Speeches & Texts
Innovation and Forward Thinking: The Transatlantic Keys to Success
Grünkohlessen
Gütersloh, November 15, 2011
Ambassador Philip D. Murphy
Sehr geehrter Herr Zinkann,
Sehr geehrte Frau Dr. Zinkann und sehr geehrter Herr Dr. Zinkann,
Sehr geehrter Herr Delius,
Sehr geehrte Bürgermeisterin Unger,
Sehr geehrte Damen und Herren,
herzlichen Dank für Ihre Einladung zum Grünkohlessen der Gildenhaus-Gesellschaft Bielefeld heute Abend in Gütersloh. Meine Frau Tammy und ich haben uns auf die Begegnung mit Ihnen gefreut, aber auch darauf, ein echtes, herzhaftes Grünkohlgericht probieren zu können. Dieses Gericht, so scheint mir, repräsentiert die Bodenständigkeit dieser Region, in der bewährte Traditionen weiterleben.
Aber ich weiß auch, dass der Respekt, den diese Region für Traditionen und „die gute alte Zeit“ hegt nicht bedeutet, dass es hier nicht auch einen gesunden Respekt für neue Traditionen und das gibt, „was noch werden könnte“. Genau darüber möchte ich heute mit Ihnen sprechen: Über die Bedeutung zukunftsweisender Innovation. Von vorherigen Besuchen in Bielefeld, Paderborn, Gütersloh und anderen Städten und Gemeinden in Ostwestfalen weiß ich, dass Innovation alles andere als ein Fremdwort für die Unternehmen der Region ist. Ganz im Gegenteil: Firmen wie Miele, Dr. Oetker oder Bertelsmann, um nur drei große Marken zu nennen, haben es immer wieder verstanden, durch hohe Qualität, exzellente Marktkenntnis und eben Innovation auf dem heimischen wie auf dem Weltmarkt erfolgreich zu sein. Das gleiche gilt für viele kleinere oder mittlere Firmen. Deutschland ist für seine Innovationen bekannt, was auch für die Vereinigten Staaten gilt und worauf wir sehr stolz sind. Besonders stolz sind wir, wenn wir als starke transatlantische Partner die Uhr gemeinsam nach vorne drehen können, um Technologien zu entwickeln, die für das Wirtschaftswachstum entscheidend sind.
[Thank you for the invitation to the Gildenhaus-Gesellschaft Bielefeld‘s annual Grünkohl dinner here in Gütersloh. My wife, Tammy, and I are happy to meet you and of course we are also looking forward to sampling an authentic, hearty portion of the region’s traditional green cabbage specialty. This dish, it seems to me, represents the down-to-earth practical values that are so important in this region.
But I also know that here in this region respect for tradition and “what once was“ does not mean that there is also not a very healthy respect for new traditions and “what could be.“ And this evening, that is what I would like to talk with you about – about the importance of forward-looking thinking innovation. I have learned from previous visits to Bielefeld, Paderborn, Gütersloh und other cities and communities in Ostwestphalia that innovation is anything but an unknown part of the way of doing business here. In fact, it is exactly the opposite. Companies like Miele, Dr. Oetker or Bertelsmann, to name three big companies, have been successful at home and around the world because of their reputation for quality, their awareness of the products that people want and need, and also their track record in innovation and bringing those products to market. The same goes for mid-size and smaller companies here. Germany has long had a corner on innovation but so has the United States – and we are proud of it. But we are especially proud when, as strong transatlantic partners, together we move the dial forward in the areas of technology that are crucial for economic growth.]
In face of the severe financial problems the world is facing, it can be easy to lose sight of the fact that growth and competitiveness depend on the capacity for innovation. Amidst the heightened macro risk factors we see across economic and political markets, as well as the many other challenges we face in a world that sometimes seems to be fragmenting along economic, political and ideological lines, it is perhaps difficult to remember the importance of innovation and the financial and mental investments it requires. To create the jobs and industries of the future, and speaking especially for countries like yours and mine that have long excelled in technology, we dare not stop investing in the creativity and imagination of our people.
On a broad scale, over the past three years, the G20 countries have worked together to strengthen the global economy to put and keep the world on a sustainable path to recovery. It has not been easy. The recovery has been fragile and it has been interrupted by a number of unexpected shocks – from disruptions in oil supplies as a result of the Arab Spring to the tragic tsunami in Japan to the current financial uncertainties in Europe. As a result, we have seen global demand weaken. Signs of vulnerabilities are appearing in emerging markets. They continue to expand, but the trend line is starting to go down. Advanced economies, including the United States, are growing and creating jobs, but not nearly fast enough.
The central question at the most recent G20 summit in Cannes earlier this month was this: How can the world’s largest economies confront the challenges facing the global economy squarely – with a clear understanding that these problems will not be solved overnight? Europe’s capacity to resolve the Eurozone crisis is an important part of that equation.
The situation is still fluid but the commitment of the major partners in EU to an implementation plan was obvious. It won’t be easy, but what is absolutely critical – and what the world looks for and expects at moments such as this – is exactly this: commitment, followed through with concrete actions.
The world has an enormous interest in Europe's success. Europe’s failure to grow and thrive can have a domino effect on other countries, including the United States. If our largest trading partner is suffering, it will be harder to create jobs and put our fiscal house in order. And as the world's largest economy, the United States also has the responsibility to do both of these two things.
In Cannes, the G20 leaders, drawing on the experiences of their own countries, agreed on concrete steps forward that will allow their citizens and the citizens of the world to reap the benefits of globalization. That means preventing and managing risks that could undermine financial stability and sustainable growth at both national and global levels.
More than ever before, the social dimension of globalization was an underlying part of the discussions within the context of the G20. The frustration that many people feel about the working of our financial system is obvious. In the United States, Americans witnessed the biggest financial crisis since the Great Depression and, less abstractly, also the huge collateral damage that it caused around the country, not just on Wall Street, but also on the main streets of our towns and cities. Many Americans – and I believe also Germans and the French, Italians and the Greeks – feel government has to do more to put an end to the kind of abusive practices that got us into the problems we not face. There cannot be a double standard. Everybody can and should profit from the advantages and opportunities of a 21st century global economy.
That means ensuring that all financial markets, products and participants are regulated or subject to oversight as appropriate to their circumstances in an internationally consistent and non-discriminatory way. But it also requires leaders to stay focused on jobs and growth.
Each nation need to do its part. And that brings us back to the topic of innovation. Innovation, either with a big new idea or a new view of an old idea, is one of the sure paths to economic growth.
Both of our two countries have long been places where innovation is encouraged, where good ideas can thrive and dreams can become real, and also where the world’s greatest minds are free to push the limits of science and technology. The key to economic success – and the United States and Germany are again cases in point – has always been, and always will be, the ability to think up new ideas, create new industries, and lead the way in discovery and innovation.
Throughout America’s history, people like Steve Jobs, who passed away last month, but also Thomas Edison, Henry Ford, Bill Gates or Mark Zuckerberg have driven an enormous amount of the economy’s progress. America is still a place where you can raise your first hundred million without owning a tie if your idea is good enough.
At the same time, however, we must recognize that fundamental innovation and progress often are the result of the essential role that the public sector plays. President Obama wrote that Steve Jobs was among the greatest of American innovators. The President said Jobs was, and I quote, “brave enough to think differently, bold enough to believe he could change the world, and talented enough to do it.” People will remember him for what he did best – and that was thinking differently. It would have been hard, however, for Steve Jobs to think differently if the Defense Department’s Defense Advanced Research Projects Agency, DARPA for short, had not developed the Internet in 1971. Where would the car industry be without highways? What kind of pharmaceutical revolutions could take place without government-funded basic research? Maintaining and increasing a capacity for innovation requires both fundamental support for entrepreneurial innovation and for the key foundations of science and technology.
In the United States, from the moment you have a new idea, you can explore it in the world’s best labs and universities; you can develop it with a research grant; you can protect it with a patent; you can market it with a loan to start a new business. That is how great ideas have been advanced from the earliest stages of research to the point where they can be handed off to the private sector to run with the ball. It is also how investments and basic research led to things like the computer chip and GPS systems – and millions of good jobs along the way.
And so in the context of today, we need to maintain that investment in cutting-edge research and technology. President Obama believes that America has not been taking competitiveness seriously enough for the last decade. It rested for too long on the laurels of what historians called the American Century. His administration is now doing all that it can to invest in the skills and training of people.
It is doing all that it can to develop the transportation and communication networks that can move goods and information as fast as possible – as we have in the past. Universally available infrastructures drive economies.
The responsibility to invest in innovation, however, also rests with the private sector. I recently read that more than half of today’s Fortune 500 companies were founded during an economic downturn. When forced to do more with less, there is no alternative but to create a better way to get things done. That is often when the real breakthroughs occur. In tough times, visionaries and risk-takers can tap into underutilized human capital, technology, information and other resources, picking up the pieces to reassemble them into something completely new.
There is a critical moment in the story of the near-catastrophic Apollo 13 mission. It is captured well in the film – a Murphy family favorite, by the way. The mission control engineers realize they need to create an improvised air filter; otherwise, the astronauts will poison the lunar module atmosphere with their own breath before they return to Earth. The astronauts have plenty of carbon "scrubbers" onboard, but these filters were designed for the original, damaged spacecraft and don't fit the ventilation system of the lunar module they are using as a lifeboat to return home. In the movie, the head of flight crew operations tosses a jumbled pile of gear on a conference table: hoses, canisters, stowage bags, duct tape and other assorted gadgets. He holds up the carbon scrubbers. "We gotta find a way to make this fit into a hole for that," he says, pointing to the spare parts on the table.
The device that was eventually concocted did its job. The astronauts returned to Planet Earth, safe and sound. The canisters and nozzles were the building blocks that created the solution for a specific problem. The trick to having good ideas is not to sit around in glorious isolation and try to think big thoughts. The trick is to get more parts on the table. After all, if the only tool you have is a hammer, you tend to see every problem as a nail.
According to the dictionary definition, that is what innovation is all about, it is “the act of introducing something new." Management guru Peter Drucker, described the process like this, “Change that creates a new dimension of performance." Or as another management analyst, not attributed, put it, innovation happens, “Wenn der Markt ‘Hurra’ schreit."
But as we know, sometimes the markets don‘t shout "Hurra" right away. Sometimes we don’t even recognize the next big thing until it is upon us.
In an internal memo dated 1876 from Western Union, the telegraph company, it was prophesied that the telephone had too many shortcomings to be seriously considered a means of communication.
Five years later, in 1881, the first telephone book was published in Berlin. I hear it was called das Buch der 96 Narren – referring to the 96 Narren or fools who had been taken in by the swindle from America.
In 1895, Lord Kelvin, the president of the Royal Society of Science in England pronounced that “heavier-than-air flying machines are impossible.”
Not to be outdone, in 1899, Charles H. Duell, the Commissioner of the U.S. Office of Patents, said that, “Everything that can be invented has already been invented.”
Harry M. Warner, from Warner Brothers asked, “Who the hell wants to hear actors talk?” That was in 1927.
And finally, in 1948, Thomas J. Watson, Chairman of the Board of IBM said , and I quote, “I think there’s a world market for about 5 computers.”
Today the computers in the phones that we carry around with us have thousands of times as much memory and ten times as much processing power as one of Thomas Watson’s projected five supercomputers. They weigh ounces compared to the 10,000 lb bulk of one of the early computers. They fit in your pocket rather than a large room; and they cost tens or hundreds of dollars or Euros rather than tens of millions.
There is a similar dynamic in other industries, especially alternative energy technology – and incidentally the challenge of creating clean-energy economies was also on the agenda of the G20 Summit in Cannes.
Scientists frequently apply "Moore’s law" (not Murphy’s law, which says that if anything can go wrong, it will) to energy. In computing, Moore’s law illustrates the exponential growth of the amount of information that can be placed on a chip. It doubles every 18 months –and it has done so for decades. That’s the reason that the phone in your pocket is so powerful.
Experts predict that there will be a solar energy equivalent of the iPhone or Android or Blackberry in your pocket – affordable, mass distributed energy technology that will be many times more effective than the giant and centralized technologies it was born from.
That too is what innovation is all about. And the beauty of the concept of innovation, no matter how you define it, is that it is an endless resource.
There is a new innovation paradigm that promotes collaboration between all players – big, small, public, and private. These days, very little innovation is by one company or one country alone. More and more, it’s networked across companies and across borders. After all, we live in a global economy where companies and factories can be located anywhere there is an Internet connection. To compete in that economy, we can’t cut corners by paying workers less or building cheaper products. That would be a “race to the bottom,“ as President Obama says. To compete, we need to expand our vision and then work with others to make that vision happen.
The challenge is not only to spend more on research and development, but also to ensure that what is spent gives more bang for its buck. The German-American model allowing for competition and collaboration is clearly a step in the right direction and also a best practice for the world.
By the way, are any of you familiar with General Electric's GE Global Innovation Barometer which came out early this year? It is based on an independent survey of 1,000 business executives in 12 countries, including Germany and the US of course. Ninety-five percent of those polled said that innovation is the main lever for a more competitive national economy, and almost as many also agreed that innovation is the best way to create jobs in their country. Not surprising, perhaps. The notion that innovation drives prosperity is not new, but the study provided some insights on an evolving definition of what prosperity is. More than three-quarters of executives said they believe the greatest innovations of the 21st century will be those that help address human needs, such as enhancing energy security and environmental or improving health quality or increasing access to education, as opposed to those that simply create the most profit. The results of the survey demonstrated that, globally, priorities are shifting from innovations that simply make money to innovations that also create “good” in people’s lives.
Let’s look at a few examples of how these new 21st century innovation paradigms work right here in NRW. Here in this state, German and US companies are working together to implement new concepts in energy and green technology. This will be the foundation of our economies in the future. It’s good for business and also good for the environment.
Look at the rise of e-mobility as a tool to reduce our carbon footprint while still meeting our growing transportation needs. It is an area that lends itself to cooperation and collaboration.
For example, Ford Motor Company has partnered with government, universities and research institutions, as well as private companies in NRW, to build a wide ranging fleet of electric vehicles to address the needs of our modern, urbanized world.
UPS is looking to build on its logistical system by partnering with a German firm to modify its trucks into fully electric delivery vehicles.
Opel has announced that hybrid and fully electric vehicles will be a major part of future production to achieve a sustainable business model.
We are looking for more two-way investments that further leverage our possibilities – such as Thyssen-Krupp in Alabama, SolarWorld in California and Oregon; or firms like Edgetech, Amazon, Johnson Controls, Ford and others, both in NRW and across Germany.
NRW is obviously a fertile area for developments in this field. And because so much is happening, it is also a good place to talk about lessons learned. For example, we have learned – or are learning – that we need to harmonize standards. RWE has built hundreds of e-mobility charging stations in NRW – but the plugs have to fit everyone’s vehicle; payment methods have to be clear; and communication and coordination with new smart grids must work across all borders and boundaries.
These are the kinds of developments that we need to see more of. These are the kind of lessons we need to learn. I spoke earlier about various definitions of innovation; and I quoted one management guru, Peter Drucker. Let me quote another: Tom Peters. He said “celebrate what you want to see more of.” And so this evening, I would like to celebrate, to commend and congratulate you all for the forward-thinking vision you bring to your various endeavors. I would also like to thank you for your partnership and for the progress we've made together to create the jobs and prosperity that our citizens deserve. There are many Mittelstand, family-owned companies in NRW – companies such as Miele or C.A. Delius and Sons, and others which like tonight’s Grünkohlgericht go back generations. They are local, well-respected companies for which quality is important. However, they could not, today at the start of the 21st century, be where they are if they were not at the forefront in terms of moving forward. Such companies understand the need to innovate. They also understand the need to take care of their people. And that brings me to my last point.
I have spoken this evening about the role that both government and the private sector can play when it comes to innovation. I would like to close by talking about what individuals can do. In the face of the many large and important problems we face, it is perhaps difficult to think that indeed an individual can make a difference. Over the past few weeks, we have heard a lot about Steve Jobs and the difference he made. He changed the way each of us sees the world. And each one of us here in this room this evening could think of others who have made and are making a difference at this very moment.
The state of North Rhine-Westphalia recognizes the value of innovation and the contribution that individuals can make. North Rhine-Westphalia is the only state in Germany that annually rewards scientists who are pushing the frontiers of knowledge. Just yesterday evening in Düsseldorf, for example, this year's award for a young scientist went to a remarkable young professor, Sonja Herres-Pawlis, who has been working at the Technical University of Dortmund to produce entirely biodegradable plastics. At 31, she is already contributing to our future. And by the way, where did she get her inspiration? From a year at Stanford, where she saw people working on another portion of the project.
John Quincy Adams, the first U.S. Ambassador to Germany who went on to become the 6th President of the United States, often repeated some good advice that he had from his mother. Never forget Mom. His mother, Abigail Adams, was important in her own right. Listen to what she wrote to her son during the Revolutionary War, and I quote, “these are times in which a genius would wish to live. It is not in the still calm of life or [in] the repose of a pacific station that great characters are formed … Great necessities call out great virtues.”
These are the times when great things can happen, when great things have to happen. These are the times, that despite the challenges we face, individuals can have an impact. This is what I say to students when I meet with them. I would hope that you also do all that you can to support the young people in your organizations. John Quincy Adams also had something to say about that. “If your actions,” he said, “inspire others to dream more, learn more, do more and become more, you are a leader."
I salute all the leaders in this room and wish you success in applying innovation to your business endeavors; and that the next time, your company launches a new service or product, you will say, like Steve Jobs said when he introduced new Apple hardware, "Click. Boom. Amazing!"
Vielen Dank fűr ihre Aufmerksamkeit.