Obama's call for innovation follows slowdown in most sectors, scholars say

Obama cited Sputnik and the Space Race as moments that inspired American innovation in the State of the Union.
Companies in the United States vary significantly in their performance as innovators, according to an analysis by the National Science Foundation.
Washington Post Staff Writer
Friday, January 28, 2011; 12:21 AM

Google and the iPhone are American inventions. But the first mass-produced gas-electric hybrid car was made in Japan.

And although the United States now fosters a nascent commercial space industry, if you want to speed from city to city on a smooth, fast train, you have to head to Europe.

As for the world's largest solar energy generator, you won't find it in the American Southwest. It's planned for Morocco.

Over the past decade or longer, U.S. innovation stalled in almost every sector except information technology and agriculture, say scholars who study innovation. Federal figures and industry surveys support their assessment.

In his State of the Union address on Tuesday, President Obama spoke at length about the need to reinvigorate American innovation. "This is our generation's Sputnik moment," he said, promising new investments in biomedical research, information technology and clean energy.

But in a deflating counterpoint to Obama's soaring rhetoric, the nation's third-largest maker of solar panels, Evergreen Solar, announced this week that it plans to cut 800 jobs, shutter its Massachusetts plant and move to China.

"The way to make quantum leaps is to do some risky stuff," said Alan I. Leshner, chief executive of the American Association for the Advancement of Science. "And that's very hard when money is tight."

Innovation scholars point to a "valley of death" where new technologies go to die. The federal government funds basic research. Private industry commercializes technologies springing from that work. But crossing the chasm between the two can be hugely difficult.

"We have investors with lots of money, and we have entrepreneurs with ideas that can get you across the valley of death," said Michael Mandel, an economist who tracks American innovation for the Progressive Policy Institute in Washington. "But it's a lot easier when you have a big winner out there, a gleaming star in the distance."

Outside the information technology sector, the United States has seen few of those huge successes of late. From 2006 to 2008, just 9 percent of American businesses innovated in either products made or in the processes needed to make them, according to a National Science Foundation report. Predictably, the software industry led the way, with 77 percent of those firms innovating.

And since 2004, federal research and development spending increased less than 1 percent above inflation, said Patrick Clemins, who watches the federal budget for AAAS.

In the biomedical research arena, the National Institutes of Health doubled its budget from 1998 to 2004, and drug companies followed suit, pouring huge sums into drug development programs designed to exploit the wash of data from the human genome project. Yet turning DNA into drugs has proved a larger challenge than anticipated, and the number of new drugs approved by the Food and Drug Administration has stagnated in recent years.

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