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Call It Sputnik, Or Something Else, America Needs a 2nd-Half Comeback

Watching the President's State of the Union address the other night, I felt like I was listening to a coach's inspiring halftime speech.  The team is down by three in the championship game.  They're still very much in the game despite some setbacks -and the coach works to reignite that fighting spirit and win the game - go USA!

President Obama said that this is "our generation's Sputnik moment."  Sputnik, of course, was the first satellite to be sent into space - and it was sent by the USSR.  It was after Sputnik that President Kennedy declared that in a decade we would walk on the moon - no one could yet imagine how, but by golly we would do it.  And so NASA was born, and a generation of scientists supported by the federal government, dedicated to exploring beyond our reach.

Pundits have been debating - even before the president's speech - about whether this is a "Sputnik" moment for the U.S.  But it's clear to me, whatever we label it, that the U.S. badly needs a second-half comeback.  In Arizona alone we face a $500 billion (+/-) - yes, billion - infrastructure bill.  That's just to repair aging sewers and treatment plants, keep our freeways from becoming parking lots, and get our telecommunications infrastructure somewhere in line with the 14 other countries that have drastically better systems.  It's all critical, because without fit-for-purpose infrastructure, how can we expect to attract and retain the best businesses?

I was pleased that the president didn't talk about China, India, the EU, or any other global "competitor" like they're the enemy.  The fact is that the rising tide really does lift all ships - at least for economies that are integrated with the rest of the world.  So the success of these other economies is good for the U.S., too - and vice versa.  At the same time, though, the fact is that we are competitors.  We compete for the most creative innovators.  We compete for the most productive companies.

Labor is still not especially mobile, but businesses are hardly confined by borders.  For-profit public companies are beholden to their shareholders and, most often, to profit maximization.  They will locate their facilities where they can access the best talent and the best infrastructure.  In that respect, then, countries certainly compete to attract and retain global businesses - the kinds of businesses that employ our workers and pay taxes into our coffers.

President Obama clearly gets this.  There are a number of factors on which America competes for businesses and talent, and I was pleased to hear the president address many of them:

Transportation infrastructure

Being able to efficiently transport goods into and out of its facilities is critical to a business' bottom line.  Companies may be willing to buy from China - regardless of shipping delays that may be caused by 10-day-long traffic jams - simply because Chinese products have historically been so much less expensive.  But the U.S. doesn't boast that advantage, so it needs to instead boast a transportation infrastructure that can get products to market more quickly than any other country.

Telecommunications infrastructure

While physical transportation - of people and goods - is clearly still important, the transportation of data is ever more so.  Yet the U.S. ranks far behind a host of countries on both speed and access measurements.  (So our Internet is on whole slower than in many countries, and fewer people have access to it.)

A nexus of education, research and entrepreneurial talent

Think about Silicon Valley, North Carolina's Research Triangle, Austin, the Boston Corridor).  I would venture to guess that all of the most innovative, productive companies were born of some sort of collaboration.  Often, it is collaboration between research institutions and innovative entrepreneurs - as was the case for Google.  Sometimes it is a collaboration formed from a nexus of entrepreneurial talent. 

Studies continue to show that it's not easy to fabricate these kinds of environments, but we can - and should - encourage their formation by partnering institutions of higher education and research with innovators and entrepreneurs.  This is the focus of ASU's Sky Song facility.  Other examples of successful collaboration between higher education and private-sector R&D are the Biodesign Institute and TGen.

Government support for promising-yet-capital-intensive innovations

This might mean subsidies for the development of clean energy technologies.  Or it might mean government sponsorship of the kind of projects that created the Internet.  As President Obama said, "Our free enterprise system is what drives innovation.  But because it's not always profitable for companies to invest in basic research, throughout our history, our government has provided cutting-edge scientists and inventors with the support that they need.  That's what planted the seeds for the Internet.  That's what helped make possible things like computer chips and GPS.  Just think of all the good jobs - from manufacturing to retail - that have come from these breakthroughs."

Former Intel CEO and Chairman Craig Barrett said it well: "Most observers of this topic conclude that there are only three things that a country can do to increase their relative competitiveness and provide for an increased standard of living for their citizens. Countries have to invest in the education of their work force (smart people), they have to invest in research and development (smart ideas) and they have to provide the right environment to let smart people get together with smart ideas and create new products, new businesses, and new services."

Written on Thursday, 27 January 2011 16:57 by Gary Yaquinto

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