Bill Wulf Discusses Incentives for Innovation at von Liebig Forum

By Stephanie Sides

La Jolla, CA, January 31, 2006  -- William Wulf, president of the National Academy of Engineering and one of the chief advocates for the “technology health of the nation” to the U.S. Congress, last week addressed the “Issues in Innovation” forum co-sponsored by Calit2 and the von Liebig Center for Entrepreneurism and Technology Advancement. The NAE, among its other responsibilities, produces reports on topics of interest to the engineering community that are “unbiased, independent, and authoritative.” It was in that context that Wulf chose to address the topic of “Incentives for Innovation.”

Wulf and Kedrosky
Bill Wulf and Paul Kedrosky,
director of the von Liebig
Center, doing Q&A with Wulf
after his formal presentation.

This might seem an odd topic, he said. The U.S. is doing well, it’s the one remaining superpower, its economy is growing at quite a respectable pace with low unemployment and low inflation, and it remains a leader in most areas of science and technology. The U.S. has long been a particularly fertile environment for innovation with its great research universities that produce ideas and train people to turn ideas into products. It’s also a culture that encourages risk taking: “It’s ok to fail as long as it doesn’t happen too often,” he said. “Even failure teaches us.”

But the world is not static, and Wulf acknowledged some disturbing trends about the future. “It’s quite possible that what got us to this point may not serve us well in the 21st century,” he said.

He, as many leaders in science and technology are doing these days, cited Thomas L. Friedman’s book The World Is Flat. This book, Wulf said, points to a flattening of the economic playing field through such mechanisms as offshoring and outsourcing. With the Internet and a computer, it’s possible to provide a host of services the U.S. needs outside the U.S. -- where labor is much cheaper. Of the 10 sources of the flattening phenomenon, nine are due to technologies that engineers have created. In a call to arms, Wulf said that if engineers helped create this situation, they, as a community, have more responsibility to help the U.S. prepare for this flatter world.

In general, Wulf believes, this trend is a good thing: Lower costs benefit consumers, the rising middle class in India and China are becoming consumers of our products, and everyone has a growing stake in a frictionless world to protect economic exchange.

Graham, Wulf, and Seible
Calit2 chief scientist Ron
Graham, Wulf, and dean of the
Jacobs School of Engineering
Frieder Seible.

But whether this trend is good for a particular country depends on whether that country is prepared to compete…

So the real question is: What does a country need to do?

The answer: Invest in our future and our children.

But the US has not done this.

Report after report over the last few years from government agencies, the National Science Board, the academies, and academic studies documents the decline of research in the U.S. Funding for research over the last 20 years has dropped nearly by half as a percentage of gross national product. The U.S. percentage of engineers is the lowest among developed countries (approximately 4-5% -- that’s about 7% of the world’s engineers). And the U.S. ’ share of peer-reviewed papers and patents is declining.

All three academies published Rising Above the Gathering Storm: Energizing and Employing America for a Brighter Economic Future through the National Research Council last fall, a study that concluded that strategies employed to achieve current economic leadership are no longer sufficient or even appropriate. This conclusion was based on copious data analyzed by a group consisting of current and former CEOs, university presidents, Nobel laureates, and presidential appointees in previous administrations.

The way to prosper is to innovate, and that means change. Change is hard, especially when you’re on top. Harkening back to Darwin , Wulf said it’s not the strongest nor most intelligent that survives but rather the one most adaptable to change.

The best run companies – and countries – tend to be the most resistant to change: More than 60 of the companies considered the “top 100” during the last century don’t exist today.

It’s hard for leaders to change because what they’ve been doing has gotten them where they are. Their advisors tell them change is disaster: Circle the wagons and protect what you’ve got.

Wulf likened each problem that a company or a country faces to a tile in mosaic: He cited a pattern of short-term thinking, lack of long-term investment, and failure to adopt disruptive technologies. Related “tiles” include loss of industrial research capability, the decline of federal funding of the physical sciences and engineering, funding of short-term research, and policies affecting foreign-born students.

If we agree that our ability to innovate is the principal cause of our prosperity, then continuing to innovate is central to prosperity.

The problem is that there’s no simple formula for encouraging innovation. Instead, multiple components, in aggregate, can encourage – or discourage – innovation. What we need includes a vibrant research base, an educated workforce, a culture that permits and encourages risk taking, a social climate that attracts the best to engineering programs even from outside the U.S., patient capital for entrepreneurs, tax laws that encourage investment, protection of intellectual property, and laws that protect the public but encourage experimentation.

Wulf is particularly concerned about the erosion of the research base in the physical sciences and the funding focus on short-term research. “This has the potential to do enormous damage,” he said. “It takes about 15 years for ideas to go from the research bench to product. If we were to stop all research funding today, it would take us years to appreciate the impact.” And the implication is that it would take us years to turn the problem around.

The most important side effect of research, said Wulf, is the development of human capital: the students who do the research.

The lack of priority on funding the physical sciences is not just a government problem; it’s a public problem. We can’t compete on cost, so we better compete on value. Therefore, we must ensure the quality of education.

Wulf encouraged his audience to “think hard about how we can make our engineering education a factor of 4-5 more valuable. We can start by training our students in two years what it now takes them four years to learn." Wulf admitted that reform of engineering education has been his “soapbox” since he came to the NAE in 1997.

Engineering is normally seen as path of upward mobility, but underrepresented minorities in engineering programs in this country are notably absent. “There’s something about the engineering image that is making it repulsive to the students we need,” said Wulf. “I think it has something to do with the ‘boot camp style’ of current curriculum.”

Talking about Leaving: Why Undergraduates Leave the Sciences, by Elaine Seymour and Nancy M. Hewitt, documents some of the reasons why students in physical sciences and engineering graduate at only about a 50% rate. These reasons belie the “myth” that it’s the poorer students that are the ones to drop out. The data say that the students who leave are indistinguishable from those who stay; they have comparable SAT scores, grades, and rank in high school. “Engineering has an incorrect image problem,” said Wulf, “and we can do a lot to change that image to a more inviting one.” Significantly, he cited two universities that graduate more engineers than enter in the freshman class: Drexel and Tufts. 

The essential characteristic of engineering, said Wulf, is creativity. The field has a lot in common with the arts because it is forever creating something that's new. 

Wulf turned back to Rising Above the Gathering Storm to talk about the social climate for students from other countries. A survey done of some 1,000 people in each of 17 countries, asked the question: Where would you advise your children to go to have a better quality of life? Only one country put the U.S. at the top of the list.

Many components of the current environment were invented for a technology that was, not that would be. For example, the patent system was designed for hardware like gears and pulleys, not for snippets of DNA.

“One of my goals over the next 18 months,” said Wulf, “is to evaluate components of our environment with respect to innovation. If f we designed the patent system today, what would it look like? Incremental tweaks won’t solve the problem.”

Wulf concluded by saying that the technology developed by engineers made us prosperous, but it also led to the flattening described in Friedman’s book. A more generally prosperous world will be a safer one. But it also means that the strategies that made us prosperous are not necessarily those that will keep us there. We need to think about change: how to do things differently to compete in a flatter playing field. Some is under our control. It’s not just the government’s problem.

Video was taken of this seminar (see air dates on UCSD-TV and UCTV, below). Once it’s been shown on UCSD-TV and UCTV, it will become streaming video on the Calit2 Website (by late March 2006).

Article by Stephanie Sides, director of communications, Calit2. Photos by Denine Hagen, director of communications, Jacobs School of Engineering, UCSD.

Von Liebig Forum: Bill Wulf on UCSD-TV:
Mon, Feb 20, 2006     8:00pm
Tue, Feb 21, 2006      10:00pm
Fri, Feb 24, 2006        7:00pm
Sun, Feb 26, 2006       8:00pm
Mon, Feb 27, 2006     9:00pm
Tue, Feb 28, 2006      11:00pm

Von Liebig Forum: Bill Wulf on UCTV:      
Mon, Feb 20, 2006     9:00am
Tue, Feb 21, 2006      1:00pm
Tue, Feb 21, 2006      11:00pm
Wed, Feb 22, 2006     5:00pm
Wed, Feb 22, 2006     8:00pm
Thu, Feb 23, 2006      6:00am
Fri, Feb 24, 2006        3:00am
Sat, Feb 25, 2006       12:00am
Sun, Feb 26, 2006       8:00am