By Jason Pang Jao, Daily Opinion Columnist
Published February 1, 2012
Facebook, Twitter and Google — these are some of today’s hottest companies that started off as ideas; not ideas planted in your head by Leonardo DiCaprio, but ideas that arose from the culmination of intelligence, an open-minded environment and polychromatic experiences. A sparkle of an idea, or even a resemblance of an idea inflames, the rest of one’s neurological and musculoskeletal systems and wires this person in front of a desk until the flares turn into a volcanic rupture that gives birth to a multi-billion dollar company.
An idea is what enables us to create new blockbuster products, find cures to diseases and institute social change. In order for an idea to survive, we have to foster it with the right resources and not let the surroundings of its bearer crush that idea. Governments have the responsibility to provide a suitable environment for creativity, and if they cannot accomplish this goal, it is our responsibility, the responsibility of the people, to tell them, “We want change!”
In Europe, a dearth of innovation has brought some of the once mightiest nations down to the brink of bankruptcy. The PIGS countries, Portugal, Italy, Greece and Spain, gained notoriety as the center of attention during the European sovereign debt crisis. Credit rating agencies Standard and Poor’s, Moody’s Investors Service and Fitch Group recently downgraded the creditworthiness of PIGS. With the added apparent risk, investors demand even higher interest rates for holding bonds issued by PIGS, rendering it more difficult and expensive for these nations to raise funds.
As the debt crisis drags on, industry experts ask, “Why is this happening?” Many conclude that it’s the political corruption, the inept fiscal policies and tax evasion that led to today’s quandary. Now, with new data from University of Toronto’s Rotman School of Management, I can confidently say that a lack of investment in Research & Development and other innovative activities are a major potential culprit for the crisis.
PIGS, both in the public and private sectors, each spent between 0.58 percent (Greece) and 1.51 percent (Portugal) in R&D activities as a percentage of GDP in 2008, which lagged significantly behind the averages of the European Union (1.9 percent), the United States (2.76 percent) and Japan (3.44 percent). According to the Global Creativity Index Report of 2011, which measures a country’s technology, talent and tolerance levels (the 3Ts), the PIGS nations lag in at least two of the three metrics. For example, Greece ranked ninth out of 82 in the education and creative class but lacked the tolerant environment and technological infrastructure needed for retaining its talent. Spain ranked sixth out of 81 for tolerance of minorities and LGBTQ members in its community but trailed in technology and talent. When compared with the per-capita GDP of countries, GCI shows a correlation of 0.82, indicating a strong link between creativity and economic prosperity.
The United States, which ranks second in GCI behind Sweden, has the world’s highest GDP. But with industry-driven economies like those of China and India shifting employment opportunities abroad, we must look for ways to catalyze the growth of our economy if we wish to harbor and improve upon our success story.
In his speech in Ann Arbor last Friday, President Barack Obama said he wished to bring back the manufacturing jobs from abroad. With all due respect, I think we ought to stop thinking about what we can take back and focus on what we can make anew. I am speaking about new entrepreneurial start-ups like Facebook and Apple, new research centers like those established by Pfizer and Ford and new opportunities for the people of this country to innovate. If we enrich the economy with a wealth of new ideas, we will create a demand for jobs so great that the free market and its constituents will have to hire domestically. The Obama administration and Congress should seek ways to further this cause, including the establishment of a long-term R&D tax incentive plan, the creation of a bureaucracy-free business landscape that promotes small businesses and start-ups, and scholarships that reward students based on their creative and problem-solving skills.
Obama said University students know how to “make” things. We damn right know how to “make” things — from world-class solar cars to renowned search engines, from fissionable materials to information theory. I am proud to say that we have one of the most formidable student bodies in terms of talents and enthusiasm. We have all the will and the right ideas. The question is, is America ready to listen?
Jason Pang Jao can be reached at email@example.com.