Fed chairman: 'Humanity's capacity to innovate' has never been greater

Federal Reserve Chairman Ben Bernanke touted innovation and information technology as drivers of economic change in a Saturday commencement speech at Bard College in Massachusetts.

“Humanity's capacity to innovate and the incentives to innovate are greater today than at any other time in history,” he said.

Bernanke brushed aside projections by some economists that the technology boom would not bring as significant quality of life improvements compared to the first and second industrial revolutions.

Bernanke said firms are just beginning to scratch the surface of potentially major advancements in biotechnology, medical treatment, communications and clean energy.

“I'm sure that I can't imagine all of the possibilities, but historians of science have commented on our collective tendency to overestimate the short-term effects of new technologies while underestimating their longer-term potential,” Bernanke said.

He also noted improved communications technology increased the ability to innovate by expediting approval of scientific journals, enhancing collaboration and enabling greater access to information.

Bernanke said those developments make it easier for change to occur more rapidly.

“We live on a planet that is becoming richer and more populous, and in which not only the most advanced economies but also large emerging market nations like China and India increasingly see their economic futures as tied to technological innovation,” Bernanke said.