Innovation is always a hot topic. Volumes have been written on this subject.   A quick internet search shows more than 120 million hits and I suspect even that figure is understated.  But in the midst of all this noise, I think it's important to begin with the most basic question: Why does innovation really matter?
 
To me, innovation matters for two fundamental reasons. First, innovation is the key to improving quality of life for people in every part of the world. We face enormous challenges today - as individual companies and institutions, but also as nations, as societies and as a planet. I believe most of these challenges can be highly responsive to innovation and many can be solved with innovation.
 
Second, innovation is the primary driver of business, financial, and economic growth. The United States of America is built on innovation and it consistently ranks among the world's most innovative economies. As I look around the table at NCAPEC and ABAC, I see why!  Here we find great companies such as Wal-Mart, FedEx, and Microsoft that were small businesses just a generation ago, but harnessed the power of sustained innovation to grow and thrive - through good times and bad - to become globally recognized companies.  I know for us at P&G innovation is not just an activity we do - it is our lifeblood.
 
As we move into 2011 - a milestone year in which the United States will host APEC for the first time in over fifteen years - we should pause and reflect on what we have achieved so far. The past few years have been challenging for all of us. As we emerge from a global crisis, and strengthen ourselves with renewed ambition for growth, we need to look at what we should do differently.
 
A focus on innovation will provide opportunities to address some of the most serious concerns of U.S. companies - large and small - operating in the Asia Pacific region. These include protection of intellectual property rights, government procurement policies, market access, standards and compliance, expansion into services, investment issues and trade facilitation issues. 
 
To foster innovation the United States must pursue opportunities to improve complementary trade rules that will enable an environment in which businesses can access new markets and capitalize on their innovative competitive advantages.  Ninety-five percent of the world's population lives outside the United States.  The correct application of strong trade policy will introduce new consumers to American products, foster innovation, and provide substantial opportunities to American companies looking to export or invest overseas.  Innovation through effective trade policy will create high paying export based jobs in the United States, and strengthen our economy as we emerge from the global economic recession.
 
The U.S Government has identified innovation as a critical tool for economic wellbeing and international trade.  President Obama's 2010 Trade Policy Agenda identified innovation as "...essential to our prosperity and to the support of countless jobs in the United States."  The Agenda also cited innovation as a critical component  of international trade, stating that, "...American trade policy has to emphasize the pursuit of the most significant new market opportunities in ways that enhance sustainable growth, innovation, and good jobs through expanded trade." 
 
Innovation and the application of innovative services and products also underpin USTR's priorities for APEC 2011. Trade facilitation, environmentally sustainable growth, and the promotion of digital prosperity are all relevant to innovation.  We can see this through the application of innovations, as in the case sustainable solutions, or through the adoption of policies that create an enabling environment so that companies can create and market innovative products and services.
 
These are just a few of the reasons I believe APEC can and should focus on innovation as a way of enabling job creation and sustained economic growth.  So as we look to 2011 and beyond, as we manage through a myriad of complex and challenging issues of growth, climate change, food & energy security, health - an innovation driven APEC can become a guiding force for all.  Our companies, our country and even our planet depend on it!!




Deb Henretta
Group President, Asia
The Procter & Gamble Company

The Ninth Meeting of APEC Energy Ministers was held in Fukui, Japan on 19-20 June, 2010.  The theme of the meeting was "Low Carbon Paths to Energy Security:  Cooperative Solutions for a Sustainable APEC".  The meeting was conducted in three sessions - one on "Energy Security", one on "Energy Efficiency", and one on "Low Emission Energies".  The agenda also included a "Ministers' Lunch with Private Sector Representatives."  National Center Energy Policy Support Group representatives from Chevron, General Electric Company, Westinghouse, and Exxon Mobil Corporation attended the meeting along with NCAPEC Executive Vice President Robert Modarelli to represent the U.S. private sector.  Closing remarks were made by the U.S. as host of next year's meeting.
 
The Meeting concluded with a press conference and release of the Ministers' "Fukui Declaration". In it, Ministers acknowledge the continued importance of fossil fuels in the regional energy security picture, as well as the role of enhanced natural gas production and trade.  The Declaration also emphasizes the role of energy efficiency, including energy efficient buildings and appliances, as a key means of addressing security, growth and emissions concerns. Recognizing the important role renewable energy, nuclear, carbon capture and storage (CCS) and smart grid technologies all must play in a comprehensive approach, Ministers also explicitly note that open and transparent investment regimes, regulatory frameworks and standards development are essential, and that continued cooperation with the private sector to facilitate policy development, investment and R&D is essential to success.
 
Full text of the APEC Energy Ministers' Fukui Declaration is available here, as well as a shorter press release here.  A complete and detailed summary of the meeting proceedings is available from the National Center.