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BOSTON--The United States needs to take a cue from Finland and Singapore to revive a flagging innovation economy, says author John Kao.

Kao spoke here at the MIT Enterprise Forum conference titled "Power, Drugs, and Money" on Thursday. Kao used his speech to make the case that the U.S. has a problem when it comes to generating technical innovation. This is the same theme he asserts in his book Innovation Nation, which was published in October. Though it's an admittedly over-used term, innovation is what leads to new technologies that drive economic growth and power, the former Harvard Business School professor said.

John Kao

The U.S. public education system, however, does not adequately prepare students, and many scientists-in-training are discouraged by what they see as a federal grant system that has inconsistent priorities and lacks funding, he said.

Meanwhile, there are more opportunities for students and scientists in places outside the United States. Singapore, for example, hired the head of the National Cancer Institute as part of its Biopolis program to expand its biotechnology industry.

Finland, which has twice as many Ph.D.s per capita as the U.S., has merged three of its universities to more effectively train students in its priority areas of education, science, innovation, and design.

Different countries have different models, ranging from heavy government direction like Finland, to the U.S. style "let 'er rip" system that relies on bottoms-up innovation. For the U.S. to better compete, Kao said, it needs a strategy that makes innovation more of a priority.

"A lot of other people are innovating when it comes to innovation because they have the stewardship, the strategy, and the will...because innovation serves a national ideal," he said. "Innovation may be about making new stuff, but it's very much about the complex and subtle interactions that have to be nurtured."

Rather than emulate France's technocrat-led "Grands Projets" approach, he said a better model is a hybrid that involves many parties, including government, academia, businesses, and entrepreneurs.

"I want to government to oversee the best platform possible, like the national highway system, but I want total freedom for entrepreneurs," he said.

In 1957 when the Soviet Union launched the Sputnik spacecraft, the U.S. made math and science a priority, but right now, there is no overt threat. Prioritizing innovation for societal goals now is more like preventive medicine, he said.

The problem with current U.S. government efforts to drive technology innovation is that people are stuck in "incrementalism," rather than taking on a national innovation agenda. And many government leaders are indifferent to the innovation problem, he said.

Kao has spoken to some presidential candidates about his call for a national innovation strategy, but would not endorse a specific candidate.

He did note that Barack Obama, perceived as a youthful candidate able to inspire people, should be talking more about innovation and that Hillary Clinton has made three major speeches so far on science and innovation.