U.S. Innovation Falling Further Behind
Innovation creates so many jobs and so much opportunity for our country…it is absolutely key to our long-term success in the global economy, [and patent filings] are a reflection of innovation.”
—David Kappos, Director of the Patent Office
It would be hard to argue with Kappos statement—the U.S. has been a world leader in innovation for decades. Unfortunately, that reign may be coming to an end.
The number of patents filed in 2009 dropped 2.3 percent from the prior year…the first year since 1996 that fewer patents were filed by U.S. inventors year over year.
Yes, you say, but we are in the midst of the Great Recession, and we should expect patent filings to drop. True enough, but it does not explain why U.S. patents (yes, U.S. patents) issued to inventors in foreign nations increased 6.3 percent over the same period.
Here is what Bijal Vakil, partner on White & Case’s intellectual property team, in Palo Alto, CA had to say:
…this trend could spell financial ruin for some U.S. companies. We’ve lost our competitive edge, and other companies from other countries stand to benefit.
I’m about to go and watch the President’s State of the Union speech, where he is supposed to talk about jobs and getting our economy back on track. We’ll see!
But, here’s the real deal—Congress and the Administration can posture and postulate all they want, but if they don’t come up with a plan to get our kids and schools revitalized in the areas of math and science, innovation leadership will soon be taken over by other countries…and where does that leave our high-tech businesses then?
How Big is the National Debt?
Consider This!
One stark and sobering way to frame the [economic] crisis is this: if the United States government were to nationalize (in other words, steal) every penny of private wealth accumulated by America’s citizens since the nation’s founding 235 years ago, the government would remain totally bankrupt.
No bankrupt nation in history has ever defended or preserved the freedoms of its citizens. In fact, it has been the exact opposite: in desperation, bankrupt governments have routinely plundered their citizens’ wealth and imposed totalitarian controls. What will make things different for the United States, the largest debtor nation in all of recorded civilization?
Putting Fiscal Year 2009’s… $9 trillion deficit another way, 17% of America’s private wealth, accumulated over a period of 235 years, was wiped out by just one year’s worth of government deficit spending…”
Note: These statements are excerpts taken from an article by Stewart Dougherty who is a specialist in inferential analysis, the practice of identifying historic and contemporary patterns and then extrapolating their likely effects upon the future. Dougherty was educated at Tufts University (B.A., magna cum laude), and Harvard Business School (M.B.A. and an academic Fellow). You can read his article in its entirety here: http://bit.ly/8WGXBH
Small Business Squashed…Again!
Well, I see the Supreme Court handed big corporations the golden spoon of political clout by striking down major parts of the McCain/Feingold campaign reform legislation. Now, big money has direct control over who does and who does not get elected.
Remember, it is all about the money, and since it takes millions of dollars to get elected to major office, it is obvious who will be controlling our government. And where does that leave Small Business?…guess!
With lobbyists from K-Street orchestrating the performances of Congress, and big business paying for the players, there is not much left for individuals and small businesses to say.
Sadly, the term “We the People” has become nothing more than fodder for political rhetoric to sooth the anger of the uninformed.
Business Funds for Veterans
Sadly, veteran owned businesses are at an all-time low. Fifteen years ago veterans owned around 20 percent of all small businesses, but today that number has dwindled to about 12 percent. Consequently, the U.S. Congress, through the SBA, has approved several programs to help veterans become entrepreneurs.
Here are three of the most popular:
- Patriot Express Pilot Loan—This program is for all veterans and active-duty military people, including their spouses. However, this is a SBA “guaranteed” loan, which means the loan is made through a bank—thus requiring that you have a good credit history. Vets can borrow up to $500,000 with 85 percent of their loan guaranteed by the SBA. And since it is an “Express” loan, you will know within one day if you are approved. For more information, call your local SBA office or visit http://www.sba.gov/vets
- Military Reservist Economic Injury Disaster Loan—This special loan is for the small business that has a key employee, or the owner, called up for active duty. The concept is to loan the business additional operating money to help it either get through the period of absence, or recover from the temporary loss of a key individual. You have a year after the return of the key employee to apply for the loan, or you can apply immediately upon the notice of call-up (a good idea if it is the business owner). For more information, call your local SBA office or visit http://www.sba.gov/vets
- Veterans Transition Franchise Initiative—This is not a loan program; it is a government-sponsored program that gives ten to 20 percent off franchise fees at almost 400 different franchising companies. This program works well for the vet who either has the additional money, or can raise it, to cover the remainder of the franchise fee, plus any operating capital requirements, and who prefers to work within the structured franchise model. For more information, visit http://www.vetfran.com
These are special programs set up to help veterans returning from active duty, or while on active duty, so don’t hesitate to take advantage of them if entrepreneurship is in your future.
The New American Workforce
It appears that in the wake of ongoing—and lengthy—unemployment, the U.S. is creating a new class of worker—the “Permanent Temporary Worker.” Of course there has always been this classification of worker, but it now appears to be going mainstream and currently accounts for 26% of all U.S. workers.
With the U.S. economy in disarray, and government legislation in process that will heavily impact employers, companies simply are not hiring full-time employees. There is such a wealth of talent available on an “as-needed” basis there is no real reason why companies should hire full-time employees. A company can enjoy the flexibility of using temporary employees—without all the hassle and expense of benefits.
But, what about the employees? How is this current trend going to affect them? Well, here is a part of the reality:
- No paid health insurance
- No sick days
- No paid vacation
- No company-funded retirement plan
- Usually no premium for overtime pay
- Without any job security, benefits, or social ties to the rest of the workforce, stress levels are increased and depression sets in, which results in permanent temps being twice as likely to report symptoms related to mental illness than their counterparts who are permanent employees.
With 26% of today’s U.S workforce falling into the permanent temp category, what does the future hold—for either the employer, or employee? When the new healthcare reform becomes law, and every person is required to buy health insurance, that will reduce the permanent temps disposable income. When small business owners are required to provide health insurance for their employees, they will likely reduce their workforce in favor of permanent temps, thus increasing the role of permanent temps even further.
A recent Princeton University study predicted that 22% to 29% of all U.S. jobs would be offshored within two decades. It may not take that long—IBM had 71% of its workforce outside the U.S. at the end of 2008, and in 2009 reduced it’s U.S. workforce by 10,000 (8%). It seems so many companies are offshoring today that any “permanent” jobs left in the U.S. may only be in the service sectors—auto, food, health, and yards.
If the U.S. should ever get to this point, the permanent temporary worker may really have the best deal of all, and that would be a very sad situation.
China to Require Web Site Registration
China recently released regulations requiring the registration of all web sites before they can be seen in China. Beijing already blocks many sites thus creating a government “blacklist.” Not content with this form of censorship, the new system will create a “whitelist” of registered sites that will be available for viewing in China. So, if you want people in China to be able to view your web site, you will have to register it with the Chinese government—assuming they accept your site for registration.
Will these regulations actually be enforced? No one really knows, but government officials certainly have the will and the capability to do so. Right after the rioting in Xinjiang last July, they cut that region off from the outside world—including blocking both email and the Internet. This embargo is still in effect today.
Technically, it is simple to accomplish in China, because the central government controls China’s communications with the rest of the world and they can impose a Xinjiang-like shutdown on the whole of China by flipping a few switches.
Some speculate that President Hu Jintao’s long-running crackdown on human rights may include his intention to take China completely off the Internet.
Time will tell, but this makes the squabbles we have with our U.S. government pale in comparison. Kinda’ makes one glad not to live in China, doesn’t it?
NOTE: This information is a synopsis of a recent article in Forbes magazine, written by Gordon G. Chang
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