The Crux of Creativity Problems

“The United States has started to lose its worldwide dominance in critical areas of science and innovation,” reported the New York Times on May 3rd. This sounds like an alarming trend, but the degree of its seriousness depends on a number of factors, including the causes of this loss, the implications for innovation worldwide, and business outcomes.
The Times largely bases its conclusion on three major trends. First, the percentage of papers in top physics journals authored by Americans declined from 61% in 1983 to 29% in 2003. Second, there’s been a recent drop in the percentage of Nobel Prizes going to Americans. Third, Americans’ share of U.S. patents is now about 52%, down from 66% in the years prior to 1988.
Are such declines due to weakness in the U.S. system of innovation or to the growing strength of other national systems? In some cases, both. Even as there’s been a decline in U.S. doctoral degrees in science and engineering, for example, there’s been a fairly steady rise in such degrees in Europe and a remarkably sharp upsurge in Asia. Science and Engineering Indicators 2004, a biennial report of the National Science Board, reports that the U.S. ranks just 17th among nations in terms of the percentage of its 18- to 24-year-olds earning natural science and engineering degrees, whereas it was ranked third in 1975.
In other cases, however, the U.S. has continued to make progress. The number of patents granted to U.S. citizens, for example, has continued to grow. It’s just that the number of patents of foreign origin has grown even faster. In a way, this is terrific news because it means that the world’s stock of intellectual capital is increasing at ever-faster rates, helping humanity address problems ranging from cancer to climate change.
So, the U.S. shouldn’t worry about its “loss of dominance” per se but rather the problems that threaten to make its culture less innovative. One of these problems is a lack of investment. In 2004, U.S. companies plan to raise spending on R&D by less than 1%, to $181.14 billion. Once inflation is taken into account, this will be the fourth year in a row that R&D spending has either been flat or declined, according to U.S. National Science Foundation data analyzed by research firm Battelle Memorial Institute and R&D magazine.
Another problem is that the U.S. is retaining less of foreign scientific talent. Annually, nearly one-third of the doctoral degrees in science and engineering and 40% of the doctorates in engineering and computer science go to foreign nationals, but more and more doctoral students from nations such as China, India, and Taiwan are planning to go home after graduation. What’s more, Issues in Science and Technology magazine warns that “visa and other immigration restrictions that have been put in place over the past two years are threatening the future vitality of the U.S. university system in sciences and engineering.” In fact, one recent survey showed that between 2003 and 2004 60% of the U.S. research universities saw a drop in the number of applications by foreign graduate students.
There’s even doubt about whether U.S. culture can continue to nurture innovation as it has in the past. Richard Florida, author of The Rise of the Creative Class, has analyzed regions with the highest level of creative economic growth. After looking at the cultural conditions in northern Europe, he concluded that many of these countries, “especially Ireland, are becoming more creatively competitive at a faster rate than the United States.”
Within U.S. companies themselves, the switch to “application” R&D may hinder innovation over the long haul, claim some experts. That is, rather than working on pure research, more companies are focused on research with more immediate market applications. While this may turn out to be a good short-term strategy, “long term, it’s a disaster,” claims Adrian Slywotzky, vice president at Mercer Management Consulting in Boston.
On the positive side of the scale, however, is the emergence of a new class of CEOs who are “focused on creativity and innovation and on reviving and polishing the legacies of their enterprises,” reports MIT Sloan Management Review. Intel, for example, plans to increase its R&D spending by 9%, to $4.8 billion, in 2004, after an 8% bump in 2003. Among other corporations said to have a renewed focus on R&D are Pfizer, IBM, GE, and MCI.
Time will tell whether such companies can lead a renaissance in corporate creativity, but U.S. leaders should keep in mind that the growing innovation of other cultures leaves little room for complacency.

To read the National Science Foundation’s press release titled “United States Still Leads in Science and Engineering, but Uncertainties Complicate Outlook,” go to
The NSF’s Science and Engineering Indicators 2004 can be found at
For much more information on U.S. patents, go to
For an article on how visa delays are discouraging scientists from going to the U.S., see
For more on how universities are seeking to ease the visa process for foreign students, see
More on Richard Florida and the “creative class” can be found at
Registered users of the New York Times Web site can get more information on innovation matters at the following links:
The sources used in this TrendWatcher include the following:
Associated Press. “Report: U.S. Lags in Science Education.” New York Times. ProQuest. May 5, 2004.
Bingaman, Jeff, Robert M. Simon and Adam L Rosenberg. “Needed: A Revitalized National S&T Policy.” Issues in Science and Technology, Spring 2004, p. 21.
Broad, William J. “National Science Panel Warns of Far Too Few New Scientists.” New York Times. ProQuest. May 5, 2004.
Broad, William J. “U.S. Is Losing Its Dominance in the Sciences.” New York Times, Internet []. May 3, 2004.
“The Economy: Corporate R&D Spending to Rise Slightly.” Wall Street Journal. ProQuest. January 22, 2004.
Florida, Richard. “Creative Class War.” Washington Monthly, Internet []. January-February 2004.
Friedman, Thomas. “Losing Our Edge?” New York Times, Internet []. April 22, 2004.
“Leaders: Less Glamour, More Profit.” The Economist. ProQuest. April 24, 2004, p. 11.
National Science Foundation. “United States Still Leads in Science and Engineering, but Uncertainties Complicate Outlook.” Press release. May 4, 2004.