Your Voice Can Change the Conversation
An open letter to America’s business and community leaders
I love my hometown of Chicago. I am committed to my city. I am proud to have built businesses and organizations in my city.
And yet, three years ago, I walked away from Chicago and moved to Washington, so I could accept the incredible honor of serving President Obama in his cabinet.
On my first day of work at the Department of Commerce, I sat down in a conference room with the 50 people who were my new closest colleagues. They began rattling off a set of acronyms like NTIA, BIS, PTO, ESA, ITA, EDA plus NOAA and NIST….. Less than an hour on the job, and I was already drowning in the proverbial Washington alphabet soup.
I thought I knew what the Department of Commerce did. But I had no real idea of its true depth and breadth.
Commerce has 12 different agencies under its umbrella. We advise the President on economic policy, ranging from international trade to the current debate on encryption. We count both fish and people. We issue both patents and weather warnings. We implement trade agreements and make sense of big data. In fact, every day we collect enough data — about weather, about the economy, about demographics — to fill two Libraries of Congress.
Three years later, I am pleased to report that I know what most of the acronyms mean. I fully understand the true reach of our Department. I have come to deeply appreciate the work done by the nearly 47,000 person Commerce family. And I have learned a lot — about our government, about our economy, about our businesses, and about our world.
Among the many lessons I have taken away from this job, let me share three that I think are particularly relevant:
- Globalization and digitalization are changing the economy faster and to a greater degree than many of us have absorbed, creating both challenges and opportunities for our people, our companies, and our government.
- Our country cannot afford political gridlock. The rest of the world is not standing still waiting for us to get our act together.
- As business and community leaders, you have much to offer government. Our country needs you to engage. Government needs the benefit of your insights.
As Secretary of Commerce, I have had a front row seat to what Klaus Schwab, head of the World Economic Forum, refers to as the “fourth industrial revolution.”
This revolution is disrupting economies worldwide. It is disrupting the way our supply chains function. It is changing the products in our pockets and in our homes. It is shifting the very nature of work for our people. And it is creating new challenges to our privacy and our security.
I saw this disruption firsthand just a couple weeks ago at the Port of Hamburg in Germany, where operations are nearly fully automated. Picture this: massive shipping containers the size of small houses, from all over the world, flying over your head at incredible speeds.
“Organized chaos” is the phrase that comes to mind. The volume and pace of goods moving through the terminal as a result of this automation is truly incredible.
The efficiencies at the port created by technology and globalization are a stark reminder of the big questions facing countries all around the world. The automated terminal employs two-thirds fewer workers than a comparably sized, non-automated operation, like most in the United States.
What risks are created when we shift the way we do business to the digital world? And what does this efficiency mean for people and their jobs?
The transition from people to machines is happening all over the world, including in the United States. We need to have a serious dialogue about the implications of this change on both our privacy and security as well as the average American worker.
As ports go digital, as cars go driverless, as more devices become connected, protecting privacy and ensuring security becomes even more critical and complex. Today, a start-up in Chicago can win support from investors in London, open up a factory in Singapore, and monitor production over cloud servers housed in Virginia.
Safe, reliable networks are essential to accomplishing that global commerce. Yet more access and more connectivity make us more vulnerable than ever before.
This presents two challenges. First, consumers today are demanding products they can trust to both protect them from cyber risks and respect their privacy, forcing your companies to consider these needs when creating new goods and services.
Second, to realize the full economic promise of the fourth industrial revolution, we must ensure that the digital economy supports the free and secure flow of information, ideas, products, and services.
This is not just a policy challenge for governments. Each of you also has a role to play.
You can help us build a secure digital economy by better managing cyber risk within your organizations and by working with this Administration to strengthen the nation’s cybersecurity posture. Only together can we ensure the opportunities made possible by today’s innovations far outweigh the risks.
At the same time, technology and globalization are forcing our country to modernize the way we train our people, but we are not thinking bold enough. We are not thinking big enough. And we are not moving quickly enough.
I have heard this refrain from people like you — America’s business leaders — who have told me consistently over the last three years that finding a skilled workforce is one of the biggest challenges facing their firms, and their ability to grow and hire.
The emphasis placed on this problem is one of the reasons that the Department of Commerce has made business-led, job-driven, and locally determined solutions to closing the skills gap a top priority. We see our role as a convener of the many stakeholders who must be at the table to make progress on workforce training.
The solutions need to be driven by leaders like you who see how the nature of work is changing and can signal what you need from our local workforce to compete. We want to see more communities breaking down silos to determine local business demand and create programs focused on meeting those needs.
We are seeing such efforts in action from Buffalo to Houston to Dalton, Georgia, where business competitors are coming together with local and state government and educators of all levels. As a result, these communities are ahead of the pack. They are building talent pipelines and insisting that their training ecosystem meet the needs of both their people and their businesses.
With all the challenges facing our country, we cannot afford to wait to evolve our workforce efforts. We have to act now.
This brings me to my next point: our country cannot afford political gridlock, because the world is not standing still.
I have been fortunate to visit 40 countries in this job and some countries multiple times a year. What jumps out at me everywhere we go is that other countries — even nations with stable, growing economies — are desperate to be more like the United States with: our strong rule of law; our commitment to innovation and entrepreneurship; our tolerance for risk and failure; our ability to adjust and adapt to change, our broad investment in research and development; our world class universities; and above all, our incredibly talented, productive, and diverse people.
Countries want to be like us, because we are on the right track. Just look at where our economy is as compared to 2009. Our overall economy is 14.4 percent larger than it was in 2009. 14 ½ million more people are employed. After-tax incomes are up nearly 14 percent. All of the 31 major U.S. banks passed the Federal Reserve’s most recent health test last year. Business investment is up 33 percent to over $2 trillion, and A.T. Kearney just named the United States the best place in the world to invest for the 4th year in a row.
We were able to dig ourselves out of the recession, because our country’s leadership took bold, decisive action to turn our economy around. Now that we are back on level ground, let’s not lose confidence in our approach. There are problems in our country that require urgent solutions, and we cannot afford gridlock.
To maintain our global leadership, we must do something: about our underinvestment in infrastructure; about our broken immigration system; about our non-competitive business tax structure; about putting more money in the pockets of American workers; and about cracking down on unfair competition from other countries.
We need to address these challenges right now, because our global leadership is being challenged.
Let me focus on one actionable opportunity that the President and this Administration have made a priority for this year: the Trans-Pacific Partnership, or TPP.
TPP preserves America’s continued global leadership and ensures that we write the rules for commerce and trade in the fastest growing region in the world, not China. It eliminates 18,000 tariffs and strengthens supply chains across the Asia-Pacific. It creates customers for businesses like Chicago-based Pinch Provisions, a small company of 12 employees that just expanded into a larger space in Elk Grove Village to keep up with the demand created, in part, by exporting.
TPP will also make exporting simpler and cheaper for small manufacturers like Graymills Corporation, whose products often face arbitrary customs processes and standards that vary from market to market.
Fundamentally, TPP requires our trading partners to abide by the same high standards that we do, forcing them to adopt a minimum wage and meet occupational safety and health standards. It eliminates forced labor and outlaws child labor. It even promotes a free and open Internet, by putting in place the most comprehensive set of rules ever negotiated addressing digital trade and e- commerce.
Before we can unlock the benefits of TPP, we need the agreement signed into law. Though this clear and straightforward economic opportunity is within reach, we are not there yet. The time to act is now. That is why President Obama and this Administration are hard at work making the case for TPP to the American people.
However, the best argument in favor of trade comes from all of you, the business leaders who understand the real value of trade and exports to the companies and workers of the nation.
This brings me to my third lesson: our country needs YOU — as business and community leaders — to engage.
When I took this job, President Obama asked me to serve as his bridge to the business community.
Whether the topic is a free and open internet or travel and tourism, commercial relations with India or advanced manufacturing, privacy or cybersecurity, my team and I have made sure that the voice of business is not just heard within the Administration but that your ideas and concerns are actively incorporated into our policymaking. Nowhere is this more evident than our renewed commitment to commercial diplomacy.
Commercial diplomacy uses the power of America’s businesses to influence policy in markets around the world.
Early in my tenure as Secretary, I went to a large multi-lateral meeting in Asia, where a senior Indonesian official asked me to me to reach out to Tim Cook about Apple opening a store in Jakarta. This was a curious request, because the Indonesian government was among the countries trying to implement a data localization policy. Data localization requires the storing of user data on servers physically situated in the country where the data originates.
The Indonesian policy was in direct conflict with their goal of generating a new, high profile investment, given Apple’s commitment to the cloud. Right then, it occurred to us that the voices of U.S. business leaders — with long-term-capital, world-class products and services, and American values behind them — carry immense weight around the globe.
We realized that we could make American business leaders great partners in affecting economic policy change around the globe — and we have been deploying this tool ever since.
We saw the power of commercial diplomacy in February during a meeting of Southeast Asian leaders in Sunnylands, California. President Obama invited the CEOs of Cisco, IBM, and Microsoft to brief the ASEAN leaders on how to create the conditions for innovation to thrive across the Asia-Pacific.
Imagine this: three CEOs, being peppered with questions about what steps are needed to draw greater investment by the Prime Minister of Vietnam, the President of the Philippines, and seven other heads of state. The CEOs made clear that short-sighted policies that restrict the cross-border flow of data will inhibit, not promote, their investment. And the heads of state heard their message loud and clear.
As leaders, each of you have the power to affect policy.
Let me say that again: as business and community leaders, YOU have the power to affect policy.
Just look at what happened in Georgia last month, when Governor Deal vetoed a “religious liberties” bill following pressure from companies like Disney, Time Warner, and Salesforce.
You have the ability to not just affect our economy but to affect the very fabric of our nation. You can own the outcome. You can change the conversation.
From my own experience, I am here to tell you that if you are interested in serving in the government, do it. You do not have to be Secretary to make a difference. Become a Presidential Ambassador for Entrepreneurship. Serve on one of the Commerce Department’s 65 business advisory committees. Make your voice heard as a commercial diplomat. Travel around the country or around the world with your mayor, your governor, your Secretary of Commerce, your President to explain the disconnect between policy and practice.
Public service can be as rewarding for you as it has been for me. Yes, at times the bureaucracy and the politics can be frustrating. True, I have never been on a steeper learning curve. But I can honestly say that this has been one of the most meaningful and exciting jobs I could have ever imagined.
As leaders with incredible insight into your community and our nation’s economy, you have much to offer. Take that chance. Seize the opportunity to change our country for the better.
I promise you: it’s worth it.
This piece was adapted from remarks at the Economic Club of Chicago on May 12, 2016.
