Government support

guest commentary by David Potts

Innovation plus the freedom to pursue our dreams is what made and makes America great. In our lifetime the United States has always been the leader in innovation. That is why we are the richest country in the world. But from everything I’m reading now we are losing or have lost our lead in innovation to other countries. My worry is that America is on the road to being a second-rate country in many of the research areas we highly value.

My whole life has been one of experiencing amazing inventions and innovations. It began with color television, FM radio, and quadraphonic speakers. Somewhere between FM radio and quadraphonic speakers Neil Armstrong walked on the moon and the first heart transplant was performed.

Today we have the Internet, smart phones, and HDTV. Cancer is no longer a death sentence for most people and wars can be fought with unmanned drones. Most of these inventions and innovations we attribute to our free enterprise system and appropriately so.

But much of the innovation used by American companies to create great products and services and the related wealth are the byproducts of governmental agencies such as NASA and the Defense Department and the research and development required by them to implement their missions. In other words, at least indirectly, government played a huge role in the inventions and innovations that fueled our economic growth and wealth.

In this part of the country, what I hear from my friends and fellow small business owners and entrepreneurs is that free enterprise is the answer to all our problems. By free enterprise they mean, “We don’t need government. Just get out of the way of capitalism and all will be well.”

Business nirvana to many would be a world without income taxes, without regulations, without subsidies, without speed limits … without government in any form. But that line of thinking is the same knee-jerk reaction of which politicians are famous. In order for politicians to flex their muscles, the marketplace has become over-regulated, government policies are implemented without consideration of the consequences, the business environment is highly uncertain, and people go without jobs. But for the United State to continue to be a leader (or regain its position as world leader) in innovation, the private sector needs government and its involvement — but balanced and thoughtful involvement.

Before I continue, let’s take a moment for you to process that last statement. Vomit. Dry heave. Wipe off the cold sweat from your brow. Finish shaking. Whatever your physical reaction to the thought of our governments being involved in the free market, allow it to happen then give me your attention again … if you’re not too afraid.

Below are links to several thinkers about our current state of affairs related to innovation and the United States. Their thoughts are alarming and encouraging. I dare you to take the time to read or listen to them. You might find them educational.

• The Future of Innovation: Can America Keep Pace?
By Fareed Zakaria. An article published June 5, 2011, on the Time magazine website showing that by some measures the United States is no longer the leader of the world in innovation.

• Manufacturing is a Vital Component to the U.S. Economy
An interview with Andrew Liveris, Dow Chemical Company CEO, January 25, 2011 on National Public Radio. Liveris authored the book "Make It In America: The Case for Re-Inventing the Economy."

• 20 Big Thinkers Suggest Ideas to Fix the Broken U.S. Government
This is a blog entry from April 2011 at The Daily Beast. I don’t agree 100% with the ideas, but it’s a good start.

• Steve Johnson: Where good ideas come from
This is a video of a TED talk by Steve Johnson, the author of “Where Good Ideas Come From: A Natural History of Innovation.”

Final thought: We need government to support our free enterprise system and implement policies accommodating business growth and encouraging innovation — especially government support of small, privately held businesses. We just don’t need the government we are getting today. But the current free enterprise system is losing the lead. It’s time for something new.

The first and greatest innovative breakthrough we should work together to accomplish is the reinvention of our government, a government that as of today hasn’t shown its ability to govern itself. There are way too many Wieners in Washington D.C.

Innovation needs to start somewhere. Why not begin in the greater Fort Smith area? I’m open for ideas. Or maybe we should just become a country in service to China. They say learning a new language will help older adults keep their mind sharp. Mandarin or Cantonese?

About Potts
David Potts is a certified public accountant also accredited in business valuation. Owner of Potts & Company, Certified Public Accountants for more than 25 years, his practice focuses on small and medium size businesses and their owners in the areas of taxation, accounting and bookkeeping, business valuation and business advisory services. He is a Fort Smith native and a graduate of the University of Arkansas. You can follow more of his thoughts at ThePottsReport.com. Although every effort is made to provide you accurate and timely tax information, it is general in nature and not specific to your facts and circumstances. Consult a qualified tax professional to discuss your particular case.

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