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America needs creative entrepreneurship, not more engineers, a business-school professor argues.

The Venturesome Economy:
How Innovation Sustains Prosperity in a More Connected World
by Amar Bhidé
Princeton University Press, 2008, 508 pages

At a time when both the National Academies and President Obama say America needs more research funding, engineers, and scientists, Amar Bhidé offers a very different assessment. U.S. market strengths derive from a complex interplay of forces, says this Columbia University professor. They rely not merely – or even primarily – upon high-level science but also upon creative product development, adaptation, and business strategies. Rather than presenting a threat, technological advances in India and China will support continued U.S. development, just as innovations from abroad have always done.

Arguing against those he terms “techno-nationalists,” Bhidé presents a vision of an America that thrives through risk-taking and skillful marketing. To maintain a global lead, we should not simply pour money into more science but invest in a range of educational and business resources. Nor should we advance a narrow agenda of protectionism, he argues, but rather, embrace global competition as healthy and supportive of U.S. development. “High-level knowledge is now highly geographically mobile and is used to produce goods and services far from where it originates,” writes Bhidé. Yet it is often mid-level innovators and not scientific or engineering experts who play a key role in turning such knowledge to profitable local use. The provocative arguments explored in The Venturesome Economy should provide engaging reading for ASEE members.

Bhidé bases his analysis upon a six-year study of 106 U.S. venture-capital businesses. Such youthful enterprises are often more risk-taking and globally focused than established businesses, he writes; so it is through them that we can observe innovation at work. Book 1 of The Venturesome Economy, which details the results of this study, serves as the underpinnings for the larger considerations explored in Book 2. Some readers may find this latter section more intriguing, with its often contrarian positions. Bhidé argues, for example, that U.S. immigration policy should stop favoring technical Ph.D. immigrants over younger, less trained talent who can provide labor for IT departments, banks, and retailers. He also questions the findings of the National Academies’ report Rising Above the Gathering Storm, charging that it draws upon limited and outdated data.

The research into VC-backed businesses in Book 1 is also engaging, and it is this section that provides greater support for Bhidé’s assertions. Here he is able to demonstrate how successful businesses often capitalize on the technical innovations of others, and how success is secured through the creative adaptation, repositioning, and marketing of services or products, rather than through the initial science. Apple’s iPod is a perfect example, employing the technology of the first portable media player – Singapore’s Nomad Jukebox – yet surpassing it with imaginative design and brilliant marketing.

The American success story is also fueled by its consumers, according to Bhidé. With strong technological know-how, education, and competitive spirit, Americans are more willing to take risks on new products than are consumers in other countries, in part, in the words of one CEO, because “they relish the idea of being on the cutting edge.” Though the Japanese are more adventurous with electronics, “U.S. consumers lead the [global] pack in spending on new gizmos – whether they have the current financial means at hand or not.” For Bhidé, such willingness to consume suggests not financial irresponsibility but a venturesome spirit and an interest in and engagement with technology – core American strengths. Bhidé is confident that the United States will continue to compete in the innovative development, application, and consumption of new products, services, and ideas. But to ensure the country’s continued leadership in the global marketplace, government, industry, and educational leaders must recognize and support mid-level innovations, including stronger business and marketing models.

Some Prism readers may not readily embrace Bhidé’s predilection for business solutions over engineering ones, nor his dismissive attitude toward the National Academies and the impending crisis in the engineering pipeline. Bhidé claims that others have oversimplified the issue of America’s global future, placing too much faith in technological solutions. Yet he himself disregards the complex and varied roles that engineers can play in business. And he ignores the multi-disciplinary strides being made in fields such as systems and biomedical engineering. Nevertheless, the value of this book comes in illuminating the importance of cross-fertilization, not only between commerce and engineering but also between engineering and mid-level market applications.

In challenging “techno-nationalist” agendas, Bhidé reminds us that merely adding more high-level scientific research and more engineering Ph.D.’s and practitioners will not provide the solution: “Filling the innovation engine with scientific and engineering fuel is fine but not if this means driving with poorly inflated tires.” Rather, as many departments and schools are beginning to emphasize, engineers must become a fully connected part of this “venturesome economy.”

Robin Tatu is a senior editor of Prism.




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