We need inventors to fill innovation black holes and help U.S. economy


This aerial photo taken in the Gulf of Mexico more than 50 miles southeast of Venice on Louisiana's tip shows the Deepwater Horizon oil rig burning. (Gerald Herbert/AP)
Vivek Wadhwa
Contributor, Innovations October 22, 2011

When oil was still spewing uncontrollably from the Deepwater Horizon well last summer, philanthropist Wendy Schmidt and the X Prize Foundation issued a $1.4 million challenge calling for better technologies to clean up oil spills. Aside from Schmidt’s concern for the environment, the need for innovation in this arena was dire.

In 1989, teams cleaning up the oil from the Exxon Valdez spill in Alaska recovered less than 15 percent of the total. Teams cleaning up oil from the Deep Water Horizon spill were not doing much better.

Vivek Wadhwa is a fellow at Rock Center for Corporate Governance at Stanford University, director of research at Center for Entrepreneurship and Research Commercialization at Duke, and distinguished fellow at Singularity University. His past appointments include Harvard Law School, University of California Berkeley, and Emory University. View Archive

Oil spills are a fact of modern life. A better cleanup technology would seem to be a no-brainer. But the hazardous spill and recovery sector is sluggish, due in large part to government contractors and federal and state agencies unwilling or unable to try new things.

More than 300 teams from across the world submitted proposals for the prize. Last summer, the 10 finalists in the Oil Cleanup X Challenge traveled to Leonardo, N.J., home of the National Oil Spill Response Research & Renewable Energy Test Facility. All of the teams brought technology that was more effective, cheaper and easier to use than existing oil spill cleanup systems.

The winner, Elastec/American Marine, utilized a spinning, grooved wheel to pull an astonishing 89.5 percent of spilled oil from the testing ground. The device collected oil at nearly 5,000 gallons per minute — fast enough to make a near-complete recovery of spills a real possibility. Now thanks to the publicity and the prize, this oil spill innovation will likely be commercialized and deployed.

The winning team’s tale and the Oil Cleanup X Challenge underscore how far behind major sectors of the global economy and global infrastructure remain. What’s more, many of these forgotten, slow-moving sectors are far more important to the long-term health and well-being of the United States and its citizens. According to the Environmental Protection Agency, there are nearly 20,000 oil spills — large and small — per year, a number that has grown considerably over the past two decades.

Eliminating these innovation black holes could do more to improve our lives and the economic future of our country than the latest Web-based social-networking applications. These long-standing problems are, for the most part, not sexy. But they exist in critically important sectors of the economy, such as chemical refining and automotive technology. Imagine a cleaner, more efficient alternative to the internal combustion engine.

Unlike battery-powered-car start-ups and solar- and wind-power companies, the internal combustion engine has been almost entirely ignored by venture capitalists. This has remained true even while gas floats above $3 per gallon. Over the past 50 years, innovation to improve fuel economy has only occurred when the government has called for it. In the same period that solar- and wind-power companies have pulled in billions in venture capital and government loans, automotive transportation start-ups focused on internal combustion engines have received little attention or financing.

This, to me, is a shocking market failure. Both wind and solar technologies require tremendous capital expenditures before they can be brought to the market and scale up to production. In contrast, a radically improved internal combustion engine could be easily produced with existing industrial capabilities and quickly dropped into the global car production cycle. This technology could also do more to quickly reduce carbon emissions, national oil dependency and general transportation costs than either wind or solar. You don’t need to get any Environmental Impact Statements, which solar and wind power developers must complete.

In healthcare, a huge source of waste is in unnecessary diagnostic tests. According to Thomson Reuters, unwarranted treatment, such as the overuse of antibiotics and the use of diagnostic lab tests to protect against malpractice exposure, accounts for $250 billion to $325 billion in annual healthcare spending. One approach would be to reduce the amount of this care — lab tests, in particular. Another might be to radically reduce the cost of the tests. That’s what a group at Harvard University, headed by professor George Whitesides, has done in making accurate diagnostic tests on patterned paper that cost pennies per pop. This is thousands of times cheaper than existing test matrices. What’s more, these paper-based tests can easily be administered in the field by lay people with no medical training.

So why aren’t we seeing more of this type of disruptive innovation? Bridges and highways are crumbling. So where are the start-ups that could help build bridges or bring to market road materials that are cheaper or more durable?

The general message is clear. Outside of computers, software and a select group of sexy technologies, innovation is almost entirely absent. What’s more, in many of these sectors huge leaps of innovation are not that hard to achieve. Witness the impressive output of Elastec/American Marine, which took less than six months to build a technology six times more efficient and far cheaper to operate than existing technologies. All it took was the impetus of a competition, a relatively modest prize and the prospect of a springboard to put their innovation into the global marketplace. Considering the cost-benefit ratio, it’s amazing we don’t have thousands and thousands of innovation prizes addressing areas of stagnancy throughout our infrastructure — contests that would unleash the intellectual power and drive of entrepreneurs.

So yes, there is low-hanging fruit to be harvested in many areas that could make the United States a better place and up our economic competitiveness. Let’s stop focusing on the shiny objects and look at the boring nooks and crannies for a better roadmap to a better country and a better world.

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