'US needs to tap innovation to keep its dominance'

The economic rise of Asian giants India and China may be one of the most notable phenomenon of this century, but a culture of innovation that drove the American idea continues to be an advantage for the US, a noted scholar has said.

In his new book, Advantage: How American Innovation Can Overcome the Asian Challenge, the Council on Foreign Relations' senior fellow Adam Segal analyses Asia's technological rise, questions assumptions about the US' inevitable decline, and explains how America can preserve and improve its position in the global economy by optimising its strength of moving ideas from the lab to the marketplace.

Segal explains that Asia's growth has been fueled by its 'hardware of innovation' -- growing middle classes that will eventually outstrip the spending power of Americans, a cheaper labour force, more students studying to become engineers, and increased money pouring into research and development.

However, Segal maintains the region lacks a 'software of innovation' -- a cultural, social, and political framework that enables and sustains generation of new ideas.

As an example, he cites a survey conducted by China Daily that found 60 per cent of graduates with doctorates admitted they had copied someone else's work.

"A member of the Chinese Academy of Sciences, a president of a university, and a member of the Chinese Academy of Engineering were involved in prominent plagiarism cases, and all kept their jobs," he says.

India's main problem, he writes, is a decrepit educational system.

He says a 2007 government study rated two-thirds of India's eighteen thousand colleges and universities and found that 90 per cent of the degree-granting colleges were poor or middling quality.

"Through his research, Segal concludes the US has an advantage over Asia in the realm of software of innovation. In America, your ideas can make you rich.

"Intellectual property is protected, and individual scientists are able to exploit their breakthroughs for commercial gains," he writes.

He says this software in its most expansive sense offers the most opportunities for the United States to ensure its competitive place in the world.

The challenge is 'to recover a culture of innovation that was driven underground, overshadowed by sexy credit default swaps and easy spending'.

Drawing the connection between national security, trade, and innovation, Segal notes 'for the United States, the basic equation is simple: economic strength and national security depend on innovation, innovation thrives only with openness, thus policies must defend and nurture openness'.

Foreign policy decisions should reflect this, especially with regard to foreign investment in the US and immigration access for scientists and entrepreneurs.

Within the United States, Segal stresses that 'cities and regions need to think about where this comparative advantage lies, and how they can best develop collaborative networks that support innovation'.

And while no single overarching strategy can be applied across the country, he says the federal government has a large role to play through the use of research support, tax incentives for venture capital investments, collaborative R&D schemes, and the joint development of intellectual property.

Segal cites Maine and Arizona as examples of economies that are forming partnerships among universities, government, and businesses, embracing emerging technologies, and welcoming investment from around the world.