The Australian Financial Review
Among all nations, the US has long been the undisputed leader in global innovation - and should stay so for many years to come. Despite the rise of China and India, our analysis at the US Studies Centre strongly suggests that the US will remain the dominant innovating nation for the foreseeable future. Policy-makers are at risk however of rejecting a number of fundamental lessons about innovation that can be learned from the US experience.
One of the most common interpretations of the recent global financial crisis is that it was caused by an ideology of individualism, materialism, suspicion of government regulation and belief in free markets. Interestingly, these are the very the same ideals that have underpinned entrepreneurship and consumer markets in the US innovation system since its genesis.
"The maxim that every one is the best and sole judge of his own private interest, and that society has no right to control a man's actions ... is universally admitted in the United States" is how Alexis de Tocqueville put it nearly two hundred years ago.
The American pioneer has always "subordinated the rights of the nation and posterity to the desire that the country should be ‘developed' ... with as little interference as possible" is how the Harvard historian Frederick Jackson Turner put it around a hundred years later.
The fact is that the American belief in individual freedom, in free-market capitalism, in consumption, and in unencumbered competition to exploit commercial opportunity is not just something that has been imposed on the world since the Reagan presidency. It has been nurtured in communities and businesses across the US for centuries - and it has been one of the foundations of American innovation.
Governments may well experience short-term benefits by exploiting the recent crisis to extend their "right to control a man's actions" and to foster positive attitudes towards state activism. But over the longer term, a softening of the anti-regulation reflex, a new dawn for the idea of big government, and a corrosion of individualism may well foreshadow a stifling of innovation and a detrimental change in economic culture.
Visit The Australian Financial Review website for the full article.