by Rob Kellogg on January 7, 2009
A significant aspect of Obama’s economic stimulus plan (which may run as high as $850 billion) involves investment towards long-term innovation. Before Sunday, the task of carrying out that vision seemed to be on shoulders of Bill Richardson. The next Secretary of Commerce, whoever that may be, will be a central figure in supporting the private sector in bringing about the next business revolution.
Over the last three decades, there have been five major innovation cycles in the U.S. and most of these orginited in Silicon Valley. They are:
- Invention of the PC in the early 1980’s
- Rise of biotechnology and genetic engineering in the early 1990’s
- The Dot.com boom beginning in 1995
- The mainstreaming of “green” technologies in the early 2000’s
- Mobile computer and communication over the past three or so years
Last year, innovation guru John Kao – dubbed “Mr. Creativity” by The Economist magazine – sounded the alarm bell regarding America’s declining economic role in the world. The website for his book Innovation Nation: How America Is Losing Its Innovation Edge, Why It Matters, and What We Can Do to Get states:
Even as the United States has lost standing in the world community because of the war in Iraq, Kao warns, the country is losing its edge in economic leadership as well. The future of our prosperity, and of our national security, are at serious risk. But it doesn’t have to be this way.
To reverse this trend, Kao has proposed investing taxpayer money (to the tune of $20 billion) to establish twenty major innovation hubs around the country. According to Kao, the model would be San Diego which has been able to transform itself from an old Navy town into a life-sciences and biotech center in just 15 years. Other hubs might pivot around clean energy in Detroit, digital media in New York, health care in Nashville or education reform in San Francisco. These regional centers would partner with leading public universities in the area to create a lot of high-skilled jobs and would serve as a training ground for students in the hard sciences.
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by Rob Kellogg on December 5, 2008
Last week, my colleague John Richardson wrote an article titled “5 Reasons to Save the Big Three.” While I do not necessarily believe that a bailout in some form should be ruled out altogether by lawmakers, I do think there are a number of solid reasons to oppose government intervention at this time. So I thought I would offer a contrasting perspective.
Most Republicans are against any bailout based on their doctrinal “free-market” ideology (yes, the same philosophy that got us into this mess with the deregulation of Wall Street investment banks under Phil Gramm during the Clinton Administration). So we know we shouldn’t be looking to that side of the aisle for the moral high ground in this debate. The Democrats, under the leadership of Pelosi in the House and Reid in the Senate, are in a very precarious spot. On the one hand, the Democrats have been given a clear economic mandate by voters to clean up the mess caused by “eight failed years of Bush economic policies.” On the other, the Democrats have some very powerful interests to consider, namely the UAW and its thousands of blue collar voting members in Michigan and the Midwest. This balancing act has caused most Democrats, including Obama, to lean cautiously in favor of some type of federal intervention.
Following the first round of hearings, House Speaker Pelosi said: “Until they show us the plan, we cannot show them the money.” President-elect Obama also agreed that taxpayers can’t be expected to “pony up more money for an auto industry that has been resistant to change.” This week, the Big 3 are getting their second – and likely final – chance to convince lawmakers.
Bankruptcy or bailout? Here are 5 reasons why Congress should think twice before dolling out the money to the auto industry.
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by Rob Kellogg on October 14, 2008
The first decade of this century has seen the economic standing of the U.S. slip in the world. Middle class jobs are moving abroad at an alarming rate, real wages have stagnated, Americans aren’t saving for retirement, the U.S. dollar has been supplanted as the currency of choice and the country’s trade deficit is soaring. New York has been overtaken by London as the center of global finance and London, in turn, is being challenged by Dubai and Hong Kong as the preferred destination for capital.
Perhaps most threatening to U.S. hegemony is the rise of China and India atop the economic ladder of the global economy. In her book The Elephant and the Dragon, Robyn Meredith asks: “How should the West respond to the economic metamorphoses brought about by the rise of India and China?” To grapple with that question, she presents an action-plan that can help restore U.S. competitiveness (recommendations by the Council on Competitiveness).
1) Education. Increase investment in K-12 public schools with focus on improving reading, math, language and science. Expand government-sponsored tuition programs to help make college more affordable to working families.
2) Deal with the “Twin Deficits.” The U.S. must pay down its growing budget deficit as it impedes the government’s ability to execute on plans to improve education and health care. The country’s trade deficit means that Americans become more and more reliant on foreign governments like China for borrowing money.
3) Technology and Innovation. Establish regional “innovation hubs” throughout the country linking local technology start-ups with universities, non-profits and local governmental agencies. Federal grants should support R&D in areas which will best position the economy to compete globally in the future such as nanotechnology, green engineering, Internet connectivity and the life sciences.
The rest of the world has caught up to the U.S. The next administration must focus on giving current and future American workers the tools to succeed in the global economy by investing in new technology and primary education. If America is going to maintain its stature as the primary economic power in the world, the children of today must be given the skills, tools and knowledge to become effective entrepreneurs and innovators in tomorrow’s world.
The Elephant and the Dragon: The Rise of India and China and What It Means for All of Us
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