Is America a 3rd World Country?
A recent article in the Huffington Post suggests that the U.S. has become a third world country in terms of innovation. The article states:
A report by the Information Technology and Innovation Foundation looked at the progress made over the last decade in the area of innovation. Out of the 40 countries and regions it examined, the U.S. ranked dead last.
A study on innovation by the Boston Consulting Group concluded that America is “disadvantaged in several key areas, including work force quality and economic, immigration, and infrastructure policies.”
In 2009, patents issued to American applicants dropped by 2.3 percent. Those granted to foreign-based applicants increased by over 6 percent.
The article suggests loosening up our immigration policy for highly trained individuals and increasing the quality of our educational institutions as solutions to this problem. While there is nothing wrong with these suggestions, they fail to recognize the real changes in policy that we have made in the last decade that are killing innovation. Specifically we have passed a number of laws and regulations that are killing innovation in the US. The incredible innovation of the 90s was based on technology start-up companies built on intellectual capital, financial capital, and human capital. All three of the pillars have been under attack since 2000. Our patent laws have been weakened reducing the value of intellectual capital. Sarbanes Oxley has made it impossible to go public reducing financial capital for start-ups and the FASB rules on stock options have made it harder to attract human capital to start-ups.
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