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An Innovation Deficit – And It Might Keep Getting Worse

I keep thinking about innovation.  We all have to.

Fareed Zakaria has one of his provocative articles up…  THE FUTURE OF INNOVATION: CAN AMERICA KEEP PACE?  And here is how he begins the article (read more from his website, here):

“The first step to winning the future is encouraging American innovation.” That was Barack Obama in his State of the Union address last January, when he hit the theme repeatedly, using the word innovation or innovate 11 times. And on this issue, at least, Republicans seem in sync with Obama. Listen to Mitt Romney or Newt Gingrich or Mitch Daniels and the word innovation pops up again and again. Everyone wants innovation and agrees that it is the key to America’s future.

Innovation is as American as apple pie. It seems to accord with so many elements of our national character — ingenuity, freedom, flexibility, the willingness to question conventional wisdom and defy authority. But politicians are pinning their hopes on innovation for more urgent reasons. America’s future growth will have to come from new industries that create new products and processes. Older industries are under tremendous pressure. Technological change is making factories and offices far more efficient. The rise of low-wage manufacturing in China and low-wage services in India is moving jobs overseas. The only durable strength we have — the only one that can withstand these gale winds — is innovation.

Even more troubling, there are growing signs that the U.S. no longer has the commanding lead it once did in this area.

On his special about innovation on CNN, he interviews some genuine innovation heavy hitters, including Steven Johnson, the author of Where Good Ideas Come From (I presented my synopsis of this terrific book a few months ago at the First Friday Book Synopsis.  You can purchase my synopsis, with handout + audio, at our companion web site, 15mintuebusinessbooks.com).

He repeats what many others are saying — what, seemingly, everyone is saying.  For example, here is one recent article:  U.S. Is Falling Behind in the Business of ‘Green’.  From this article:

A recent report by the Pew Charitable Trusts found that while the clean technology sector was booming in Europe, Asia and Latin America, its competitive position was “at risk” in the United States because of “uncertainties surrounding key policies and incentives.”

And, as I think about all this innovation, I realize something else.  A lot of innovation is putting a lot of people out of work.  It goes back to the problem of “Automation” that Robert Reich wrote about.  In Aftershock, he wrote:

The problem was not simply the loss of good jobs to workers in foreign nations but also automation…  Remember bank tellers?  Telephone operators?  The fleets of airline workers behind counters who issued tickets?  Service station attendants?  These and millions of other jobs weren’t lost to globalization; they were lost to automation.  American has lost at least as many jobs to automated technology as it has to trade. 

Here is a summary of this aspect of the problem, quoted in Points this morning in the Dallas Morning News:

“If you’re doing something that can be written down in a programmatic, algorithmic manner, you’re gong to be substituted for quickly.”  (Claudia Goldin, a Harvard economist, offering a dire job-market forecast for U.S. manufacturing workers).

So…  we need innovation.  We need to do new things.  We need to do old things better, faster, more effectively.  We need innovation in products, innovation in systems, innovation in every arena.

But, we also need some really innovative thinking in this area:  “where will the new jobs come from?”

Anyway, I keep thinking about innovation.