The Organization for Economic Cooperation and Development (OECD) just released a useful new study entitled Policy Complements to the Strengthening of IPRs in Developing Countries. It significantly undermines the claims of "public interest" advocates who wail that they just know intuitively that improved legal protection for intellectual property rights (IPRs) are merely one more means through which developed countries oppress developing countries. While such claims often sound lofty and compassionate, very ugly prejudices often lurk beneath them. Fortunately, by actually studying real data, the OECD found that such claims are wrong as applied to actual developing countries: "[T]the results point to a tendency for IPR reform to deliver positive economic results."

Working in the IT industry, it's heretical to suggest, "Step away from the IT." But, sometimes, maybe we should.

I am not alone. Recently, the American Thinker ran a nice piece by Matt Patterson, entitled, Step Away from the Computer. In it he suggests:

...I do not advocate entirely forsaking the conveniences and necessities of the Digital Age. We need them for work and play, and I love my iPhone as much as the next person. But we need to learn how to turn it all off if we are to reclaim the noble soul that humanity has heretofore held but which is now rapidly slipping away. This technology, any technology, must be our servant, not our master. Prometheus brought fire to Man to assist us in life, not as a replacement for it.

About 10 days ago I gave a presentation to a D.C. business group on "Innovation: The End? Or a New Beginning?" We got into a discussion of high-end immigration and were in general agreement that we should grant easy green cards to all STEM PhDs educated in the U.S., among other enticements to smart immigrants. One commenter then suggested this was a kind of a zero-sum race between the U.S., China, and India for the world's human capital.

I replied, however, that the technological, economic, and political advance of China and India is a good thing. Innovation anywhere in the world benefits us, too, if we are open to the global economy. For hundreds of years, North America attracted much or most of the world's financial and human capital because (1) though imperfect, we were an attractive realm of freedom and (2) much of the rest of the world was so inhospitable to innovation, entrepreneurship, education, and was generally politically intolerant. This massive tilt in our direction is now over. Other parts of the world present more opportunities for entrepreneurship and education, and we're not going to get all the smart people, no matter how open our immigration laws. Doesn't mean we shouldn't try to get the smartest people. Just that there's going to be lots of innovation and new enterprise in new non-U.S. places, and that overall that's a good thing.

So I was intrigued when an Economist article on this very topic hit my radar yesterday. Turns out Amar Bhidé of Columbia Business School has written a whole book on the subject: The Venturesome Economy.

So does the relative decline of America as a technology powerhouse really amount to a threat to its prosperity? Nonsense, insists Amar Bhidé of Columbia Business School. In "The Venturesome Economy", a provocative new book, he explains why he thinks this gloomy thesis misunderstands innovation in several fundamental ways.

First, he argues that the obsession with the number of doctorates and technical graduates is misplaced because the "high-level" inventions and ideas such boffins come up with travel easily across national borders. Even if China spends a fortune to train more scientists, it cannot prevent America from capitalising on their inventions with better business models.

That points to his next insight, that the commercialisation, diffusion and use of inventions is of more value to companies and societies than the initial bright spark. America's sophisticated marketing, distribution, sales and customer-service systems have long given it a decisive advantage over rivals, such as Japan in the 1980s, that began to catch up with its technological prowess. For America to retain this sort of edge, then, what the country needs is better MBAs, not more PhDs.

A lot to agree with. The addition of China and India to the world economy, with new minds and new centers of research and innovation, make it more likely that new general purpose technologies like the integrated circuit or laser will be invented -- maybe the next one will be in the field of biotech or energy, who knows. It will be good for humanity, at least for those open to these inventions and, yes, the commercializers. But how does clustering -- like Silicon Valley, where a whole ecosystem of talent, firms, and infrastructure spiral virtuously upward -- come into play? Does clustering mean as much as it used to in the age of instant global broadband communication? If technology and the corresponding innovations rapidly diffuse everywhere -- and they do -- it's largely a matter of who earns the profits. Who sets the standards. And which governmental jurisdictions get to tax the innovations and entrepreneurs. In nationalist terms, where military and political power derive from economic power, it is largely a competition for tax revenues.

But Bhidé, at least in this article (I've yet to read the book), I think still underplays the importance of PhDs or their equivalents who not only make the once-in-a-generation breakthroughs but also do help manufacture and commercialize these inventions. And Bhidé probably overplays the the importance of MBAs, who he says are key to our "consumer" culture. Consumers don't drive the economy. Entrepreneurs do. Yes, MBAs are good at cleaving consumers from their wallets. But consumption is a function of growth and growth expectations, which depend on entrepreneurial confidence. Supply creates its own demand.

If we had a perfectly globalized, flat, frictionless world -- it's true, the "where" of innovation wouldn't matter much. And we should basically be shooting for that type of world. But until we get there, the "where" of innovation probably matters more than Bhidé would like.

In this game, it's the farsighted innovators and consumers, who want free trade and tax competition, against the all-too-often shortsighted politicians, who seek the short-term advantage of protectionism, tax gouges, and "energy independence" campaigns. It takes real wisdom to understand that China's or India's gain is also our own.

That is often the message we send the world's most productive and creative people who want to live and work in the U.S.

Check out this new flowchart from the Reason Foundation showing how difficult it is to immigrate to the U.S. -- legally.

As you'll see, the best-case if-you're-lucky scenario is six years. More likely 10-20 years. Often, impossible.

This is not the way to remain a dynamic and innovative nation.

Jason Riley's new book on immigration, Let Them In: The Case for Open Borders, is now available. A brief excerpt:

It's a tragedy that America's public school system is geared more toward appeasing teachers' unions than educating kids. And until that changes, the trends will be difficult to reverse. The upshot of the status quo is that Mumbai and Beijing – often by way of MIT and Stanford – are currently producing a good amount of the talent that Bill Gates needs to keep Microsoft competitive. Immigration policies that limit industry's access to that talent become ever more risky as the marketplace becomes ever more global. If we want American innovators and entrepreneurs to continue enhancing America's wealth and productivity – and if we want the United States to continue as the world's science and technology leader – better to let Apple and Google and eBay make their own personnel decisions without interference from Tom Tancredo and Lou Dobbs.

Check it out.

We should ditch the absurdly low cap on H1-B visas for highly skilled immigrant workers, say Tuck's Matthew Slaughter and Reason's Shikha Dalmia. "America's political leaders are so fixated on illegal immigration," writes Dalmia,

they've barely noticed that the U.S. is losing the race for the best high-tech minds. This country won't keep its edge in the global economy until legislators stop behaving like border sentries and start acting like international recruiters – a switch virtually every industrialized country is making.

A good way to begin is for Congress to pass pending legislation to scrap the cap on skilled worker (H1-B) visas. This cap is currently so low (65,000) that in April last year it got used up within a day of these visas becoming available, leaving thousands of left over engineers to be scooped up by America's competitors. Immigration authorities started accepting 2009 applications last Tuesday – and expect a similar flood.

Slaughter notes that

At the end of the 1990s, 24% of all IT firms in Silicon Valley had been founded by immigrants from China or India....

At the Tuck School of Business at Dartmouth, where I am a professor, 36% of tenured and tenure-track professors are foreign born.

and, noting that U.S. financial markets have lost out to world markets of late, asks,

[W]hy is it easy to hire financial talent in London? Because the U.K. welcomes an unlimited supply of the world's best financial minds. Since 2004, the U.K. Highly Skilled Migrant Programme has maintained a list of the world's top 50 business schools. Anyone who earns an MBA from one of these schools is automatically eligible to work in the U.K. for at least one year.

As it watches the hypergrowth of the surrounding hypernations, Japan becomes insecure about the quality of its educational system, long considered one of the world's best. So, says the New York Times, the nation is rushing to emulate Indian teaching techniques:

Bookstores are filled with titles like “Extreme Indian Arithmetic Drills” and “The Unknown Secrets of the Indians.” Newspapers carry reports of Indian children memorizing multiplication tables far beyond nine times nine, the standard for young elementary students in Japan.

And Japan’s few Indian international schools are reporting a surge in applications from Japanese families.

At the Little Angels English Academy & International Kindergarten, the textbooks are from India, most of the teachers are South Asian, and classroom posters depict animals out of Indian tales. The kindergarten students even color maps of India in the green and saffron of its flag.

U.S. public schools could learn a lot from any of these Asian nations, or the Europeans, for that matter. And American parents could surely learn something about valuing education from their Asian counterparts. Of course, Asia doesn't have all the answers. In fact, most of their recent success is because they are adopting our capitalist economic ideas.

But in the meantime, as we struggle to improve our schools, what does the U.S. think it is doing by strictly limiting legal immigration and visas for supersmart people from all over the world? Japan has to focus exclusively on indigenous education because it allows virtually no immigration. Fortunately, America can rely on both home-grown and imported human capital -- at least in theory. At the moment, however, we don't seem to be nurturing either source of smarts like we should.

I've just begun Amy Chua's new book Day of Empire, which argues that hyperpowers rise through tolerance and meritocracy -- and fall when they insulate themselves (become intolerant) to outside people and ideas. After the Introduction, at least, it rings pretty true.