How America can get its groove back

John J. Kao, M.D. ’77, M.B.A. ’82, does not even mention his medical degree in the biography for his latest book, Innovation Nation: How America Is Losing Its Innovation Edge, Why It Matters, and What We Can Do To Get It Back.

Medical school at Yale and a psychiatry residency at McLean Hospital were just starting points for a career that has earned Kao the designation of “Mr. Creativity” from The Economist. Along the way he has played keyboards for Frank Zappa; taught at MIT and at Harvard, where he earned his business degree; started two biotech companies; and was production executive on the Palme d’Or-winning film sex, lies, and videotape. Recently he founded a nonprofit, the Institute for Large Scale Innovation.

Despite his distance from hospital corridors, however, Kao said he still draws on what he calls “the implicit curriculum of medicine,” which taught him, “You work hard, and no one works harder than you. You take responsibility and make things happen. And you’re it: when someone comes into the ER at three in the morning, you’re it. I’ve never forgotten those lessons.”

Lately Kao’s hard work has involved advising corporate and government leaders around the world on fostering innovation—and warning Americans that they are not doing enough. Business Week called his book “scary, insightful, and ultimately very useful,” and listed it among the top 10 business books for 2007.

Kao believes that Americans lack a cogent vision of where innovation is taking them, even though half of the world’s research and development money is invested within this country. “No country, not even the United States, can afford to be without a strategy,” he said. Kao defines innovation as the ability of individuals, corporations and nations “to continuously create their desired future.” If the United States wants to chart its own course rather than simply reacting to developments elsewhere, it must foster innovation.

Kao cites Singapore’s innovation strategy as instructive. The island nation of 4.5 million has built a huge research complex called Biopolis, paid for talented young people to earn doctorates in the sciences and recruited researchers and advisors from around the world. In his book, Kao quotes former University of Washington President Lee L. Huntsman, who has called Singapore a “venture capital company masquerading as a government.”

Like Singapore, each nation should foster innovation consistent with its national character and endowments, Kao said. Otherwise, he said, “you don’t make the best use of your opportunities and resources.” The United States, for example, has both strong links between academia and business and a mature venture capital industry willing to take chances on unproven ideas. “And,” said Kao, “we have a very forgiving attitude toward what I would call noble failure. … If you fail in European countries or Asia, typically you’re out of the game.”

America has also benefited by welcoming immigrants: half of those with doctoral degrees in computer science, for instance, come from abroad. “We’d be stupid to imperil that flow of talent into this country,” Kao said. “Many other countries are stepping up to the plate and making their countries highly desirable to immigrant talent.”

Kao advises physicians who value innovation to seek skills and knowledge beyond medicine. For instance, he recommends that doctors earn master’s degrees in business or in public administration. “These days it’s arguably as important to understand how discoveries get into the marketplace as it is to pursue discovery itself. … The more we can do a variety of things in addition to having our core skills, the more we can contribute to society.”