In a competitive world, innovation cannot sleep
Knowledge gets transmitted around the nation and world so rapidly, says Richard Cyert, president of Carnegie Mellon University, that each new leap forward gives its inventor only a short-lived advantage. This means the United States cannot lament lost opportunities (example: the videocassette recorder), nor lean on past successes (the computer). It has to continue researching, investing, inventing, and competing globally.
Dr. Cyert was chairman of a National Academy of Sciences committee on innovation and growth in the US economy. Among its conclusions: Technology creates more jobs than it makes obsolete - but ``slow adoption by US firms of productivity-increasing technologies is likely to cause more job displacement than the rapid adoption of such technologies.''
In other words, there are no choices in dealing with technology. Anything that increases productivity must be embraced quickly. If not, the advantage goes to a competitor such as Japan.
``The alternative to rapid rates of technological change,'' says the report, which was issued last month, ``is stagnation in US wages and employment.''
In an interview this week in Boston, Cyert said the rapid movement of knowledge is ``equalizing standards of living around the world.'' This makes knowledge an increasingly important factor in economic development.
``In the case of computers in the US,'' he notes, ``we gain a comparative advantage and have a higher standard of living as a result, but it is quickly dissipated as the knowledge spreads. So we have to dip in and find another basis. All comparative advantages are temporary. And the world is ratcheting up its standard of living.''
Research and development is vital to this race to innovate, Cyert says. While recognizing that the computer industry is largely a product of US military spending, he argues that it is time to shift federal R&D funds from the Department of Defense to the National Science Foundation.
``It is more likely,'' he says, ``that in the future we will get military spinoffs from civilian research than the other way around.''
This is because international trade is the critical competitive race in peacetime - and because economic growth determines how much can be spent on the military, not the other way around.
Once technological breakthroughs occur, however, it is very important that the ``spread of knowledge into the commercial market be improved.'' Cyert says a 13- to 18-year lag in commercialization has been typical in the US. This must be reduced.
His committee's report notes that if US companies consistently develop and adopt new technologies more rapidly than foreign producers, productivity will improve, costs will fall, and this will ``enable US workers to retain higher-wage jobs.'' But because of the rapid transfer of knowledge, ``any technology-based advantages held by US firms and workers over foreign firms and workers are likely to be more fleeting in the future.''
Closer relations between businesses and universities could speed up the process of technology commercialization, he says. More attention to education could improve productivity and innovativeness. And Americans - especially those in business - must realize that technology is always evolving, that no steady state will ever exist.
``Even the American steel industry,'' says this Pittsburgh-based college president, ``has a future. But we must automate it.''