Is innovation falling behind in the US?

In the New York Times on Monday, one more person asked a common question these days: Is innovation slowing down in the United States going to cause other countries to overtake the US as world leaders of innovation?

Judy Estrin's new book Closing the Innovation Gap: Reigniting the Spark of Creativity in a Global Economy sends a warning out about the dwindling amount of innovation that could result in less ground breaking technologies and economic growth. The Time article points out that a study done in 2005 ordered by Congress says that there was 45% less federal financing for research in physical sciences in 2004 than there was in 1976. Another alarming statistic was that 93% of students in grades 5 ' 8 learned science from teachers whose specialties were in a field other than science.

A few reasons for the downturn in investment in science were mentioned in the article: a decline in federal funding which has lead to ideas drying up, entrepreneurs and venture capitalists are hesitant to make large investments in the current state of the economy.

However, there are positive things occurring in the fields of innovation. Both presidential candidates are placing emphasis on the importance of science in their current presidential campaigns (Read further: John McCain and Barack Obama), and there is a surge in investment on finding sources for alternative fuel.

Estrin concluded the article with this quote: 'Too much of it is short-term, incremental innovation, and the roots of the tree aren't happy.' What do you think on her stance on innovation? Should we be concerned about the current situation of innovation in the US today?