The problem for the US economy – and the global economy, for that matter – is not that we have too much innovation; rather, we don't have enough of it. What's needed is not for the political class to denigrate technology, automation, or innovation, but to enact more aggressive innovation-supporting policies: everything from more generous R&D tax credits and greater federal investment in R&D to better education policies. The nations that will do best in the intensifying global race for innovation-based economic growth are those that embrace both innovation and creative destruction, while also putting in place effective public policies that empower society to cope with the rapid and ongoing changes brought by technology, automation, and innovation.
Note to Tom Friedman: Technology Creates, Not Destroys, Jobs
Tom Friedman's Op-Ed in The New York Times in which he argues technology is destorying jobs is essentially a flawed argument. There are three essential reasons for this. First, the economic evidence. It is unambiguous that higher rates of productivity lead to more jobs in the medium to long term, not fewer jobs. Second, the most serious challenge facing the U.S. economy over the next 25 years is the declining worker to population ratio as the baby boomers age. Finally, if we want to raise the living standards of Americans now holding low wage jobs, the best way to do it is to increase, not decrease, automation of these jobs. When a job can only produce 10 dollars an hour in value, there is no way to pay more than $10 per hour. If we can use technology to boost the productivity of many low wage, low productivity jobs, we can pay more for these jobs and workers who move out of these occupations can move into higher value added ones.
IT is the Foundation for Better Building
In a recap of a compelling ITIF event, Steve Norton reflects on the need to innovate in the construction industry. Construction is a physical undertaking of getting bricks, beams, pipes and glass to sites and putting them together but IT can help us better design, coordinate and revolutionize the process. When we start breaking new ground literally, we should also do so in our thinking and consider the economic footprint of a more productive and innovative construction sector.
Antiquated Economic Policies Are Killing Jobs More Than Robots Are
In an Op-Ed for The Huffington Post, ITIF President Rob Atkinson clarifies we should be worried about job creation but recognize that technology and machines are the solution, not the cause of our stubbornly-high unemployment rate. For that we can blame a tax code that does not encourage innovation and long-term investment, the lack of a national innovation and competitiveness strategy, passivity in the face of unfair or illegal trade practices, and a failure to invest in the talents of our workers and in new technologies.
Rather than rail against the machine, pundits and policymakers would do better to embrace technology-led productivity, while at the same time do much more to help workers adjust to changes, including investing more to create a 21st century skills system and shoring up a unemployment safety net that is full of holes. Fundamentally, the machines are our friends.