I touched on this idea in the last post discussing the need to have a functional government. I am concerned that the United States is in danger of losing it’s competitive edge. A recent Washington Post article details how Chinese scientists are leading development in quantum technology (https://www.washingtonpost.com/business/2019/08/18/quantum-revolution-is-coming-chinese-scientists-are-forefront/?tid). The United States economy has been fueled by it’s edge in innovation for decades. The Chinese government is increasing it’s funding of R&D and employing a number of perks to entice Chinese scientists to return home. Other countries have for years been great at reverse engineering but the original innovation often was developed in the U.S. That might not be the case for much longer.
China isn’t just interested in quantum technologies but also Artificial Intelligence (AI), battery technology and other emerging technologies that will define our world in the coming decades. China maintains a strong control over rare earth elements that are used in many of these emerging technologies in addition to today’s computers, smartphones, solar panels, etc. The Chinese are asserting themselves into Arctic nation meetings and claim to be an Arctic nation when they are not. Why would they do this? Because there are numerous valuable minerals and other resources that will be accessible with melting ice along with the opening of valuable trade routes.
In addition, the rate of business creation has fallen over the few decades. This is problematic because it is most often smaller startups that facilitate creative destruction in economic terms through innovation and innovative products. If there is not a healthy level of creative destruction and new innovations in the economy it become worrisome that the economy might be stagnant. High-growth startups, sometimes referred to as gazelles, are responsible for a large portion of job creation and industry job growth (https://www.kauffman.org/what-we-do/resources/entrepreneurship-policy-digest/the-economic-impact-of-high-growth-startups).
And what is the U.S. doing to make sure we maintain our innovation edge? That is a good question. Are we funding education or STEAM programs at an adequate level? No. Are we funding basic research at a historic level where many of the innovations have their beginnings? No. Are we enticing the best and brightest to work in the U.S.? No. In fact, just the opposite. We are denying visas, making it harder to get visas, or just plain scaring people away with hateful rhetoric. Are we creating healthy and vibrant ecosystems for startups? In some areas yes, others probably, but there are other where there is much room for improvement. The lack of universal or at least portable healthcare, adequate and affordable child and elder care, and diverse venture and seed capital funding are all obstacles. These are just some of the areas where we could focus to maintain and possibly increase our innovation edge. Without proper attention we might just be fiddling and fooling ourselves that the U.S. will always remain most dominant economy. Complacency is never rewarded.