The New York Times


November 17, 2013

Toy Story

MY model American entrepreneur of the moment is Cheong Choon Ng. He has not attracted a $3 billion bid from Facebook, like the young inventors of the photo-sharing service Snapchat. Wall Street is not cooking up an I.P.O. But Ng is a star in my household. He is the creator of the Rainbow Loom, which in the middle-schooler market is the hottest device not called iSomething. If you have noticed that half the children in America — and a fair number of adults — seem to be sporting bracelets that are braids of brightly colored rubber bands, then you have seen the fruits of the Rainbow Loom.

Ng told me he has sold about three million of them, even before cracking the overseas market. Not least among the charms of his simple device is the fact that it unplugs children for a while from the mind-sucking Matrix in favor of projects that require focus and creativity. (In fairness to the Internet, I should note that kids learn new bracelet designs from demonstration videos on YouTube.)

The United States may not manufacture as much stuff as it used to, but we are still the world’s cradle of innovation. Inventiveness has been an American point of pride dating back to the days when the country was in its infancy. The Atlantic magazine, in one of those exercises that manages to be both arbitrary and fascinating, this month asked a panel of smart people to identify the greatest inventionssince the wheel. If you discard breakthroughs made before the United States was up and running, an astonishing number of civilization-altering innovations — 16 of 30 on that list — were born here. Oil drilling. The telegraph. Refrigeration. Anesthesia. Electricity. The airplane. The Pill. The semiconductor. You might say that America itself is something of a civilization-altering innovation.

Choon Ng is in several respects a case study in how America has kept its edge. He moved here from Malaysia at age 21 to earn a master’s degree in engineering from Wichita State University. He hadn’t planned on staying, but he was offered a job as a crash-test engineer in the auto industry. The companies he worked for sponsored him for work visas until, after a dozen years, he had negotiated the arduous path to citizenship. Then inspiration struck.

The loom, originally a wooden tablet with a grid of pushpins, began as an attempt to score dad points with his craft-obsessed daughters. When it was a hit at home, he fashioned a version out of molded plastic, scraped together his savings and loans from his family, and went into business. Eventually he managed to line up a few retailers to stock the loom, and quit his day job. He is a cheerful advertisement for the American dream. “The longer you stay, the more you see the opportunity,” Ng told me from his home in Michigan, where he is working on a loom upgrade and his next invention. “Whatever you work for, you can own.”

His loom, by the way, is now manufactured in China, which makes a lot of things but invents very few.

In Ng’s story you can discern the main components of America’s success as an incubator of new things: a welcome mat for talented, ambitious immigrants. An education system that (when it is not teaching test-taking) values creativity. The availability of start-up capital. Patent laws that protect intellectual property. An infrastructure that gets things shipped and marketed. And, perhaps most important, a culture that preaches opportunity and celebrates the risk-taker, the pioneer. From the Wright Brothers taking flight, to Bill Bowerman of Nike using a waffle iron to revolutionize running shoes, to Steve Jobs and his beautiful machines, to Choon Ng, we worship the inventive spark.

The question is, can we keep it up?

The culture part, at least, seems to be alive and well. “Entrepreneur” is to the academic achiever of today what “doctor” and “lawyer” were to my generation. “It’s the cool thing,” said Bill Aulet, who runs a center for entrepreneurship at the Massachusetts Institute of Technology. “I would say nationally we’re looking at 20 or 25 percent of the student population that wants to be entrepreneurs.”

But for all the pop-culture enthusiasm, there are signs that our innovative dynamism is diminishing. The pace of new business creation, on a per-capita basis, has been in a slow but steady decline since the mid-1980s, according to the Kauffman Foundation, which studies entrepreneurial trends. That suggests that other essentials of a thriving innovative economy have been neglected.

Let us count the ways. The decline of our education system is exaggerated but real, especially in the scientific and technical fields. The Internet has made it harder to enforce intellectual property rights, creating havens for pirates and narrowing the advantage of innovator over copycat. (Ng’s greatest frustration is protecting his patent against aggressively lawyered-up imitators.)

Start-up capital is still more abundant than anywhere else on earth, but the supply has been depleted by the recession. Dane Stangler, Kauffman’s research director, said most new small businesses are financed not by high-profile venture capital firms, but by family and friends, including home equity loans that went away when the housing bubble burst. Crowdfunding is a new source of capital, but still minuscule.

And then there is the erosion of our infrastructure — physical and intellectual. James Fallows, who wrote up The Atlantic’s great-inventions list (and who is an astute student of the economic cultures of the U.S. and China) worries about the dwindling of America’s publicly financed research. The budgets of the National Institutes of Health, the National Science Foundation and other sources of investment in the long-term basic science that undergirds practical innovation have been slowly eroding — even before the ham-handed budget sequester and the idiotic government shutdown. “This is more maddening than the other most obvious problem, the neglect of physical infrastructure, because it would be so much easier to solve,” Fallows told me in an email. “Rebuilding bridges, ports, etc. takes a long time. Increasing research budgets is an ‘it’s only money’ issue. The sums are small on the national budgetary scale but large in their implications.”

PROBABLY the most perverse impediment is our immigration law. Currently, Bill Aulet reports, the brightest foreign students come to M.I.T., earn degrees in high-demand disciplines (with a healthy side order of rigorous entrepreneurship training) and then are recruited to work in Canada or Britain because they can’t get an American green card. “We should be embracing these people,” Aulet said, as a source of the heterogeneity and drive that generate new ideas.

“The U.S. attracts a lot of talent,” Ng agreed. “But it’s very hard to stay and contribute.”

The comprehensive immigration bill passed by the Senate includes more immigrant visas for foreign graduates in sciences and technology and a small pilot program to admit promising entrepreneurs. But that measure is stranded in the House, another casualty of our broken politics, and another reminder that these days Washington is where bright ideas go to die.

Choon Ng 2.0 will just have to wait.

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