Tuesday, February 2, 2010

A Few Thoughts About Building Jobs and Innovation

Innovation grows when the government encourages people to buy into it. Not every new idea is an iPod or an iPhone. Most require taking risks and overcoming inertia. But like cash for clunkers – if you give people a good reason, they line up. Governments should be required to buy say 10% of new American technology and businesses should get tax incentives to do the same.

How else can you encourage innovation?

Let’s face it, if left to their own devices, most companies and government purchasers are afraid to buy new products. So, even when the government pumps money into innovations it may not really drive business: you may get new products and services but you don’t necessarily get buyers. Besides, sales cycles are slow and many innovators lack sales skills. So the inovation cycle is not completed the companies and fail and the money is wated.

At the end of the day, it is not enough to push technology – you also have to pull it by creating a buying incentive.

The most spectaculalry successful plan for boosting business was the cash for clunkers which gave people a clear incentive and moved cars off the the lots. Sales is is what drives innovation, everyithing else is more or less welfare.
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