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Showing posts from August 2, 2009

How about an Innovation Index to "predict" downturns?

"While Wall Street's mistakes may have triggered the financial crisis, the innovation shortfall helps explain why the collapse has been so broad," says Michael Mandel in his June 15, 2009 BusinessWeek article. He comes to that conclusion based on an analysis of innovation in America in the past decade. A driving fact: potential high-impact innovations in areas such as satellite-based Internet and drug development did not commercialize.

Mandel's analysis looks at some factors that indicate the presence or absence of important innovation:
Stock marketTrade balance in advanced technology productsWages of college-educated workersVenture capital investmentsDeath rates by age.Each of these (mostly economy-related) factors has shortcomings as an innovation indicator, but taken together, they tell important stories such as "weaker-than-expected-innovation" as in Mandel's recent findings. Alan Greenspan, in a 2000 speech, said "We appear to be in the midst of…