“The First Step in Winning the Future is Encouraging American Innovation”
Obama’s State of the Union Address Sets a New Course for Progressive Economic Philosophy with Innovation at its Core
President Obama’s second State of the Union address presented a comprehensive economic philosophy for the progressive movement in this century. The mantra of the conservative movement since Reagan popularized the now-defunct concept of trickle-down economics has been clearly stated and often repeated: tax cuts, less government. Ask anyone what forms the basis of the conservative economic philosophy and those four words will be among the first you will hear.
But what is the correspondingly simple mantra for the progressive economic philosophy? That is a harder question to answer, even for progressives. But after last night’s address we now have a strong candidate: innovation and competitiveness.
The president mentioned innovation and competitiveness numerous times throughout his address Tuesday, and outlined with surprising clarity a strategy to invest in all of its building blocks: science, education, workforce training, infrastructure, manufacturing, small businesses, access to domestic and export markets, and incentives to spur private capital investment.
This is encouraging news for us at Science Progress, since we have been working to advance the notion of the innovation-driven economy for years. Our unpublished prospectus—the document that, like a constitution, launched our little program—begins with the statement, “An appreciation for the importance of innovation must be central to any progressive philosophy.” Our mission statement from 2007 talks about the important role that science (and by extension, innovation) has on driving economic growth [emphasis added]:
“Science Progress proceeds from the propositions that scientific inquiry is among the finest expressions of human excellence, that it is a crucial source of human flourishing, a critical engine of economic growth, and must be dedicated to the common good.”
In a more recent article, we pointed out the long-simmering but still rarely discussed consensus that innovation is what drives modern economic growth, and how the United States is falling behind in educating our students with the skills to succeed in the 21st century innovation economy. Obama echoed these words when he said,
“Maintaining our leadership in research and technology is crucial to America’s success. But if we want to win the future—if we want innovation to produce jobs in America and not overseas—then we also have to win the race to educate our kids.”
In another article, we talked about how innovation and competitiveness are inseparable. An economy that does not innovate cannot compete in the long run. We pointed out how technological innovation, broadly speaking, had been responsible for between half and three-quarters of all economic growth over the 20th century. To this, the president pointed out that,
“In America, innovation doesn’t just change our lives. It is how we make our living.”
In that article we also observed how the private sector alone tends to under-invest in innovation because of the positive externalities of knowledge spillover. Much of the benefit of innovation is invisible to the market because of the unexpected ways the inventions of today influence the development of the technologies of tomorrow. This necessitates the intervention of public policy.
Today, as in the past, public policy has a strong role to play in setting the course for innovation-driven economic growth, job creation, and competitiveness. The federal government must set goals that signal to investors that there are lucrative opportunities awaiting those who invent and commercialize technologies that help solve social, medical, and environmental problems. But at the same time, we should not pick winners, but must instead let businesses in the private sector compete to commercialize only the best and most cost-effective new technologies and production methods. Again, the president echoed these sentiments in his State of the Union speech:
“The first step in winning the future is encouraging American innovation. None of us can predict with certainty what the next big industry will be or where the new jobs will come from. Thirty years ago, we couldn’t know that something called the Internet would lead to an economic revolution. What we can do—what America does better than anyone else—is spark the creativity and imagination of our people. We’re the nation that put cars in driveways and computers in offices; the nation of Edison and the Wright brothers; of Google and Facebook…
Our free enterprise system is what drives innovation. But because it’s not always profitable for companies to invest in basic research, throughout our history, our government has provided cutting-edge scientists and inventors with the support that they need. That’s what planted the seeds for the Internet. That’s what helped make possible things like computer chips and GPS. Just think of all the good jobs—from manufacturing to retail—that have come from these breakthroughs.”
Rising to the Challenge
Have a look at our new report on what the U.S. can learn from China’s investments in innovation and competitiveness.
In our most recent report, “Rising to the Challenge: A Progressive U.S. Approach to China’s Innovation and Competitiveness Policies,” we noted how China’s growing prowess in science, education, research, information technology, and infrastructure are all contributing to the emergence of a Chinese innovation economy. “China,” the president said on Tuesday, is
“educating their children earlier and longer, with greater emphasis on math and science. They’re investing in research and new technologies. Just recently, China became the home to the world’s largest private solar research facility, and the world’s fastest computer…[they are] building faster trains and newer airports.”
Indeed, China is also home to the world’s largest hydroelectric dam, and the world’s fastest bullet train. The number of published scientific articles in China recently surpassed that of Germany and Japan to take the number two spot behind the United States, and is on course to surpass even that within the decade.
“This is our generation’s Sputnik moment,” the president said, implicitly comparing our lack of investment in a space program, research, and education in an era of Soviet competition then to our lack of an innovation-driven competitiveness strategy in an era of global competition now.
On the whole, the president’s words on Tuesday very clearly pointed to one realization: we live in an innovation-driven global economy. The sooner our government becomes savvy to this reality, the sooner we can start to systemically accelerate our progress toward fulfilling our national priorities. Our nation needs a cross-cutting and comprehensive innovation agenda to shape federal policies toward maximizing the potential for innovation in all sectors.
And yes, the president pointed out in his address, a key part of achieving our goals will require us to rein in our deficits. But, as the president put it on Tuesday,
“Gutting the deficit by gutting our investments in innovation and education is like lightening an overloaded airplane by removing its engine. It may make you feel like you’re flying high at first, but it won’t take long before you feel the impact.”
The president has talked about Innovation before, noting that ”innovation is in our DNA.” But during Tuesday’s speech we glimpsed how innovation has the potential to become a new intellectual architecture underpinning progressive thought. Obama’s speech on Tuesday elevated innovation from just a nice sounding word that corporate CEO’s sometimes throw around, to a core element of the progressive strategy for winning the future.
Such a strategy rests on the idea that every dollar that improves a child’s abilities in math; or helps a worker obtain new skills in technology, science, engineering or business; or helps a small business find the capital to invest in new manufacturing equipment to make its product cheaper, faster, or more reliably; or connects a brilliant university researcher to an investor willing to support commercialization or his potential breakthrough; or helps a technology company market a new clean energy product overseas will pay us back down the road in innovation, job creation, tax revenue, and competitive economic growth.
“We know what it takes to compete for the jobs and industries of our time,” the president said. “We need to out-innovate, out-educate, and out-build the rest of the world.”
His words suggest that “innovation,” in its broad sense, has the potential to be as synonymous with progressivism as “tax cuts, less government” are with conservatism. After 30 years witnessing the shortcomings of trickle-down economics, it’s about time we shed those old ideas. After all, as the president said in his concluding remarks, “that’s what Americans have done for over 200 years: reinvented ourselves.”
Ed Paisley is the Vice President of Editorial at the Center for American Progress and Editorial Director for Science Progress, Sean Pool is the Assistant Editor for Science Progress.
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