“We need to out-innovate, outeducate, and outbuild the rest of the world” – President Obama

In reading the stories and quotes from last night’s State of the Union address by President Obama, it is clear, and frustrates me to no end, that my government talks a lot about innovation but still does not understand how to foster it. Innovation in America, especially in the short term, is not achieved by pumping huge sums of money into government-sponsored research and development efforts. Yes, many successful innovations have resulted from government research investments, but we need to take a more strategic approach to these efforts. The focus on research and capital projects by the Obama administration also begs the question of whether long-term investments be our only approach to innovation.

The Internet itself may be one of the most successful government research and development efforts, but we need more of these types of platform innovation investments, not just spending on basic research. We need to think strategically and fund those research efforts that could serve as platform innovations to power a whole new wave of innovative business ideas and job-creating companies in this country.

High-speed internet will boost worker productivity a bit sure, but worker productivity would be boosted even more by working to reduce the friction we all face in dealing with the government to get things done in our work and personal lives. Investing in high-speed internet is not an innovation investment, it is trying to get back to parity with the level of service that other counties enjoy. And besides, private sector competition should be driving high-speed internet construction, not government investment. Furthermore, if we are going to make investments that take a long time to realize, we should be looking to leapfrog the competition, not skate to where the puck used to be.

For all of the talk about innovation, there is far too little action in American government. And even as much attention as the word innovation received in the press from yesterday’s State of the Union speech, the magnitude of its use is interesting in this graphic from Fast Company that I modified to highlight where “innovation” shows up in the word cloud (it was used only NINE times by my count):

We need to take a step back and define what the role of government is in our overall innovation efforts as a country:

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Name one of the leading governments for fostering innovation?

If you said the United States, I think you are wrong. While the United States government may dole out a lot of research grants, the United Kingdom tends to take a more active approach in encouraging citizen innovation.

Witness this article from the BBC web site about a competition launched by the UK government at showusabetterway.com to find innovative ways of using the masses of data it collects.

The article profiles three different websites including:

1. Crime Mapping
2. FixMyStreet.com
3. Rate Your Prison

I would love to hear about what countries you think are the most successful and stirring up citizen innovation.

Comment away…

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Every once in a while innovations come along that offer profitable opportunities for the inventors and business minds that turn them into innovations, but offer even greater possibilities for humanity if widely adopted. I read an article in Fast Company recently that struck me as one of those opportunities. It profiles a mechanic name Jonathan Goodwin and his fuel efficiency exploits.

Traditionally, a potentially market transforming technology will use a skimming price strategy and come into the marketplace priced high and gradually reach lower price points as volume builds and development costs are recouped. This is fine with something like the iPhone or high definition television, but it strikes me that on the other hand there is a loss to society with this price strategy with certain innovations. This includes things like life-saving drugs (AIDS, Cancer, etc.), but also other technologies like Mr. Goodwin’s innovation in internal combustion engine design. The article mentions a $5,000 device he co-developed that sells through SAE Energy that can, in general, yield a 100% increase in fuel economy while simultaneously producing 80% fewer emissions.

In general, Mr. Goodwin’s engineering feats can double and possibly quadruple the fuel efficiency of vehicles by replacing their gasoline engine with a high efficiency diesel engines, introducing hydrogen into the combustion process, and marrying the engine to a hybrid propulsion system using regenerative braking and batteries. Many examples are given in the article, from creating a 18mpg H1 Hummer (it used to get 9mpg) to a 100mpg Lincoln Continental.

Obviously if X number of people spend the $5,000 for the diesel engine modification and get their payback in one to two years, that is a great benefit to society. But, if a charity like the Sierra Club or even Bill Gates bought the rights to this innovation and worked with an overseas manufacturer to drive the costs of production lower and produced then in mass quantities at a sustaining profit instead of an enriching profit, how low could they be sold for? $3,000? $500? $100?

Social capitalism is an incredibly powerful opportunity for right-minded charities. If a charity did grab onto this and focused on cutting production costs as a way to increase access instead of increasing profits, they could still profitably produce the technology (providing resources to sustain the effort and possibly to fund other efforts) and their success would increase the pressure on the Big Three to take action and possibly could open up a licensing revenue stream if the technology was incorporated into new vehicles as well.

The public relations for a charity taking on such a challenge and approach would be substantial. In addition to delivering on their mission in a tangible way, donations to a charity engineering such a feat would skyrocket. This is a man on the moon kind of opportunity for a charity or philanthropist. Who has the vision and the gusto to grab this bull by the horns and drive it forward?

In the United States, diesel engines predominantly reside in trucks and buses, not automobiles. The article mentions that his company, SAE Energy, is in negotiations with DHL on an 800-vehicle dual-fuel conversion that could get them a 70-cent a gallon offset and reduce their fuel costs by 50%. If we as a society were to take that a step further, what would the impact on society be if instead Mr. Goodwin was recruited to help convert all buses (and possibly trucks) via conversion subsidies to be paid for with an increase in the national gas tax (no matter how big)?

Really, it would be in the interests of national security to do such a thing. There would also be a secondary benefit of such a strategy – public transit ridership would increase as a result of the gas tax increase and fuel consumption would decrease (along with the number of cars on the road). Our nation would be much more secure if we cut our fuel consumption for transportation in half, especially if at the same time the percentage being supplied by home grown Biodiesel and Ethanol went up. And if we get reductions in emissions at the same time? What are we waiting for?

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