f a country loses the computer chip industry to foreign competitors, that value similarly disappears as the industry’s supply chains and industrial commons are hollowed out. The neoclassical assumption that residual assets will be redeployed to high-value-added sectors is not necessarily the case. More likely than not, many of the laid-off computer chip workers would end up working in lower-paying sectors, perhaps making potato chips. The United States economy does compete with other nations for high value-added production and losing the race means a stagnant economy, with limited wage growth and higher unemployment rates. Just what America is facing today.

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In a chapter for the new book Practicing Sustainability, Rob Atkinson wrote about sustainability from an innovation economics perspective, writing that sustainable development means that all people, particularly those in developing nations, be able to achieve the best possible standard of living while emphasizing that environmental sustainability is really only possible through radical technological innovation, especially clean energy innovation. His chapter shows the need to overlook the misguided claims that countries can't afford productivity - at the end of the day what is really not sustainable is low productivity and poverty.

Boosting productivity is key. But if we are going to get the policy framework right Washington needs to stop thinking that conventional economists are the only ones qualified to shape economic policy. It’s time to bring in business scholars, technologies, innovation economists, regional planners and others who have grounding in the real world of organizations and industries.