Our nation is better because we create better. We innovate. We try new things. We risk failure. But when we fail, we pick ourselves up and we try again. We create new business models and they succeed. And then newer models come along and destroy them.
One example is television broadcasting, which blossomed for years until cable TV came in and quickly took market share. Then satellite was launched, and it stole some of cable’s share. Now fiber and wireless networks are delivering broadband entertainment to millions of Americans.
The same happened for retailers. Walmart, Target, Best Buy and RadioShack became destinations for Americans wanting a great deal. But then Amazon and eBay created new business models and enticed many of those same Americans away from the shelves to their computers.
These examples illustrate disruptive innovation and how central it is to America’s entrepreneurial culture. Critics may claim that disruptive technologies hurt certain businesses and industries, but the reality is that “creative destruction” drives the market, displaces older technology or ideas with the new, and offers consumers value they didn’t dream up yet.
Take these new online services that are making it easier than ever to innovate. If you have an idea for a great new product, take it to Quirky.com. If the Quirky community likes it, they will improve it and bring it to market and you and whoever helped in the project will get a cut of the sales. For example, a high school student who won a science fair made big money on Quirky for proposing a flexible power strip. And if you want to make the product yourself and simply need funding, go to Kickstarter.com. There, interested investors and buyers help innovators get their products off the ground with funding.
Even Congress has made crowdfunding easier. The Jumpstart Our Business Startups (JOBS) Act that passed with bipartisan support in April 2012 makes it easier for startups to attract investors. Since passage of this bill, crowdfunding platforms have seen their usage increase, leading to more investments and business innovation.
America’s culture, which fosters entrepreneurship and risk-taking, is the key ingredient that allows it to be one of the most innovative nations on earth. But we’re losing our edge. The Global Innovation Index of 2012 is a tool for innovators, policymakers and business leaders to see its country’s progress on an annual basis. According to the latest report, the U.S. ranks 10 out of 141 countries. While this remains a positive score, a year-by-year comparison shows that the U.S. dropped three ranks from 2011 to 2012.
The United Nations’ report weighs a nation’s innovative strengths and weaknesses based on a set of metrics, like business sophistication, creative outputs and infrastructure. According to the rankings, the U.S. excels in a variety of different metrics – investments, venture capital deals, e-participation and ease of starting a business. But one of the ways in which America can improve is by increasing the number of graduates in science and engineering. Additionally, we must reform our immigration policies to make it easier for highly skilled immigrants to build and grow their businesses here. America should reform those policies so that we don’t lose these entrepreneurs to competitor nations. This would be a step in maximizing America’s innovative culture.
For the U.S. to continue to lead the global economy and bounce back, we need to pursue national policies that encourage innovation, creativity and new ideas. We need to invest in technological innovation and create an environment where entrepreneurs can challenge, improve and strengthen our society.
We need this help now more than ever, as our economy faces a looming fiscal cliff and the debt clock ticks past $16 trillion. This election has highlighted differences on taxes, economic policy, the role of government and the rules affecting businesses. But instead of focusing only on the differences, both sides should must also come to agreement on the importance of innovation and how the private sector can restore America’s place as the most innovative nation on earth.
