The wealth of networks: The economics of open source collaboration

Yochai Benkler, professor of law at Yale, has written an interesting book, The Wealth of Networks analyzing the economics of the open source movement.

He was recently interviewed at Open Business, and observed

“commons-based peer production” means any one of a wide range of collaborative efforts we are seeing emerging on the Net in which a group of people engages in a cooperative production enterprise that effectively produces information goods without price signals or managerial commands... The critical defining feature of these “enterprises” is that they rely primarily on social information flows, motivations, and relations to organize the group. Individuals self-identify, mostly, for tasks, and through a variety of peer-review mechanisms contributions get recognized by the group and incorporated into what emerges as the collaborative output.

Learning to harness the power of these self-formed networks is an incredibly big idea.

Place matters because innovation is a contact sport

There is a very interesting dichotomy developing. People globally to collaborate via the Internet in incredible ways that were not possible a few years ago, but people are social creatures and personal relationships still matter.

Randall Kempner, vice president for regional innovation at the Council on Competitiveness, observes that in a recent interview that,

We believe that regions are the place where innovation takes place, because innovation is actually a contact sport. In this highly-connected world, people still like to have personal interactions and know the suppliers, buyers and related institutions that enable new product and idea development.

He also identifies what I believe is an enormous untapped opportunity for all regions, especially ours.

I'll just use Rochester , New York , as an example. Kodak has a bunch of orphan technologies. There you have a large company that has developed a bunch of patents and potential technologies that don't fit into their business strategy because the opportunities are too small or not in the company's core market. However, one firm's “small” $100 million dollar market is another man's fortune. But, as of yet, neither the region nor the company has found a way to get their technology into the hands of people that could actually do something with these opportunities.

InnoVenture is at the infancy of building on these concepts.

Bringing Science Alive in Low-Income Schools

The Ewing Marion Kauffman Foundation has awarded a one-year grant of $352,000 to Kansas City Public Television (KCPT) so that 50 low-income schools can participate in ChalkWaves – an innovative, technology-based effort that makes a vast archive of more than 7,000 science-related digital video clips instantly available to teachers and students. This is one more grant in the Kauffman Foundation’s 10-year agenda to advance student achievement in the areas of mathematics, science and technology.

ChalkWaves functions much like an audio/video encyclopedia, delivering live-action video clips that illustrate a wide variety of science concepts into the classroom. Each program is correlated to state learning standards and can be displayed upon a computer screen or by projector within a matter of moments.

Anyone up to helping a low-income school apply for a ChalkWaves grant?

This would be unbelievable, if it weren't so typical

The Lee County School District "received the state's lowest rating, 'unsatisfactory,' and more than two-thirds of the students scored 'below basic,' the lowest score, on the annual state test."

Educational entrepreneurs are trying something different. The Sun Times reports,

In a cluster of portable buildings on a lot behind the Church of Christ, the MLD Higher Learning Academy is trying to offer 75 students something different in a school district that academy officials say has failed its children.

In one room, part-time teacher Barbara Wilson guides 15 fourth- and fifth-graders through a lesson on words that describe the sense of touch. Some students sit at computers donated by a nearby school district.

The class prepares students for the Palmetto Achievement Challenge Test, South Carolina's annual exam on which the pupils and their new school will be judged.

"I think we're filling a big void for the district," Principal Benita Dinkins-Robinson said. "A lot of these kids would have been home."

Now it would make sense for the Lee County School District to support talented, passionate educators trying to reach students who are otherwise failing. Clearly what the district is doing isn't working. If they are successful, then perhaps the district can take their model and expand it to other areas of Lee County.

But no. The District's response would be unbelievable if it wasn't so typical. Lee County School District "Superintendent Lloyd Hunter says the district is being forced to divert precious resources to an unproven concept."

Mind you we're not talking about taking money out of public education and giving it to private schools. A charter school is a public school, accountable to the same standards as every other public school in the state. We're talking about funds flowing from a failed school district to a principal and teachers who think they can perform better, which shouldn't be too high a hurdle.

In the real world, it's common sense for resources from failing enterprises to be reallocated to innovators creating new ways of delivering value to customers not well served by the status quo. I had a partner who used to remind me that common sense isn't so common though.

Public education is the biggest place it is easy to get depressed about our ability to do what is necessary to be successful in an increasingly global economy.

Get Out of The House

Post by Jeff Papenfus

Tonight (Thursday) is Gigi Dover and her band at The Handlebar around 8:30 ish. Gigi is a favorite of ours and should be one of yours. Come see her wail away on original and covers. She makes it to G-Vegas a couple of times a year. She is scheduled for the Reedy River Music series later this Spring also.

It should be a nice tonight so come to Downtown Alive at Piazza Bergamo after 5:30 before Gigi. Did you know they've been doing that for over 20 years! Wow! Come be a part of history and drink warm beer at Greenville's oldest Thursday afternoon party while you can still play on the grass!

Friday night is Hootie and the Blowfish at the Bi-Lo Center. Darius and the boys are back for the umpteenth year playing in, around and at the BMW Charity Pro-Am. If we ask nicely maybe they will play I Go Blind ;)

Did you know that Soby's now has Sunday Brunch! What could be better than that?? Check out the details at Soby's.

We hope everyone Got Out of The House and enjoyed Artisphere last weekend - it was wonderful. Three cheers for Mary, Henry and the whole team that is working to give us a great venue for creativeness and to put Greenville on the International art map.

Our friend Teri Pena has opened a gallery in the West End. Well less a Gallery than a window display. But coolness non-the-less. Teri is a fantastic painter, sculpter and general all around creative class poster girl. Check it out across from Latitude on Main Street.

Our old friend Anastasia, an artist specializing sculptures, has launched a new biz online selling mini-sculptures of her busts, butts and torsos. The catch is they are soap! Sounds a little goofy, but worth the looksee: Art by Anastasia.

Investor seeking acquisitions in aviation, or early stage investments in transportation related innovations

I have a friend with an extremely successful track record of creating value in the aviation industry. He has significant capital and is " seeking acquisition of or investment in aviation/aerospace related companies. Minimum sales ideally would be $25 Million, [and the company] must be profitable, must have top-tier quality rankings, [and must have] excellent Management willing to stay."

Given the growing transportation sector in the southeast, he is also considering forming a venture capital fund to invest in early stage companies with transportation related innovations.

Please let me know of aviation/aerospace related companies that may be interested in partnering with an extremely successful capital partner, or of emerging companies with transportation related innovations seeking a venture capital partner with significant industry experience.

How do you validate the reputation of those you collaborate with but have never met in person?

IBM's Global Innovation Outlook 2.0 notes,

In the last decade the proliferation of communication networks has not only connected people, places and ideas in unprecedented ways, but also catalyzed the evolution of social structures. Suddenly, it’s possible to transcend physical and geographic borders more easily, and that freedom has fostered a new willingness to partner both within and outside the traditional boundaries of organizations and countries.

Most of us have experienced this. The Innovation Outlook goes on to note,

In such a world, unifying forces such as loyalty and pride of ownership could be supplanted by trust and pride of contribution. But that also suggests the need for a new set of social standards to help foster collaboration. In many GIO discussions, people kept coming back to the idea of “reputation capital”... as a kind of currency for building trust in a prospective worker’s personal and professional qualifications. They cite examples such as Wikipedia and eBay, both of which have built successful brands based on the contributions of hundreds of thousands of non-affiliated individuals. In each case, there are standards in place that allow people to see and rate the integrity and credibility of contributors. And the more a contributor consistently demonstrates a high level of accountability and quality, the more value he or she garners—from commanding a higher selling price on eBay to having more “authority” on Wikipedia. Reputation capital is even beginning to function as a currency outside the parameters of a specific endeavor—some college-age and postgraduate job hunters now put their eBay rating on their resumes, pointing to this “trustmark” as a de facto measure of reliability and desirability.

Even for businesses not built around the contributions of individuals, reputation capital has intriguing possibilities, especially for those emerging global players who have only a virtual presence and no visible brand of their own. What new standards, systems or institutions might emerge to provide the equivalent of the eBay trustmark or the Good Housekeeping Seal for small businesses and other entities looking for partners in the global economy?

InnoVenture is focused on creating Communities of Innovation, and so that last question is a very personal one for me. I'm interested in your thoughts.

Do you have examples of programs to increase our innovation capacity?

Here's Doug Woodward's presentation at the Moore School of Business' 23rd Annual Economic Outlook Conference. In it he says,

Innovative capacity is the key to regional growth. Innovation is more than just science and technology. Enhancing innovative capacity requires progress in multiple ways:

* Expanding university research, also commercialization vehicles
* Taining of scientists and engineers
* High-quality MBA/management programs
* Risk capital and strong incentives to take risk
* Building supporting industries for commercialization (e.g. legal, accounting, consulting)
* Intellectual property protection
* Linking technology and entrepreneurs

Do you have an example of someone from the traditional economic development community with a program focused on increasing our innovation capacity?

This would be unbelievable if it wasn't so typical.

The Lee County School District "received the state's lowest rating, 'unsatisfactory,' and more than two-thirds of the students scored 'below basic,' the lowest score, on the annual state test."

Educational entrepreneurs are trying something different. The Sun Times reports,

In a cluster of portable buildings on a lot behind the Church of Christ, the MLD Higher Learning Academy is trying to offer 75 students something different in a school district that academy officials say has failed its children.

In one room, part-time teacher Barbara Wilson guides 15 fourth- and fifth-graders through a lesson on words that describe the sense of touch. Some students sit at computers donated by a nearby school district.

The class prepares students for the Palmetto Achievement Challenge Test, South Carolina's annual exam on which the pupils and their new school will be judged.

"I think we're filling a big void for the district," Principal Benita Dinkins-Robinson said. "A lot of these kids would have been home."

Now it would make sense for the Lee County School District to support talented, passionate educators trying to reach students who are otherwise failing. Clearly what the district is doing isn't working. If they are successful, then perhaps the district can take their model and expand it to other areas of Lee County.

But no. The District's response would be unbelievable if it wasn't so typical. Lee County School District "Superintendent Lloyd Hunter says the district is being forced to divert precious resources to an unproven concept."

Mind you we're not talking about taking money out of public education and giving it to private schools. A charter school is a public school, accountable to the same standards as every other public school in the state. We're talking about funds flowing from a failed school district to a principal and teachers who think they can perform better, which shouldn't be too high a hurdle.

In the real world, it's common sense for resources from failing enterprises to be reallocated to innovators creating new ways of delivering value to customers not well served by the status quo. I had a partner who used to remind me that common sense isn't so common though.

Public education is the biggest place it is easy to get depressed about our ability to do what is necessary to be successful in an increasingly global economy.

Be a regular contributor to the Swamp Fox Blog

We want to add new voices on a regular basis to the Swamp Fox blog.

While Swamp Fox gets lots of comments to blog entries we've make, Jeff Papenfus is the first person to post his own topic the Swamp Fox blog: Cloning Ben Franklin.

Jeff is a leader in the Greenville entrepreneurial community. Among other things, he is a technology entrepreneur who is founder and President of North Gate Labs, and he helped found NEXT, "a resource collaborative that supports and attracts high-impact entrepreneurs and their ventures in the greater Greenville area and throughout the Upstate of South Carolina."

If like Jeff you're a leader in your field, and you think you have something to contribute on a regular basis that the Swamp Fox audience would find useful and interesting, contact us and we'll let you know what is involved in being a regular Swamp Fox contributor.

Cloning Ben Franklin: Posted by Jeff Papenfus

Ok, Ok, I'm a little behind in reading this blog, my only excuse is I'm building companies too....

I noticed this from March 30th, - "Did you know this? Franchising begun by Ben Franklin in Charleston" - with the comment that why don't we just clone Ben himself?

What was it about Dr. Franklin that made him the amazing man he was (writer, inventor, diplomat, businessman, musician, scientist, humorist, civic leader, international celebrity [franschisor?])? One of the most extraordinary humans, ever.

What were the circumstances that lead to the development of such a person? Born only 14 years after the Salem Witch trials as the 15th child of a candle maker in colonial Boston. Certainly not a child of wealth, Franklin never stopped learning or thinking or asking questions.

An amazing person even before 1727 when he helped form the Junto, a club for business, friendship and conversation. Imagine the discussions and debates that must have gone on for 30 years (and continue today as the American Philosophical Society 200 years later) . Could this collaboration of diverse occupations and backgrounds have contributed to Franklin's success. I suggest that sure didn't hurt.

And how do we produce our own Franklin today? By supporting initiatives in our community that bring together opportunities for diverse minds to think together and get out of the way of the results.

Imagine if we had our own Franklin in the Upstate? Or if everyone had the opportunity to pursue their one idea! An successful society encourages, nurtures and facilitates its citizenry to be creative in life and in deeds. Our community is good at this today. Our community can be better at it tomorrow.

Support entrepreneurial activity in Greenville! And let's all find our inner Ben Franklin.

Put your oar in the water with New Carolina

The Swamp Fox article What’s the right vision for the future? elicited quite a passionate response.

Jimmy Simons puts his finger on the issue, "Negativity isn’t the problem, apathy is."

Dalhi Myers provides the solution, "Becoming an “A” state requires every hand on deck. If you’d like to have input into some of our endeavors, put your oar in the water. We do not have a monopoly on good ideas!"

New Carolina needs you. Contact Executive Director George Fletcher and let him know you want to get involved.

IBM's Global Innovation Outlook: Thoughts on Transportation

IBM recently published its Global Innovation Outlook 2.0, which makes for some pretty interesting reading.

In particular, Chapter Two deals with transportation.

It even makes mention that, "At least one leading tire manufacturer is considering ways to embed microchips in its products to allow future interaction with smart devices built into roads and other parts of the transportation infrastructure."

Think the Michelin Research and Development Corporation in Greenville, SC!

We've been building buildings, not focusing on building talent, haven't we?

One of the things stuck in my mind from InnoVenture 2006 was a conversation I had with an official of the City of Greenville. We were in the CIO Roundtable on the first day, listing to IT leaders tell us what they needed to be successful. The Roundtable discussion focused on talent, talent, and more talent.

The City of Greenville has done a wonderful job over the last 30 years of rejuvenating Main Street into one of the best downtowns in America. If you haven't visited lately, you should. Downtown Greenville has turned into a very neat place.

The city official turned to me and said, "We've been building buildings, not focusing on building talent, haven't we?"

Now this official has known intellectually for a long time that talent was critical. What happened at InnoVenture is that this lesson was absorbed emotionally... as in "this really is important isn't it?"

It's conversations like these that are the real signs that we are making progress. We're really starting to get it, not just in or heads, but in our souls.

Lessons Henderson Advertising has for public education

Why did Henderson Advertising close abruptly? I don't know.

Here's an interesting analysis of how a company gets into that situation. I've seen similiar things happen to other companies before. And here's a reaction from a current college student majoring in marketing.

Imagine the reaction if Henderson management suggested that the government ought to put more money into the company to help them build better buildings and hire better professionals. It's silly even to suggest, isn't it.

Imagine all the soul searching that is going on in advertising agencies that are still in business, trying to make sure they don't meet the same fate.

Imagine if public schools that failed had to close, and the motivating effect this would have on all those that didn't. Why is it that rather than allowing failing schools to close so many people insist that the solution is investing more money in them?

Why didn't more African-Americans show up?

InnoVenture 2006 was fantastic, except that we missed a base of talented people in the community.

Last year I noted:

InnoVenture 2005 was a smashing success. 450 people attended... Why were less than 1% of the 450 people who attended InnoVenture black?... What can we do to attract more blacks, Hispanics, and other minorities to InnoVenture 2006?

Two young African-American leaders, Marvin Rogers and David Mitchell, stepped up. They organized the InnoVenture Prism Initiative, designed to attract the best and brightest young talent representing the diversity of the community. A successful pre-InnoVenture event was held February 23rd, attended by 70+ people. For InnoVenture itself, the committee organized a series of speakers, which the conference funded, targeted to the a diverse base young talent.

At InnoVenture 2006, out of 600 participants, a handful of African-Americans attended, which is better than the 2 we attracted at InnoVenture 2005. After all the Prism Initiative did, I confess that I am completely humbled by the observation of one attendee, “I only saw one person of color – and that happened to be the dinner speaker.”

Now there were actually a small number of African-Americans at InnoVenture. But that doesn't matter, because perceptions are reality. We haven’t tapped into all of the talent in the community until those who attend look like the community.

We have some dedicated individuals helping us to address this issue, which is very very hard to solve. I look forward to the continued leadership of our Prism Committee to help InnoVenture attract “the best and brightest talent reflecting the diversity of the community” as we move forward.

And, like last year, I'll still interested in any thoughts you have about how we can attract more blacks, Hispanics, and other minorities to InnoVenture 2007?

Observations from some who attended InnoVenture 2006

In the next couple of weeks, we'll begin addressing the inbox full of suggestions to improve InnoVenture 2007. For now, we'll bask in the glow of another fantastic conference.

Tony Boccanfuso, University of SC, Columbia, SC
A great event, and I am very pleased with the value that we received from the investment.

Vince Gallicchio, Clemson University, Clemson, SC
I want to express my appreciation to you and your staff for organizing what was a superb get-together. Rest assure knowing that Clemson University continues to be active partner in the InnoVenture concept.

Jessica Knight, Furman University, Greenville, SC
I just wanted to thank you for letting me participate in InnoVenture. It was one of the best experiences I think I've had during college - really. I learned so much and met so many incredible people. I think what you are doing to create a vibrant upstate is working...I'm hooked!

Terry Payne, Oak Ridge National Laboratory, Oak Ridge, TN
InnoVenture 2006 was a remarkable success! The addition of the Invention Hall and the increased participation by the region’s research universities and national labs was very appropriate. I can’t wait to see what great improvements will be made for InnoVenture 2007.

David Wilfong, Milliken Automotive, Spartanburg, SC
Thanks John to you and your team for an excellent InnoVenture event! Overall, I found the experience positive and useful. I especially enjoyed meeting the Clemson team involved in the ICAR initiative since this is something that I'm studying at the moment. It was also interesting to learn about all of the efforts to transform USC and the city of Columbia into the world's leading Hydrogen energy center.

Walter Wilkinson, Kitty Hawk Capital, Charlotte, NC
Given what the Upstate South Carolina is trying to do and from an entrepreneurial prospective, Dr. Walter Alessandrini’s address was inspirational. Great conference. I like the entrepreneurial, university, and corporate approach.

Nathaniel Clarkson, Academy Funds, Charlotte, NC
I wanted to congratulate you on a fantastic job. Aside from my obvious interest in venture capital, I am very proud to see what you and Innoventure have done for South Carolina. As a South Carolina and Greenville native, I believe that Innoventure is the most significant step we have taken toward creating a knowledge-based economy in the region.

Andrew Kurtz, Vigilix, Greenville, SC
It would have taken months, if it would have happened at all, to meet the people I met at InnoVenture. In two days, I was introduced and had meaningful conversations with people who will have a positive impact on my company and our growth. The ROI on my time was immediate. I can't wait to see what you do for InnoVenture 2007.

Doug Moreland, Benefitfocus.com, Inc., Mount Pleasant, SC
Innoventure is the premier venue in South Carolina for bringing together the innovation leaders of tomorrow with today’s community leaders in a forum that fosters the birth of new technologies as well as new businesses.

Ben Weinberger, Digitalsmiths, Beaufort, SC
InnoVenture presented a quality opportunity for our company to not only meet with potential investors, but also make valuable contacts throughout the southeast. Our region is growing feverishly!

Chris Miller, The Creative Coast Initiative, Savannah, GA
You did a superb job with InnoVenture. I was blown away by the sheer size and scope of the event. I don't need to tell you how important a service this is the region. Thank you so much again for your generous offer of use of the table. I look forward to working with you more closely in the upcoming year and will absolutely participate in next year's event. We will be expanding the area we serve in 2006 and hope this adds an additional benefit to the companies we are both trying to serve. I can't thank you enough for all you do!

Kristin Badger, FastTrac/ThinkTec, Charleston, SC
Thanks so much for the incredible contest exposure you gave us on Tuesday and Wednesday. InnoVenture was the perfect venue, and I found your line up of speakers and companies to be incredibly interesting.

John Moore, Greenville Chamber of Commerce, Greenville, SC
Congratulations! I strongly believe that InnoVenture 2006 truly went to another level. The vision of driving beyond a basic venture capital conference to an innovation conference linking ideas and people wherever they are found - large multinational corporations, startup ventures, research universities, and national labs - was a huge success. Last year, while a good first step, did not have the true chemistry of interactions that took place in the display hall. This year, the display was abuzz all day long. I literally was unable to leave the NEXT booth all day due to steady traffic of very talented, impressive entrepreneurs, grad students, economic developers, etc. And I heard similar comments from Clemson and others at their booths at the end of the day.

Neil McLean, Engenuity SC, Columbia, SC
Withpout exception, everyone that I ran into feels great about where we're headed w/the innovation economy in SC. You get credit for putting together the biggest and best innovation celebration of the year.

John Lumpkin, USC Innovista, Columbia, SC
You have continued to build on the solid foundation you created. You have every right to be extremely proud of what has occurred as well as the momentum which is clearly in place.

Robby Hill, HillSouth, Florence, SC
I promise you a huge delegation at next year's InnoVenture event from my part of the state. We have much to learn from our colleagues from other parts of the state. I am amazed at the talent attracted to this event and I for one can not wait for its continued growth.

Steve Hoffman, Skyline Exhibits & Design, Greenville, SC
Thank you for an event that raises the image, esteem and ultimately the productivity and profitability of our region. The one comment I heard several times yesterday was ......"The quality of the attendees makes the event worthwhile."

Nancy Whitworth, City of Greenville, Greenville, SC
Thanks for all your hard work, it certainly paid off! I thought the event was really good.

Kay A. Martin, Protocol With Ease, Anderson, SC
Thank you and everyone who led the way to InnoVenture 2006. My partner, Laura Capell, and I are developing a new company, Protocol With Ease. The opportunity to "see" the vision for the new Carolina is priceless to us as we anticipate our customers in business etiquette consultation. In two days we gathered research and development that could not have been accomplished by any means available to us within our resources. Thank you. We made connections with key people for our company's plans of the near future.. May we encourage you that everyone we encountered with official authority of InnoVenture was professional, courteous and most helpful. We had no negative observations. "Well done " is the only response we can honestly give to express our experience of these two days. After hearing and seeing the visions of the key speakers, it is exciting to anticipate the great things about to open up in South Carolina.

Julian Crawford, Swaim Brown,Greenville, SC
Inevitably [the morning after InnoVenture] must feel like the "day after the lord mayor's parade". The undeniable truth is that the existence of the event itself is a tremendous success. Congratulations on a job well done and, above all, thank you for helping to make it happen.

Bill Hogue, University of SC, Columbia, SC
I enjoyed participating and especially appreciated the opportunity to interact with some folks whom I had not met before. I also want to compliment your team for their active engagement and professionalism in facilitating the CIO discussions.

Judy Prince, USC Upstate, Greenville, SC
Congratulations on an excellent InnoVenture Conference! I thought that John Sibley Butler did an excellent job. The new Upstate Dean of the School of Business will definitely be with you next year. I appreciated the opportunity to hear USC mentioned during the lunch!

Reed Bolton Byrum, Strategic Communications Associates, Austin, TX
Magnificent work. Great conference. Congratulations!

Jay Kirkman, radii, Greenville, SC
Thanks for staging InnoVenture. This was my first time at the conference and I plan to make it a regular part of radii’s business development program. Overall, I was greatly impressed with the level of organization and management.

J. Paul Solitario, Tobin Advisors LLC, Charlotte, NC
Let me say what a terrific and pleasant surprise InnoVenture 2006 was. Congratulations and thank you and your entire team for all of your hard work.

Don Koonce, Envision, Inc., Greenville, SC
Wonderful Conference! I have heard nothing but rave reviews.

Phyllis Nolan, Nolan Management Company, Inc., Greenwood, SC
Innoventure was an extremely good conference, and yes the talent and energy was impressive. In general, the organization and materials were very well done. You and your staff deserve a huge round of applause. Thank you for your energy and enthusiasm for economic development in the State of South Carolina!

John Lee, Nimlok-Greenville, Greenville, SC
After debating about attending the conference, I’m glad I did and hope to be a part of it in future years. Congratulations on a successful event and kudos for having the vision, determination and leadership to pull it off!!!

Mary Ann Pires, The Pires Group, Inc., Greenville, SC
"InnoVenture" was again an exciting, energizing event for all who took part---a bridge to South Carolina's future.

John Sibley Butler: "When the Chinese get innovation right, it's over."

John Sibley Butler, the keynote dinner speaker at InnoVenture, did a fantastic job. John is director of IC2 at the University of Texas at Austin, where the Austin Model of knowledge-based economic development was created. The core of John's talk centered on the conditions that lead to the development of knowledge-based economies.

He had an ominous observation that stuck with me in particular. He had just returned from a long visit to China, and he commented, "When the Chinese get innovation right, it's over."

Recently the Kauffman Foundation released a study identifying key factors driving offshoring of corporate R&D. The study concludes that,

Contrary to popular belief, it is intellectual capital and university collaboration, not just lower costs, that primarily attract companies to locate R&D activities in locations away from their home country, according to a new study sponsored by the Ewing Marion Kauffman Foundation. The study of more than 200 multinational companies across 15 industries, mostly headquartered in the United States and Western Europe, finds that emerging countries such as China and India will continue to be major beneficiaries of R&D expansion over the next three years as companies seek new market opportunities, access to top scientists and engineers, and collaborative research relationships with leading universities.

If the United States does not get more serious about education, especially of the next generate of scientists, engineers, and mathematicians, it will be over.