Innovation in Obama's Speech on the Economy

President Obama yesterday made a major address on the economy. Here is a video excerpt:



Here are some selected portions of the address:

(T)he day I took office, I said we would rebuild our economy on a new foundation for growth and prosperity. And with dedicated, persistent effort, we have been laying the cornerstones of this new foundation every day since. 

The first cornerstone is new investments in the energy and technologies that make America a magnet for good, middle-class jobs........ 

American manufacturing has added more than 700,000 new jobs. It's growing almost twice as fast as the rest of the economy........That's progress we can be proud of. But we also know that many of these manufacturing jobs have changed. You're not just punching in and pounding rivets anymore; you're coding computers, and guiding robots, and mastering 3D printing. These jobs require some higher education or technical training. That's why the second cornerstone of this new foundation is preparing our children and our workers to fill the jobs of the future...... 

Of course, even if you have the right education, for decades, one thing that made it harder for families to make ends meet and businesses to grow was the high cost of health care. And so the third cornerstone had to be health care reform....... 

Finally, we put in place financial reform to protect consumers and prevent a crisis on Wall Street from hammering Main Street ever again. 

And this:

If we want to make and sell the best products, we have to invest in the best ideas, just like you do at Northwestern. Your nanotechnology institute doesn't just conduct groundbreaking research; that research has spun off 20 startups and more than 1,800 products, and that means jobs. Here's another example. Over a decade ago, America led the international effort to sequence the human genome, and one study found that every dollar we invested returned $140 to our economy. I don't have an MBA, but that's a pretty serious return on investment. Today, though, the world's largest genomics center is in China. That doesn't mean America is slipping. That means America isn't investing. We can't let other countries discover the products and businesses that will shape the century. Let's invest more in the kind of basic research that led to Google and GPS, and make our economy stronger.

I think the key to economic progress is to learn to do things better in the future than we are doing them now. Clearly a large part of that effort has to be based on improving technology. The president has stressed the need to improve energy technology, and implied the need to innovate in health, education and manufacturing technology. We will also have to invent new technology to solve problems we are not adequately addressing now.

Technology is not used simply because it is invented and/or available. As the president indicates, people apply the technology, and they must have the education (and health and incentives) to do so. It also takes finance to invest in the application of the technology. As the president implies, you will not have the capacity to finance technology unless the financial industry as a whole is on a firm basis.

The president does not address the fact that you have to organize to do things better, and I would suggest that you have to better organize for that purpose. Economists have long described the process of creative destruction, in which the business community is reconstructed again and again to apply new ways of doing things to improve production and thus people's lives. I suggest that the same is true in fields of health care, education, and public infrastructure -- which we do not necessarily perceive as part of businesses.

It goes without saying that a gridlocked Congress, inhabited by many entrenched politicians who deny and denigrate science and technology is no help in achieving the technological revolution we need.