Over the weekend, I read venture capitalist Pascal Levensohn’s take on America’s innovation crisis, which he presented last week at the Cybersecurity Applications and Technologies Conference for Homeland Security in Washington, D.C.
In a nutshell, Levensohn warns that the economic plunge is exacerbating a dropoff in U.S. funding of basic research, the lifeblood of innovation in this country.
“The freedom to fail has always been one of the greatest strengths of the American economy. But this is now in jeopardy because a climate of risk aversion dominates the country’s financial institutions,” he said.
His speech naturally elicited reaction from some that this is another call for a VC bailout at a time when there remains plenty of capital dedicated to startup funding. Though Levensohn is quick to point out that his emphasis is the lack of cooperation between the public and private sectors and the need to better balance basic research vs. incremental/commercialization-driven research.
Levensohn laments the demise of institutions such as AT&T Labs that were known for basic research that led to innovations in areas such as optical networking and wireless.
I wonder whether outfits such as Google and Microsoft can help fill the void. IBM seems to be doing its part based on the way it keeps cranking out patented technologies. Juniper Networks has also committed to significant R&D investment, even at the cost of executive paycuts.
Levensohn says he is encouraged by the Obama Administration’s direction in terms of funding science and tech R&D, though argues that a more cohesive game plan is needed in light of a changing global environment in which other countries have more coordinated support for entrepreneurs (he cites China’s 15-year plan).
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