Protesting too much – quietly exploiting nurturing innovation

by YankeeJim | June 15, 2010 at 10:59 am

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American Treasury Secretary Geithner is out there pounding the Chinese on various currency and trade disputes. He deserves respect for trying to engage.

Guys like Steve Ballmer at Microsoft will fight for every last living ounce that he can from the once innovative Microsoft.

Yet, the solution to the American economy returns to understanding what makes our culture able to produce higher states of innovation than other cultures. In a culture war where individual freedom is the bottom line, we win, if we don’t kill the culture with too much socialism.

In a celebrated article in the Harvard Business Review back in December 2009 titled, “How I find innovative people...,” the article discusses five factors about innovative people: 1) Associating, 2) Questioning, 3) Observing, 4) Experimenting, and 5) Networking. In a closed and claustrophobic society such as China, how do you think these behaviors fare?

I am starting to sound like Malcolm Forbes Jr.

We have a cultural advantage that won’t quit anytime soon, unless we smother it with government spending and defective national industrial policy.

“China Tries To Boost Innovation
By Christopher S. Rugaber, AP Economics Writer
Manufacturing.Net - June 15, 2010

WASHINGTON (AP) -- China is heightening trade tensions with the United States by taking steps that could make it harder for U.S. software, clean-energy and other cutting-edge companies to sell in the Chinese market.
Beijing has proposed rules that U.S. businesses say would lead its government agencies to buy high-tech and other goods only from companies that develop the technologies in China. It also plans to subsidize Chinese companies in industries such as clean energy.
U.S. business groups warn that such efforts could, for example, exclude wind turbines from General Electric Co., Siemens and other foreign providers from government-financed wind-power projects.
Members of Congress and U.S. trade officials are taking notice. The U.S. International Trade Commission holds two days of hearings starting Tuesday. The House Ways and Means Committee will look into the issue at its own hearing Wednesday.
Software executives from 12 companies, including Microsoft's CEO Steve Ballmer, raised the issue last week in meetings with members of Congress and Obama administration officials.
U.S. software companies say they fear China's proposed policy would cost them billions in sales. Government purchases represent about 40 percent of the Chinese economy. And most software is developed outside China. Those products wouldn't be eligible for purchase by Chinese government agencies and state-owned enterprises.
China's policies to encourage what is known as "indigenous innovation" have moved to the top of the list of trade concerns for U.S. businesses. For some, they are nearly as important as the disputes over China's currency and the piracy of music CDs and Hollywood movies in that country.
Treasury Secretary Timothy Geithner raised objections to China's approach in high-level talks in Beijing last month. At a congressional hearing last week, he said China agreed to discuss U.S. objections "over the coming weeks and months."
China hasn't yet formally adopted the government procurement rules. But according to a survey in March by the American Chamber of Commerce in Beijing, 37 percent of U.S. information technology companies said they were losing sales because of other "indigenous innovation" policies already in effect.”