Tuesday, January 28, 2014

Innovation State of the Union 2014

Every year we in the US go through a bit of political theater, where the president of the United States travels to the halls of Congress, to present his or, in the future, her, programs and goals for the coming year.  This speech has become known as the State of the Union speech.  Over the last 30 years in particular it has become a rather significant media event, where new programs are launched.

The President is required by the Constitution to present "information on the state of the Union and recommend to their consideration such measures as he shall judge necessary and expedient".  The President is required by the Constitution to update Congress on the state of the Union, but many presidents before Wilson presented a report, not a speech.  President Reagan probably set the tone for the modern State of the Union presentation, especially the idea of introducing a recent hero, when he invited and recognized Lenny Skutnick, who risked his life to save passengers on a jet that crashed into the Potomac.

The modern State of the Union typically consists of two messages.  First, a review of the current state of affairs.  Most presidents like to start out by saying the state of the Union is strong, or some other platitude, before going on to the meat of the presentation, what I like to call the list of demands.  These are programs, initiatives, regulations and laws the president would like to see enacted in the next term.  I've always wondered, since every president says the state of the union is strong, why do we need so many new initiatives?

Barack Obama will present his State of the Union speech tonight, January 28, 2014.  In it will be a statement about the current state of affairs, domestic and international, a recap of last year's legislative accomplishments and a request for new programs.  I wonder what would happen if the President included a state of affairs about innovation.  I think it would have to look something like this:

The Innovation State of the Union for 2014

 Friends, colleagues, citizens, I come before you tonight to say that the state of innovation in our country is strong.  (applause).  For years the US has been a consistent leader in innovation, and our innovation success is based on several core principles we hold dear:  private enterprise, excellent education, the incredible rewards for individual achievement, the intersection of research and technology.  While there are certainly strong innovators and entrepreneurs all over the globe, we know that no other country has the capabilities, core principles and governance structures to sustain innovation in the way the US has done for years.  (Applause)

But we must ensure the foundations of our innovative spirit are strong, and that we leave a legacy of innovation to our children and grandchildren.  Today I am here to tell you that while our current innovation state is strong, we can do more.  Specifically, we can improve our innovation state in several areas.

First, while many government agencies and private enterprises are innovating, the application of innovation is broad but not deep.  Innovation in many enterprises is a relatively new phenomenon, and it has yet to take hold, and expand through all function functions.  In too many places, innovation is a tool used occasionally for rapid response to a competitor, rather than a constantly engaged capability.  We must find ways to deepen our commitments to innovation and expose more of our organizations to innovation.

Second, while we are innovating, much of the output is incremental, continuous improvement.  I'm not here to denigrate that excellent work, but to point out that incremental innovation creates solutions for the short term, but does not imagine new and disruptive products and services.  We need to achieve a better balance between short-term focus and long-term aspiration.  We need more moon shots, both at NASA and in private organizations.

Third, innovation must make a shift from a "cottage" industry to an engaged community.  Yes, you've heard me talk about community many times, but in this instance I'm talking about opening up every innovation activity to discover people or companies that have ideas or technologies that help you achieve your goals.  Open innovation is an accelerator, and increasingly we must all find ways to discover the best ideas, wherever they exist.

Fourth, and I harken back at this point to my great predecessor, Franklin Delano Roosevelt, who said, the only thing we have to fear is fear itself.  We must lower the resistance to innovation, overcome corporate inertia.  Years of cost-cutting and efficiency gains can't be lost, but can't hold us back from the passion, energy, and yes, risks we must take to create compelling new ideas.

Finally, I've spoken to you about inequality previously, and I want to address the reasons that inequality exists and the role innovation has to play in creating and eliminating inequality.  In our great country, great innovators stand to gain outsized rewards for their ideas, technologies and inventions.  A significant amount of the "inequality" in our country is caused by people earning vast rewards for excellent ideas.  Thus, innovation is a cause of inequality.  But it is also a solution to inequality.  As good ideas emerge, in many cases they raise the standard of living for all of us, so our lives are improved.  Further, the tools and methods of innovation are freely available to everyone.  Many of our noted innovators, people in the highest echelons of wealth, started with little and used their good ideas to move upward.  Steve Jobs, a man who was adopted as a youth, a college dropout, became a billionaire based on his great ideas and hard work.  We can close the inequality gap by creating more opportunities for great innovators to recognize the value of their ideas.

In conclusion, my fellow Americans, we stand at a crossroads.  Our history is replete with stories of incredible innovators who have built industries, created jobs and established wealth.  We are not done yet.  There are so many new opportunities for innovation, to create new industries, new jobs and new incomes.  As Joseph Schumpeter noted, innovation is part of the process of creative destruction.  We must realize that as new products and services emerge, they may make existing solutions obsolete.  Our economy must be nimble, constantly changing and evolving, and creating a new workforce where every employee is capable of innovation, and every individual is capable of becoming an entrepreneur.

Thank you for your time and attention.  Thank an innovator, an inventor or an entrepreneur for their creative spirit.  Work to implement the recommendations I've made tonight.  Leave a legacy of innovation for future generations.

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posted by Jeffrey Phillips at 11:08 AM


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