Reflecting on “Solving America’s Innovation Crisis”

This article by Alexis Ohanian supplied a prescription for some of the ills that have beset our economy, particularly with regards to ‘innovation.’ It also put forth some suggestions as to what workers should do with themselves in this new world in order to compete. The suggestions, in my opinion, flew far from the mark. Reflecting on it over a year later, it does not look any better. My response:

First, it’s a bit confused, so let’s unpack the issues within. There are really two crises, and they have some overlapping solutions, but are definitely not the same thing.

First, there are innovation issues. As Tyler Cowen goes over in his books, we’ve already picked much or all of the low-hanging innovation fruit, and will have to work much harder (collectively and individually) to innovate. Ohanian’s statements and implications about education (which I would argue is more about knowledge, practice, and spending time actually thinking about problems and solutions, rather than formal credentials) are correct. Autodidacts are likely to be at the forefront of innovation for the foreseeable future. Those willing to focus on learning and building things for themselves will reap the gains compared to those who want to just live their lives (spend time with others for fun, party, have hobbies, and all those other things people in earlier generations were promised once they “put in their dues”) will struggle. While this was probably always true, we’re entering a new era of hypercompetition where (in the US at least) it’ll be what divides those in poverty from those with plenty (see Autor’s work for more on this.) Which brings us to the second crisis:

Jobs. In the coming decades, as we continue to automate people out of jobs permanently (turning them into Zero Marginal Product workers) those left solidly in the job market will be eventually able to command much higher salaries and benefits, while the ZMPs scrape by with either a) welfare if we leave things as they are, b) live a decent life off a guaranteed basic income if we’re wise enough to do that, or c) starve, if we continue to do what we’ve been doing for 30 years. Those on the margins will be the ones dealing with the hypercompetition and will have to work harder and harder to stay above the line. So he’s right again about “they instantly show who is resourceful and who isn’t — who will go the extra mile and who will coast to the finish”, but not for the reasons he thinks. The way we got here wasn’t some grand choice by the people, it’s the result of political choices: radical deregulation (mostly a bad story), the destruction of labor unions (had to happen), automation (technological unemployment as the result, unstoppable), and as a result, a changed culture of doing more with less. He uses the term “welcomes”, but aside from those who enjoy meritocracy and all its upsides and downsides, I would guess that most do NOT welcome it. If given the choice, most would choose to bring back some semblance the Golden Age (which I believe is impossible and should not even be considered, as the landscape has changed far too much to make that a possibility.)

So there is overlap in the two stories: hypercompetition leading to people having to work harder and harder to stay alive at the margins, and low-hanging fruit being picked requiring us to work harder to innovate. The unspoken idea that if everyone works harder we will all be able to succeed and innovate is naive; working harder to _innovate_ will be necessary but not sufficient. Working harder to _succeed financially_ will only work for some, and as time goes by, a smaller and smaller slice of the population.

Mr. Ohanian has romanticized a (for most) tough new reality. I believe this is unwise. We should look at it clearly and with eyes wide open so we can improve the future by putting in policies that support the innovators while keeping all the jobless and medium-term future jobless people from starving; telling people that they can succeed if they only work harder and obtain more education should be considered dangerously misguided.

I received some questions about this post, which I will answer below. They are paraphrased, since I don’t know if the inquirers want their words used (if you’re reading this and would like attribution, please let me know.)

Are “marginal” innovators really the only safe ones? Many jobs which rely on interpersonal interaction / soft skills will probably survive, right?

Well, there are couple things here. In the medium-term, which I’m most concerned with now, I think the percentage of people with “soft skills that are still useful / necessary to employ” will shrink. It will not go to zero like cashiers or fast food cooks, but as a percentage will go down. We are seeing the very beginnings of this in certain automated fast-food experiments (the equivalent of fast-food Matire’D people) and big-box store greeters (perhaps at some time in the past they would have been stocking shelves.) So rather than having ten human shelf stockers or cooks for each greeter, it might be ten automated shelf stockers/cooks for each greeter. Here in NYC, there are supermarkets with self-checkout aisles, and only 1 human left at a register, along with 1 human left to watch all the machines. Previously it was six or seven (up until a few years ago.) I think that will be the story for more types of jobs which require those soft skills in the future. Certain types, however, will do even better than now. I outlined a few in another comment:

news.ycombinator.com/item?id=6466353

Marketers will become especially important, especially as the prices of many things are driven ever lower due to automation. Perhaps we’ll have 2x-4x more than we do now, and even more importantly, we will start to integrate the idea of marketing into more jobs. We already see this with musicians, visual artists, etc. Everyone needing to sell themselves even today gives a glimpse into this, I think. Other soft skill jobs that will be around in the medium term: nannies, a new breed of personal assistants, personal shoppers/designers/makeup artists, and politicians (who have long ago learned the importance of forever being in “marketing mode.”)

So there is absolutely room for some soft skill jobs, but not nearly the number we’re used to — and these fields will also get highly competitive, which is where the marginal innovation comes in. If I’m a marketer, even a very good one, I will potentially be competing with a large number of others who have the same training as I do, are unemployed, hungry, spending their time all day working on their pitches, etc. So in this way, I am still having to innovate at the margins. I don’t think that part goes away for jobs that have lowish-barriers to entry, but are still in demand.

Telling people to get an education is good, as long as we understand that it really means ‘get useful skills.’ A problem is that many students go to college to learn things that don’t add value and are funded by student debt that may well never be paid back. Past returns from education will likely not be repeated in the future — we’re already seeing this in the west, but people should at least get educated/trained in ‘good’ areas.

I agree with that in the abstract, but I don’t think it has a long shelf life. Here’s another comment where I deal with that issue:

news.ycombinator.com/item?id=6226836

The short answer there is that supply and demand work against that being a viable strategy. Imagine the scenarios:

1. Everyone (for example) becomes a software developer. Number of jobs as a percentage doesn’t move that much. We fill all the existing positions, and are left with a glut. Software developer salaries plummet due to the “reserve army of labor” effect. We actually already have natural experiments for this one in certain fields (all the ‘janitors with PHDs’, STEM grads in India (http://www.theguardian.com/commentisfree/2009/nov/29/india-unemployment), various others, etc.) Highly unlikely in any case.
2. Everyone tries to become a software developer, and many or most fail. Software developer salaries stay where they are or increase. Those people are still jobless, but now have a pile of debt from 2–3 years of schooling. Not incredibly far from where we are now, but still different.
3. The status quo continues exactly as it is, and more people wind up with useless degrees. They remain jobless and in debt.

The highly implausible way this works out positively, is that everyone somehow succeeds against all odds and actually does 1), and the number of jobs also somehow keeps pace with the graduation numbers. I think you can probably see how unlikely this scenario is.

What path would you recommend for someone who isn’t technical?

For jobs of the short-to-medium term for people who want to stay away from software/hard science/robotics, I would put:

• Nurses, Physician assistants, and medical professionals in general in remote-ish areas (rural and ex-urban US areas still have a high demand for obvious reasons, smaller cities too. Big-city medicine is tough unless you are at the top)
• Excellent marketers / creative professionals (art directors, for example, and anyone else who is “consistently creative” / constantly reinventing — if you’re the cream of the crop here, you can do well)
• Nannies (top ones can make 150K US)
• Physical therapists (will eventually get automated, but likely 20–30 years out)
• Pilots and air traffic controllers (hard to get into, start with decent pay, get very good later. Will likely be automated sooner or later, though.)