Why US is still leading the world in Innovation?

just saw the latest report from Pitchbook about University Innovations, as expected, US is still leading the world in terms of new companies started and funded.


For anyone who is not able to access the website, I attached a screenshot from the article here

As our readers can see from the chart, among top 20 schools, only 3 are outside of US, two in Israel and one in India. Comparing to the education quality of the world ranked by either QS or other institutes, this is definitely strong enough correlation. One might question why leading academic institutes in other countries are not as productive in building companies and convert their academic achievement into products. As a parent myself, after experience from Singapore, China and US educational systems, I think the fundamental educational system is one of the key answers to this question.

Many had talked about the eco-system US has built over the years as the main reason, I want to elaborate a little bit more about the education received from different countries as the root cause. My son went to Singapore for kindergarten, and then went to China for 1st grade in elementary school, later came to US for education from 2nd grade onward. We can clearly feel the difference among those systems.

The educational system in Asia has more constrains because of the culture. The traditional value in Asia asks student to respect academic authorities, and question teacher and challenger status quo in a secretive way, not in public. This kind of culture resulted in a strange mentality in startups, the first thing most people consider would be “Is this going to be permitted by the government”, when I was discussing a startup funded by several well-known VCs with my colleagues in Singapore, often the very first questions asked is “don’t they need permit to do that?” The paradigm shaped by the education deeply affects startup directions, so we see less disruptive innovations from Asia (There are still lots of good inventions, just not as much or as significant as from US). When my son was attending the 1st grade in Beijing, he can’t go out to the playground during recess, and teachers often use disciplinary measures to make sure they stay in the classroom, only going to restroom is allowed.

After coming to US, he realized the US educational system is what he truly want. His teacher told him on the first day he started class as 2nd grader that “Your parent is not 100% right, so you need to think”. I was shocked by the way teachers encourage kids to have different opinions and to reason the logic behind things got taught. From elementary school to high school, students are trained to have critical thinking, logic and reasoning. This in turn, created a society that cherish change and innovation. The teaching method used by a lot of schools in US are not merely lecturing, but inspiring through moderating discussions. I think this is the root cause of why students trained in US educational system would innovate more. Another factor is there is flexibility built in the curriculum so that teachers can teach student in various topics involving most recent development in the world. Students can talk about the Middle East crisis, the war between Russia and Ukraine during their classes, which can’t possibly in any textbooks. Student can try out all the latest AI tools, even those just got released a week ago. Many things are project based from k-12.

In universities, we often see the same thing happening. The peer pressure among professors and among students drive the whole system to come up with disruptive ideas. A professor won’t convince his peers if he or she doesn’t present some things with unique perspectives. A student is not cool if he/she can only comprehend existing knowledge without his own fresh thought on most recent topics. A positive cycle so alive enabled all the participants, and creates the funnel to have huge amount of ideas in universities. All the ideas then driven by the capitalism machine, especially Venture Capital and Private Equity to go through commercialization,, and become great companies one after another.

How other countries can really catch up with this wave? I don’t think innovation is a money play, and I don’t believe it’s a series of government interventions. One can only catch up with an open and encouraging educational system. I do hope in the future, we will see more correlation between academic ranking and startup ranking for all around the world. After all, people is the ultimate key driver of innovation.


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