Hillary Clinton talks Gingrich, China and Russian elections during innovation event

Does innovation destroy or create jobs? Can the United States regain its competitive edge? Will China surpass the United States in fostering an innovation economy?

These were among the questions posed during a gathering of business and policy leaders at the Newseum in Washington on Wednesday for “Innovation and the Global Marketplace,” an event sponsored by Intel, The Aspen Institute and the PBS NewsHour.

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Secretary of State Hillary Clinton was the keynote speaker, appearing in an interview format with PBS NewsHour Executive Editor Jim Lehrer.

“What we’ve tried to do in the State Department is to demonstrate clearly that economic state craft is an essential part of American diplomacy,” Clinton said.

Lehrer didn’t stick entirely to innovation, taking the opportunity to ask Clinton about the accusation by Russian Prime Minister Vladi­mir Putin that she was inciting unrest following the country’s disputed election results and subsequent protests.

“Russia has one of the most highly-educated populations in the world and a growing middle class, so this didn’t come from the outside, it came from within,” Clinton said.

The conversation also turned to China and the actions the United States was taking to protect U.S. businesses, while still expanding its reach in the growing marketplace.

“China is now going to have to come to grips with being a responsible stakeholder in the global economy as well as in the traditional areas of diplomacy,” Clinton said. “It is one thing to be a developing country and get cut some slack. . . . We need new rules of the road.

“We do not begrudge or fear a peaceful rise of China,” Clinton said. “We also think it is in our interest as well. At the same time, though, countries go through phases. . . .We engage with the Chinese as we do with others around the world.”

Clinton was also asked about Republican presidential candidate Newt Gingrich’s comment last week that Palestinians were an “invented people, and whether the former House speaker’s comment was helpful in U.S. foreign relations. “No,” Clinton said. “I think he realized that was one of those innovative moments.”

A mix of concern and optimism from industry and policy leaders

Experts took predictable sides in the first panel discussion, centered around innovation, trade and the creation of the next 10 million jobs.

“Most of the net new jobs come from a small number of high-growth businesses,” said Karen Mills, administrator for the U.S. Small Business Administration. Meanwhile, Fred Bergsten, director of the Peterson Institute for International Economics, argued that reducing, if not eliminating, the trade deficit is at the center of improving U.S. competitiveness and key to an innovation economy.

“Let’s not allow an election year to undermine the ability of the United States to show economic growth,” said Myron Brilliant, senior vice president of international affairs for the U.S. Chamber of Commerce.

All of the panelists agreed that education reform was needed to sharpen the United States’ competitive edge. But they disagreed on how best to go about it. The issue was further complicated by calls for a revamping of the nation’s visa system.