U.S. President Barack Obama's plan to "win the future" by out-innovating the rest of the world was a ringing climax of his State of the Union address this week. Obama suggested increasing U.S. investment in research and development, a good and welcome step. But what will really determine U.S. competitiveness in the global ideas market isn't the money we can pour into the system. It's the strength of the system itself --  the social, political, and cultural institutions that shape ideas from start to finish.

There is no doubt that China and India are catching up with the United States when it comes to hardware -- the raw materials for innovation. They are increasing their spending on science and technology, training more engineers and scientists, applying for more patents, and churning out more research papers.