Innovation Champion No More – Pacific Research Institute

Innovation Champion No More

Much is always written about “innovation.” How to manage it. How to inspire it. How to benefit from it. How to create an environment where it blooms. So much lip service is paid to innovation that unfortunately many people tune it out. Certainly, ignoring the value of an innovation environment, or even making it harder to innovate, seems to be the status quo for many policymakers.

While few will call out innovation for criticism directly, companies that stand as icons of innovation have lately been scorned by populist politicians. In the midst of the challenge posed by the coronavirus pandemic, having a political class that appreciates innovation as much as the economy and consumers do is valuable. Unfortunately, California policymakers have sadly been standing by as the state’s innovation ranking continues to plummet.

The state had long led as a champion in innovation, a golden land where new inventions, creations and inventions were dreamt up and eventually made available to the world. California innovation changed the world again and again. But the state has sat on its laurels in recent months when it comes to innovation, failing to appreciate the policy environment that unleashed innovation in the first place. As policymakers sat idly by, or worse, intentionally created an atmosphere where innovation would be less likely, the state has sacrificed its leadership position and continues its diminished rating in state innovation standings.

The 2020 Consumer Technology Association’s Innovation Scorecard now ranks California in 23rd place amongst the states.  Unless action is taken to reverse this trend, California is in danger of being in the bottom half of the class. While the state boasts of nearly two thirds of its households having high speed broadband and 77% with at least moderate speeds, California has still failed to implement policies to smooth the way for 5G, the next generation of broadband. This threatens to leave its citizens behind the curve for tomorrow’s innovations. The corporate tax burden also weighs negatively on its rating, discouraging new innovative companies from forming much less succeeding.

As the Golden State slips, other states have leapt to the fore. Unlikely states such as Iowa and Missouri now rank 7th and 14th respectively, with Iowa earning a “Best & Brightest” rating. Such rankings, ratings and awards may all sound academic but the economic impact on each respective state, and the state of innovation is real.

Texas, which is ranked similarly as an “Innovation Leader” but with vastly less venture capital spending, much less research and development investment, and far fewer advanced degrees.  However, but the Lone Star State boasts of pockets of stand-out success, demonstrating the value of a culture of innovation.

Faced with the challenge of an international pandemic, some Texas innovators got to work.

Eyeing the repeated complaints of a coming crisis because of a lack of ventilators, a group of innovators got to work addressing the problem at Rice University in Houston. Using 3-D printed parts and off the shelf hobby shop items, they found a way to achieve success. Weighing 8 pounds at a cost of $200, they created at product that could treat less urgent patients. Compare that to what it takes to put together a regular ventilator, which takes over a week to manufacture, weighs hundreds of pounds and costs of tens of thousands of dollars. This is what happens when a culture of innovation is encouraged and fostered with the sound public policy.

The right public policy is one important ingredient in the mix to spawn and grow a culture of innovation. Left unattended though, even the best of ecosystems will wither by comparison to those jurisdictions that are actively seeking to enhance their innovation environment. Particularly in times like now, a culture of innovation can be exactly what the doctor ordered and a healing balm for a sagging economy.

Bartlett Cleland is a senior fellow in tech and innovation at the Pacific Research Institute.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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