Workforce of the Future Conference: Have Americans Lost Their Mojo?

The question of the morning is whether Americans, as a whole, have lost the ability to innovate.

Panel moderator Michael Hirsh cited writings in the Atlantic and elsewhere arguing that despite pouring money into clean energy and despite the fact that innovation usually happens in a recession, that hasn’t seemed to happen in this current recession. Why is that? Is that what’s causing the economy to drag its feet?

The panelists respond. WaPo writer Steven Pearlstein and National Association of Manufacturers senior vice president/Manufacturing Institute president Emily DeRocco get rather into it at the bottom:

Martin Bailey, senior fellow at Brookings:
“I do not agree that the US is stagnant or lacking in innovation. We’ve been hit over the head with a massive recession so it’s no surprise that venture capital is down, but I do think we’ll recover. Discouraging smart people from coming from other countries is not helping us. A lot of the Silicon Valley companies, as we know, were started by immigrants.

“I’ve actually proposed, and this has shocked and horrified some of my colleagues, I’ve proposed we start an innovation fund. We put money into an innovation fund with the projects selected by panels chosen by the private sector. That came out of some work I did with Mckinsey. One of the Mckinsey studies found that if you look across the world you can’t find a major high-tech industry that started without the government. The government does play a role in the early days.

“Third, this is inelegantly called blowback innovation. This is innovation that may be made overseas but comes back to help the U.S. We have a myth that we invented everything, but we didn’t. Now, we may be the leading source of innovation, but we should look at China and India and say, what can we learn there?”

Emily DeRocco: “The majority of our innovation in the private sector occurs in manufacturing. We call it R&D for a reason. If we allow our development and production to go offshore, the fear is that the research will follow and we can’t afford to lose that innovation.

“We support wholly a public-private innovation approach and we would hope that that idea would gain more momentum now.

“Third, this nation has huge innovation assets not being put to good use. We have not connected the dots in this country. Most of the research remains unpatented, Uncommercialized. We have 60 supercomputing centers in our national labs, but 90 % of our manufacturers have no access to these. It’s all sitting out there and we have been unable as a nation to figure out how to move those university assets outside those ivy covered walls and begin connecting those opportinities to the people and processes that can commercialize them.”

Steven Pearlstein:
“Everything Emily said right now is really important. Particularly, if you lose too much of the manufacturing you will lose the development, and if you lose the ‘D’ then you lose the ‘R.’ That’s a very important point. And everything else she said is absolutely true. Here’s the problem. You have suggested limited role for government in helping us to establish and pursue a competitiveness strategy so that we can win. But if you, ‘you’ meaning the National Association of Manufacturers,’ continue for other reasons — because you like low taxes, because you like low regulations — to support candidates like Jim DeMint, we will never get there. Because if you’re always running down government, if you’re always saying, ‘government is bad, it has no role, they’re taking money out of our pockets,’ if you keep supporting politicians who say that, then we’ll never get there. It doesn’t mean you have to vote for Democrats, but it does mean you have to support Republicans who can have the same conversation we’re having here.”

After cheers from the audience, DeRocco responded that she personally didn’t have those views and that the Manufacturing Institute, the nonprofit arm of the NAM, was a non-partisan association “representing all manufacturers.” (The NAM does of course endorse candidates.)