How America can create jobs
The nation's entrepreneurial prowess may be the best hope to stem 9.7 percent unemployment. Companies from a laser-tech firm to a baby-sitting network are harnessing new ideas – and helping reinvent the economy.
(Page 5 of 5)
Another problem facing start-ups is the "brain drain" to other nations. America continues to educate and attract many highly skilled immigrants, who are among the most likely to help launch high-growth firms. But many others are now going elsewhere to study or returning home after attending college in the US.Skip to next paragraph
Subscribe Today to the Monitor
Despite all the challenges, the US enjoys considerable strengths in its innovation economy. First, as the world's premier bastion of consumerism, there is no better place to give new products a try. Columbia University economist Amar Bhide believes traditional theories of economic growth overestimate the role of scientific research and underestimate the role of "venturesome" consumers, people who take risks alongside the entrepreneurs by trying new products.
Second, businesspeople in America excel not just at technology but also on the "softer" side of innovation, the art of managing people. The success of Field's printing business in Montana doesn't stem simply from the confluence of the Internet and high-tech color presses. It's also his customer service, embodied in three-person teams that take each print job from start to finish.
Third, the US sports an array of supportive institutions, from university research labs to "incubator" business parks that offer low-cost office space and mentoring. Z Corporation, based near Boston, sprang up because the Massachusetts Institute of Technology (MIT) created technology for hitting a "print" button for three-dimensional objects.
If a 3-D printer sounds like something out of Willie Wonka's fantastical candy factory, just replace the confectioners' sugar with a less appetizing kind of white powder. The little granules get molded into any imaginable colorful shape – from prototypes of shoe soles to architectural models.
"We've developed our own patent portfolio" since licensing the initial technology from MIT, says CEO John Kawola, whose 15-year-old firm now has 130 employees.
Many US start-ups are also increasingly "born global" – with blueprints that recognize customers might be in Sydney, Australia, and parts suppliers in Seoul, South Korea. Take IPG, the laser firm. As the company grows, new jobs could be added not just in the US but in the firm's Russian or German operations – or elsewhere. Gapontsev says his choice of locations hinges on two issues: finding top talent to hire and having access to key markets for his products.
His own Russian roots are a reminder that the US has never had any patent rights on ingenuity. As a scientist in Russia shortly after the Soviet Union collapsed, he became convinced that optical fiber could be the conduit for delivering much more laser energy than others believed to be feasible – and through a flexible cable ideal for computer-guided movements on the factory floor. Pursuing his vision, Gapontsev laid the groundwork for a company that has seen sales grow from $61 million in 2004 to $229 million in 2008, according to Deloitte, the accounting firm. "For America, there is only one way to compete with Asia," says Gapontsev – automate wherever possible.
It's clear that the rest of the world won't be standing still. The challenge for the US, as it tries to recover from this recession and achieve longer-run prosperity, is to nurture even more entrepreneurship. As Mr. Atkinson puts it: "We need the US economy to keep reinventing itself."
• Todd Wilkinson contributed to this report from Livingston, Mont.