Center for American Progress

President Obama Links Middle-Class Prosperity and Innovation

President Obama Links Middle-Class Prosperity and Innovation

His State of the Union Speech Shows the Two are Intertwined

Ed Paisley and Sean Pool explore the president’s science and innovation policies to demonstrate how key they are to sustained middle-class prosperity.

See also: Will Congress Block Infrastructure Spending? by Donna Cooper; Obama’s Clean Energy Plan for an America Built to Last by Dan Weiss; Manufacturing America’s Energy Future by Kate Gordon; Rebuiliding our Middle Class by Gadi Dechter and Michael Ettlinger

You can also read this article at Science Progress, CAP’s online science and technology journal, here.

President Barack Obama’s State of the Union address last night demonstrated the importance of U.S. science and economic competitiveness to a prosperous and growing middle class. His focus on “keeping the American Dream alive,” invoking core American values of “fair play,” and “shared responsibility,” were inexorably linked to his administration’s past innovation policy actions and proposals for 2012.

This reflects the Obama administration’s clear understanding that innovation is an intrinsic aspect of the American identity, and an indispensable tool to ensuring the future success of our economy and middle class. Indeed, as the president said last night, “innovation is what America has always been about.”

Certainly, technology can be a double-edged sword. It creates, as the president said, “new American jobs, and new American industries,” but “technology… also [makes] some jobs obsolete.” The only way to compete for the new jobs, new businesses, and new industries that technology brings is to keep our economy on the cutting edge by investing in the building blocks of innovation—the assets our businesses, workers, and industries need to stay best in class. The blueprint the president unveiled last night outlined a robust vision to invest in those building blocks, which include:

  • Innovative manufacturing
  • A work force with technical skills
  • Thriving small and startup businesses
  • Modern infrastructure
  • Access to international markets
  • Robust public research and development

These innovation building blocks mirror closely the broad policy areas we identified and developed in our recent package of five policy reports on U.S. science, innovation and economic competitiveness.

The president in his speech gave key examples of these innovation factors now at work in our economy. First, he alluded to the importance of innovation in manufacturing when he touted his policies that helped Detroit retool and restructure to adapt to changing market conditions. Proposing that high-tech manufacturers who innovate here at home rather than outsourcing their facilities get a tax deduction, Obama suggested “What’s happening in Detroit can happen in other industries. It can happen in Cleveland and Pittsburgh and Raleigh.” Our work on innovation clusters has long argued the same thing, and a forthcoming paper on manufacturing innovation looks into this in more detail.

The next part of the president’s blueprint for an innovative economy is technical skills for the workforce. “Higher education,” said the president, “is an economic imperative,” and outlined the problems our innovation-intensive industries face today:

I hear from many business leaders who want to hire in the United States but can’t find workers with the right skills. Growing industries in science and technology have twice as many openings as we have workers who can do the job. Think about that: openings at a time when millions of Americans are looking for work. It’s inexcusable. And we know how to fix it.

To address the problem, the president invoked the story of Jackie Bray, who benefited from a regional partnership between a Siemens gas turbine factory and a local community college that helped her get the skills she needed to help fill one of these technology job shortages.

In order to better equip our students with the skills they need to stay competitive in the 21st century global innovation economy, he outlined proposals to expand access to higher education, transform community colleges into community career centers, and streamline access to scattered federal workforce training assistance programs through a single program. Our papers “Building a Technically Skilled Workforce” and “Rewiring the Federal Government for Competitiveness” contain detailed versions of these proposals.

The president also noted that another piece of the puzzle to building the workforce we need is to “stop expelling responsible young people who want to staff our labs or start new businesses.” Our paper “Immigration for Innovation” addresses this need to reform our high-skill immigration system to ensure the United States remains the land of opportunity for all.

The president also spoke forcefully about the importance of inventive entrepreneurs to our economy and of the returns on public investment in research and innovation. Noting “most new jobs are created in startups and small businesses,” President Obama called for policies to help them succeed.

“Thousands of Americans have jobs,” he said, thanks to our public investments in clean technology innovation. He also pointed out that “The payoffs on these public investments don’t always come right away. Some technologies don’t pan out; some companies fail.” The fourth paper in our series on science and competitiveness, “Universities In Innovation Networks” contains five broad pieces of policy that would help accelerate the motion of basic research to market through the commercialization of university research.

President Obama also reiterated his proposal to consolidate trade and commerce agencies to make the federal government work better in ensuring businesses large and small have access to international markets for their products and technologies. Our paper “Rewiring the Federal Government for Competitiveness,” takes this proposal and goes into deeper detail about how consolidation of federal trade, technology, workforce training, and economic development programs and agencies can help promote more strategic coordination of these activities and promote innovation and competitiveness of U.S. businesses and regional economies.

The president’s State of the Union address demonstrates the importance that science and innovation policy play in his larger efforts to rebuild our middle class and return to our core American values. Innovation policy is a key piece of the toolset the Obama administration will use to develop an economy built to last and keep alive the American dream for the middle class.

Ed Paisley and Sean Pool are the coordinating editors of the series on U.S. science and economic competitiveness by the Center for American Progress. Ed Paisley is Vice President for Editorial at the Center. Sean Pool is assistant editor in charge of the Center’s Science Progress project.

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Ed Paisley

Senior Director, Communications and Publications