In the 21st century, some writers are saying essentially the same thing. In The Rise and Fall of American Growth, Robert Gordon of Northwestern University argues all the developments in information technology will not have nearly the impact on the economy and growth as did the developments of 100 years ago, like cars and electric motors. Hence, stagnation.
In their book, The Innovation Illusion, Fredrik Erixon and Bjorn Weigel claim the engine of economic growth is stalling. Growth comes from hungry new firms with exciting new ideas. The road is cleared for them by the death of older, tired firms whose methods and products have become out of date.
Frixon and Weigel say this healthy growth process has been bogged down as huge corporations like Google and Microsoft dominate whole sectors. Older and larger firms predominate in both Europe and America. The number and proportion of startups has fallen. Once more, stagnation.
Supporting the gloom and doom are productivity statistics that show the increase in the amount a worker can produce has been slowing. And if you are not yet depressed, all the innovations that have recently taken place, such as drones, 3D printing and driverless vehicles, will leave us all jobless.
Just as Duell was very wrong when he thought that everything had been invented by 1900, so is the pessimism of the current gloom and doomers. Seeing future developments and their implications is difficult. To take just one example, for a long time, people have been able to imagine space and space travel, but no one foresaw satellites, GPS and all the related effects here on Earth. So, too will the future surprise us.
What we do need to ensure that our economy is not bogged down in old firms and old ideas are entrepreneurs: bright, young people with ambition, fire in the belly and a taste for the new and innovative. Unfortunately, our education system was not designed to produce this kind of person.
From the beginning of time, most people learned what they needed to know from their parents and family. There was little change between generations. Then came the industrial revolution in the 1700s, in which agricultural work gave way to factory jobs.
These new factory workers had to learn how to be in specific places surrounded by people they might not know. They had to stop and start work at times not of their own choosing. They had to do what they were told to do by a person who had recently been a stranger. And they might need more literacy and numeracy than before.
Now the world of work has gone beyond the old factory jobs and often beyond jobs themselves to less structured, more creative entrepreneurial activity. Unfortunately, our educational system still has too much of the old factory model. Graduates emerge looking for jobs – that is, someone to tell them where to go, what to do and when to do it.
What we need are more people who ask themselves entrepreneurial questions. What good or service can I supply that people are willing and able to pay for? How can I do something new and different that has not been done before? Where is there a need even if it is only for a marginal improvement?
The Canada West Foundation has just released Start ‘Em up: Incubating Nextgen Innovators. These nextgen innovaors are the people who can and will develop and implement new technologies and improve our productivity and standard of living. We are starting to develop such entrepreneurs in some parts of our post-secondary system, especially in business schools.
Now we need to move our elementary and high school systems away from the pre-factory classroom model into structures that encourage independence, entrepreneurship, creativity and the competitiveness and hard work that the 21st century requires.
New automated learning technologies will help. So will more entrepreneurial approaches by teachers. Once we do this, this next generation of entrepreneurs will lead us into a bright, prosperous future that we cannot yet imagine.
Troy Media columnist Roslyn Kunin is a consulting economist and speaker.