrupt bureaucracy, and financial markets and a venture capital system that are unrivaled at taking new ideas and turning them into global products.
"You have this whole ecosystem [that constitutes] a unique crucible for innovation," said Nandan Nilekani, the C.E.O. of Infosys, India's I.B.M. "I was in Europe the other day and they were commiserating about the 400,000 [European] knowledge workers who have gone to live in the U.S. because of the innovative environment there. The whole process where people get an idea and put together a team, raise the capital, create a product and mainstream it — that can only be done in the U.S. It can't be done sitting in India. The Indian part of the equation [is to help] these innovative [U.S.] companies bring their products to the market quicker, cheaper and better, which increases the innovative cycle there. It is a complimentarity we need to enhance."
What would Indian techies give for just one day of America's rule of law; its dependable, regulated financial markets; its efficient, noncorrupt bureaucracy; and its best public schools and universities? They'd give a lot. These institutions, which nurture innovation, are our real crown jewels that must be protected — not the 1 percent of jobs that might be outsourced. But it is precisely these crown jewels that can be squandered if we become lazy, or engage in mindless protectionism, or persist in radical tax cutting that can only erode the strength and quality of our government and educational institutions.
While I'd instinctively agree with that statement, I also believe there is something structural changing, thanks to the forces of globalisation. Perhaps this time emerging economies will emerge as the main beneficiaries?? Nothing wrong with that though. A little bit of equity was long-overdue.
America is the greatest engine of innovation that has ever existed, and it can't be duplicated anytime soon, because it is the product of a multitude of factors: extreme freedom of thought, an emphasis on independent thinking, a steady immigration of new minds, a risk-taking culture with no stigma attached to trying and failing, a noncorrupt bureaucracy, and financial markets and a venture capital system that are unrivaled at taking new ideas and turning them into global products.
"You have this whole ecosystem [that constitutes] a unique crucible for innovation," said Nandan Nilekani, the C.E.O. of Infosys, India's I.B.M. "I was in Europe the other day and they were commiserating about the 400,000 [European] knowledge workers who have gone to live in the U.S. because of the innovative environment there. The whole process where people get an idea and put together a team, raise the capital, create a product and mainstream it — that can only be done in the U.S. It can't be done sitting in India. The Indian part of the equation [is to help] these innovative [U.S.] companies bring their products to the market quicker, cheaper and better, which increases the innovative cycle there. It is a complimentarity we need to enhance."
What would Indian techies give for just one day of America's rule of law; its dependable, regulated financial markets; its efficient, noncorrupt bureaucracy; and its best public schools and universities? They'd give a lot. These institutions, which nurture innovation, are our real crown jewels that must be protected — not the 1 percent of jobs that might be outsourced. But it is precisely these crown jewels that can be squandered if we become lazy, or engage in mindless protectionism, or persist in radical tax cutting that can only erode the strength and quality of our government and educational institutions.
