Can Innovation Save Us?

It is now conventional wisdom that America can maintain (or recover) its preeminent economic and political position in the world through innovation.  Anyone who wishes to be seen as a Serious Thinker, or a viable presidential candidate, must repeat the word “Innovation,” always with that implied capital letter, throughout the day, as if they were observing the religious hours of Medieval times.  Pundits, politicians, policy wonks, and high priests of entrepreneurship all assert as dogma that innovation will solve both our current and long-term problems.

That it is now a capital-letter convention is enough to make me skeptical that innovation can deliver.  There is something too familiar about all this scribbling.  I am old enough to remember similar talk about the “Service Economy” not too many decades back.  Trade magazines and economists were asserting that as the American economy shifted from manufacturing to services, American workers would grow rich providing services such as accounting, banking, insurance, customer service, education, legal services, and design not only to each other but to the new manufacturing economies to which we were transferring our manufacturing base and its supporting technological knowledge.  No one foresaw that innovation in digital technologies would lead either to outsourcing of many services or to greater efficiency, both of which would reduce the demand for service workers in the United States.  Some of us are still shocked when we dial an 800 customer service number and hear Indian or Asian accented English on the other end.

I can’t help but wonder if Innovation is the same kind of delusion.  For one thing, those who promote the glories of innovation are not always clear or specific as to what kinds of innovation will effect the magic cure.  Those who do try to specify what they mean generally trot out education, digital technologies, and green technologies as their prime examples.  American education certainly needs intensive care, but the various diagnoses and proposed cures inspire no more confidence than television’s erratic Dr. House; all too often, the remedies proposed boil down to more computers in the classroom and more online learning.  No one has explained why the post-World War II education system was relatively so successful despite the lack of computers and electronic library materials.  Whether or not green technologies can be developed fast enough into a large enough industry to compensate for all the industries we have lost remains to be seen, yet it appears that China may beat us to the finish line, having already surpassed the U.S. in the manufacture of solar panels.  (Whether or not green technologies will have any ameliorative effect on fossil energy consumption and global warming is a different question.)

Innovation in digital technologies would appear to be a good bet, yet again there are reasons to be skeptical.  The Internet and email are wonderful innovations, yet the latter has led to a sharp decline in letter writing, which has led in turn to a sharp decline in first class mail; so now the post office is deeply in red ink and will be laying off thousands of employees who will not have any other job to go to.  Much current innovation seems to be in such ephemera as apps for cell phones and tablets and in social networking, yet none of these creates American jobs on the scale needed.  Facebook, for example, has about 2,000 employees, despite servicing millions of users (As Neal Stephenson recently said, “We can’t Facebook our way out of the current economic status quo.”).  Apple employs considerably more, in excess of 40,000, but that is their worldwide employment figure—a breakdown by country apparently is not publicly available.  But at least Apple produces actual things—but not here in the United States.  Their computers, iPads and smartphones are all manufactured overseas.  Apps for their (and others’) smartphones and tablets are software rather than hardware and therefore require little in the way of personnel to design and distribute.  As China, India, Brazil and other countries start to innovate on their own, the primacy of American companies, no matter how innovative, is likely to diminish, and with them the promised golden opportunities for American workers, regardless of their education.

A more fundamental problem may be saturation.  The American economy is 80% consumer spending, and purchases of knick knacks and entertainment account for far too much of that 80% to be sustainable. At some point consumers are going to wonder if it is really worth spending even a few extra bucks on yet another app or yet another bigger and better television or yet another fetchingly named wine.  And as jobs in those fields that actually make things continue to leave the country and as more and more service jobs follow them, one wonders where the demand for consumer products, innovative or otherwise, will come from.  Even the very rich have only so storage space and only so much time to spend online.

Perhaps all the talk about Innovation is a way to divert our attention from a deeper problem for America.  Perhaps the real discussion should be about how we are to adjust to a very different world than recent generations knew.  “Innovation” seems to entail old priorties (the “new and improved” slogans of the past) when we need to rethink what really constitutes the good life and the good society.  I don’t think there’s an app for that.

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