Solving America's Innovation Crisis

Harvard Business Review

An interview with Bruce Nussbaum, professor at Parsons The New School of Design and author of Creative Intelligence: Harnessing the Power to Create, Connect, and Inspire.


Download this podcast

SARAH GREEN: Welcome to the HBR IdeaCast. I'm Sarah Green. I'm talking today with Bruce Nussbaum, professor of innovation and design at Parsons School of Design and author of the new book Creative Intelligence, Harnessing the Power to Create, Connect, and Inspire. Bruce, thanks for talking with us.

BRUCE NUSSBAUM: Oh, it's my pleasure.

SARAH GREEN: You say that only 9% of all US public and private companies are doing any kind of serious innovation, which is hard for me to believe that it's really that bad. So how did you get that number and tell me a little bit about the dire straits that we're in.

BRUCE NUSSBAUM: Well look, I was stunned when I heard about this. A good friend of mine, Mike Mandel, who is the Chief Economist at Business Week when I was there, did a great cover story in which he coined the term "the innovation shortfall." And it was a stunning idea. We're all used to our iPads and iPhones and Facebook and we live, most of us, in a space that we think is very high tech in very innovative and so we think the whole world is like that.

But when he went back and did some very serious economic research he came upon these great-- and I'm going to be very specific with you, right. The National Science Foundation report released in September 2010-- called the 2008 because the research took place at that time. Business R&D and innovation survey, and it's known in economic circles as the BRDIS, that showed that only 9% of public and private companies engage in either product or service innovation between 2006 and 2008. And then they did a second survey which showed it continued into 2009 and 2010. And I'm sort of quoting from my book.

That's a stunner, and anecdotal, right? This is serious analysis, a huge survey of corporations. So it killed me, just stopped me dead. 9% of all corporations, private and public, do any sort of serious innovation. And I thought to myself, well, you know, let's stop, take a moment and think about the economy as a whole. And it could be true, right?

And I did further research and anecdotal stuff and there you go. Whether it's 9% or 10% whatever it is, a tiny, tiny percentage of our companies do any sort of innovation. And that's where it kind of all began there. And I said to myself, whoa, we ought to stop and think about what is really going on in corporate America, around the world, and that began part of my research into creative intelligence.

SARAH GREEN: I know there are things-- and you talk about a lot of these things in the book-- that individuals can do to try and overcome that. But I'd like to focus now a little bit on sort of the broader innovation ecosystem that we're talking about. Because it seems like if it's really that few companies who are really innovating there's got be something bigger going on.

I'd love to have your thoughts on America's innovation policies, should we be reallocating some of our investment dollars at a government level into something that might be more fruitful and help make a better innovation ecosystem? And we'll go through a lot of different facets of this. But let's just start there. What should we be investing in?

BRUCE NUSSBAUM: So let's start with what should be America's national innovation policy. I would start with we actually spend a huge amount of money, billions and billions of dollars on research every year. Most of that research for, I would say, the last 20 years has gone into bio science. We've made enormous bets on bio science.

And one of the reasons why that has happened is because there's an agreement on that. There's no big infighting among industries in this and that as to where to put money. It's about health, it's about safety, it's about longevity. We've put a fortune into bio science with very little return. We were expecting the world to move from a silicon based society to a bio based genome based-- it hasn't happened. We could go into those reasons at another time. But it hasn't happened.

We need to redistribute the amount of government money, your money, my money, taxpayer money, away from bio science. Keep some of it there, or a lot of it there, and put it into manufacturing. Put it much more into the making of things, the materiality of things, into 3D printers, robotics, digital fabrication. We simply need to get back to a more balanced investment portfolio coming out of the government.

I really am big into making culture. I think it was a disaster for us to move away from it. I think now we're really at the point-- we have a whole new series of technologies that can give us back our making culture. And people are taking it back.

SARAH GREEN: You mean like the manufacturing economy?

BRUCE NUSSBAUM: Yes. The manufacturing economy. I think we need to get back to the manufacturing economy. And we as individuals, we could talk about that a little bit later, we need to become makers again. It's very important for us to become makers again and to learn by doing, to learn by making.

Actually that's my second thing. In addition to redistributing government money away from bio science into making and materials manufacturing the materials, I think in education we need to augment our focus on math and science with a much bigger investment on creativity. And that means very simply you know, bring back shop. Art and shop should be central to education. These are the making tools that we need to learn. We need to go back to Dewey, John Dewey, whose whole educational philosophy was learning by doing. So we need to bring you doing and making back to our educational experience. And that is absolutely essential.

A part of that, I think, has to involve moving away from teaching to the test. Memorization in a time of search is just ludicrous. And teaching to the test is all about memorization and the assumption that you know what the major problems are and that you know what the solutions to them are. We live in an age where we don't even know what the problems are.

And we have enormous challenges and there are many ways to respond to these challenges. We need to be able to creatively deal with challenges and have the agility to offer up many options. That's the way we have to think. That's a creative way of thinking. Not problems and solutions. So that's another big thing.

I would also say that in terms of people in Washington, Washington is full of Wall Street people. Washington is full of people from big banks and big corporations. We need to have entrepreneurs in Washington. We have venture capitalists in Washington. We need to have people who know how to start up a company and what that means populating the regulatory agencies, in Congress. I wouldn't mind seeing one as a president. So I think we need to shift away from only focusing on the big and bring in the entrepreneurs, bring in the start up people, and bring in the people who are into creativity.

I would make, myself personally, David Kelley the head of the Department of Education. he's the co-founder of IDEO and the founder of the d.School at Stanford. He's got great ideas about education. Bring him in, or Katie Salen who has these great schools in New York and Chicago where all the lesson plans are gamed. They're in the form of a game. So she's gamified the public school curriculum in New York and Chicago. Bring in people like that and really shake it up.

So I think Washington needs to really shift its focus from big business to small start ups and from CEOs to entrepreneurs. Both in the economic policy and education policy. And of course tax policy has to be modified somewhat to the capital gains stuff. All of that really has to be shaped so that it promotes and encourages start ups and entrepreneurs. That's the easy part. So I'll stop there.

SARAH GREEN: Well, there's certainly a lot there to unpack. And it's a very ambitious agenda. I'd like to, actually, since you were talking about education, I'd like to talk a little bit more about college students. Because I think some of the splashiest companies have been started while students were still in college like Microsoft or Facebook.

But it's easy to see that if you were shackled with student debt you're not going to be spending your free time building Facebook. So do you think that the student loan crisis is part of a drag on our national creativity? And if so, what would you do about that?

BRUCE NUSSBAUM: That's a very good question. I think the fact that students are burdened with an average of $20,000 of debt these days that there's a trillion dollars of student debt overhanging basically the whole Gen Y population, right, it's really demographically specific to Gen Y, is a catastrophe and a shame. It's really shameful that a country like in the US says got to finance its higher education by putting such a burden on people.

I wrote a blog item a couple of years ago calling for renunciation of student debt. It was a little bit tongue in cheek and I said, look, you know, when we had a Latin American debt crisis the banks wrote off the debt. And they stuffed it in their portfolio, and they went on. And Latin America went on and started growing and we ought to start thinking about doing that here. Frankly, it's not a bad idea. OK? There are other ways of doing it. I think we need to structurally change the way we finance our education so that it doesn't land on students.

When I went to school in grad school in the '70s I had full fare through a National Defense Language Fellowship. The Cold War basically paid my way. Well, there are all kinds of major reasons why the US should be finding a way to finance students higher education in a way that doesn't land on them or their families. We need to be creative about this.

We also need to be creative about our education system. How do we really need four years in undergraduate? The Europeans take three. Most of our college year is really short. We have one of the shortest college years of any country around. We could probably do it in three for most people who then will, especially those who want to go on for a professional degree, want to go on for their masters in something. That would really cut the cost of education. And then of course we all this MOOC and online stuff. We really need to be more creative about structuring our education one, and two we need to be much more creative about reducing the personal debt of people.

SARAH GREEN: So it's interesting when you are talking more about different government policies and financing models there, because that goes back to something else you mentioned that I wanted to unpack, which is that one of your underlying points throughout the book is that creativity and innovation rarely moves in a perfectly straight efficient line. And if you try to make it into as efficient a process as possible, you end up squeezing out a lot of what is useful about it. At the federal level that can be a challenge because I think all of us want our tax dollars to be spent efficiently. So how do you see that shaking out in the real world?

BRUCE NUSSBAUM: It's a good question. Well, I'm going to rephrase it. Do we want our tax dollars to be spent efficiently or do we want our tax dollars to be spent credibly, or adequately? I worked at Business Week for a long time, right? Business works in a culture of efficiency. Business schools teach the culture and the analytical tools of efficiency. And it's a very important variable, and a very important value. But it's not the only one.

Creativity doesn't work on the principle of efficiency. It works on other principles and other variables. If you get right you can build a system that will probably deliver you some wonderful stuff that has great economic value over time. In the book I talk about the Hewlett Packard labs when David and his partner created Hewlett Packard and they set up a series of labs where you had two or three scientists and engineers, mostly engineers, just mucking around. Pretty much doing what they wanted to do. And the end result was Hewlett Packard created this innovation machine of enormous economic value that produced a whole series of things that weren't particularly related. You know, they had scientific instruments and then they had the HP printer.

They allowed this cauldron of creativity to bubble. And they knew how to scale it. OK? They knew how to connect people with resources who could do the scaling to the scientists and engineers who were doing the creating. That's a system that you can build. And HP was wildly successful decades before Apple in doing that and then it all went to hell when they stopped doing that.

I mean, on one level it's a very efficient system, on another level you're building in pockets, I would call them circles of creativity where efficiency isn't really the value. Originality adaptivity, agility those are other values that are, I think, quite important to creativity.

So let's take it to the national level. Over time if you invest properly you're going to get, I would say, you're going to get a lot of economic value from the dollars that go into the kind of R&D and creativity that lead to economic value. Looking at it in terms of efficiency over one year or three year time frame is not the way to go.

SARAH GREEN: Well I know we've spend most of the time today talking about some of the headwinds companies are facing and your book is actually full of solutions. I don't want people to get the wrong impression. But thank you so much for talking about some of those headwinds with us today.

BRUCE NUSSBAUM: Oh sure, it's my pleasure. And as you said the book is full of really interesting [INAUDIBLE] skills, both for individuals and for big business managers to make their organizations much more creative. And I argue that we can make creativity routine. It's not something special. It's something, you know, we all play sports. We're good at sports. Some of us are really good at a very particular sport. Creativity is really like sports. You can train for it, and you could make it routine and you could amplify your creativity.

SARAH GREEN: Well, I'm glad we were able to end on a hopeful note there. Thank you Bruce for talking with us today.

BRUCE NUSSBAUM: Sure. Thank you.

SARAH GREEN: That was Bruce Nussbaum, author of Creative Intelligence, Harnessing The Power to Create, Connect, and Inspire. For more, visit hbr.org.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.