Only 9% of US Companies Innovate, Survey Says

Only 9% of all 1.5 million U.S. companies reported innovation in any product, service or process between 2006 and 2008.  Data source is an extensive 2010 NSF, or National Science Foundation, Business R&D and Innovation Survey.

Only 9% of U.S. companies are innovating.  Can we really call that an innovation economy?

China innovates at 0%. “China doesn’t innovate at all,” is what we tell ourselves.

For the sake of argument, let’s say it’s true, that China has no innovation prowess. Does that makes our 9% innovation rate acceptable?

Nine percent innovation across industry in a country is not an innovation economy. It leaves 91% making the same old stuff and approaching things the same old way: the same way that didn’t work the year before.  It’s a stunning statistic.  It ought to rouse a fire under our hindquarters — maybe President Obama was the only one who took note of the study, hence his current Revolutionary Ride.

Innovation and need. Recently I saw a blog post that said a greener New England is on the way, that the northeast quadrant of the US is poised to become the innovative green tech capital of the world.

The gist was that the overeducated, industrious, conservative New Englanders would bring innovation and revolution to the green tech, rather like what Silicon Valley did for the computing industry. New England wouldn’t do this out of utopian ideals. It would come to pass out of practical need.

What sort of need? The inability to afford New England heating and cooling expenses, and the New Englander ability to do something about it.

Shell Oil notes increasing demand and more difficult supply restrictions. To illustrate the need, here are two pieces of news from last week:

  1. Europe is planning an 80-90% GHG reduction, or greenhouse gas reduction, by 2050. The plan, published earlier this month, aims for emissions reductions as follows: 2020 (25%), 2030 (40%), 2040 (60%) and 2050 (80-95%).
  2. Simultaneously, the largest oil company in Europe, Shell Oil, announced that there will soon be an oil shortage, between tightening restrictions and increased Asian demand. “Supply will struggle to keep pace with demand,” said the report, which is oil-company-ese for “significant price hikes are somewhat inevitable.”

The logic is as follows:

  1. There is monstrous expected economic growth in India and China from now through 2050,
  2. There are increasingly stringent restrictions on emissions, ergo processes, transportation, and regulatory parameters, therefore
  3. Meeting increased demand with more restriction will be challenging (thus expensive).

The gap of demand to supply “will have to be bridged by some combination of extraordinary demand moderation and extraordinary production acceleration,” said Shell, as reported by the Associate Press.  AP ended the article rather cheekily, but fairly, by pointing out:

Shell’s net profits last quarter were $6.79 billion.

You know what’s cooler than $6.79 million?  $6.79 billion.*

What’s cooler than $6.79 billion?  Making $6.79 billion per quarter.

Innovation as necessity. What’s cooler than cheap oil? Not needing oil and gas for heating and cooling homes, office buildings and public spaces.

I recently read something about a vision for America by 2025:  geothermal heating and cooling for every building in the country.  Maybe we should contact New England about that, was my first thought.  But really, it’s not such a bad idea.  If the cost of doing so less than $6.79 billion per quarter, we ought to get some momentum behind the idea; because we’re spending that money anyway.

Maybe that’s the kind of innovative thinking we need to get over this 9% hump.

Nine percent!

For more on the innovation survey, please see this NSF data: See also: Bruce Nussbaum on America’s Innovation Policies

*Paraphrased from the film, The Social Network.