About 10 years ago, Sino CES started operating in China.
“We realized we couldn’t stop them,” said Gary Shapiro, president and CEO of the Consumer Electronics Association, which puts on the world’s biggest electronics show in January in Las Vegas.
“We couldn’t sue them,” Shapiro said. “So we entered into a partnership with them.”
That’s how a lot of business is done in China, Shapiro told about 100 people attending his morning talk at InnoTech San Antonio Thursday.
Every year, Shapiro travels to China for the show. But a few years ago, an encounter with a Chinese politician, who spoke no English, shook him up so much he decided to write a book. The Chinese politician, in a few simple hand gestures, indicated that China was on the rise with a thumbs up sign and that the United States was on the decline with a thumbs down signal.
“There was some truth to it,” Shapiro said. “We’re not leading innovation the way we should be.”
Shapiro, 55, and his wife had children late in life. He has a four year old and another child on the way. His children make him have a laser-like focus on the future of the country. Last year, he wrote the bestselling book “The Comeback: How Innovation Will Restore the American Dream.”
For years, the United States has feared the rise of various countries like Japan, Korea and Mexico. All of those countries threatened to extinguish the U.S.’s powerhouse economy. But they didn’t, yet China has made a dent in it. But even China is suffering now because of the subprime mortgage crisis in the U.S. market and because of China’s enormous growth, Shapiro said.
Manufacturing jobs have fled the U.S. in favor of cheaper labor in China, and those jobs are not coming back, Shapiro said. In China, a worker might spend all day doing one repetitive task on a manufacturing line.
“Americans are not going to be doing that kind of repetitive work – not with our education,” he said.
That’s why our national strategy should be focused on creating an innovation economy, Shapiro said.
“The thing about innovation is that every new idea challenges something in the past,” he said.
That’s why the U.S. has fewer travel agents, newspaper reporters and plant workers than years ago.
“As Americans we have a culture of doing things better,” Shapiro said.
To encourage innovation, the U.S. school system needs improvement, Shapiro said. Kids need to be taught to ask questions. The teachers that allow students to ask questions and challenge them are the best teachers, Shapiro said.
The U.S. entrepreneurial system also encourages innovation. The U.S. should not punish people for being successful and making money, Shapiro said. Entrepreneurs like Bill Gates, whose estimated net worth is around $60 billion, should be applauded, Shapiro said
“We reward people by letting them get wealthy,” he said. “It encourages the best and the brightest.”
But the focus on innovation has changed since Sept. 11, Shapiro said.
To remedy that, the U.S. also needs to change its immigration policies so that it doesn’t kick out the smartest people in our society who earn advanced degrees in science, engineering, technology and math. The National Science Foundation spends $6 billion a year on research and a lot of that research is done by foreign graduate students attending U.S. universities. Upon graduation, those students must go back to the countries they came from instead of being allowed to stay in the U.S., Shapiro said.
The U.S. also must increase its high bandwidth transmission capabilities to remain competitive, Shapiro said
And the signing of the JOBS Act by President Obama on Thursday was a step in the right direction in making it easier for entrepreneurs to raise money for their businesses through crowd funding.
“Innovation is so important for our country,” Shapiro said. “What’s really important for the future of innovation and technology companies is the health of the U.S. economy.”
Right now, all countries look to the U.S. for innovation, Shapiro said. They all want to emulate the U.S. That’s why he created Innovation-Movement.org to keep the focus on that strategy.
“Every company, every country, every individual needs a strategy,” Shapiro said. “Our strategy should be innovation.”

(InnoTech San Antonio was an advertiser with Silicon Hills News)