America's Fleeting Edge in Innovation

In a Sept. 7 speech before a World Economic Forum meeting, Chinese Premier Wen Jiabao announced his country was "pursuing an innovation-based model of development." Why should America care if China puts innovation at the center of its next five-year plan? In fact, why worry about Brazil, Britain, Canada, Denmark, India, Israel, Korea, or other countries whose government policies push innovation? After all, Google (GOOG ), Facebook, the iPod (AAPL ), and the Boeing (BA ) 787 Dreamliner all have "Made in America" stamped on them. Right? And we have Silicon Valley. They don't.

Well, actually they do. In fact, as John Kao, an innovation consultant, points out in his new book, , all the key advantages once enjoyed by the U.S. are going, going, nearly gone. In a scary, insightful, and ultimately very useful book—written to inform the 2008 Presidential primary agenda—Kao punctures America's smug self-congratulation.