Overview of United States Innovation Ecosystem

Role of U.S. Government

Has anyone in this room heard of a company named BackRub?

Well, BackRub was the first iteration of what we know now as Google. And it was in academia (Standford University) were this company first gain momentum through the efforts of two individuals, Larry Page and Sergey Brin.

Federal government funding for research and development (R&D) is essential to address societal needs in areas in which the private sector does not have sufficient economic incentive to make the required investments. Key among these is basic research- the fundamental, curiosity driven inquiry that is a hallmark of the American research enterprise and a powerful driver of new technology.

Role of the Private Sector

A great part of the U.S. innovation ecosystem is that the private sector can greatly benefit from basic research funded by the government. This is due to many wonderful policies, such as the Bayh–Dole Act (passed in 1980). This law essentially enables the use of federal funds to research and develop a project, while the patent and commercial interests sit with a individual or organization outside of government. These types of policies are critical for the private sector to capitalize on the government’s investment in basic research.

Uber is a great example of how technology developed over decades mixed with innovation and entrepreneurship can drive new business and create jobs. Uber is only about six years old and is already valued at roughly 40 billion dollars. More importantly, it has created jobs and a new transportation experience for millions of people across the globe. But without the United States innovation ecosystem, I believe new business models of this type would be hard to develop.

Role of Academic Institutions

The United States has a rich academic culture that enables the foundation of innovation and entrepreneurship to thrive in this country.

They are places were the lion’s share of basic research is cultivated and nurtured through support from the federal government.

However, its culture is not only about research but it is also about human development. These places of learning educate and challenge the next generation of innovators and scientists to push the envelope of understanding without the chains of financial gain or bottom lines. The academic environment also forces individuals to interact with other disciplines. Enabling a diverse view to global issues and creative ideas in how to solve those problems.

Also, many times these places contain technology transfer offices that sit at the interface of emerging technology and commercialization. This promotes the immediate transfer of academic ideas from the lab to the market. This is a real driver of useful innovation.

Role of Diasporas

We must utilize our diasporas, of which you are now a part of within the global innovation scene. We come from a national legacy of pioneering diasporas like Albert Einstein and Google cofounder Sergey Brin who have brought us groundbreaking triumphs.

Taiwanese and Israeli diasporas founded Silicon Valley, the world’s leading hub for entrepreneurship and technology innovation right down the road.

Recently, we’ve seen a rise in such Silicon Valley technologists returning to or spending part of their time building up the entrepreneurship ecosystem in their countries of affiliation. They are opening doors for greater knowledge and technical exchange and giving back through mentoring the next generation.

It’s increasingly apparent that diaspora members can make contributions from both in the U.S. and abroad, and returning to their home countries or staying in the U.S. is no longer a trade-off.

Researchers and innovators increasingly work in global teams, problems are shared, supply chains bridge continents, and products move to markets across borders.

Role of Diversity

Our collective economic growth and competitiveness depend on inclusion of all types of creators. This is why we must promote diversity in our schools, in our laboratories, and in the business.

A McKinsey & Company study suggests that the increase in women’s overall share of labor in the United States—women went from holding 37 percent of all jobs to 47 percent over the past 40 years—has accounted for about a quarter of current GDP.

A diverse workforce can capture a greater share of the consumer market. By bringing together individuals from different backgrounds and experiences, businesses can more effectively market to consumers from different racial and ethnic backgrounds, women, and consumers who are gay or transgender. It is no surprise, then, that studies show diversifying the workplace helps businesses increase their market share.

Diversity in the boardroom is needed to leverage a company’s full potential. By 2050 there will be no racial or ethnic majority in the United States, and our nation’s boardrooms need to represent these changing demographics.

In summary, the U.S. innovation ecosystem is unique and thrives due to many players and critical investment.