Since the early 1970s, most well-off countries have experienced income growth slowdowns like US due to the reaching of a technological plateau. For almost 40 years, we’ve had near-universal dissemination of the major innovations stemming from the Industrial Revolution, many of which combined efficient machines with potent fossil fuels. Today, no huge improvement for the automobile or airplane is in sight, and the major struggle is to limit their pollution, not to vastly improve their capabilities.
Although America produces plenty of innovations, most are not geared toward significantly raising the average standard of living. It seems that we are coming up with ideas that benefit relatively small numbers of people, compared with the broad-based advances of earlier decades, when the modern world was put into place. If pre-1973 growth rates had continued, for example, median family income in the United States would now be more than $90,000, as opposed to its current range of around $50,000.
Will the Internet usher in a new economic growth explosion? Quite possibly, but it hasn’t delivered very good macroeconomic performance over the last decade. Many of the Internet’s gains are fun — games, chat rooms, Twitter streams — rather than vast sources of revenue, and when there have been measurable monetary gains, they often have been concentrated among a small number of company founders, as with, say, Facebook. As for users, the Internet has benefited the well-educated and the curious to a disproportionate degree, but apparently not enough to bolster median income.
Science should be encouraged with subsidies for basic research, as well as private charity, educational reform, a business culture geared toward commercializing inventions, and greater public appreciation for the scientific endeavor. A lighter legal and regulatory hand could ease the path of future innovations.
2 comments:
Paul Romer says that the US is the leading country in developing innovative ideas, and that innovation brings growth. This article's argument is kinda one-sided. Indeed the statistics show the income rate didn't change much, but other factors are more relevant to this and we can not say innovation is not helping.
Indeed the US is spending a lot on health care, but the quality of the health care system compared with other countries is not very satisfactory.
I think this article is relevant to the podcast we listened to with Paul Romer and his ideas about the power of innovation. The podcast discussed weak property rights on discovery which he tied into using the media, like the internet, as a collective resource to influence and encourage discovery. I think with the time the internet will be a tool that will help lead towards new discoveries in many different fields that could lead to an increase in income. It opens the doors for more people to get involved and with more involvement the odds of discovery increase.
Also the article suggests science and encouragement for subsidies for research. This really connects back to the Romer's comments about universities giving these research subsidies to students instead of professors, and perhaps if this happens we could see incentive gains that could lead to innovation. For me, the aspect of giving incentives to students in science could really aid to increased innovations that lead to a higher income in the future.
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