I’m an optimist by nature. Pragmatic, but an optimist. Which is what’s making this particular column so difficult to write. I want to see the horizon, the sun ascending on the future of our nation, not the rocky canyons toward which we’re currently careening. I want the promise of our future to be better than the achievements of our past. I want tomorrow to be better than today. And the only way to do that is to innovate.

But we’re losing the race for innovation. We’re falling behind. This nation, which has brought to the world its most enduring experiment in democracy, modernity’s first recording of inalienable human rights, capitalism, electricity, the telephone, radio, television, the mechanized assembly line, lunar landings, the personal computer, the internet, and global interdependency, is losing the race for its own history. And it’s not why you think.

This isn’t about education. It’s not about engineers, outsourcing, or over-regulation. It’s not about business taxes, evil corporate empires, monopolies, or greed. Though it’s a little bit about greed. It’s about the hidden costs of our economic crisis. It’s about the often tenuous link between pocket books, bank accounts, and innovation. It’s about saving jobs and growing the economy. It’s about startups. And it’s about us.

Back in the heyday of the tech boom (let’s say the mid 1990’s), there was hardly anything better to be in business than an entrepreneur. My California friends tell me that all one needed for success in Silicon Valley was an idea, a pitch, a rumpled t-shirt, and a pair of jeans. Everyone was ready to invest in the future, because their present was so bright. Whether resulting from rational economic analysis, greed, or an abiding belief in the American Dream, Angel Investors (those high-net-worth individuals who form the backbone of startup financing) were willing to put money into the hint of an idea. An idea that might (might) change some small segment of a segment that didn’t yet exist.

Think about the best of the companies that appeared in the past thirty years. Think about the companies that do things we’d never thought about, until we realized we couldn’t live without the things that they were doing. Google. Microsoft. Apple. Facebook. Any of the non-legacy wireless providers. The search engine, the browser, the ipod, the social network, and the cell phone. Where would we be without any one of those? Where would our economy be?

To greater or lesser extents, each of these new titans of corporate America burst onto the scene because someone, or some group of people, decided to invest in an idea before it was a product. Those early investments funded innovation. They funded growth. They created jobs, and they changed the world. Those investors are the Angels we’re losing today. The hidden cost of this economic crisis is that the Angels have lost their wings. And if the Angels don’t fly, today’s startups won’t soar.

So here’s how we get them back. Here’s how we fund the 100,000 green garages of Tom Friedman’s energy future, the next big internet thing, the medical devices that’ll save the lives of people we love, or the innovations we can’t yet conceive, because (to paraphrase Dr. Dalton Millgate*), “great achievement has no roadmap, except investment.”

1. Tax deductability for Angel Investments. Maybe the quickest way to put money into the hands of the would-be innovators, is to induce the would-be-investors with dollar-for-dollar income deductions. Invest $10,000 in a startup, deduct $10,000 from your taxable income. Invest $50,000, deduct $50,000. Cap it at some level (perhaps $100,000), and define what a “startup” is, but give the Angels some guaranteed benefit for their investment. Even if the startup goes nowhere, they’ve lessened their tax burden.

2. Have the Federal Government, through state innovation funds and programs, put money into the system. Such funds already exist at the state and local level (see the Massachusetts Technology Collaborative, New York Seed, or Idea Village in New Orleans). Dedicate whatever amount of money is appropriated specifically to investment in startups. Define (again) what “startup” means. Require the replenishment of whatever capital is invested in a startup when (if) the startup achieves certain revenue benchmarks, and begin the cycle anew.

If you’re a conservative, the first idea appeals to you. Lessening a tax burden is a good thing, especially when it comes with its own feel-good profit motive. Progressives will like the second idea, which forges the kind of public-private partnership so often idealized in discussions of the role of government. Pragmatists might like both.

Regardless of where we fall on the political spectrum, we can agree that innovation is an imperative element of American economic strength. Our history is one of innovation, and if light is to shine on our economic future, innovation will be the pillar pushing the sun to the sky.

* Dr. Dalton Millgate is an eminent astrophysicist from Princeton University, who appeared in an episode of The West Wing entitled “Dead Irish Writers”, and is entirely fictional. He was played by Hector Elizondo, who has starred in many episodes of many shows, and is not fictional. The entire quote reads: “That’s because great achievement has no roadmap; and the X-Ray is pretty good, and so is penicillin, and neither were discovered with a practical objective in mind; and when the electron was discovered in 1897, it was useless; and now we have an entire world run by electronics. Hayden and Mozart never studied the classics. They couldn’t. They invented them.”

(Photo: William Hook’s Flickr photostream)