If you are like most Americans then you love the president state of the union speech where he talked about innovation and taking America into the 21st century. I could not agree more because I’ve been innovating through entrepreneurship all my life, and rather than being humble, I’ll tell you straight away, I’m darn good at it. Nevertheless, I’d like to play devil’s advocate for a second here. I question some of the government spending on innovation and let me tell you why.
First, as a part-time consultant in semi retirement, I often talk to entrepreneurs who are busy going after various research grants, loans, and venture capital funding. I am also very close to a major University, and I am amazed at all the government funding for research there. Nevertheless, I also find that these university researchers go to conferences, and submit papers to major scientific journals, and that information is used by industries and foreign nations with foreign government subsidies, or competing companies.
Folks, I’m here to tell you that most of the innovation we do in America is being stolen, and producing innovations in other nations which compete with our companies. It’s not creating all the jobs we have been told especially when you look at the alternative energy sector. Therefore, all we are really doing is building a giant bubble in the alternative energy sector, and throwing billions of dollars and not reaping the rewards of employment.
Our jobs are not being recovered, and even though our economy appears to be on the mend, we still need those jobs back – we cannot keep spending ourselves into oblivion on some wing and prayer that everything will work out. Further, I’ve noticed far too many new entrepreneurial companies take their new innovations and manufacture there concepts overseas. And their financial backers, the venture capitalists, and other groups that are funding them are actually recommending that they do this.
Why you ask? It’s very simple the regulations in the United States are far too onerous, corporate tax rates are too high, the unions are hard to deal with, and there is too much litigation. It doesn’t make sense to do business here. Further the labor costs are quite a bit higher, and the increased regulation on employment for things like healthcare benefits, really takes it over the top. No honest company that wants a serious return on investment is stupid enough to set up a factory in the United States.
So whereas, I love the idea of innovation, I am not sure that I believe my tax dollars should be subsidizing the formation of companies in China, India, or contributing to the financial strength of nations like Japan, Germany, or other major competitors in the global free market. Now mind you I am all for innovation, but we are not reaping the rewards of all the R&D we are spending. Further our universities are setting up shop overseas to teach our future competitors how to innovate and do business.
Meanwhile, our government continues to subsidize the funding of the very universities that are setting up secondary divisions in all these other countries for the research they do here, while those professors often take jobs overseas when setting up the new universities in those other countries as well. It’s time to stop and look at what we are doing rather than just making great speeches. Indeed, hope you’ll please consider all this and think on it.