Competing in a Global Economy

“While competing in this global economy requires new thinking, many cities continue to pursue zero-sum economic development strategies that subsidize stadia and steal businesses rather than incent innovation,” write Bruce Katz and Jeremy Nowak in The New Localism. Our world’s globalized economy scares a lot of people. Add to globalization new technological innovations and the automation of a lot of jobs, and we find threatened people, threatened cities, and threatened industries. The proper response to such threats is adaptation and change, but a more common human reaction is fearful recalcitrance. Rather than go through reinvention, rather than develope new skills, and rather than embrace new changes, cities, states, countries, and the people within them double down on the familiar and the known, using policy to entrench themselves in the familiar jobs of yesterday.

 

Katz and Nowak continue, “These strategies are rarely aligned with smart education and workforce strategies that give workers the technical skills they need to succeed in growing occupations. And reinvestment in neighborhoods, downtowns, and water-fronts still has a long way to go to make up for decades of disinvestment, depopulation, and decentralization.” 

 

Stealing jobs, offering tax incentives to get companies/sports teams to move, and passing policy which prevents companies from automating away common jobs is not a strategy built for success in a globalized world of changing technology. To be competitive in a world where companies can move easily, where ideas can take root anyplace, and where jobs and technology are changing the way we work, cities and governments need to find new ways to build human capital and new ways to get innovative ideas into the economy quickly. Approaching the world and the economy as a zero-sum competition prevents innovation and encourages the short term thinking that leads to the poor strategies mentioned above.

 

The only way to truly adapt to the changing globalized world is to innovate. Protectionism leads to eventual disruption and greater anger on the part of the people whose industry and jobs are being disrupted. Those who lose out to automation without any training or skill development to help them adapt are understandably frustrated, but the proper response is not to dig our heels into the dirt to pull back on innovation and change. The proper response is to embrace change and help people innovate and learn alongside new technology, new jobs/industries, and new institutions.

Technological Change

Colin Wright reflects on his place in the world in his book Come Back Frayed, which is about his time living in the Philippines at the requests of his fans and readers. During his time outside the United States, he commented on the technology he used to document his experiences, the changes he has seen in information technology over his life time, and the uneven distribution of technology between places like the United States and the Philippines. Regarding technical change, Wright writes, “The internet revolution happened when a technology was made common, cheap, and widely available to people of the world.”

 

Wright focuses on the last part of his quote and highlights the fact that not everyone is operating with equal tools, “Which brings me back to the smartphone,” continued Wright, “Science fiction author William Gibson famously said, “The future is here already, it’s just not evenly distributed.” So what happens when it is?”

 

I really enjoy the way that Wright introduces technology, technological change, society, and social change. In the United States we tend to be so focused on our technology that we forget how much of the world goes without the basic necessities we take for granted. Much has been written and many have made better comments than I can on the inequalities that exist between countries, but Wright brings up a point not often considered. When the rest of the world is in possession of game changing technology, what will we think of the technology? How will societies react? What will it mean for political regimes in rich  countries? The United States has seen debates about how information is handled on public versus private email servers over the last two years, and currently has a president who often has a questionable use of direct social media platforms. How could these same technologies impact less developed and less wealthy countries?

 

Wright’s thoughts aline with a passage I recently read in a public administration class at the University of Nevada. Joseph Nye Jr. in 2002 wrote for the Brookings Institute a piece titled Information Technology and Democratic Governance and he highlighted the role of technology as an agent of social and political change. Nye wrote that social and political change often lag behind the technological change, with political change falling in behind social changes. Combining his thoughts with Wright’s, we get a sense that the large changes that seem to dominate American life, are still building toward their greater impact. Once the technology we enjoy in the United States has become more commonplace around the world, we will begin to see more social change, which will be slowly followed by political change.