Innovation Creates Value ?

 Now, perhaps more than ever, the fear of globalization haunt the United States of America. Many manufacturing companies have once a flourished to foreign competition and many of them moved abroad to work. Then on the same trip. Like the manufacturing exodus started with low-wage, unskilled labor, the offshoring of services on the first entry of the data, routine software development and testing, and operation of the phone banks. But today, overseas workers analyze financial statements, the most important trading strategies, and designing computer chips and software architectures for American companies. This is the offshoring of research and development of innovation and the future that create the strongest fear. The economist Richard Freeman for many Americans when he warned that the United States significantly less competitive "than the big developing countries like China and India harness their growing scientific and technical expertise to their enormous, low-wage labor forces can be." What is the

appropriate response?One, from the conservative scholar Pat Buchanan, the television broadcaster Lou Dobbs, and they will call for protectionism. Another, seemingly more progressive approach would be to spend more money for cutting-edge science and technology.Many of the owner, the Democratic and Republican alike, have embraced the economist Sylvia Ostry and Richard Nelson called techno-nationalism and techno-fetishism, which both claim that U.S. prosperity requires continued dominance of these fields. We have such fears and instructions to the public. In the 1980s many of the problems the U.S. economy due to the proliferation of lawyers and managers and a shortage of engineers and scientists, Germany and Japan was praised as countries with better health professional relationship.But in the 1990s, their economies to ease, while the United States to prosper and not because they listened to the warnings. In fact, the teaching of mathematics and science in American high schools are not much better.Entry in the law schools remained high, and managers are responsible for a growing percentage of the workforce. The U.S. share of scientific articles, science and engineering PhDs and patents continued to decline, the services sector to expand production and employment stagnate. Of course, the United States rely on the same happy ending to every episode of "losing our lead" serial no. The integration of China and India in the global economy is a seminal and unprecedented phenomenon. Will the outcome be different this time? Is the United States of America on the edge of pummeled by a hurricane technology? I think the answer is no. Concern about the offshoring of R & D and the progress of science in China and India arose from a failure to technological innovation and its relationship to the global economy. Innovation a key role in the development of wealth play, but we must be careful policy rather than undermine example by favoring one form of innovation in a different formulation to maintain. Three levels of innovation Innovation involves the development of new products or processes and the expertise they generate. New products can take the form of a high-level building blocks or raw materials (eg, microprocessors and the silicon which they made), midlevel intermediate goods (mother boards with components such as microprocessors), and ground-level end products (eg computers) . Similarly, the underlying know-how for new products include high-level general principles, midlevel technology and ground-level, context-specific rules of thumb. For microprocessors, including how the laws of solid-state physics (high level), circuit design and chip layout (midlevel), and setting the conditions in the semiconductor fabrication plants yield and quality (ground level) to maximize. Technological innovations, especially high-level, usually have a limited economic or commercial interest, unless it is supplemented by lower-level innovations.Breakthroughs in solid state physics, for example, the value for the semiconductor industry only if it is accompanied by a new microprocessor design, which itself is largely useless without plant-level tweaks that enable them to produce these components in large quantities can be.A new microprocessor's value is impossible to achieve without the new motherboards and computers as well. New know-how and products also requires connecting nontechnological innovations in a number of levels. A new diskless (thin-client) computer, for example, generate an income for the producer and the value for the user only if it is effectively marketed and deployed. Marketing and organizational innovations are usually needed, such as a computer maker its a new sales pitch and materials and forcing users to have their IT departments to reorganize to develop. Argue about what innovations or innovators make the greatest contribution to economic prosperity, however, is not helpful because they all need and additional roles.Innovations that welfare support is developed and used in a great game that many players over many years on many levels. Consider for example the story of the key active component in almost all modern electronics, the transistor. A pair of German physicists obtained the first patent for it in the 1920s and '30s. In 1947, William Shockley and two colleagues at Bell Labs, the first practical point-contact transistor, which is only in small quantities Bell building. In 1950, the radically different bipolar junction transistor Shockley and licensed to companies like Texas Instruments, for the first time in a limited period of radios implemented as a sales tool used. Within two decades, transistors replaced vacuum tubes to radios and TVs, and spawned a whole world of new equipment such as electronic calculators and personal computers. The German physicist's discoveries the beginning of an extensive process of development of know-how a number of levels. A few steps involved a high level discoveries as the transistor effect, Shockley and his colleagues a Nobel prize earned.Other steps, such as those required for a high production yield in semiconductor plants, asked for a lower level, context-specific knowledge. A similar complexity characterizes globalization. A variety of cross-border flows can be important for innovators, for example, the dissemination of scientific principles and technological breakthroughs, the licensing of know-how exports and imports of the final product, the procurement of intermediate goods and services (offshoring) sharesinvestments and the use of immigrant labor. Many kinds of global interactions are more common, but not in a uniform way: international trade in manufactured goods has soared, but most services remain untraded. Of the many activities in the innovation game, only a few things in the remote, low-cost locations performed, many midlevel activities, for example, is close to the best prospects. What went wrong technomania Techno-nationalists and techno-fetishists easy for innovation by making it equal to the announced discoveries in scientific journals and patents for the latest technology in university research labs and commercial developments. Because they rarely distinguish between the different levels and forms of know-how, they ignore the contributions of the other players that do not contribute publications or patents generate. They simply globalization as such by the assumption that high-level ideas and know-how rarely if ever on national borders and that only the final products of their trade.Ideas and technologies move in fact, very easily from country to country, but many final output, especially in the services sector, either. The findings of the study is available for the price of learned books and magazines, to any country that they can use. Advanced technology, however, commercial value because it can be patented, but patent owners are generally charge higher fees to foreigners. In the early 1950s, a small Japanese company called Sony is one of the first licensors of Bell Labs transistor patent for $ 50,000. In a world where breakthroughs travel easily, their national origin is fundamentally unimportant. Despite the progress of the celebrated author and New York Times columnist Thomas Friedman, it does not matter that Google's search algorithm was developed in California. An Englishman invented the World Wide Web protocols in a Swiss laboratory. A Swede and a Dane have Skype, the leading provider of peer-to-peer Internet telephony in Estonia. To be sure, the foreign origin of such advances does not damage the U.S. economy. What is true for breakthroughs in Switzerland, Sweden, Denmark, and Estonia is true as well for those of China, India and other emerging economies. We should expect and demand that the wealth spread, more places to contribute to humanity's stock of scientific and technological knowledge. The nations of the earth is locked in a winner-take-all race for leadership in these fields: strengthening research capabilities in China and India, so they share the latest work, improving the living standards in the United States; what, if anything to encourage these developments rather than wasting valuable resources fighting. The willingness and ability of the lower level players new knowledge and create products is at least as important to an economy such as the scientific and technological breakthroughs in their rest. Without the radio manufacturers such as Sony, for example, transistors may have remained mere tourist attractions in the laboratory. Maryland has a higher per capita income as Mississippi because Maryland is or was an extremely important developer of innovative technology, but because of its greater ability to benefit from them. On the other hand, the city of Rochester, New York home to Kodak and Xerox alleged is one of the highest per capita levels of patents of all American cities. It is far from the most economically vibrant of them, however. More than 40 years ago, the British economist Charles Carter and Bruce Williams warned that "it is easy to [economic] growth hampered by excessive research, by a high percentage of scientific manpower engaged in the stock of knowledge and small a percentage of those involved in using it is the position in Britain today .. It is very to the point that the United States has not only great scientists and research laboratories, but many players who can exploit high- level breakthroughs, regardless of where they originate an increase in the provision of high-level know-how, no matter what the source, offers a raw material for the medium-and ground-level innovations that raise living standards in the U.S. has increased. Techno-fetishism and techno-nationalism also ignore the implications of the sector's growing share of the U.S. economy. Manufacturing, with only 12 percent of U.S. GDP, is responsible for about 42 percent of the country's R & D and the use of a disproportionately large number of scientists, technicians and engineers. Services, with about 70 percent of U.S. GDP, is responsible for a disproportionately low. But that does not mean the service sector shuns innovation. As the economist Dirk Pilat notes, "R & D in services is often different in nature from R & D in manufacturing. It is less focus on technological developments and in the joint development of hardware and software providers, ways technology "applies to products. Whatever part of the resources, a production economy spent formal research (or research labs) and the training of scientists, the relevant section lower in a service economy. Think of a very important aspect of the U.S. services sector: its use of innovations in information technology. It is easy no matter where they are developed, and the benefits primarily for American workers and consumers by chance, as opposed to manufacturing, most services in the United States consumed. Suppose that the IT researchers in, say, Germany is a program that helps retailers to cut inventory. Wal-Mart Stores and many of its American competitors conclusively shown that they are much more prone to such technology as retailers, for example, Germany, where the rules and a preference for picturesque but inefficient small-scale shopping companies discourage a chance something new. This is one of the main reasons why there since the mid-1990s, productivity and income has accelerated in the United States than in Europe and Japan. Verandering course Since innovation is not a zero-sum game among the nations, and high-level science and engineering is more important than the ability to use it in the center and ground-level innovations, the United States reversed policy in favor of the one over the other, and it should stop worrying that the forward march of the rest of the human race will be reduced to ruin. A clear example of his mistaken policy is the provision of grants and awards for R & D, but not for the marketing of products or the development of ground-level to know how the people who use them to help. Similarly, companies like Wal-Mart has a large IT budgets and staff that the development of a large part of the ground-level expertise and even in the house. But none of these qualify for R & D incentives. Policies to promote long-term investment by providing tax credits for capital equipment and brick and mortar structures seems outdated as well. The purchase price of the Enterprise Resource Planning systems, for example, only a fraction of the total cost of projects to implement it. Businesses are eligible for investment tax credits hardware or software to buy tax breaks to get the cost of training users, adapting the hardware and software to the specific needs of a company, or reengineering its business processes to accommodate them. Immigration policy in favor of a high-level research by highly trained engineers and scientists for people who only bachelor's degrees holding is misguided for the election.By working in, say, the IT departments of retailers and banks, immigrants who do not have advanced degrees than likely a large contribution to the economy of the United States than those who do not. Similarly, U.S. patent over-sensitivity to the needs of R & D labs and not enough for the innovators of the development of medium-and ground-level products, which are often not patentable intellectual property developed under the current rules and are often easily threatened by high-level patents obtained. Thomas Friedman to the contrary, the world is hardly flat: China and India are close to catching the United States the ability to develop and use technological innovations.Starting again, may allow these countries to continue to Leapfrog some respects, the construction of advanced mobile networks, for example. But the shiny in the overall innovation requires a large and diverse team, which is a very long time to build. Japan, for example, began in the late 1860s to modernize. Within a few decades, it has completely changed its industry, educational system and the military. Today the country's highly developed economy makes important contributions to technological progress. But after almost 150 years of modernization, Japan is lagging behind the United States in the overall ability to develop and use these innovations, the average productivity data shows. South Korea and Taiwan, which is truly miraculous growth rates since the 1970s enjoyed, is further behind. China and India have any real probability, at any time in the foreseeable future, the achievement of equality with the United States, which has so far eluded Japan, South Korea and Taiwan? Fighting is dangerous, but the anger over the imaginary threats affect the ability to real children talking. A false fear of scientific and technological progress in China and India to the attention of the Americans and the benefits of the biggest problems created by the integration of these two countries into the global economy-such as rising per capita fossil fuel consumption more than two billion people. We do very little to be. Let us worry about the right things.