The American Dream, Innovation and the Knowledge Economy

With few exceptions - support for research and education, diversity and immigration policy - my blog does not touch on political subjects.  But it is hard not to be thinking about politics, given our upcoming US presidential election, and in particular, the recently concluded Democratic and Republican conventions.

Beyond the relatively straightforward question of how I am going to vote, I have been struggling with how best to put into words my feelings about this coming election.  What are the key concerns of individuals, families and communities?  What are some of most important problems facing our nation as a whole?

There is clearly no single answer to these questions.  The conflicts in Iraq and Afghanistan, the war on terror, healthcare reform, energy, immigration and the financial crisis are clearly among the most important issues facing the next president.  But I wonder if, in the end, the most critical questions people are asking themselves around the country are less grand in scope but much more relevant to their daily lives.  How are our families generally doing financially?  Where will the good jobs come from that are needed to preserve and hopefully increase our standard of living?  How about our children?  Are they getting the proper education so they, too, can aspire to a decent, well paying job and a good standard of living?

These are the kinds of questions that bring to mind an old fashioned phrase from the 1930s,  “The American Dream,” even as we transition from the industrial to the knowledge economy and the 21st century.

In its essence, The American Dream refers to the opportunity for achieving greater material prosperity and a decent standard of living based on one’s ability and work ethic, as well as the hope that one’s children will receive a good education so they, too, can aspire to a good job and standard of living.  The term was coined by historian James Truslow Adams, when he wrote:

“The American Dream is that dream of a land in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement.  It is a difficult dream for the European upper classes to interpret adequately, and too many of us ourselves have grown weary and mistrustful of it.  It is not a dream of motor cars and high wages merely, but a dream of social order in which each man and each woman shall be able to attain to the fullest stature of which they are innately capable, and be recognized by others for what they are, regardless of the fortuitous circumstances of birth or position."

These words and the feelings they embodied captured the hopes and aspirations of people across the US, as they were struggling in the midst of the Great Depression.  But they continued to resonate beyond the 1930s, not just in the US, but around the world, because they reflected the most basic of human aspirations – a decent life and standard of living for oneself and one’s children.  The association of The American Dream with the US went a long way toward establishing the positive image that our country enjoyed around the world for decades, as the land of life, liberty and the pursuit of happiness.

What’s the current state of the American Dream?  I believe the answer is very mixed, perhaps more than it has been in a long time.  Not surprisingly, given the knowledge economy in which we increasingly find ourselves, it primarily depends on one’s skills, education and consequent ability to get a good job.  Let me elaborate.         

A recurrent message in my blog has been the critical importance of human capital - that is, the stock of skills and knowledge that enables individuals to produce economic value.  Talented, well educated individuals are more needed than ever in our global, highly competitive, knowledge economy.  Countries and regions endowed with that kind of human capital will be in a much better position to cope with, adjust to and thrive in our fast-changing, emergent world. 

Education is good for the nation, but it is particularly critical for individuals and families.  Every single study shows that per capita and household incomes go up significantly with education.  In fact, a major reason for the income inequalities over the last thirty years has been the demand - and corresponding higher wages - for individuals with high skills.

Furthermore, there is even growing evidence of a so called divorce divide.  The divorce rate appears to be measurably lower for households with college degrees than for those without.  Such a divorce divide could further add to the income inequality of future generations, as the children of higher educated, higher income families will enjoy even more opportunities, because of the additional support with which their families can provide them.

These major economic development issues are the primary reasons why innovation has become so prominent in the US and just about every other country in the world. 

In December of 2004, the National Innovation Initiative issued its final report, Innovate America.  It succinctly concluded, “Innovation will be the single most important factor determining America’s success through the 21st century,” because “the legacy America bequeaths to its children will depend on the creativity and commitment of our nation to lead a new era of prosperity at home and abroad.”  It further stated that “America’s challenge is to unleash its innovation capacity to drive productivity, standard of living and leadership in global markets.”

The report went on to make recommendations, which it organized into three broad categories:  Talent – the human dimension of innovation, including knowledge creation, education, training and workforce support; Investment - the financial dimension of innovation, including R&D investment, support for risk-taking and entrepreneurship and encouragement of long-term innovation strategies; and Infrastructure, the physical and policy structures that support innovators, including networks for information, transportation, healthcare and energy.

As I was watching the two conventions, and in particular the debates on social issues and the culture wars that the election seems to be degenerating into, my mind kept turning back to that old-fashioned concept of the American Dream. 

We have succeeded, beyond our wildest imaginations, in convincing nations around the world to turn to their own version of the American Dream.  It would be ironic, if not downright tragic, if at this historical juncture we spend our times in debates of limited relevance to the future of the nation, instead of reaffirming the American Dream through a renewed commitment to innovation and everything that it implies for jobs, education and our standard of living.

Comments

[Chris Ward]

You might want to look at Tapping America's Potential http://tap2015.org/ , where a consortium of US corporations are expressing concern about the state of the American dream, and pondering what to do about it.

You might also be interested in IBIBLIO http://ibiblio.org/ , the self-proclaimed Center for the Public Domain, at University of North Carolina; they chronicle everything from Rosa Parkes and her episode on the bus, to today; and they look as if they're trying to do something practical about it.

We have much the same problems in the UK. It's debatable whether we understand and address them as well as some parts of the USA are doing. At least the US sees the problem.

Customers and Employees. That's a fairly narrow, but accurate, view of who a business can provide for. But it neglects "The next generation" and "The wider world" at its peril.

[mukesh]

At the recent GDC, Paul Barnett was tapped to give a presentation/lecture on Warhammer, of which he was pretty vocally opposed to doing in the first place. You might recall from last year that it isn't his favorite place in the world. He then spent his time railing on flawed game design and designers in question. It was, to put a fine point on it, bizarre. Paul even had a PR handler because, and I quote him, "EA can get quite jumpy when I am out and about giving talks. They find my … candor... a little hard to take." He followed that up with a YouTube video trying to explain where things went... askew at the conference.
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I still think Warhammer is way better then WoW but the numbers do not seem to show it. I wonder if it is because Warhammer does not seem to be advertised as much as Warcraft.
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mukesh112
Warhammer Gold - Warhammer Gold