Is the U.S. Losing Its Innovation Edge?

CIO.com asked four senior IT executives to weigh in.

Bob Wittstein, CIO of Sappi Fine Paper North America We as a nation have been so focused on cost cutting, efficiency and profitability—obviously all important things—but I think it’s sometimes at the expense of service and innovation.

Innovation is not cheap. If you do it wrong, you’ve wasted a lot of money. But there’s an exponential gain if you do it right—if what you’re innovating is something the customer is willing to pay a premium for. Companies are starting to realize that customers now expect operational excellence, cost cutting and service. The differentiator has to be innovation. So as you evaluate your strategy and try to understand where you’re going to make a difference and outperform your competition, it’s going to have to be in your products.

Michael MacKenty, corporate vice president of IT and supply chain services at Nypro, a precision plastic injection molding companyPersonally, I feel that our “innovation” gap is overblown. Many new and exciting technologies are being introduced by U.S. firms and much of the web economy is being driven from America. The real change in the innovation picture has everything to do with globalization. Innovation is becoming a global game, and I believe America is at the forefront of utilizing this for our own advantage. We are constructing new paradigms for using outsourcing to bring product to market faster. This is innovation that is often accused of being just the opposite.

The real concern should be around education and how we are preparing our future generations. Innovation is the result of a well-educated workforce coupled with a culture that encourages and supports new ideas. We certainly have the culture. It’s the education that I worry about.

Bud Mathaisel, CIO of Solectron, global provider of electronics manufacturing and integrated supply chain servicesNo, we’re not losing the innovation edge. We are losing the market opportunities to prototype the innovation in a way that you improve the innovation. While [the U.S.] comes up with some very good original ideas, new product introduction is occurring in places like Tokyo, Shanghai or Singapore. You see that when you visit their high-tech shops. The options and range of things available—cell phones, PDAs, laptops—are far broader in those places than here.

We create the ideas, but they are then expanding on them and offering to the market more quickly. In our markets, we end up with less of a selection and much more of a high-volume, low-mix environment because of the retail distribution and the fact that stores like Comp USA and Best Buy don’t want to carry the broad range that a smallish shop in Singapore would.

It’s not an innovation problem. It’s a mass market, big box store problem.

Barbara Bailey, information services director of the South Carolina Budget and Control Board, General Services DivisionA lot that’s happened with innovation is that the whole IT sector is so unwieldy. People are laid off all time. Companies are bought and sold on a regular basis. I think that’s a big reason why people are afraid of getting too sunk into the technology area. People feel that it’s less attractive even though the money is there. And we do too much outsourcing, not necessarily just offshore.

Government and unions feel they have a harder time firing poor employees. That’s inclined them toward outsourcing because they see it as an easier way to get rid of bad-performing employees. More insourcing with the ability to fire poorly performing employees would stabilize the whole field of technology, thereby attracting more people to it.