The author of this article makes the important distinction between innovation and creating wealth. Three levels of innovation are introduced as necessary to derive a product from an initial technological advancement. However, there is clear failure to acknowledge that only with a profound understanding of “high-order” technologies can the “mid-level” and “ground-level” innovations be made to commercialize a new product.

Even though certain arguments and policies may be misplaced in promoting only fundamental research that gives rise to high-level innovations, the fact remains that there is a dwindling number of American students graduating from university with the technical abilities to even comprehend the advancements that are being made abroad. It is my firm belief that this is a necessary requirement without which the US may start to fall behind in creating value from innovation.

The example of the commercial applications of the transistor in the 1950s fails to recognize the historical context in which they were developed – that is, following the massive investment in R&D during the second world war in which legions of scientists had been trained and funded to develop innovations at all three levels.

It is short-sighted to believe that because lower-level innovations that serve to commercialize new technologies are best conducted close to potential customers, the US will continue to maintain a competitive advantage in this area. Given the technological advances that have led to globalization and the emergence of the Chinese and Indian markets, these arguments may be obsolete already.

With such an uncertain economic climate and the impending dangers of climate change, the best possible strategy that the US can adopt is one readiness and adaptability. Such characteristics are inherent in the training of scientists.

Having lived in Germany and seeing those picturesque shops—and having been especially frustrated to see them closed on Sundays which was the only day I had time to do my shopping—I can appreciate Amar Bhide’s take on why American retailers might have absorbed German inventory-reduction technologies better. I’ve always believed that go-to-market is what separates a great idea from blockbuster revenues, so I totally agree with Bhide that the US is way ahead on that count.

But, my views deviate when it comes to the reason for all this. I don’t believe it has anything to do with great teams or time (150 years), as Bhide asserts. In my opinion, it’s attitude. An average German citizen believes that it’s unfair to make store employees work on Sundays or beyond 6PM on Saturdays. That’s why German shopping hours are much less than American ones, that’s why they’re inefficient. Even today, many Indians use the words ‘crass’ and ‘commercialization’ in the same sentence. It takes a recession like the present one for them to understand the importance of things like commercialization/go-to-market.

In India and many other parts of the world, invention for the sake of invention is considered as noble, whereas profiting from it is seen as greed. It’s this attitude in many countries outside the US that explains America’s lead in productivity and usage of innovation. This lead will be challenged severely if India and some of these other countries lose this attitude—that could take even more than 150 years. But, if India could build a mobile phone network for close to 300 million subscribers in less than 20 years, why should it take 150 years to start putting innovation to use?

Excellent article. It’s high time we moved away from a simplistic either/or mindset with respect to innovation and looked at an and-also mindset. Despite flat-worldly access to—and global movement of—information, cultural strengths of different regions and peoples tend to persist, which can be exploited in a positive sense.

Americans will likely continue to have an unbeatable lead when it comes to polishing, packaging, positioning, and all aspects of successful marketing in various industries, thus retaining an edge in attracting and nurturing innovative products and services.

America need not hold on to manufacturing and low-end services and processing if these can be performed better elsewhere.

This is a great article that dispels the hype about innovation. While product innovation is indeed important, it is ultimately application innovations which harness technological innovations that bring about economic benefits. This is a wake-up call for countries to allocate resources for commercialization versus R&D. In fact, with the proliferation of information on technological innovations, a monitoring department to keep track of these and their economic potential should be given priority.

Yes, indeed, offshore patented technologies can be licensed. It is usually after the fact, while the inventor is off working on the next generation of the technology. As well, the license fees and royalties, sap the profitability of the licensee. These are funds that would nominally be invested in developing its own new technology.

This type of licensing should be thought of as a defensive move, not as the ordinary course of business.

Lastly, there is no assurance that the patent holder would even want to grant licenses to potential competitors.

The most crucial part of Amar Bhide’s argument was in the last two paragraphs. He needs to elaborate in more detail about lesser abilities of Japan, S. Korea and Taiwan in developing and using innovation. How does lower productivity indicate this? I don’t mean to say that he is wrong, but he needs to elaborate this assertion.