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The US Hasn't Lost Its Tech Edge

The US Hasn't Lost Its Tech Edge

Naysayers who point to an America that's lost its edge in technology aren't paying attention. Sure, some of the top tech companies are as susceptible to market mood swings as others, but the foundation they have built are based on constant innovation -- a quality proved by the numbers of patents issued, and by what's cooking with the next generation of U.S. entrepreneurs.

There is much lamenting in some quarters that the U.S. has lost its road map in tech innovation. Many point to China as a country in a hurry to catch up to and even pass America in technology. They talk about how China is stressing tech-related endeavors and how forward-looking it is.

I simply don't buy this argument. Why?

Let's start with retailing and Amazon, the world's largest online retailer.

The Tech Edge in Shopping

Back in the mid-90s, Amazon founder Jeff Bezos didn't want to be left behind in the dot-com frenzy. Wikipedia describes it best: "The company was founded in 1994, spurred by what Bezos called his 'regret minimization framework', which described his efforts to fend off any regrets for not participating sooner in the Internet business boom during that time."

Amazon is on the leading edge of technology for many reasons. In 2012 the company acquired Kiva Systems, a manufacturer of robots run by computers. In many ways Amazon has put itself in the forefront of online retailers because of its heavy reliance on technology.

Consider also Amazon's massive computer infrastructure -- so massive that it rents out excess capacity through its Amazon Web Services division. Many businesses and even some countries are making use of this gigantic cloud.

AWS' website says it best:

"Amazon Web Services offers a complete set of infrastructure and application services that enable you to run virtually everything in the cloud: from enterprise applications and big data projects to social games and mobile apps. AWS enables you to eliminate the need for costly hardware and the administrative pain that goes along with it. AWS can reduce costs and improve cash flow, whether you are starting out or operating on a large scale."

Macs and Motors

What about Apple, maker of the iPhone, the iPad and other technological marvels? There is no doubt that Apple is a formidable player in the field of technology. I use a wide variety of Apple products because of their flexibility, reliability and ease of use. I like the way their exquisite designs and brilliantly engineered interfaces combine for amazing usability.

In the field of robotics -- a field to be watched closely when it comes to the country's ability to compete with foreign manufacturers -- keep an eye on an innovative company in Massachusetts called Rethink Robotics. Do you want to guess which venture capital company is helping to fund Rethink? None other than Bezos Expeditions, the personal investment company of Jeff Bezos. Small world, isn't it?

Then there's Tesla Motors. It's a manufacturer of electric cars, winner of Motor Trend's 2013 Car Of The Year. Why am I mentioning a manufacturing company when this column is directed to the question of the U.S.'s technological prowess? It just so happens that Tesla is a Silicon Valley-based manufacturer. Its cofounder is Elon Musk, who played a major role in PayPal before it was sold. He bought his first computer at the age of 10 and taught himself how to program. Therefore, please forgive my pun that Tesla is "driven by technology."

There are many other tech companies I can cite to make the point that the U.S. is and will remain the dominant player in technology. Suffice it to say that I truly believe that the country will stay in that position because of its entrepreneurial drive and "can do" culture.

Patently Dominant

Patents are a key indicator of technological activity. With that in mind, the number of patents issued tell a very compelling story.

The U.S. Patent and Trademark Office publishes a document called "Patents by Country, State, and Year -- All Patent Types." Their December 2011 report shows that by the end of that year, there were 4,508,076 patents granted throughout the world, including the U.S.

The most interesting thing about this statistic is that of all of the patents granted, the U.S. was the source country of 2,433,535 patents. That means America provided a whopping 54% of all patents granted by the PTO. The closest contender was Japan with 852,028 patents issued, followed by Germany with 298,635 patents and China with 16,581. I think data speaks clearly to America's technological dominance.

The Entrepreneurial Edge

The U.S. is a country with a long history of capitalism and free enterprise; its residents are lucky this heritage is the foundation for its success. That long record of entrepreneurial drive extends from Thomas Alva Edison to Bill Gates.

Today, there are youngsters like Mark Zuckerberg and Elon Musk who represent the current generation of forward-looking entrepreneurs. With the impetus that history and culture provide , I have no doubt that there will be many more following the trails blazed by those who have gone before them.

Many of those future leaders will come from hotbeds of creativity like Silicon Valley, as well as Austin, Seattle, New York and many other regions throughout the U.S. that are producing technology startups.

If anyone casts doubt on America's ability to maintain its technological dominance, my response would be: Don't bet on it.


Theodore F. di Stefano is a founder and managing partner at Capital Source Partners, which provides a wide range of investment banking services to the small and medium-sized business. He is also a frequent speaker to business groups on financial and corporate governance matters. He can be contacted at Ted@capitalsourcepartners.com. Follow Theodore F. di Stefano on Twitter.


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