American Exceptionalism - Distinguishing Innovation from Exploitation

Foursquare is an example of clever exploitation - not true innovation..

Foursquare - an application for mobile phones or other mobile devices including GPS -  is a social networking site for people on the go. = Users can "check-in" at venues using text messaging or the web.  The check-in gives the user points and badges.  As a Realtor® I am familiar with Foursquare but have chosen to confine myself primarily to Twitter for my mobile local presence.

Dennis Crowley and Naveen Selvadurai founded the company two years ago - Foursquare is now considered to be worth $250,000,000.  The two founders were interviewed  by Fareed Zakaria   on his CNN special - "Restoring the Dream."  As such, Mr. Zakaria was sighting Foursquare as a symbol of hope for American "exceptionalism."

Now, I have no desire to diminish the achievements of Dennis Crowley or Naveen Slevadurai.  Creating something that captures the imagination of the masses so quickly is no small feat.  It is indeed an example of how someone with an idea can do well as a start-up in the US and still achieve great success.  However,  in terms of American " "exceptionalism," it falls well short in one crucial area.

Foursquare is not de novo innovation - it is simply the exploitation of existing technology...

Foursquare is not proof that America is on the cutting edge.  It certainly doesn't show that technologically speaking we are thinking out-of-the-box at all.  Nothing new in terms of technological, scientific or engineering innovation happened here.  Some will argue that this means that America is still at the top of its game in terms of innovation.  Some may even go so far to say that this is "proof" that the free market is capable and can sustain cutting-edge innovation.  This is absolutely incorrect.  It is innovative in that it is a new way to exploit existing technology.  No more, no less.  Foursquare is clever exploitation of technology.  Exploitation - no matter how clever - is not innovation. It breaks no new ground, it simply creates a new product from an established technological base.

The internet and GPS changed the world - Foursquare will not...

This line of distinction is not trivial.  And an understanding of the difference is essential in understanding why American "exceptionalism" is tottering on the brink of extinction. R&D is not readily funded by the private sector until it is well past the innovation stage and has entered the realm of exploitation.  True ground-breaking research is a high-stakes game that can require years of funding and many blind alleys before you hit pay dirt.  This makes it a remarkably unattractive investment for venture capital.   Even the most risk happy venture capitalist would not like the odds on most of these projects which have a 20-year timeline to any type of profit and where the odds of said profit are about 1000 to 1 against.

Foursquare is the product of two major innovations, the internet, and GPS - both of which were made possible by publicly funded R&D. Crowley and Selvadurai acknowledged as much in their interview with Zakaria. Nevertheless, I fear that the importance and impact are often lost on those who scoff at higher education and kneel to the God of the "Private Sector" to the exclusion of all else.  Yes, I mean the tea party.

American "exceptionalism" is tied to innovation..

American "exceptionalism" with respect to R&D is tied to looking into the abyss of long odds and stepping boldly into the future to finance that type of research.  That type of seed money can only come from the public sector and when we cut that off - we cut off any hope of a cutting edge future.

© 2011 - Ruthmarie G. Hicks - http://www.therobberbaroneconomy.com.  All rights reserved.