America and Innovation - Thoughts on Sustainability

I have been reading Tom Friedman's latest book, Hot, Flat and Crowded, and I was struck yesterday by one small portion on America's role in the world. He argues that the United States has traditionally led the world in technological and institutional innovation and that it must exert this same leadership our environmental problems.

He says:

It's not just technology innovations we need to be offering the world. America has also been an innovator in the conservation of natural resources, and we can promote this value globally as well. . . . If America would become the world leader in building clean energy technologies and promoting conservation, it would tip the whole world decisively in that direction. This probably sounds a little old-fashioned or jingoistic. I do not mean it that way. It is just that I continue to hold the view that many large-scale bad things happen in the world without American leadership, but few large-scale good things happen without American leadership. . . . Americans forget, especially in recent years, when so many people around the world seem to be criticizing us, how much American either stops setting trends or sets bad ones, the whole world fees the effects. (pages 176 -177)

From my perspective here in Brazil, I believe Friedman is right. His linking of innovation to American leadership and the need to create a sustainable world puts a challenge to the Obama Administration that the rest of the world agrees with. Technological innovations in the environmental area are expensive and are beyond the financial capabilities of most of the developing world, as Friedman and development economists such as Jeffrey Sachs point out. Likewise, only in the United States does the concentration of science, engineering and entrepreneurship permit innovation on a sufficient scale to create the basic technologies, which can then be adapted and applied throughout the rest of the world.

For example, support in Brazil for technological innovation is clearly lacking and technological innovations coming from Brazilian research centers suffer from lack of industrial development of them. The three big exceptions to this are Petrobras (the state-owned oil company), Vale de Rio Doce (mining), and Embraer (aviation). These three companies appear on all the "Top 1000" companies' lists for R&D. Brazil does have the industrial capacity to manufacture the innovative products created in other regions of the world, but it simply does not have the to develop fully new technologies. The situation is the same throughout the developing world.

Whether developing countries are angry at the United States for its aggressiveness or its "go it alone" posture towards foreign relations, they do look to America for innovation indeed.

Another factor to be considered is America's potential moral leadership to bring other countries along to sustainable thinking. A group of American environmental policy students recently visited the MBA program where I teach in Brazil. In the round table discussion they had with our students and staff, one of the Americans offered the opinion that Brazil would do best to avoid America's dependence on an industrial and consumer culture. This is the kind of naïve view that harms America's relations with the world. It was politely pointed out to this student that participation in industrialization and consumption is exactly what the U.S. had been preaching for the last 50 years and this is exactly what people in Latin America were seeking. How could the US suddenly pull the rug out from under these decades of aspiration and say, "Well, that didn't work, so don't you do it."

The message that could enable the US to establish its moral weight in favor of sustainable development is quite different. It should be that the US is willing to invest heavily in new sustainable technologies that will allow growth to continue but in a different direction than it has in the past sixty years. The US government needs to commit to an R&D program for sustainable development as part of its recovery plan from the financial crisis. Since the financial crisis became apparent some six months ago, many commentators and policy makers have urged American and worldwide industry to adopt a new, sustainable model for growth. A commitment from Washington to do just that would both help lead the world in the new direction that Friedman is speaking of and create a useful program that could help sustain America's technological leadership for a long time still to come.