On Tuesday, October 11, the Center for Economic and Policy Research , the Communications Workers of America and the Kalmanovitz Initiative sponsored a conference on competitiveness, job creation, inequality and the role of the public sector in innovation. This conference was one of several whose purpose is to inform the Innovation Advisory Board as it advises the Department of Commerce on its comprehensive study of the economic competitiveness and innovation capacity of the U.S.
Larry Cohen, President of the Communications Workers of America and a member of the Advisory Board, began the discussion. He pointed out that over the past 30 years, large gains in productivity have not been matched with increases in wages. Mr. Cohen noted that this is not just significant as human rights issue, but that it also has implications for our competitiveness and ability to innovate. Abby Cohen, partner and chief U.S. investment strategist at Goldman Sachs and also a member of the Advisory Board, noted that the decline in household income pre-dated the financial sector crisis, which both unmasked and exacerbated the decline. Ms. Cohen also expressed concern about the plateau in educational attainment in the U.S. and its implications for our ability to innovate vis-a-vis other nations. Jason Furman, Principal Deputy Director of the National Economic Council, touted the American Jobs Act, discussed several of the factors fueling the increase in income inequality, and identified policy prescriptions to address inequality.
Ed Montgomery, Dean of the Georgetown Public Policy Institute, pointed out that our GDP has recovered to its pre-crisis level, but with high unemployment. Richard Freeman, Herbert Ascherman Professor of Economics at Harvard University, reminded the audience that we are very much in the Third World in terms of income inequality. He also argued that innovation will not lessen income inequality. Margaret Blair, a professor at Vanderbilt University Law School, spoke about the dangers of excessive leverage in the shadow banking system. She also questioned the growth of the financial industry’s share of GDP given that innovations outside of the financial sector in the past 30 years have decreased its communications and computational costs.
Dean Baker, Executive Director of the Center for Economic and Policy Research, moderated the last panel. On that panel, Matthew Keller, Assistant Professor of Sociology at Southern Methodist University, argued that the government already plays an important role in innovation. J. Erik Garr of PricewaterhouseCoopers spoke about the broadband industry and its potential to create jobs. He also addressed the uneven access to broadband. Kate Gordon of the Center for American Progress addressed clean energy and its importance to innovation. Given that progress in this area is unlikely at the federal level, she pointed to the potential for state- and local-level action in the short term. Mark Doms of the Department of Commerce, wrapped up the conference and spoke about government investment in research and development.
For more information on the conference, and to see a recording of panelists remarks, click here.