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Keeping Innovation Vibrant in the U.S.

America is known for its innovation and ability to take risks, but recent events in the global economy are changing the dynamics and places like South Korea, China and India are now becoming innovators and risk takers, too. India, for example, is gaining ground in software development, IT consulting and chip design—not just call centers that we hear so much about. The advantages the United States enjoyed in the past are disappearing. The global economy is definitely sharing technological advances more rapidly, which results in leveling the playing field for everyone.

During the 1980s, many articles were written about how the United States was losing its competitive edge, and far too much manufacturing was leaving America for other parts of the world. Business Week ran a cover story on “The Hollowing Out of America” that went into great detail discussing industry after industry that was losing workers to foreign competition. Now, some twenty years later, America continues to struggle to keep manufacturing companies alive. Entire industries, including textiles and clothing manufacturers, are all mostly shadows of their former selves. Levis Strauss has finally stopped all manufacturing in the United States. This results in huge displacements for our workers.

In 1986, the United States founded the Council on Competitiveness as a forum for evaluating national competitiveness, and is the only organization comprised exclusively of CEOs, university presidents and prominent labor leaders. Some two-dozen industrial, university and labor leaders joined forces to form the organization. The basic mission is to set action agendas that will drive economic growth and raise the standard of living for all Americans. On balance, the Council has been well received, but much more needs to be done.

Companies, universities and labor leaders need to get more involved to make sure the innovation process stays healthy in America by developing new technologies. Not just basic research and development, but bold new ideas. One good example of this is IBM working very closely with Georgia Institute of Technology to establish a national center for encouraging and fostering innovation. Hopefully, this alliance will produce dramatic results, and can clearly demonstrate the need for others to follow.

The pressures to keep up with the accelerated pace of change only makes the job for U.S. executives more challenging. Global competition is a very powerful driver, and increases with every passing day. There needs to be a better balance between labor costs driven by unions, technology provided by entrepreneurs, and the government making concessions for businesses by fostering tax allowances encouraging the creation of new jobs for U.S.workers.
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America in the past has always been able to rise to the occasion and meet global competition head on, and now is the time for our leaders to step up to the plate and increase their commitment to creating new industries to keep the country healthy. As we are faced with huge escalating deficits, trade imbalances that stagger the imagination, and the increasing cost of the war in Iraq, it’s imperative that our leaders increase their resolve to keep innovation vibrant and not let America down!

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William Dollar is a Senior Contributing Editor for the Wisconsin Technology Network, and has his own consulting company at www.billdollar.com. You can also contact him at bill@wistechnology.com.

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The opinions expressed herein or statements made in the above column are solely those of the author, & do not necessarily reflect the views of the The Wisconsin Technology Network, LLC. (WTN). WTN, LLC accepts no legal liability or responsibility for any claims made or opinions expressed herein.

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