How the United States is reinventing itself yet again

January 2

The sun is rising, not setting on the United States. (Karen Bleier/AFP/Getty Images)

We have moved from the Great Recession to the Great Malaise. Despite massive government stimulus, the world’s largest and most advanced economy continues to limp sideways. Unemployment remains stubbornly high. Growth remains slow and prospects for employment growth remain bleak. Wages continue to stagnate. Recent college graduates and young professionals may well be the first generation to live a life inferior to those of their parents, conventional wisdom holds. The United States has entered a period of slow decline, much like the sun finally setting on the British Empire in the 20th century.

And that’s not all the pessimists say. They also argue that while the United States continues to dominate in the emergence of new technology powerhouses, the biggest IPO of the decade belongs to Facebook, a social network that is more media company than technology innovator. Stifling red tape and regulations has driven costs of testing new medicines and medical devices so high that many drug companies have shifted testing regimes and market focus to Europe and Asia. Despite mounting evidence that skilled immigrant entrepreneurs have delivered a wildly disproportionate share of the country’s technology innovation and technology job growth, the powers that be in Washington, D.C. have, even with broad bipartisan support, not mustered up the votes to reform the country’s regressive and punitive immigration policies. Add to all of this an aging populace requiring more and more support from younger workers, ballooning health costs and a tax structure that beggars the young to underwrite benefits for the aged, and the United States looks more and more like a historical footnote than a superpower.

Peel back the layers of the onion, and the reality appears quite different. In fact, the United States stands on the cusp of a dramatic revival and rejuvenation, propelled by an amazing wave of technological innovation. A slew of breakthroughs will deliver the enormous productivity gains and the societal dramatic cost savings needed to sustain economic growth and prosperity. These breakthroughs, mostly digital in nature, will complete the shift begun by the Internet away to a new era where the precepts of Moore’s Law can be applied to virtually any field.

Computer-assisted design and fabrication will reshape manufacturing forever. These technologies will slash waste and replace nearly all conventional manufacturing with more environmentally friendly and cost-effective additive manufacturing run with robots and computer programs. Complex systems resistant to modeling will succumb to advances in big data that allow mankind to finally make sense and improve upon the most intricate multi-faceted interactions. Where big data fails, ubiquitous crowd sourcing will harness untapped brain cycles to train systems and solve problems, one small activity at a time — on a global scale.

In this massively digital world, A/B testing or parallelization of R&D processes will become commonplace for just about everything from airline design simulations to online advertising to artificial organ construction. This will, in turn, allow for far more rigorous testing of products and processes. Dirt-cheap digital delivery platforms for educational content and improvements in the understanding of the way the brain learns will yield a sea change in how we gain knowledge. This will result in more open, flexible educational systems and structures — and a smarter, more learned, constantly learning populace. While the world will benefit from these changes, the United States is uniquely positioned to lead this sea change.


The cost per watt of solar and wind energy keeps falling. (Reed Saxon/Associated Press)

In the field of energy, even as Silicon Valley has turned cold on green startups, the cost per watt of solar and wind energy continues to fall. GTM research computes that solar has already by dropped by 97.2 percent over a 35-year period. Renewables have undercut old carbon-based power generation in swathes of the country — such as Hawaii and California — where electricity is costly. Less reliable has been progress in algal biofuels but progress in biotech drug development techniques and complex drug manufacturing will likely provide equivalent benefits to manufacturing drop-in carbon fuels based on algae fed with water and ambient carbon dioxide.

In the interim, the enhanced availability of natural gas extracted domestically via new fracking techniques has sent energy costs plummeting and has resulted in the usurpation of old-line coal-fired power plants for gas-fired generation facilities. In turn, this has driven a new wave of construction of high-efficiency steel and chemical plants along the Gulf Coast of the United States, close to shipping lanes and benefitting from cheap natural gas or electricity. Energy efficiency technologies, such as LED light bulbs, improved heating and cooling systems, and Internet enabled hardware like the Nest thermostat, can save enough money to offset the initial cost – often within a year or less.

The implications of these shifts are tremendous. Manufacturing in this country will rebound. The economies of scale that benefitted cheap labor and cheap locations overseas will be stood on their head as the percentage of cost of manufacturing products consumed by labor continues to drop due to automation and mechanization. People will learn more, faster, more easily and with far more enjoyment. Healthcare costs will fall dramatically as the old doctor’s office centric and one-size-fits-many treatment approaches give way to personalized medicine. Connected hardware – cars, thermostats, cell phones, pacemakers, appliances, heating and cooling systems – will supply an endless stream of useful data that will allow us to optimize for efficiency and live more comfortable lives.

Because the United States continues to lead the world in its ability to adapt to, incorporate and develop new systems and new technologies, we are uniquely poised to reap a disproportionate share of the benefits of these shifts. Even better, these advances will remedy the very weaknesses that have straightjacketed the U.S. economy and confined economic growth to the upper classes while causing income and life expectancy to stagnate for the lower 70 percent of the country’s population over the past three decades.

The Internet is in the very early stages of a driving an exponential economic growth curve akin to what electricity earlier wrought during the later half of the Industrial Revolution. Let us remember that the Internet only achieved semi-mass adoption a decade ago. (We say semi because, unlike electricity, not everyone has access to the same quality of Internet and that is, actually, an area where the United States lags the rest of the developed world).

We have exponentially increased our ability to access knowledge. Search engines we take for granted deliver access to knowledge that would have been unimaginable two decades ago. Social networks have increased our ability to reach out to millions of people to request information and advice. Everything from real-time stock prices to reviews of consumer electronics to food safety violations for restaurants is now online and available virtually anywhere on Earth to anyone with a mobile device. As Peter Diamandis writes, “A Masai warrior on a cellphone in the middle of Kenya has better access to knowledge than President Reagan did 25 years ago.”

Wadhwa and Salkever are authoring a book on how technology will transform our lives, which is expected to be published in Fall 2014. Wadhwa is a fellow at the Rock Center for Corporate Governance at Stanford University, director of research at the Center for Entrepreneurship and Research Commercialization at Duke’s engineering school and distinguished scholar at Singularity and Emory universities. His past appointments include Harvard Law School and University of California Berkeley. Salkever is a writer focused on cloud computing and new technologies. He was formerly the technology editor at BusinessWeek.com.

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