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SOTU: Obama's Innovation Economy

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The nation is nervous, yet outwardly calm. President Obama has set the stage for a vision of America's new Innovation Economy and forward-looking anticipation of global competitiveness.

I had almost forgot the catastrophic caterwaul from the White House, pleading desperately with Congress and the American people as the stock market plunged 777 points in a single day, the biggest dive ever; and the internal arguments and brawls that kept top leaders of the president's party at each others' throats.

But as President Barack Obama addresses the nation, even as I'm writing, my mind drifts back to the latter part of 2008 when the George W. Bush administration beckoned John Boehner, John McCain and other GOP stalwarts to "save" the nation from further economic disaster, which Dubya and congressional leaders billed as certain without a $700B bailout.

Economic Memories

The Associated Press reported on Sept. 26, 2008:

"The White House summit meeting had been called for the purpose of sealing the deal that Mr. Bush has argued is indispensable to stabilizing frenzied markets and reassuring the nervous American public. But it quickly revealed that Mr. Bush's proposal had been suddenly sidetracked by fellow Republicans in the House, who refused to embrace a plan that appeared close to acceptance by the Senate and most House Democrats."

Congressman Barney Frank (D-Mass) summed up the atmosphere in his remarks to the press:

"This is the president's own party," Mr. Frank said at the time. "I don't think a president has been repudiated so strongly by the congressional wing of his own party in a long time. ... I didn't know I was going to be the referee for an internal GOP ideological civil war."

McCain had no answers, no plan, and was, for a while ambivalent about even traveling to the White House, where both he and then-Senator Obama were summoned to assist a "scrambling" president.

The AP reported:

"Participants in a meeting late yesterday afternoon that Mr. Bush had at the White House with congressional leaders, Mr. McCain and Mr. Obama said that it descended into arguments. Disagreements were so deep-seated that some lawmakers wondered aloud just who -- and how many -- would show up for the resumption of talks ..."

State of the Union

Ah, back to today's State of the Union.

2011-01-26-obamasotuonhuffpo.jpg

It's hard to believe that a little more than two years ago, the nation was flirting with economic ruin. No one could've predicted that America's cliff dive into the pile of disaster Dubya left behind in 2008 would result in a visionary outlook articulated by a confident president tonight.

In stark contrast to his predecessor's pleading at the end of his term, President Obama's economic outlook is dramatically positive. Innovation and Competitiveness are primary points the president is pushing. And that's right what many, if not most all of America's business owners, entrepreneurs and educators need to hear.

INNOVATION ECONOMY

Innovation is the new buzz word across the nation. And in most industries, innovation is the fuel propelling change at the speed of light ... seeking to create jobs as fast as possible and counter the fact that America lost eight million jobs over the past couple of years of economic recession. Many of those jobs aren't returning. And for Americans who haven't been introduced to the new Innovation Economy, well, here's your introduction, according to Johnathan Holifield, CEO of the Black Innovation and Competitiveness Initiative (BICI):

"To thrive in the current Innovation Economy, which is marked by radical socioeconomic changes brought about by the globalization of commerce, democratization of information, exponential growth of entrepreneurship and acceleration of new knowledge creation, demands that America encourage and powerfully incent new high-growth entrepreneurs, as well as nurture the vital entrepreneurial pipeline with essential science, technology, engineering and math (STEM) education, from kindergarten through college and continuing throughout our careers."

(blackinnovation.org)

The BICI answers the question of why you and I should care about the Innovation Economy at all:

The Innovation Economy is knowledge dependent. By the 1990s, managers and "knowledge workers" had become the largest occupational category in the U.S.  Managerial and professional jobs increased as a share of total employment from 22 percent in 1979 to 28.4 percent in 1995 and to 34.8 percent in 2003. In contrast, about one in seven workers is employed as a production worker in manufacturing, and even there, knowledge and continual skills enhancement is becoming more important.

'It's the Innovation Economy, Stupid!'

Recall the phrase that exemplified the roaring '90s "It's the economy stupid!" Today, it should be, "It's the Innovation Economy stupid."

Entering the second decade of the 21st century, five truths should be beyond dispute.

  • Traditional manufacturing can no longer provide the same level of economic growth productivity and employment; however, advanced manufacturing can, and should, be part of our economic agenda.
  • Knowledge-intensive industries have taken the place of mass production as the economic engine for growth.
  • The innovation revolution has led to the creation of new, promising industries.
  • Growth in information and communications technology, advanced materials and life sciences industries continue to outpace traditional manufacturing.

These and other Innovation Economy industries hold the promise of future wage and employment growth.

What has been missing in our national dialogue on innovation and competitiveness, however, has been a full understanding of what the terms innovation and competitiveness mean. Knowing how those terms are defined and utilized in the debate concerning how our country will enhance America's innovative capacity and competitive posture within the global market. That we need to enhance that posture should not be in question; what we should question is 'how' we will adopt a new posture and 'what' vision should we pursue.

Innovation, therefore, refers to a process of renewal and improvement of something that exists and not necessarily, as it is commonly used to mean, the introduction of something altogether new. This can be in the form of a product or service, or even an improved process that results in better products or services, and is a process that involves knowledge and creativity, as without them innovation would starve for lack of sustenance.

Innovation is also a process that requires access to capital and an entrepreneurial spirit as they are the drivers of commercialization and what brings innovations to market.

Competitiveness is the ability or capacity to compete, and in the economic context it means the ability to compete with other nations in the global marketplace. Economic competitiveness then refers to our inherent capacity to understand the challenges of a globalized marketplace (the 'game') and the other competitors who seek to win and succeed in the competition, which translates into market share, profits and economic growth.

America has weathered a perfect storm of financial corruption coupled with failed political leadership. It has emerged in 2011 battered and bruised and still limping ... but alive, invigorated, encouraged and inspired. In Obama's new Innovation Economy, America may again find firm footing atop a global economic mountain that requires us all to participate. From investment in new companies, universities and k-12, innovation will be the song Americans sing nationwide. It will be the energy that fuels our economy recovery. And the imagination and creativity emanating out of Silicon Valley, Silicon Alley, Ohio and elsewhere will filter down to the elementary grade school level to prepare future generations for launch.

As I see it, the American people made one small decision at the voting booths in 2008 that resulted in one giant leap forward for the nation. I cannot imagine the result of an alternative selection.