Money Matters: Innovation is key element in the nation's future economy

By Joe Nathanson The Daily Record Newswire In his State of the Union address, President Barack Obama urged Americans to once again think on a grand scale and resolve to accomplish big things in order to "win the future." "We know what it takes to compete for the jobs and industries of our time," he said. "We need to out-innovate, out-educate, and out-build the rest of the world. We have to make America the best place on Earth to do business. We need to take responsibility for our deficit, and reform our government. That's how our people will prosper. That's how we'll win the future." And the president went on to describe the next steps needed to translate these lofty aspirations into the tangible new products, the innovative processes and the entrepreneurial business practices that will bring real jobs to offices and research laboratories, to factories and shops in places like Baltimore and communities across the country. The president's ideas on this front were foreshadowed by a major conference held in Chicago one month earlier -- the Global Metro Summit. This summit was sponsored by the Metropolitan Policy Program at the Brookings Institution, in partnership with the London School of Economics, among others, and TIME magazine as media sponsor. Key participants included the mayors of Chicago, Philadelphia and Los Angeles, former Housing and Urban Development Secretary Henry Cisneros, several urbanologists from the London School of Economics and, from Baltimore, Johns Hopkins University President Ronald Daniels. "Global Metro Summit 2010: Delivering the Next Economy," was a forum that unveiled a vision for America's post-recession economy that emphasizes export-oriented industries and low-carbon technologies. As head of the Brookings' Metropolitan Policy Program, Bruce Katz, a national force in advocating for the role of metro regions in economic development policy, presented his particular take on "Delivering the Next Economy." Starting with innovation and a new commitment to actually producing things in America, this next economy relies on export industries to satisfy growing demand in emerging markets around the globe. As in the president's remarks, innovation is a key element of this future economy. The industry sectors that can be expected to succeed will embrace low-carbon technologies. And, as the home of our major research universities and many private research laboratories, our major metropolitan regions will be the locus of much of this innovation. "We still manufacture a range of advanced goods that the rest of the world wants, including aircraft, spacecraft, electrical machinery, precision surgical instruments and high quality pharmaceutical products," Katz says. To realize the opportunities envisioned in this next economy will certainly require overcoming some severe constraints. Mincing no words, Katz goes on to assert that, "The movement of freight in the United States is compromised, undermined by transport networks that are clogged and congested and an infrastructure that is third rate." Not only are physical infrastructure systems in need of new investment, but human capital retooling is also required. As Daniels said, there continues to be a mismatch between the skills required by the industries of the future and the skill sets of many of those entering the labor force. It's an observation that's been made before in Baltimore and other metropolitan regions. But, it's a situation still begging for an effective response. New approaches in education, research and development will have to be a part of the next economy. And, this too will require new investment. Some on the political right have begun to treat "investment" as the latest dirty word. This is certainly short-sighted thinking, forgetting the catalytic role that public investment has played throughout the nation's history in spurring private enterprise. Think of the federal government's role in early canal building and the development of the transcontinental railroad and, in our own times, the development of the interstate highway system and our air traffic control system. As President Obama reminded us in his recent address to the nation, "Our free enterprise system is what drives innovation. But because it's not always profitable for companies to invest in basic research, throughout history our government has provided cutting-edge scientists and inventors with the support that they need. That's what planted the seeds for the Internet. That's what helped make possible things like computer chips and GPS." Even in this era of government budget cutting, it is critical to ensure that strategic investments will be made in order to "win the future." Joe Nathanson heads Urban Information Associates Inc., a Baltimore-based economic and community development consulting firm. He can be contacted at urbaninfo@comcast.net. Published: Thu, Feb 10, 2011