In terms of sheer economic impact, the single most important, dynamic, defining technological innovation in America hasn’t been the silicon clich of Moore’s Law; it’s the relentless promotional promise of “everyday low prices.” Sure, Microsoft, Intel, Cisco and Dell may be terrific companies, but the true corporate leader driving productivity improvement over the past decade has been Wal-Mart. When it comes to managing high-impact innovation, there is no contest-Sam Walton still matters more than Bill Gates.

The reason is simple. Wal-Mart is by far the commercial world’s most influential purchaser and implementer of software and systems. It is the 800-pound gorilla in a retail jungle of bonobos and howler monkeys. Microsoft and Cisco may set technical standards; Wal-Mart sets business process standards. When Wal-Mart-which is bigger than Sears, Kmart and J. C. Penney combined-wants global suppliers like Procter and Gamble or GE or Pfizer to comply with its inventory software and data networks, they do so or else. “Everyday low prices” don’t come cheap.

So yes, corporate IT departments may “care” about the latest Windows upgrade or a faster microprocessor from Intel. But Wal-Mart’s ongoing infrastructure innovation is what inspires their investments, actions and fears. The result has been a genuine revolution in economic productivity. This revolution also reinforces a profound truth about the economics of innovation: implementation matters far more than invention.

The numbers starkly bear this out. A recent McKinsey Global Institute report analyzing the spurt in U.S. productivity growth from 1995 to 2000 proffers provocative statistics that should give champions of “supply-side” innovation pause. “By far the most important factor in that is Wal-Mart,” reports Robert Solow, the MIT Nobel Prize-winning economics professor emeritus who chaired the report’s advisory committee. “That was not expected. The technology that went into what Wal-Mart did was not brand new and not especially at the technological frontiers, but when it was combined with the firm’s managerial and organizational innovations, the impact was huge.”

Solow’s comments bear particular notice as he’s notorious in technology circles for his tart-tongued observation a few years back that “Computers can be found everywhere but in the productivity statistics.” In fact, the McKinsey analysis found them-but not exactly where Solow thought.

“Productivity growth accelerated after 1995 because Wal-Mart’s success forced competitors to improve their operations,” the report maintains. “In 1987, Wal-Mart had just nine percent market share but was 40 percent more productive than its competitors. By the mid-1990s, its share had grown to 27 percent while its productivity advantage widened to 48 percent. Competitors reacted by adopting many of Wal-Mart’s innovations, includingeconomies of scale in warehouse logistics and purchasing, electronic data interchange and wireless bar code scanning. From 1995 to 1999, competitors increased their productivity by 28 percent, while Wal-Mart raised the bar by further increasing its own efficiency another 20 percent.”

The key variables here, says Solow, are the roles of imitation, adaptation and organizational innovation that he believes traditional economists either minimize or ignore. “Our historical research emphasis focusing on measuring R&D spending as a proxy for innovation is probably a mistake,” he observes. “I do think that’s a gap-that we don’t look enough at organizational innovation as in this Wal-Mart case.”

Consider Wal-Mart’s $4 billion-plus investment in its “Retail Link” supply chain system. What’s intriguing is not the multibillion-dollar nature of the company’s IT infrastructure initiative, but the fact that it has had at least an order-of-magnitude impact on its suppliers’ own supply chain innovations. That is, Wal-Mart’s own $4 billion expenditure has likely influenced at least $40 billion worth of supplier investments in systems and software. Of course, those supply chain innovations are also eventually emulated by competitors, further amplifying the multiplier effect.

This power of procurement facilitates the procurement of power. Suppose Wal-Mart decided that it would be economically advantaged by abandoning proprietary software formats in favor of “open source” to manage its supplier interactions. Imagine the ripple-or rather, tsunami-effect on the future of systems design and development in the retail, wholesale and consumer goods sectors. What happens to a Microsoft or Oracle in that environment? Suppose Wal-Mart determined that it could do a better job of offering “everyday low prices” by migrating its best customers to “smart” debit cards. Would the innovation be in the “smart card” itself? Or would it really be in the way Wal-Mart rolled it out nationwide?

Today’s economic reality is that high-tech decisions made in Arkansas play a larger role in boosting America’s productivity than decisions made in Silicon Valley or Seattle. If you appreciate clever innovations, spend more time with inventors, entrepreneurs and venture capitalists. If you want to know which innovations will rewrite the productivity statistics, ignore early adopters and identify the Wal-Marts in key vertical markets. Moore’s Law is a necessary but not sufficient condition for economic growth; Wal-Mart’s motto is what makes Moore’s Law matter.