For all the discussions of "green shoots" in housing or consumer spending over the past few months, too little attention has been paid to a classic American economic advantage: innovation. If cash flow is the blood of the global economy and spending and investment are its main arteries, then innovation is the heart that does the pumping.
Over the long term, innovation is what drives cost reduction, higher employment, spending, health care, investment and ultimately, better living standards. Many business owners see it as their No. 1 priority. When consulting group McKinsey asked executives in February where the government should direct the majority of its stimulus spending, 59 percent of respondents said on "fostering innovation and potential new industries," putting it in the top spot, even before potential solutions such as "helping workers who have been laid off" or "helping existing companies."
Can Innovation Save the Economy?