Driverless cars, robot factories, drones and 3-D printing; the U.S. is rapidly transforming from an industrial to a digital economy, changing the nature of work and creating uncertainty for workers.
At the Jack Kemp Foundation, we understand that the key to harnessing change and building a more prosperous future, as participants noted at a recent Kemp Forum on Opportunity in the New Digital Economy, will be government policies that don’t kill the golden goose and empower individuals and companies to adapt quickly to the changing landscape.
The Internet Association’s Michael Beckerman addressed the transformational nature of today’s technology and noted the extraordinary opportunities for small business to use the internet to sell in the global marketplace.
He cited the need to avoid policies that would slow the growth of technology and called for better science, technology, engineering and math (STEM) education at all levels of school.
Walmart’s Dan Bryant noted that our country has been through epochal change in the past, transitioning to new technologies and ways of working. Learning from the past will be crucial to charting a successful path forward. He said that in periods of economic disruption and social change, people need strong social bonds to help them adapt.
Bret Swanson of Entropy Economics and the American Enterprise Institute noted that productivity in the digital economy has skyrocketed but that companies in the broader economy, which represent 70 percent of the total, haven’t seen much productivity or wage growth.
He suggested that this is changing fast, and as the brick-and-mortar economy incorporates new technology, we should expect more broad-based growth with rising wages for workers.
He also spoke about the need to transform health-care policy to balance between privacy and productivity and about the vital need for tax reform to help entrepreneurs get greater access to capital.
Michael Mandel of the Progressive Policy Institute noted that faster economic growth “with an expanding winners circle” should be good news for both political parties. E-commerce is revolutionizing retail, Mandel said, which will mean higher wages, better services and growth in previously depressed areas of the country.
He predicted that the transformation of logistics in America will contribute to a manufacturing boom and a brighter future for workers.
Sen. Ben SasseBen SasseThe Hill's Morning Report - Presented by ExxonMobil - House to vote on Biden social spending bill after McCarthy delay CBO releases cost estimate of Biden plan Real conservatives must make a choice MORE (R-Neb.) noted that human society has progressed through three economic eras — hunter-gatherer, agrarian and industrial — and is now rapidly moving into a fourth, the information age. Chief among our needs at times of such disruption is a virtuous citizenry, and that is as evident today as ever.
The nature of industrial jobs — one large employer, often for decades, providing good wages with defined-benefit pension and health plans — is a thing of the past. So too are the sense of community, usefulness and personal identity that such jobs often fostered. So we have to adapt and we should do so intentionally.
In the future, people are far more likely to change jobs frequently. A common reason people go without health insurance is due to transitions from one job to another. So, Sen. Sasse emphasized the need for government to incentivize portable health insurance for catastrophic events and suggested thoughtful reforms to our education system that take account of changing work dynamics.
Sasse also indicated a major problem in society is loneliness — as people work more independently and congregate through social media, they have fewer intimate friends and confidants. He suggested the need to evolve new civic institutions to help today’s workers rebuild social capital in their communities.
Secretary of Labor Alex AcostaAlex Alexander AcostaOn The Money: Trump slams relief bill, calls on Congress to increase stimulus money | Biden faces new critical deadlines after relief package | Labor rule allows restaurants to require broader tip pooling Labor rule allows restaurants to require broader tip pooling Federal litigator files complaint alleging Labor secretary abused his authority MORE echoed these themes and emphasized the need for greater “nimbleness” to help workers adapt to the new economy. He noted that while individuals and private companies are often quite nimble, government is typically inflexible and slow.
For that reason, government should focus on setting frameworks, i.e., enabling lifelong learning tied to lifelong earning, while breaking up stultified institutional arrangements that exist today in education.
He noted that most people weren’t well served studying for college entrance exams rather than developing practical life skills, and he said the gap between available jobs and worker training is a problem.
Acosta also noted that there is a strong resistance to change and wondered whether the U.S. would adapt to the new economy. He suggested the U.S. could be overtaken by other economies if it didn’t continue to evolve and maintain its competitive edge.
As the U.S. contemplates this new digital economy and the policies it will pursue, I’m reminded of President Reagan’s summary: “Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”
If government doesn’t overregulate the technology sector, successfully reforms the tax code, makes health care more personal and portable and helps people get practical skills when they’re young and throughout their working lives, the future will be very bright for all Americans.
James Kemp is president of the Jack Kemp Foundation, a 501(c)(3) charitable organization. It's mission statement is to "develop, engage and recognize exceptional leaders who champion the American Idea."