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PR- 456-07
December 10, 2007


The following is the text of Mayor Bloomberg’s speech as prepared.

"Good morning.  Thank you, Frank, for that kind introduction. Xie Xie nimen de zhao dai. This is not my first trip to China. On one visit to Beijing a number of years ago with my oldest daughter, I remember going out for a morning jog near Tiananmen Square and not being able to find my way back to the hotel. I'd like to tell you that it was my flawless Mandarin that eventually got me home, but truthfully it had more to do with the kind people I encountered.  They couldn't have been warmer or more gracious.

"It's appropriate that China would take the lead in organizing a conference on innovation, because there is a long history of innovation here, with important inventions in science, medicine, and technology. Of course, more recently, China has once again become one of the world's leading centers of innovation - and not just in inventions, but in management as well.

"A recent report by two of America's top innovation consultants came to the following conclusion, quote: 'China is rapidly emerging as the global center of management innovation, pioneering management techniques that most U.S. companies are struggling to understand.' But I should point out: the authors of that report state that this innovation is being driven in China by private sector entrepreneurs, not state-controlled industries - which comes as no surprise to anyone who has worked in both the public and private sector, as I have.

"I spent my first career, starting in 1966, as a Wall Street businessman, my second career, commencing in 1981, as an entrepreneur, and I'm spending my third career as a Mayor, from 2002 through 2009 - when I'll start my fourth career. But you should know, I never set out to become any of those things and who know what I will be doing next. But when I was a young man, I did want to be an engineer. And so I studied engineering at university - in fact, President Hu and I were studying engineering at exactly the same time, although some 7,000 miles apart.

"Learning how to think like an engineer involves much more than memorizing mathematic formulas and physics theories. It's about understanding how something works - and then asking a simple but critically important question: How can it work better?

"I've been asking that question every day for decades. I certainly don't have all the answers.  No one does. But if you bring together the smartest, most creative people that you can find, if you encourage them to think big, and if you have a lot of luck - you can discover new and exciting answers. Answers to questions you had - and often to those you weren't inquisitive or creative enough to ask - but answers nevertheless that open doors, create opportunity, and take you to places you never thought possible.

"Of course, once you discover the answers, you have to figure out how to turn those ideas into something real - something that is useable and has value to people. And once you figure how to do that, there's just one last step, which is the hardest of all: Going from revelation to application or implementation - risking failure and money and pride. To me, doing these three things - discovering new answers, figuring out how to make them real, and then having the guts to go for it - that's the essence of innovation.

"Twenty-six years ago this month, I was fired from my job on Wall Street - a job I loved.  But it turned out to be the best thing that ever happened to me - other than the birth of my two daughters. Because over the years on Wall Street, I had developed an answer to the question, 'How can it work better?' And when I left the job, I gathered together some very smart people, and we figured out how to turn the idea into a real product: a computer terminal that would deliver better financial information, faster than anyone else.

"Then, the only thing left to do was to make the leap, and take the risk that the whole thing might fail and lose money. In my experience, when one door closes, often the question is not whether another door will open, but whether you can muster the courage - though others will call it craziness - to walk through it. One of my original business partners bailed out in the first week.  It was just too big a risk for him.

"Today, that company has nearly 10,000 employees with offices in 130 cities across the world - including Beijing, Shanghai, and Hong Kong. This success isn't because we were the first to have an idea - it's because we've never stopped asking, 'How can it work better?'

"Innovation isn't the same as invention. In fact, innovation often grows from adaptation. Just think about how electronic products from Asia came to dominate the market. The radio, the television, the record player, the telephone - they were all invented in the United States. But other countries - especially here in Asia - began producing and customizing these and other hi-tech products, and soon enough, they were improving them.

"Innovation doesn't always come down from the heavens as a thunderbolt of inspiration.  In many cases, it seeps up through the ground as a wellspring of knowledge. Adapting the innovations that others develop is critical for companies in developing nations - and I think it's just as critical for those in developed nations like my country. Let me give you just one example from my own experience. 

"When the internet came around in the early 1990s, I remember so called 'experts,' who are always in the audience but never in the playing field, saying that all of its free information would put Bloomberg LP out of business. But just the opposite occurred: We began leveraging the power of the internet to improve the quality of the products the company offers. And by helping to both expand the volume of data and encourage new economic growth, the internet drove up demand for financial data and news - and we prospered.

"I believe there's a parallel lesson in that story for those who say that Chinese innovations are a threat to U.S. economic strength. Nothing could be further from the truth. 

"Innovations are threats only to companies and countries that have stopped looking forward - stopped asking the question, 'How can it work better?' For the rest of us, innovations are opportunities - and that is true for employees and employers, consumers and producers, and businesses big and small.

"Every country wants to have lots of innovators - because innovators create the skilled jobs that raise living standards, increase tax revenues, and promote economic growth. But how do countries promote innovation? 

"Certainly, government support of research and development is crucial - but that's just the beginning. I hope that this conference will fully explore all the principles that make up a successful national strategy on innovation, and I'd like to briefly touch on five of them that I believe are particularly central.

"First, innovation begins with education. In the U.S., we have many of the best universities in the world, and they are continually getting better, continually pushing the bounds of every field of study. But our system of education for primary and secondary public schools has been running on a 19th century operating system that can no longer support the needs of today's students. To promote the forces of innovation, all governments must prepare this generation of students for the jobs of tomorrow. That means emphasizing math and science - and, it means fostering environments where students engage in critical thinking, so that they can begin asking at an early age: 'How can it work better?'

"Second, innovation takes root in societies that allow their people the freedom to pursue and express new ideas. As the founder of a data and media company, I can tell you that efforts to control access to information - whether it's the internet or anywhere else - will undermine progress. Access to information is a strength, not a threat… and it is a fundamental part of innovation. The more that China embraces this notion, the more innovative it will become.

"Third, innovation is driven by competition. Government-controlled industries, by reducing competition, reduce innovation. If governments prevent fair competition from taking place, they will reduce the opportunities for their most talented and skilled citizens to become innovators, and those who are most determined to succeed will simply take their talents elsewhere.

"Fourth, innovation flourishes only when the rights of innovators are protected. One of the points of discussion in the Strategic Economic Dialogue that Treasury Secretary Hank Paulson has initiated in China concerns intellectual property. The creativity industry in America is a vital part of our economy, and it includes the movies, music, television, fashion and design, and computer software and hardware. All of these businesses are based on new ideas - but developing new ideas costs money.

"If a country wants its creative citizens to invest and innovate, it has to give them some ownership rights over their innovations. That's why I believe what will ultimately move China to strengthen its protections of intellectual property will be its own self-interest. Because there will be an increasing realization in China that lax protections are negatively impacting China's climate for innovation.

"China now ranks third in the world in its number of patent applications, but if patents are not strongly protected, innovators will take their business overseas - or they will stop innovating.  In other words, China should be the champion of property rights protection - not the 'Wild West' where anything goes and 'something for nothing' is accepted practice. In the long run, nations that protect and incentivize innovation will have an enormous edge over those that don't.

"China is now entering a world where it has more to lose than gain from lack of protections - because it is becoming a society that is a net generator of intellectual property, an economic powerhouse others will take from without fair compensation - unless mutual protections exist.

"And fifth and finally, innovation comes from everywhere. Opening our borders to cultures, ideas, and people from the four corners of the world is critical to staying ahead.  All countries are in an international competition to attract the best and the brightest.  We all need others' knowledge, skills, drive, entrepreneurship, and capital.

"History has shown that societies that close themselves off to the world always lose to those that open their doors to the world.  National pride is a great thing - but if it used as an excuse to shut out the world, innovation will suffer.  All countries face the challenge not only of rejecting a fear of things foreign, which can arise especially in difficult economic times, but of actively opening up to innovation - from wherever it comes. Because innovation is inevitable.

"The only question is whether the good jobs and benefits it produces are going to go to your country or another country.  We face this question in the United States, and so does every other country in the world.   China and the U.S. both have important natural advantages when it comes to innovation:  large domestic markets; easy access to large foreign markets; consumers who demand the best, safest, and most up-to-date products; an exceptional work ethic that is ingrained in the culture; and a spirit of entrepreneurship that is flourishing like never before.

"For all these reasons, I believe that our countries are well-positioned to drive innovation in the 21st century. And I will predict that if both of our countries embrace the five principles I discussed:  better public education; freedom to pursue and express new ideas; active, fair competition; understandable, meaningful enforced protections of intellectual property; and societies open to others from around the world. If we both embrace these principles, then we'll both be the clear leaders in innovation in the decades to come.

"That is the challenge America and China have before them, and we can both be winners. I want to thank you, again, for inviting me to participate in this conference, and I hope that it will be part of an expanding dialogue around innovation that will lead to advances for both the U.S. and China.

"Every day, our innovative citizens are asking, 'How can it work better?' As government officials, we owe it to them to do the same. Thank you."


Stu Loeser   (212) 788-2958

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