A Call to Innovation

01 Dec 2007

A Call to Innovation

Re: John Kao (MBA 1982); By: Sean Silverthorne

Topics: Information-Books Competency and Skills-General Knowledge-Knowledge Management Innovation-Innovation Leadership Innovation-Innovation Strategy

As innovation guru and former HBS faculty member John Kao (MBA ’82) sees it, the United States is already losing on the great economic battleground of the 21st century: the struggle over national competitiveness. Countries such as Singapore, Ireland, and South Korea are chomping into America’s edge in the global economy.

In his new book, Innovation Nation: How America Is Losing Its Innovation Edge, Why It Matters, and What We Can Do to Get It Back (Free Press), Kao points to signs of our innovation decline: an eroding educational system relative to other top nations, a talent drain, the drop-off of spending for basic R&D, and a lackluster telecommunications infrastructure. Meanwhile, Finland — with the same population as metropolitan Atlanta — has spent the last twenty years in a national effort to become one of the most competitive economies on earth. What can we do?

Kao isn’t looking only at oft-cited remedies, such as increased teacher salaries and more homework for pupils. He’s proposing a comprehensive plan similar to President Kennedy’s moon-landing challenge that places big bets on the future; bankrolls ambitious research and experiments; reinvents the way we educate our young people; and aligns federal, state, and local agendas. The result, Kao believes, will be to recharge “the magnetism of openness and opportunity that has historically attracted the world’s talent to our shores.”

In fact, becoming an innovation nation should not only be presented as a generational challenge, he argues, but also as a means of solving the world’s thorniest problems: poverty, disease, global warming, energy sustainability, and weapons of mass destruction.

The effort needed to address these “wicked problems” will throw off an enormous amount of social and economic value, such as the start of new businesses and advances in fundamental research.

The bottom line, says Kao, is that innovation pays. He points to the work of Nobel Prize–winning economist Robert Solow, who estimated that as much as 80 percent of gross domestic product flows from the introduction of new technologies.

But at the end of the day (and that end may be arriving sooner rather than later, the book suggests), Kao concedes that the rise in competitiveness and the diffusion of innovation around the globe means that the United States will never again dominate the world stage as it did in the latter half of the 20th century. But it can yet again be the “indispensable nation” by “using our mastery of innovation as a force for good in the world.”

Kao, the founder of the consultancy Kao & Company, speaks with authority on the issue. He developed and taught a course on innovation at HBS and served as a visiting professor at both the MIT Media Lab and the U.S. Naval Postgraduate School.

— Sean Silverthorne

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