Innovation is the only way the U.S. can get out of its economic hole. - Inspired by Michael Mandel

I absolutely agree. The status quo on Wall Street isn't working. It's not going to take just the Federal Reserve to save the U.S. economy, it's going to take some serious revamping and overhaul on the way big companies do business. While the entire global economy is in crisis right now, a good deal of it is because of the U.S. economy, and maybe its time to start looking at other economic models in other countries that have done better in the last few years while ours has floundered.

If Innovation was the only thing that would get the USA out of the hole, the economy should not be in a hole - nanotech and biotech being pointed out above. - The first thing the USA needs to do is follow the rest of the World - the way Europe regulates their markets, deals with mortgage issuers maintaining risk for the loans they make, International accounting standards and so forth. - To get out of the hole, they will also need to encourage capital back into the country by reducing corporate taxes, especially taxes on repatriated profits, and come in line with the most of the developed nations. - Finally, policymakers need to grow a backbone and push through policies that encourage investments in the future: renewable energy, more fuel-efficient cars and allowing immigrants with university degrees to more easily come and work in America. - Innovation by itself means nothing if regulations are lax, lobbyists can hold back the country and taxes provide no incentive to spend money there.

Most of the time absolute statements are only partially correct at best, so I am skeptical that innovaton is the only way. It is critically important in this business climate to innovate, but it is also important to provide the customer with a consistent, repeatable experience with your brand, and with good customer support. Some companies remain very competitive with only limited innovation. The benefits of innovation are easily wiped out by bad business practices, which is how we got to where we are now. It seems to me that one of the things we need to fix first is the gap that can exist between a company's perceived strength (or stock value) and its actual competitiveness in the marketplace. When many (possibly most) stock trades are transacted based on the performance of the stock rather than the company, speculation rather than true value will drive our economy. Starting with bad mortage lending, we as individuals and institutions have dug this hole in large part with speculative buying. Innovation will help increase value in strong companies, but will not magically create value where there was little to begin with.

Stop wasting money and resources?

Sometimes we need to acknowledge that we are part of a larger world. Would it be innovative for us to adopt the metric system--a world standard since the 19th Century? It certainly would help and should have been done in the 1970s as originally proposed. While much of our technology is, in fact, innovative, we are well down the list of "early adopters" in business and consumer culture. We need to look a comparative norms worldwide and get away from the NIH (not invented here) mentaility.

Many different players can have a role in this. We have been working on ways to communicate to local economic development practitioners the value of promoting "transformational economy" (TE) principles and industries, as a way of revitalizing local economies. TE includes reinterpreting industrial processes to more benign methods of production, curtailing waste, etc.; recycling byproducts of extraction/production; developing new products or new systems that achieve comparable utility while demanding fewer resources; and adopting new methods of providing goods and services that tend to be inherently more efficient, among other things. Economic developers can work with their local industry base and governments to help define opportunities, and encourage governments to apply subsidies for industry (if they must do this sort of thing) that contribute directly to the implementation of TE principles. The strong growth potential of TE principles and applications is exactly what would appeal most to job-generating economic developers, plus it gives them real branding possibilities, new ways for cities and industries to partner, and other advantages.

Technology Review covered the full story on the quants in relation to the current crisis. You can get the articles easily. One is called "The Blow Up" A banking recovery plan will have to be a key focus of the financial sector for specialized conferences, web seminars, and web conventions. In fact, Algorithmics should be one of the main tools of the quants, Federal Reserve, and any kind of Resolution Trust in making determinations on key value judgements. Evidently Japan did not favor the unwinding of paper during their crisis. How to measure the whole deal should be a focus of the financial experts. After all the practical will prevent another such mortgage lending collapse. Bubbles are the "no-no" that can't coexist with global money markets. So one of the best commentary comes from a financial professional . you can find his take by going to Investors Insight and clicking on the article titled "The Fall of Lehman and the Terrible Lesson of Bear Stearns" So why were the quants so off base, when they set up the equations that created the Credit Default Obligations, etc? What should be done to insure that the tech. sector gives enough support to eliminate any errors of such magnitude for the future? And, what process and standards have to dictate the financial regulations on the quants?

I think innovation is a big factor in improving our economy, but so is reinvesting capital in our manufacturing and raw materials industries. China isn't getting rich producing ideas. It is banking on its production capabilities. One way to insure innovation is to restructure the patent laws. Currently, patent law plays into the greediness of the wall street crowd. Patents have become a tool for extracting rents through litigation and stifle technological progress. Patents carrying a use it or lose it policy would encourage innovation, but discourage holding companies who watch for companies who successfully exploit their intellectual property before pouncing and extorting.

Thanks for an interesting post on innovation as the solution to the challenges within the United States. I recently discovered that the Kauffman Foundation is seeking to promote higher rates of business formation within the US and around the world. The hope is that young people will consider entrepreneurship as a path to solving great challenges. For the people who want to consider entrepreneurship, there are a host of opportunities to change the world. In November of this year there will be a new effort to promote entrepreneurship. This will be the first time effort among more than 60 countries to establish Global Entrepreneurship Week. I hope this international effort will be an inspiration to young people across the world to face the challenge of their dreams and not to be frozen by the fear of loss. Let’s hope we can encourage young entrepreneurs around the world to give innovation and implementation a try. Shallie Bey Smarter Small Business Blog

Innovation is at the root of this economy meltdown. Shouldn't have been by the "innovative" financial products that allowed to re-sell risky portfolios covered by a coat of sophistication and a lot of information hidding techniques (in sake of simplicity, I guess) things might be in a better shape. Do not foul ourselves: innovation, as mostly anything else, is a good thing only when is exercised with resposibility. The consequence of irresponsible innovative ideas is to trigger more innovative market intervention from the government. (Do someone remember, say, Enron? Innovative accounting and then much more innovative SarbOx regulation.)

Innovation and using all of our resources is our only answer. It is time to quit being politically correct and get back to what is right and wrong. We need to Drill everywhere we can and reinvest profits into alternative energy. The middle east and Russia could shut the US down totally if they decied to forgo the profits from seling oil to us. If we dont get self sufficiant we will eventually end up in the hands of our enemies and our resources will be taken from us. Drill now and move on technology as fast as possible.

Beside innovation, American businesses should get back to basic of values creation and not to be involve in over expansion. I think it is over confidence and over depending on debt or future money that kills the American dream. We love the ideas of new venture, however too many did not have the business accountability and ethics it should build into their business DNA. Lastly, American business still impose the American method or way onto other global markets. That is a big mistake. Time to awake, and recognize that Asian is not as stupid as it use before.

Instead of innovation, how about integrity? Colossal greed got us in the mess we are in today. Ranging from the senior executives to mortgage brokers to loan officers to property appraisers to real estate agents to ill-informed or ignorant buyers to speculators---pure out and out greed fueled the economic fire storm we are experiencing today. So, how about this for innovation—honesty, integrity, selflessness. These steadfast character traits have been gone from the hearts and minds of too many people in the business industry for so long that they are new. Hey, that could be innovation—the introduction of something new. What if integrity had been the motivation not greed? Corporate executives would have sought gain, not profits. Sub-prime loans would never have been considered let alone offered. Mortgages would not have been written or processed for the unqualified. Accurate appraisals would have been given, not inflated estimates. Speculators would have not foolishly risked the money of others. How much of the economic hardship our nation is now facing would been averted if the business community had demonstrated integrity and honesty in its dealings?

Innovation is one way to get out of this economic mess, not the only way. What ever happened to living within our means? With reducing our debt (individually and Federally)? Time will get us out of this hole, but we'd be wise to find ways to manage our greed so we don't find ourselves here again.