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Experts at AAAS Forum Explore the Complicated Interplay of U.S. Innovation, Jobs, and Wealth

The technological revolution is creating new wealth in the United States, yet the percentage of the working-age population with jobs has not rebounded, and “toxic thinking” continues to hinder innovation, experts said at the 2012 AAAS Forum on S&T Policy.

Wealth distribution represents another challenge to broad economic recovery, speakers said during a session that asked the question, “Can the United States Innovate Its Way to Jobs and Economic Recovery?”

Edward Derrick of AAAS opened the session by noting that new business opportunities are cropping up daily as a result of technological progress. Yet, he added, digital advances and new ways of doing business can also result in job losses. “There seems to be great productivity growth and new wealth creation,” said Derrick, chief program director for the AAAS Center of Science, Policy and Society Programs. “But the economy is not necessarily transforming this into new jobs or different jobs for those displaced.”

Richard B. Freeman of Harvard University and the National Bureau of Economic Research proposed policy responses to the changing U.S. job market, particularly to help ensure broader distribution of new wealth generated by rapid technological advances.

Richard B. Freeman of Harvard University and the National Bureau of Economic Research said new technologies have meant additional wealth primarily for a fraction of those already in the “upper 1%” of the U.S. socioeconomic scale.

Another speaker, Michael R. Nelson of Georgetown University, said job-seekers in creative fields, “masters of Big Data,” and those with dual areas of expertise are likely to dominate the emerging economy.

The good and bad news about rapid technological advancement is that “cash is coming back, jobs are not,” said Andrew P. McAfee of the Massachusetts Institute of Technology (MIT). The U.S. gross domestic product (GDP) is larger than before the recent recession, and corporate profits have improved, said McAfee, co-author of Race Against the Machine: How the Digital Revolution is Accelerating Innovation, Driving Productivity, and Irreversibly Transforming Employment and the Economy.

But, McAfee added: “The last decade saw fewer Americans working at the end of the decade than at the beginning.” At the same time, a comparison of U.S. real GDP per capita versus the real median household income reveals a widening gap between the upper- and lower-ranges of affluence in America.

In the future, digital technologies will become two times more powerful and twice as cheap every 18 months, McAfee said. Toyota has already created a semi-autonomous car, and the Defense Advanced Research Projects Agency (DARPA) has challenged engineers to create sophisticated new humanoid robots. Machines traditionally have failed at uniquely human tasks such as pattern-matching and complex communication. That meant, for example, that a bakery truck driver’s ability to process a constant stream of visual, aural, and tactile information from the environment and to safely execute turns could not be easily replicated by machines.

Now, though, technologies are beginning to surmount those traditional limitations. “Some 3.5 million people drive trucks in America, and a lot of those jobs will go over to digital labor in the future,” said McAfee, who serves as associate director and principal research scientist at MIT’s Center for Digital Business in the Sloan School of Management. “We have to think long and hard about what humans will be doing for work in America in the decades to come.”

Freeman, Harvard’s Herbert Ascherman Chair in Economics, said that, in his view, “the service jobs, driving bakery trucks and so on, are still going to be there in the near future.” He pointed out, however, that many of the most innovative fields such as biotechnology “will never be huge job-growth centers.” He proposed policy responses to the changing U.S. job market to ensure better jobs for a larger percentage of the population.

In particular, Freeman said, “the policy that most fits with the U.S. brand of capitalism would be to increase the extent to which regular workers obtain profit-sharing, employment ownership through stock ownership, or other modes of group incentive pay.” Freeman said he believes executives have done well, in part, because they have ownership stakes in firms. “Studies show that the all-employee incentive programs pay off in terms of productivity and in sharing the benefits of economic progress,” he added.

Michael R. Nelson of Georgetown University said job-seekers in creative fields, “masters of Big Data,” and those with dual areas of expertise are likely to dominate the emerging economy.

Nelson, a technologist, geologist by training, and visiting professor of Internet Studies in Georgetown University’s Communication, Culture, and Technology Program, summarized pathways to innovation across five layers of operations: the individual, team, and company, as well as “ecosystems of innovation” that link companies and laboratories, and nations. The United States needs “double-deep individuals” who move “out of the disciplinary cocoon” and instead develop deep knowledge in at least two fields, he said, while teams work best when they are limited to the number of people who can be fed with no more than two pizzas.

Companies and Internet-based ecosystems of team members become more innovative when they avoid excessively restrictive intellectual property protections and embrace the notion that “information-sharing is power,” according to Nelson. Similarly, at the country level, he decried what he sees as an excessive focus on monopolizing power through patents and copyrights. “People with power are buying more power and are using that power to monopolize and to hold back innovation,” Nelson said.

“The old MBA idea of building a monopoly or duopoly, looking for scarcity as a way to generate wealth, is toxic thinking,” he said. “Toxic thinking is getting in the way of innovation and preventing technology from advancing our economy.”

Today’s forward-thinking enterprises focus less on scaling up, or selling an ever-higher volume of products, and more on scaling out, or customizing products to meet the needs of individual customers, Nelson said.

“We need to move from STEM to STEAM-including more artists in the process of innovation,” said Andrew P. McAfee of the Massachusetts Institute of Technology.

This shift has enhanced the marketability of designers and other creative professionals, McAfee said. “I don’t think you do substantive innovation in the modern economy without the science, technology, engineering, and mathematics (STEM) fields involved, but you should involve more than just the STEM fields,” McAfee said. “We need to move from STEM to STEAM—including more artists in the process of innovation.”

So, can America innovate its way to job growth and economic recovery? Innovation to support long-term prosperity for most Americans may be possible, but it will be critical, moving forward, to address the widening gap between those who do and do not have wealth, according to Freeman.

“We need some kind of policy direction to make sure we get through this technological revolution and make sure it strengthens all people’s prosperity, not just some,” he said.

The 37th annual AAAS Forum on Science and Technology Policy took place 26-27 April in Washington, D.C. More than 400 elected officials, government and business leaders, researchers, foreign embassy staff, educators, and reporters participated in the Forum, which is intended to offer in-depth analysis and information on current science policy issues. Presentations were offered, for example, by White House Science and Technology Adviser John P. Holdren and U.S. Rep. Lamar Smith (R-Texas) chairman of the House Judiciary Committee and a member of the Committees on Science, Space, and Technology, and Homeland Security.


See the full Forum program.

See more coverage of this year’s Forum.