Best business books of the year

Innovation Nation has been named by Business Week as one of its top ten business booksof the year. Here’s what they say:

Finally, in a book that reviewer Bruce Nussbaum called “scary, insightful, and ultimately very useful,” consultant John Kao asserts that America’s competitive advantage is going, going, nearly gone. Innovation Nation: How America Is Losing Its Innovation Edge, Why It Matters, and What We Can Do to Get It Back (Free Press) notes that today, talent is more widely dispersed across the globe than ever before. Venture-capital pools are launching a generation of new startups across Asia and Europe. How should the U.S. respond? For one thing, Kao would spend $20 billion to create 20 innovation hubs revolving around such things as clean energy, digital media, and health care. Kao certainly has big ideas—but he is far from the only author providing smart thinking for the New Year.

The full list of books is:

  1. In Spite of the Gods: The Strange Rise of Modern India, Edward Luce
  2. Asian Godfathers: Money and Power in Hong Kong and Southeast Asia, Joe Studwell
  3. The Age of Turbulence: Adventures in a New World, Alan Greenspan
  4. The Black Swan: The Impact of the Highly Improbable, Nassim Nicholas Taleb
  5. The Strategy Paradox: Why Committing to Success Leads to Failure (And What to Do About It), Michael Raynor
  6. Boeing Versus Airbus: The Inside Story of the Greatest International Competition in Business, John Newhouse
  7. The Oil and the Glory: The Pursuit of Empire and Fortune on the Caspian Sea, Steve LeVine
  8. The House of Mondavi: The Rise and Fall of an American Wine Dynasty, Julia Flynn Siler
  9. The Billionaire Who Wasn’t: How Chuck Feeney Secretly Made and Gave Away a Fortune, Conor O’Clery
  10. Innovation Nation: How America is Losing its Innovation Edge, Why It Matters, and What We Can Do to Get It Back, John Kao

Openness does help

Chrystia Freeland, the U.S. managing editor of the Financial Times, picks up Innovation Nation and finds a pessimistic message:

As billionaire philanthropist Eli Broad told me last month: “Frankly, in America we’ve become fat, dumb and happy.” In his new book Innovation Nation , John Kao echoes Broad: “We are rapidly becoming the fat, complacent Detroit of nations”.

Part of what Broad and Kao are responding to is the rebalancing of relativeglobal wealth and power prompted by the collapse of communism and the rise of emerging markets, especially India and China. This is the great good news of our age, but I understand how it can feel uncomfortable for America to adjust to being merely first among equals.

But they also are worried that something more dangerous than thisflattening of the Earth is taking place. As Kao puts it: “Just as we are beginning to slack off, others are stepping on the gas”.

On this point, foreigner though I am, I’d like to urge them, and their fellow Americans, to be a little more, well, optimistic. It’s true that the balance sheets of the nation’s households, banks and, indeed, the nation itself are looking strained at the moment. And a few decades of prosperity have created a country which, as Kao notes, “spends more on astrology than astronomy”.

My worries about the current situation of the U.S. spurred me to write the book, certainly. But I remain hugely optimistic about the nation’s ability to reinvigorate and reinvent itself. One of the reasons for my optimism is the openness identified by Freeland. Chapter seven of the book is largely dedicated to a discussion of the importance of openness in many forms. Here’s Freeland’s view:

America has one great strength that inclines me to bet that it will not only work its way out of the subprime mess, but also retain a comfortable position of global economic leadership. That strength is openness…

Openness is valuable in and of itself – once we are safe and fed, liberty is an enduring human need. But even if that sounds to you like the abstraction of a latte-drinking liberal, I think you will agree that openness – to money, to ideas, to people – is one of the most important drivers of which economies will flourish and which ones will founder in the coming century.

Sclerotic nations?

Richard Florida has a pithy round-up of some of the pros and cons on the United States as innovation nation on his blog. Recently transplanted to Toronto, Florida isn’t optimistic about the future for the U.S.

I stand by my prediction from Flight; Small states have a keen advantage in the new globalization. Canada, Australia, and the Scandanavian nations are best positioned, economically and socially to benefit from the age of creative globalization.  Large old economy states – most notably Russa but also Germany, France, Japan and the United States – have their work cut out for them and suffer from extreme scelerois of the sort Mancur Olson long ago identified.  China and India, as big as they are, have a long, long way to go  before they become real players in terms of innovation, creativity and talent attraction.