Recessions tend to lead people towards reordering their priorities and concentrating on what works. Thus, the fiscal and economic crisis of 2008–2010 has raised serious questions about the very purpose and direction of American capitalism from the early 1990s to the present. Consumption, once thought of as the engine of endless growth and revival, is now viewed as one of the sources of the crisis. Decades of liquidity and easy leverage have left companies, households, and even the federal government mired in debt. While, in late 2006, President George W. Bush asked the American people to "go shopping more" to beef up the slowing economy, it is now clear that the country cannot buy its way into renewed affluence. Achieving growth by sending the average American out to purchase more stuff has proved untenable.
The United States does have, however, a powerful alternative to debt-fueled consumption—namely, technological innovation and entrepreneurship. The resolution of some of the country's biggest challenges—fiscal crisis, energy dependence, and affordable health care—lies in innovation. As President Obama stated before an audience of America's most prominent scientists and technologists at the National Academy of Sciences in April 2009, the current crisis demands a national movement that would inspire young people "to be makers, not just consumers of things." To achieve this end, Americans will have to break from their recent past and mastermind innovations that will not only spur the growth of industries and jobs but also address the consequences of climate change and reduce America's dependence on foreign oil.
The burning question is, after several decades of frenetic spending, can the United States find salvation through innovation? At first glance, the outlook is not good. Since 2004, observers in Washington and Silicon Valley have warned of the erosion of the United States' technological lead. They attribute this downhill slide to the rise of Asia and to a series of self-inflicted wounds to the American innovation ecosystem: flat spending on basic research, declining enrollment in science and engineering courses, irrational immigration policies, cheap debt, irresponsible spending, and a lack of focus and seriousness. "Every one of the early warning signals is trending downward," former Intel chairman Craig Barrett told U.S. News and World Report in 2006. "We're all fat, dumb, and happy, which is one reason why this is so insidious."
Copyright © 2011 by Adam Segal. All rights reserved.