Innovation and opportunity: short-term costs, long-term gains

Alan Kay, a pioneer in the field of computer technology, once said, “The best way to predict the future is to invent it.”
Indeed, I suggest that the future always has been predicted by the technologies that invented it. And even a cursory review of the history of America reveals the role that research and innovation have played in building America’s global economic leadership.Americans invented the light bulb, the airplane, credit cards, the integrated circuit and the Internet.
American ingenuity transformed agriculture with innovations ranging from the self-polishing steel plow and the cotton gin to today’s genetically modified crops and livestock. Agricultural productivity soared by such a scale that the percentage of the U.S. population involved in production agriculture dropped from 50 percent in 1899, to less than 2 percent today.
Even when we aren’t inventing something, it seems we Americans are always finding new ways to apply the discoveries others have made.
We didn’t discover penicillin; the Brits did. But during World War II Americans figured out how to produce it quickly and at a low enough cost to make it available globally.
We didn’t invent the internal combustion engine, or the automobile, but Americans perfected the assembly line and mastered mass production with world-changing results. Indeed, when you consider the ongoing discoveries in microelectronics and biotechnology, our future opportunities are breathtaking.
Innovation vs. the Luddites
The creation of new technological knowledge through research and innovation is our most direct economic avenue for acquiring added value.
When new knowledge is quantified in a market environment, it creates fuller employment, capital formation, growing profits and surpluses for reinvestment.
Put more simply, research and innovation beget new companies, which beget new jobs, which beget economic expansions and ultimately the creation of new wealth. That is the economic version of the “birds and the bees” story.
Still, since the time of the Luddites — those 19th century English textile workers who took to smashing mechanized looms for fear of losing their jobs — people and politicians have feared the loss of jobs whenever innovation makes some jobs obsolete.
Of course, loss of jobs is no laughing matter, but as Tom Friedman quipped, “if horses could have voted, there would never have been cars.”
Indeed, I have yet to meet an economy that grows without adding new jobs at its leading edge while at the same time destroying old jobs at its trailing edge.
Government and business would do well to tell the truth about economic growth and encourage displaced workers to acquire the new skills required by newly created industries, because the old jobs are not coming back.
Luis M. Proenza is president Emeritus of The University of Akron. He serves on the Executive Committee of the Council on Competitiveness, the Board on Science, Technology, and Economic Policy at the National Academies, as well as its Council of the Government-University-Industry Research Roundtable.