Jonathan Brill is a futurist and the author of Rogue Waves: Future-Proof Your Business to Survive and Profit from Radical Change (McGraw Hill, Aug. 17).
The future rarely goes as planned. Great powers like Great Britain, Napoleonic France and the USSR imploded when individually manageable squalls built into rogue waves of unmanageable change. Each wasn’t resilient when it got overwhelmed, and each lost its future.
Unlike most countries, the United States has become LESS resilient over the past five years. This is concerning because the world is becoming more volatile, and rogue waves are occurring more often.
America needs a government innovation strategy that drives both resilience and growth. Historically, the United States resilience has allowed it to turn rogue waves to its advantage. Our physical, innovation and education infrastructure have been central to this suppleness. Today, all of them have become brittle. If we want to sustain existing growth and sprout new opportunities, we need to reinvest in resilience.
We need to invent new mousetraps, not better mousetraps.
If the government wants to drive resilience, it needs to invest in strategic innovation. Since 1980, US research and development investment increased by over 500%. Almost all of this has been by corporations…the government’s innovation budget has barely budged. And that’s even when you add the annual fifty percent bump in research spending from the $250 Billion industrial innovation bill that’s winding its way through Congress.
The result is that innovation priorities have shifted from new general-purpose innovations, like the internet, which are hard for any one company to monetize the exploitation of existing inventions, like putting Tik Tok on your smartphone.
At some point (and stock buybacks suggests its coming fast), you need new worlds to conquer, not just new ways to carve up the world wide web. Yet, investors disproportionately reward companies that do cool things over companies that do hard things, think Facebook, Apple, and Netflix. While their CEOs may tell congress different, these companies commercialize others research and suck up consumer dollars, they don’t invent new wheels.
Such stocks glitter, but they are not gold. Consumer spending drives two thirds of the US economy, but consumers aren’t better off than they were in the 1980s. Without a ‘next economy’ that grows incomes, consumer businesses must steal from each other instead of increasing opportunity for all.
The next economy will require a new idea, a new wheel, a new internet. Few Americans have noticed that they face the most serious competitive threat in their history.
We need to build tomorrow’s infrastructure, not Silicon Valley’s infrastructure.
Covid stimulus proposals also fail to lay out a coherent national infrastructure strategy. While the bills replace the old, they fail to build a bridge to new value. Politicians avoid touching the political third rail of winner pickings by being reactive. They do worse. They fail to create new ones.
Bucketloads of cash are spent backfilling infrastructure that investors have started and failed to complete, like retrofitting highways for electric vehicles and rural broadband internet. Few of these investments grow the pie. Most just move ownership from small towns to the coasts.
We need to teach tomorrow’s skills, not todays.
Several spending bills before congress seek to reinvent college education. Many of them are built on the insight that a national innovation strategy is useless without people to fill the new jobs.
Unfortunately, the current spending target jobs that today’s employers want filled, and they train students in currently high value, but rapidly depreciating skills like basic programming. If there is a shortage of skilled labor, perhaps enterprises should increase training budgets (which have been decreasing for decades), instead of laying off outdated workers.
If America wants to increase its long-term resilience, government funded STEM education should tilt toward lifelong skills development, new science, and advanced technology research and away from the fool’s gold of early career salaries.
For all of these failings, the US is a bent country. It’s not yet broken, and a better future is still possible, but we have to start preparing for tomorrow today.
The future gets better when we turn it to our advantage. In the short term, that means catching the next rogue wave and riding it. In the long term, it means recovering quickly when it catches you by surprise. Government should invest in the long term, and we need a national innovation strategy that drives resilient growth.
Another pandemic, a financial shock, a cold war, they will all happen. They always have and they could all happen at once, as they did in WWI. When they do, America needs the resilience to turn the next rogue wave into growth.