The Invisible Web

Eric Schmidt, the CEO of Google, wrote an op-ed piece on February 9th for the Washington Post where he put forth a number of ideas for getting innovation flowing again in the United States.  One of his ideas is for more H-1B visas so that foreign technical people who have been educated in the United States can stay here to work after finishing college.  Another is to extend R&D tax credits, and another is for leaders to develop a higher tolerance for failure.  Schmidt believes that we need to be willing to undertake riskier projects. If we never fail, we aren't taking enough risks. His final paragraph reads:

We have everything else we need to climb out of the current morass. Right now, somewhere in the United States, someone is working at a kitchen table, in a dorm room or a garage, developing an idea that could not only create a new industry but could also just possibly change the world. If we provide the right environment, she'll do the rest.

I agree with much of what Schmidt says, but is a lack of innovation the Big Problem?  If we just roll up our sleeves and become more innovative, will everything be all right again?  Don't get me wrong.  I am totally in favor of innovation, the more the better.  But is a lack of innovation the Big Problem that drives unemployment and the other ills we are experiencing today?  If we had ten or a hundred more Googles, would we be okay?  My short answer is "No".

So what is the Big Problem?  One thing I am certain about is that the issue of innovation and job creation is very complicated and no single (or simple) fix is likely to change the outcome by itself.  It shares this characteristic with other big problems like the healthcare crisis, climate change, energy dependency, jobs, the banking mess, to name a few.  As a nation, we prospered in the past because we had: 1) loads of natural resources, 2) the ability to attract immigrants and encourage their creativity, 3) a rising standard of living that allowed people to buy products made in our own factories (which were cheaper than imports) and because 4) international transportation costs were high and locally made products were better products anyway.

We have reached a point in our history where the old drivers of growth and prosperity just don't have the same impact that they use to have.  For the most part, I don't think this is a situation that exists because we have become lazy or self-satisfied.  The problems are a direct result of our own success in creating products that the world has wanted to buy.  Those products and technologies helped other countries come up the learning curve and let them compete more effectively in an increasingly global market.  The rest of the world is very aware of the high standard of living that we enjoy (in better economic times) and, not surprisingly, would like to share in that same prosperity.  As Tom Friedman, the New York Times columnist, never tires of pointing out, the world is getting flatter by the day.

The problem for which we need a new solution is how to sustain a high standard of living while coping with an ever more complex and interconnected world.  Over two hundred years ago, the Scottish philosopher and economist, Adam Smith, postulated the idea of the Invisible Hand which says in effect, if each of us acts in our own self-interest, we will collectively be better off as if guided by an Invisible Hand.  It worked when the world was rapidly moving from a pre-industrialized society to becoming a highly industrialized society.  Maybe if Adam Smith were alive today he would help postulate another idea that would fit the post-industrial world into which most of the First World is rapidly evolving.

We need lots of new approaches.  And in that way maybe a lack of innovation is, in the end, actually the Big Problem after all.  But this is not innovation in the usual sense of how to foster hi-tech businesses or how to invest more in basic R&D.  It is the innovation of rethinking how we can sustain the life we want on an ever-smaller, more interconnected, and fragile planet.  This will require us to do more than act in our own self-interest.  It will take  coordination across scientific disciplines, governmental bodies, business networks, and a host of other actors.  Maybe Smith would have called it the Invisible Web.

We have such an Invisible Web. It's called the internet or the World Wide Web and it is how you are reading this blog.  It allows us to connect with each other in ways that Smith could never have dreamed possible.  But the Web is just the beginning.  While we can finally talk to each other more easily, we must match that ability with the ability to work together to solve problems.  We need the social and collaborative skills that come naturally to those who have been raised in a wired world.  I know that we must stay open to change, the very thing that is the most difficult for many of us to accommodate.  Change will come, regardless.  I would rather it was a change for the better. It can be if we learn how to live and work together.