Friday 16 December 2011

Saving the US Economy – Productive Involvement of Government, Academia, and Home business

United States has the most expansive patent subject matter in the world. An inventor gives an invention to the public and gets exclusive rights over it for a limited period of time.

To be eligible for a patent, an invention should satisfy the requirements of Patentable subject matter (Sec. 101),

Usefulness - An invention would be eligible for a patent grant only if it is useful (35 USC Sec. 101). The utility of the invention should be current, substantial and credible.

Non-obviousness - An invention to be patentable should not be obvious or known at the time of invention. An invention is obvious, if a single prior art reference or a combination of prior art references as a whole, make the invention obvious to a person with ordinary skill in the art to which the invention belongs. The invention should be obvious at the time of conception of the invention and not at the time of contention of obviousness.

Specification - An inventor must file a patent application containing a specification (35 USC Sec. 112). The claims define the metes and bounds of the invention claimed by the inventor. (35 USC Sec. 101). As per section 101, any new and useful invention or discovery, which is a process, machine, manufacture or composition of matter is patentable. Selling the invention for testing deprived it of the novelty.

An invention can not be patented, if the inventor had abandoned the invention to the public. An invention is not patentable if another person before the applicant has invented it. The rapid development of the Asian economies provides numerous examples of methods to develop job growth, incubate new technologies and new products, scale-up to production and manufacture of the new product, and develop a strong economy. As Tom Blair, in his book Poorer Richard's America: What Would Ben Franklin Say?, "the government of China spends their money to build industry and sell products, and the USA spends money to make the world safe." Not long ago in California, and in particular the Silicon Valley, the most dynamic economy on the planet was in place, thanks, partly, to local, state, and federal government, where a tremendous incubation of new companies and new technologies was occurring. Those companies went on to produce their products in California, realizing great job growth and bolstering the economy. Clearly, the great Silicon Valley innovation machine hasn't been creating many jobs lately in the USA.

In years past, scaling-up to production and manufacture worked well in the Silicon Valley. Investors provided money to build the new business. American companies discovered they could have their manufacturing and even their engineering done cheaper overseas. Meanwhile, a very effective computer-manufacturing industry has emerged in Asia, employing about 1.5 million workers, including factory employees, engineers, and managers.

The deterioration of US job creation is endemic to much of US industry, not just in our computer industry. Alternative energy is another example, where an emerging industry is replete with much innovation. Photovoltaics are a U.S. invention. With some technologies originally developed in the USA, such as advanced batteries, both scaling-up to production and innovation are occurring overseas. New companies are emerging in the USA, including Tesla in Northern California and Fisker in Southern California.

The small presence of the USA in the production of high-tech batteries presents a problem for growing this, and related industry in the USA.

Adversion to risk may be another problem companies face. Foreign governments often mitigate the risk of companies through government funding. The investments required are much higher than in the invention phase.

However, in previous years, when Intel's business focused on making memory chips, Intel hesitated to add manufacturing capacity, not being sure about the market demand in years to come. Again, technical knowhow and innovation are being exported overseas, with long-term economic consequences, as well as the killing and sickening of people because of poor quality control overseas.

Again, the economic mantra of today seems to be "free market is best, and government is the problem."

Evidence of government working through a controlled free market to develop economies and advance innovation, jobs, and a strong industry presence is observed in several Asian countries during the past few decades. These countries seem to understand that job creation and building industry must be the No. 1 objective of state economic policy. Over time, the Golden Projects contributed to the rapid development of China's information infrastructure, job creation, and the country's economic growth.

Further, the birth of the biotech industry in California was largely a result from work at a number of great research universities, supported by government, including the University of California.

In the biotech industry this is reflected by many companies developing an "Indian" or "China" strategy to move production or studies overseas because their competitors are doing so already.

To better compete in the world economy, the US will need to view business in the long term as well as the short term. Outsourcing overseas and giving away our scale to production for short term profits needs a disincentive, thus rebuilding our industrial base. Government needs to support our great research institutions, provide liquidity in the financial markets for all businesses, including start-ups and small businesses, and should develop a system of financial incentives, such as to levy a tax on products produced offshore. Then use the dollars from this tax to provide liquid capital to those companies creating innovative products in the USA and/or scaling their production within our borders.

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