When Americans think of technology, companies like Amazon, Apple, and Google usually come to mind. And because innovation at these companies is thriving, most Americans think that United States must be doing pretty well when it comes to innovation. However, MIT professors Jonathan Gruber and Simon Johnson discuss two interrelated innovation challenges the country faces. The first is that the overall rate of innovation has slowed, and the second is growing regional imbalance.
As Rob Atkinson writes in a book review for the New York Journal of Books, the authors are right to Targue that “To really improve the performance of the American economy—and to raise incomes across the board—we need to invest heavily in the underlying science of computing, human health, clean energy, and more." However, their solution misses the mark. The authors default to the linear model of science, which holds that government should fund science that scientists choose and then sit back and wait for wonderful things that happen.
But most important innovations—radar, drugs, jet engines, advanced computing and the Internet—came from “strategic research” in which researchers were trying to solve problems related to societal needs. As such, big areas to fund would not be ocean research, as they recommend, but rather electrical and mechanical engineering related to robots, which if it pays off would lead to a major boost in living standards. They also unfortunately repeat the canard that the falling share of labor income is due to a growing share going to capital, when it’s actually because a growing share is going to rent. But, as Rob writes, these are minor quibbles in what otherwise is an important and interesting book about the future of the United States.
Read the review.
