How America is losing its tech mojo (and how it can get it back)

What will win: Enervation or innovation?

Once upon a time, the United States led the world in science, inventions, research and development, and technology. Now we're a nation of fat dumb Facebook addicts and the rest of the world is kicking our butts. How did we go from world leader to world loser?

[How to ruin your life with social networking]

Software patents: A plague and a pox

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The Patent and Trademark Office headquarters: No friend to the little guy

When you can't innovate, litigate. Software patents are a drag on progress, though they have spawned a busy and hopeful patent troll industry that has emerged to try to attach itself, like a lamprey, to companies who are producing actual products, and feed off them. (Lampreys, if you don't know, "feed on prey as adults by attaching their mouthparts to the target animal's body, then using their teeth to cut through surface tissues until they reach blood and body fluid." Usually lampreys don't kill their hosts -- not right away, anyway -- but merely weaken them.)

It is often said that patents foster innovation. This may be true in industries with heavy capital costs and high barriers to entry. But the software development world is different. Anyone can play; all it takes is a personal computer, ability, and time. Software development is more akin to writing books and making music, and so advocates of reform say that copyrights and trademarks are proper protections for software. Creative works are protected from the start by copyrights and cost nothing; patents cost a bundle and do not apply until they are approved, a process that takes 18 to 30 months.

The system is weighted in favor of patent applicants and holders, and it is expensive, time-consuming, and difficult to successfully challenge even the most obviously bogus software patents. Software development moves so fast that the glacial pace of patent litigation snoozes on long after the patents in question have any relevance, and even without any disputes 20 years is eons in the computer world. Adding to the fun, the USPTO isn't exactly bursting with examiners who have computer science backgrounds or software expertise, and so applicants are rewarded with junk patents, one of the most famous being Amazon's One-Click patent.

Patents are supposed to protect the little people from the big bad megacorps. But this doesn't work for software. Big companies like IBM, Microsoft, Oracle, and others routinely file for thousands upon thousands of software patents every year. So technically they are stepping on each other's patents every minute of every day. Nobody wants to start a patent war, so they cross-license with each other and go about their business. The cost of a software patent application can easily hit $20,000, legal advice on how to deal with a patent threat is $40,000 or more, and defending a patent suit can cost at least $2 million. The little people are excluded from this fun game.

What if your own patents are violated by one of the big people? They will pummel you with their patent portfolios and blacken your sky with lawyers until you give up.

We don't need no education

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Anything good happening here?

Right here in the good old US of A we have perfected the art of producing marginally-educated high school graduates, an astounding achievement that wastes a cool $100,000 and 12 years of schooling per graduate. We spend more per student than anyone else. The much-cited OECD (Organisation for Economic Co-operation and Development) Programme for International Student Assessment (PISA) report "compares the knowledge and skills of 15-year-olds in 70 countries around the world, [and] ranked the United States 14th out of 34 OECD countries for reading skills, 17th for science and a below-average 25th for mathematics."

But why bother working hard in school when there aren't any jobs? We're number 106 in our employment rate. That means 105 countries are better than we are at creating jobs.

And why bother looking for a job when the ones you'll find are so frustrating? Those of us who are working are barely treading water. While wealth has been flowing upwards into the coffers of the top 1 percent of our population the past 30 years, wages have been stagnant. The top 1 percent income earners have seen their annual take rise from half a million in 1979 to nearly $2 million in 2007. Meanwhile, middle-class working people have lost ground, with per capita incomes of $31,000 dropping slightly from 1979, while taking big hits on home values. Working people are are subsidizing the uber-rich and making their corporate masters very wealthy.

Those of who are working, that is. American workers are working very hard, putting in more hours than anyone else on the planet. So they have less time to take care of themselves, less time for self-improvement and learning new skills, less time to help educate their kids, and less time to contribute to their communities.

But we are number one in obesity

The U.S. holds the world title for most obesity, at 30.6% of the population. Mexico is second at 24.2%, and the U.K. third at 23%.

Despite spending squillions more than anyone on health care, we rank 50th in life expectancy and 46th in infant mortality.

Sad 'green' technology policies

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Made in the USA?

While many of our fine elected persons are arguing and legislating in favor of pollution, waste, and obsolete, destructive energy technologies, and doing a fine job at blocking any sort of actual forward movement in modern green tech, the rest of the world is cleaning our clocks. For example, a U.K. company, the Mark Group, expanded its business of insulating old homes with advanced new technologies into the US. This is potentially a $5 trillion market that we are leaving wide open to more foresighted, ambitious countries. Inexpensive clean energy and efficient infrastructures are the foundations of future growth, and we're missing the boat by an entire ocean.

Investing in prisons, domestic spying, and bombs

It's hard to believe that this is the same country that was excited about going to the Moon. It's hard to pin down how much the US spends on defense and the absurdly-named Homeland Security, since there are many sleights of accounting hands, but depending who you ask in 2010 it was anywhere from $700 billion to over a trillion dollars. How much went to research and development? About $146 billion. That sounds like a lot until you compare it to the Cold War rate of 3 percent of our gross domestic product. $146 billion is 1 percent of the 2010 GDP of $14 trillion.

Did you know that the U.S. has the highest percentage of citizens in prison of any country on the planet? Over one percent of all American adults are serving time. This is a major drag on the economy, and considerably more expensive than education, R&D, and jobs training.

In a nutshell, we have unlimited funds for wars, "security", criminalizing everyone, and protectionism for companies locked into hawking obsolescence. But no funds for progress.

So, is there any hope? There are a number of bright spots. The catch is these positive indicators are not the usual suspects, but come from an entirely different direction that the usual pundits and analysts are missing.

Masses of money

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Still no shortage

Americans have a pattern of unleashing tsunamis of money to solve problems, often with debatable results. The U.S. has long led the world in spending on research and development, and even during our current politically and economically freakish times, the oceans of R&D money flow. The US outspends the rest of the world, accounting for about a third of global spending on R&D. In 2010 this came to $395 billion. The National Science Foundation (NFS) identifies five categories of R&D investment: the federal government, federally-funded R&D centers, private industry, academia, and non-profits. Private industry accounts for the majority of this, at about a 65 percent share. The federal government covers about 28 percent with direct funding, plus the cost of the R&D tax credit. This is a 14 percent credit, which sounds like a cool deal until we learn it is not a permanent credit, but must be renewed every year. Which makes no sense because R&D usually has a long horizon and can't be managed on a short-term ad-hoc basis. It has always been renewed, but it creates uncertainty and the perennial "will he or won't he" dance is wearying.

Of the Feds' 28 percent, the bulk goes to the Department of Defense -- $80 billion in 2010. Nobody spends as much on war as the U.S. The Department of Health and Human Services received about $30 billion, NASA $10 billion, the Department of Energy $10 billion, and the National Science Foundation $5 billion. DoD spending is coming under scrutiny, and is the poster child for "more spending does not always deliver more results," so it is likely to be reduced significantly in coming years.

China has been investing heavily in R&D for years, at an annual growth rate of about 10 percent over the past ten years, and now ranks second in the world in R&D spending. In 2010, this came to about $141 billion. But the dollar totals do not tell the whole story, for the U.S. figure represents 2.8 percent of our gross domestic product, while China's is only 1.4 percent of GDP. One way to interpret this is that China has plenty of room to continue significant annual increases in R&D investment, especially since its economy is growing strongly while the most of the world struggles.

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Millions of Chinese students, like these at Peking University, are picking up important skills

China has also been investing in education, and now has a whole new generation of highly-skilled scientists, engineers, and other essential skilled workers. In comparison, the US has been losing ground in the STEM (science, technology, engineering, and math) disciplines, and the Baby Boomer generation of scientists and technologists is entering retirement age without an adequate flow of replacements. "Do you want fries with that?" is the bitter career joke that won't die.

Another key element in China's emergence as a science and economic power is a 30-year investment in infrastructure, such as transportation and modernizing factories. They're not bogged down with substandard roads, crumbling bridges, outmoded rail systems, or ports with aging facilities and inadequate capacities like we are.

Brazil, Russia, India, and South Korea are all moving ahead in similar fashions to China, and represent the next great wave of technological progress and economic growth.

eBay Revolution

So where is the upside for the US? A big one is the stability in R&D funding by private industry. Over the past 30 years, industry R&D has grown at a stable rate and always accounts for the biggest dollar total. Private R&D funding doesn't cover all necessary arenas, but it is vital and valuable. While our elected leaders play silly games and act like facts and data are toxic waste (when Congress is in session all I see are colorful cavorting baboon butts), business owners continue to try to get the job done.

Even more hopeful is the decentralization of research and industry across the planet. Sadly, this causes a lot of pain to American workers in depressed wages and job losses. I think a lot of the de-emphasis on education in the US is a direct result of outsourcing jobs and growing overseas markets; the big globalcorps don't need American workers or markets. Yes, the exploitation ethos lives. But over the long-term the big benefits are expanding the talent pool, increasing mobility for American workers (telecommute from your island paradise!) and increasing interdependence. The more ties we have with more countries, the more damaging it will be to launch stupid wars. Remove the profit motive from war and see war go away.

But the biggest game-changer is the Internet. I'm not the first person to say this, but I think the usual pundits and policy makers still don't get it. Governments fear the Internet because they fear free exchanges of information -- and rightfully so, because citizens tend to become annoyed when they learn what their leaders are really doing, and tend to rebel when they learn they have allies outside their borders. Governments try to erect fences and gates, and control what their citizens see and do on the Internet, but this doesn't work.

In their paranoia they are missing the vast opportunities. The new operating principle is decentralization. National borders don't have the same economic significance anymore. Here in my home county -- a 75 percent red county that passed a resolution banning the United Nations -- you hear a fair bit of grumbling about one-world government and the U.S. losing its sovereignty. The economy here has been in the dumps for decades with double-digit unemployment, low incomes, and a declining population, so it's unclear to me what benefit this much-vaunted sovereignty and snubbing of the U.N. has brought to us. We probably qualify for some kind of international aid. This is the poster child for old ways and old thinking that don't work. This same outmoded thinking goes all the way up the chain to our national leadership, and leaders of other countries. They're in a top-down central control mode, even the ones that pay lip service to representative government.

The Internet has busted down the doors and now anyone can play in the global economy. Access to information (truly, knowledge is the most valuable commodity of all), easy sharing, easy distribution, and distributed projects are gigantic game-changers. R&D is revolutionized by the Internet.

One example is the OpenTox project, which is replacing testing substances for toxicity on animals with sophisticated computer models. OpenTox collects and shares data all over the world. Many other are listed on this Wikipedia entry and on Distributed Computing. Open, distributed projects have the potential to outperform the traditional closed, controlled research model by reducing costs and duplication of effort, making it easy to collect and analyze masses of data from diverse sources, and allowing the best brains to participate no matter where they live.

Last, but not least, is the great leverage this gives to individuals. Now we can reach both domestic and international markets at a minimal cost. We don't need physical stores, but can run a big operation from anywhere with an Internet connection. Every aspect of selling goods and services is revolutionized, from manufacture to supply chain to marketing and distribution. We can establish far-flung partnerships without ever leaving home. With a little luck, the future does not belong to giant disdainful globalcorps and their wholly-owned legislators, but to individuals, non-profits, and small businesses.

How does this translate to a win for the U.S.? Because we have the strongest culture of individualism and freedom. True, these have take quite a beating the past few years because the giant entrenched interests invest vast resources in maintaining the status quo, but now we have potent tools at our fingertips to take back what has been lost, and to make some real forward progress.

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