Universities are the most important producers of knowledge and research, paving the path for innovation. Some have been innovation houses themselves. A study of startups established by MIT graduates, faculty and the university itself shows that, as of 2006, the turnover of these businesses totaled $11 trillion, roughly the size of Korea's current GDP. The USC Stevens Institute for Innovation is another success story. One of its many innovations: it has developed a method of treating deadly glioma brain tumors with chemotherapy delivered by inhalation.

Knowledge partnerships are crucial for economic ascendancy. During a visit to Carnegie Melon’s National Robotics Engineering Center in June, President Obama stated the obvious when he said technological innovations can help create jobs and spur growth. He proposed the government work with universities and corporations to reignite the American economy through an emphasis on cutting-edge research and new technologies.

Innovation, creativity, and learning have been proven to yield greater sustainable growth than brick-and-mortar investments. A recent U.S. Department of Commerce report found that $10,000 invested in business incubators can create up to 45 jobs, while the same amount invested in infrastructure projects, like building roads, can create only up to five. Business incubation programs focus on providing a knowledge-based support system to new enterprises, hastening their spurt from startup to sustainability.

Startups supported by incubators have a greater success rate. According to the National Business Incubation Association, some 41,000 U.S.-based startups that utilized incubators had an 87 percent survival rate compared to 44 percent for companies that did not. These small startups help job generation. A study by the Kauffman Foundation found that such businesses created almost two thirds of all new jobs in the past four years. And they are good businesses in themselves. There are over 1,200 incubators in the U.S., and at least 6,000 around the world. Canada’s Innovacorp generates over $279 million in export revenues and employs some 1,455.

The Obama administration realizes innovation is the cornerstone of growth. In his State of the Union address, Obama called for investing more than 3 percent of GDP on research, with $50 billion on university research. If successful, it would mean more university graduates; higher standards of science, technology, engineering and math education; and community college programs more in line with market demands. The obvious motivation for this program is the threat of an educated East overtaking the world’s greater superpower.