Editor’s note: This post was republished with permission from the Ewing Marion Kauffman Foundation’s Policy Dialogue blog.
There has been a fair amount of pessimism about the U.S. economy lately as Wall Street was pounded with significant losses in early 2016. But a new book from the Roosevelt Institute and Kauffman Foundation counters that with a look at a future in which innovation could produce the strongest economic boom since the 1950s while also promoting broader opportunity and equity.
In The Good Economy, authors Bo Cutter, senior fellow and director of the Next American Economy Project at the Roosevelt Institute; Dane Stangler, vice president of Research and Policy at the Kauffman Foundation; and Robert Litan, adjunct senior fellow at the Council on Foreign Relations, envision an economic resurgence beginning in 2020 driven by what they call “eight surprises.” These include the continued growth of freelancing platforms like Uber and Etsy coupled with the development of new advances like nanotechnology and artificial intelligence, the rise of new forms of worker organizing and the emergence of a new political dynamic as the federal government breaks free from political paralysis and cities and states serve as hubs of experimentation.
“It is often easier to focus on the negative trends in front of us and ignore positive developments,” said Stangler. “We believe the best economic years are ahead of the United States, but public and private decision-makers need to take a variety of actions to help us get there.”
“By 2040, our definitions of ‘work’ and ‘job’ may be very different,” said Cutter. “Changes in the economy could force average workers to become entrepreneurs, making use of new technologies and services to acquire skills and opportunities while taking on more responsibility for their own health care and retirement. But if they can manage the transition, they will be able to find more work even as more jobs become automated.”
The authors argue that these developments would entail a radical transformation of the U.S. economic system based on information technology, akin to the new system that emerged due to steam, electricity and internal combustion in the 19th and early 20th centuries. “Change and disruption almost inevitably accompany the emergence of a new economic and business system,” they write. “Real economic growth—the movement of the economic frontier—does not occur as a steady, incremental, almost-inertial aspect of an unchanging system.”
While The Good Economy offers an optimistic portrait of how the economy could develop in the coming decades, the authors acknowledge that even this scenario would entail more risk and instability for workers, and that there are potential pitfalls along the way to realizing this vision. Unless we comprehensively rewrite the rules for business, labor rights, government spending and other issues to account for this economic transformation, the authors warn, it could result in a new feudal system in which an extremely small percentage of Americans possess nearly all the wealth and power, and the rest depend on them for subsistence.
The Good Economy builds on ideas introduced in The New Entrepreneurial Growth Agenda, a major report released by the Kauffman Foundation in February, which also features contributions from Stangler and Cutter, and on a series of multidisciplinary convenings held by the Next American Economy Project over the last two years.
Mark Marich is the executive vice president of Global Entrepreneurship Week. Since 1998, Marich has provided communications leadership on several national initiatives and more than 100 public forums covering a wide range of policy issues, including: entrepreneurial growth and economic development, health care, renewable energy, telecommunications, regulatory reform and workforce development.
He is a regular contributor to the Ewing Marion Kauffman Foundation’s blogs, which are syndicated by Missouri Business Alert.
Find Marich on Twitter: @markmarich.