- The Washington Times - Thursday, January 25, 2007

America is being overtaken by a growing “army of protectors” — those who seek to guard us from corporate greed, side effects of medicines and even unhealthy foods. The ramifications undermine personal choice, the growth of business and industry, and threaten our economic competitiveness.

Conservatives and libertarians, business leaders and others compare us to a “nanny society,” one where government steps in to eliminate all risk from daily life. Liberals, trial lawyers and supporters of big government argue that if the government has the ability to create a safer world for its citizens, it has a moral obligation to do so.

While there is some validity to both sides of the argument, the growing prevalence of a risk-averse mindset is stifling the American entrepreneurial spirit that fuels the national economic engine.

Government may have been among the first to corner the risk-aversion market. The operating mantra for the bureaucracy was, and remains, that the punishment for taking a risk and making a mistake — to be ridiculed, disciplined or fired — was far more severe than the potential reward for thinking beyond the norm and dreaming up with a better idea, program or policy.

The result is to discourage innovation by many of the people who know best how to fix the broken programs that they deal with every day.

Elected leaders, as well as CEOs, who embark on radically different paths are often lambasted by the protectors of the status quo and likely to find themselves with the label “former” attached to their titles simply for traveling down the path of innovation.

Risk aversion has had a devastating impact on America’s leadership in technology. The fact is, no president, Republican or Democrat, and no previous Congress has ever developed a meaningful national technological strategy for the United States. Certainly, there were fits and starts — the Kennedy Space Program, the Carter Shale Oil Program, the Reagan Strategic Defense Initiative and the Clinton/Gore Human Genome Initiative — but never has a comprehensive and consistent strategy been employed.

The failure may be directly linked to the potential backlash that could result from a president or Congress being accused of “picking the winners and losers” for future business growth.

Unfortunately, this kind of government thinking has reached the private sector.

The Sarbanes-Oxley reforms, whose purpose was improving accountability and transparency in corporate governance, has also chased innovative thinkers from corporate boardrooms. Choosing to serve on a corporate board or deciding to take a small private company public may now not be worth the risk.

Risk aversion in the private marketplace has had a paralyzing effect on high-tech growth. In 2000, there were an estimated 170 initial public offerings for high-tech companies; by 2006 the number of such IPOs dwindled to 35.

Economic competition from Singapore, Taiwan, Korea, India, China and Japan reminds us of the atrophy in the domestic auto industry. The burgeoning presence of nail and tanning salons on Main Street USA stands in stark contrast to Singapore’s stem-cell “research city,” Taiwan’s science parks and the new R&D labs in Bangalore, India.

To be remembered for rebuilding America, our president must commit to re-establishing the global technological leadership of the United States and take a risk on some technologies that meet our national needs, such as alternative energy, for decades to come.

If the new Congress really wants to improve the future for America’s working families, it will leave the self-congratulatory echo chamber about enhancements to the minimum wage and get down to the hard work of implementing a national strategy for technological innovation, even if this threatens the defenders of the status quo.

The 110th Congress can be inspired by the bipartisan 1980 Bayh-Dole Act, enabling universities to own intellectual property from federally sponsored research. Prior to this transformational legislation, the annual number of university patents fluctuated below 500. By 1990 it doubled and, by 2003 it exceeded 3,000, with a threefold increase in the number of participating universities, which furthered high tech economic growth.

We need such visionary initiatives now from Congress and the president.

Hal Raveche is president of the Stevens Institute of Technology.

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