This is not the world’s first pandemic. Cholera, bubonic plague, smallpox and influenza have each taken their turn ravaging mankind. Death and suffering was widespread for people with the misfortune to be living when those outbreaks struck.
Fortunately, we have something they didn’t: Innovation.
Innovation gives us the capabilities to meet the health, information, aid, and supply chain challenges that victims of past pandemics had no hope of overcoming.
Innovation isn’t new. At the Global Innovation Policy Center, we like to say that innovation happens everywhere. Some of the most innovative people in the world are children at play. Yet, it’s patently obvious that innovation doesn’t take place to the same degree every-when and everywhere. For tens of thousands of years, despite incremental advances in knowledge and occasional technological breakthroughs (e.g., the wheel, writing, mathematics), the human experience changed very little, due to a lack of systemic, sustained innovation.
That changed suddenly when nations began to embrace an economic system that enabled risk-taking, that allowed—even encouraged—failure, that allocated resources quickly and effectively to the most promising initiatives. On that foundation, we’ve invested in the know-how necessary to take on a disease like Covid-19—or another natural or man-made disaster—on demand, and at speed.
Public and Private Investment in Technical Know-How
Over decades the American people, through our government institutions and across the breadth and depth of our world-leading business sector, have assembled the scientific talent, built the research facilities, trained the best business minds in the world to attack any problem—and overcome
This know-how resides at companies like San Francisco-based Genentech, where they tell scientist recruits: “We reward creativity, we reward independent thought, we reward complex problem solving. All those are component parts of innovation.” Genentech brags, quite defensibly.
This know-how resides at the National Institutes for Health, where Dr. Christopher Austin leads the National Center for Advancing Translational Sciences. His job: Translate “geek-speak into street-speak,” taking abstract observations and knowledge and pointing out their practical applications. In Dr. Austin’s own words: “[T]ranslation is the process of turning observations in the laboratory, clinic and community into interventions that improve the health of individuals and the public.”
The Role of Intellectual Property Rights
Everything changed when we democratized invention and creativity, by granting individuals the same rights to the outputs of their intellectual labor that we do to their physical labor. That simple insight—that there was no logical distinction between physical and intellectual value creation—meant that invention and authorship were transformed from luxuries of the idle rich into potentially fruitful undertakings for anyone with the genius, the passion, and the perseverance to invest themselves in the art of the possible.
Bridging the Abyss Between Pure and Applied Science
Governments everywhere have encountered the challenge of translating scientific discoveries stemming from basic research—often government-funded—into actual new and useful products that can reach people who need them. This process of “commercialization” tends to be the riskiest and most expensive part of the innovation journey, in part because of the technical difficulties involved, but also because it is so dependent on collaboration among a diverse set of partners.
In the past, innovative research and development tended to be vertically integrated within a single entity; results were correspondingly limited. Today, partners specialize within an ecosystem of innovation, allowing specialization and creativity to thrive, with amazing results.
Pfizer, one of the world’s premier biopharmaceutical companies, describes it this way: “Years ago, we tended to focus on our internal research… The new ecosystem allows very different types of interactions between different components [of the bio-medical community (“academia, patient associations, venture-backed bio-tech… regulators”)], that accelerates drug discovery, that enables new ways of funding, exploring, science, and achieving new drugs.
Public sector investment in scientific research (pure science) at the academic level, combined with private sector investment in research and development (applied science) at the testing and production stage, is a proven model for advancing the commercialization of new products and technologies. This new ecosystem has been able to develop and thrive as a result of laws that provide for the transparent and predictable assignment of intellectual property rights among partners that include government funders, academic researchers, and businesses, among others. The clarity and reliability of intellectual property rights enables seamless hand-offs between these partners, where one’s role ends and another’s begins.
In the United States, this was achieved in large part by the enactment of the 1980 Bayh-Dole Act, which facilitated public-private collaboration by establishing clear and enforceable assignment of intellectual property rights throughout the innovation lifecycle, enabling transactions to proceed among numerous actors each adding value within a diverse ecosystem.
Licensing of intellectual property is a critical mechanism for the advancement of knowledge along a progression from pure science, to applied science, to product development, testing, and commercial availability. A legal and regulatory framework, such as Bayh-Dole, enables voluntary, contract-based licensing among diverse partners in government, business, and academia. It works because it effectively requires parties to reach shared assumptions about the relative levels of value added and risk assumed at each transitional stage in the process.
Markets Working to Deliver Innovation
The story of the American economy is that when society respects private property rights, makes markets for diverse assets, and provides a rule of law environment, money comes out from under our mattresses and is available for productive use. In the innovative and creative sectors, with its high-risk, long-term, capital-intensive investments, these factors become even more critical.
Fortunately, because historically we have tended to hold American ingenuity in such high esteem, our legal and economic frameworks have generally provided these conditions and created a safe haven for investments in innovation and creativity—a key reason the United States has led the world in the innovative and creative sectors.
The result is that in the face of the Covid-19 pandemic, we are positioned to win. Two examples showcase what has been a broad effort across many companies, and many industry sectors: Gilead Sciences says, “When faced with the impossible, we don’t falter.” And they haven’t. This is a company that has tackled cancer, developed a pre-exposure prophylactic for HIV, and cured—pause for a moment to take that in—Hepatitis C.
Today, due to more than a decade of intense investment in antiviral research and development, Gilead is among the best positioned innovators to provide a treatment for the novel coronavirus Covid-19, with its remdesivir drug in Phase 3 clinical trials.
In similar fashion, U.S. manufacturer and innovator 3M has risen to the forefront of public consciousness with its ubiquitous N95 mask.
3M’s excellence across personal protective equipment and in numerous other technologies has not been a matter of overcoming a single technical challenge: 3M’s Chief Science Advocate, Dr. Jayshree Seth, tells students, “Innovation is not just an ‘aha’ moment… it’s a journey.” That journey is mapped by the investments in research and development made over decades by 3M and many thousands of other U.S. companies that have positioned us for a win today against Covid-19.
Ultimately, innovative and creative solutions are only as good as their availability to the people who need them, and here, too, 3M has stepped forward alongside myriad small, medium, and large businesses around the world to ramp up production of essential products, to streamline supply chains, and to do everything in its power to make technologies, products, and services available to everyone who needs them.
Rule of Law is our Greatest Strength
Our nation’s long commitment to the rule of law is what enables markets to deliver the investment and productivity America needs to sustain our supply chains and our innovation and creativity.
There is a long tradition of rule of law in the United States– American Bar Association
For business, rule of law means transparent laws, predictably and consistently enforced, combined with a stable approach to economic governance. That is to say, businesses should know ahead of time what the rules are and how they will be applied—not sometimes, but every time—and that governments don’t arbitrarily or retrospectively change those rules.
These factors are especially relevant to investment in the innovative and creative sectors, where normal business risk is compounded by the additional layer of technical risk that is involved in doing something inherently unproved. Accordingly, in responding to crisis situations, it becomes critically important for governments to signal their respect for legal rights of individuals and businesses, even as they take emergency measures to expedite an effective response.
The U.S. Chamber of Commerce Identifies Five Factors Contributing to a Pro-Investment Rule of Law Environment:
- Transparency – laws and regulations applied to business must be readily accessible and easily understood;
- Predictability – laws and regulations must be applied in a logical and consistent manner;
- Stability – the state’s rationale for the regulation of business must be cohesive over time, establishing an institutional consistence across administrations, and free from arbitrary or retrospective amendment;
- Enforceability/Accountability – investors must be confident that the law will be upheld and applied equally to government as well as private actors;
- Due Process – when disputes inevitably arise, they must be resolved in a fair, transparent, and pre-retermined process.
Businesses Providing Health, Safety, Security Comfort and Aid
In these dire times, our great good fortune is that American innovators and creators have responded to well-founded economic policies, effective market mechanisms, and a commitment to the rule of law. Thanks to this long-term societal commitment to knowledge creation, knowledge advancement and the arts, business has been ready to respond at this time of need, delivering the health, safety, security, comfort and aid that society needs in turn.
Covid-19, you’ve met your match in American ingenuity.