BusinessWeek thinks so, writing in their cover story this past week.  You could also see signs that perhaps innovation is on the cusp of rebounding if you believe their premise.  I think in general people underestimate how much time, money and effort goes into creating the next wave of technological innovation and that is why they posit that the US is losing its' place as the world's innovator.  In the Biotech space in particular, discoveries take years to find and many more years to exploit and consume large volumes of cash.  Because of the risk involved, the government has been the primary funding source for the basic innovations and then VC's and larger companies come in and provide the capital for commercialization. This process has not been successfully matched in any other country and is likely the key to our future success economically.