The United States is in the early phase of a new era that will bring Industrial-Revolution-scale transformation to the economy, says Philip Zelikow, a leader of the Markle Initiative for America’s Economic Future in a Networked World and a University of Virginia history professor.
We’re on the cusp of a change “comparable to 1880 or 1890 when the economy was about to fundamentally transform,” he says. “This should be a really bright era.”
Yet, Gallup polls show that Americans are more pessimistic about the future than ever. And even this Techonomy Detroit discussion offered a less-than-optimistic view of the future for the middle class.
Kicking off Techonomy Detroit today with a conversation about the American Dream entitled “Was It Just a Dream?” David Kirkpatrick pointed out that, although the Dow Jones Industrial Average has far surpassed its 2007 high of 14,000, national unemployment rates are higher today than they were 7 years ago, and the average price of a college tuition has increased by 80 percent in a decade. The Techonomy CEO asked Zelikow and three other panelists—Carol Goss, a longtime Detroit community activist and a fellow with the Advanced Leadership Initiative at Harvard University; Danae Ringelmann, co-founder of the crowdfunding platform Indiegogo; and AFL-CIO secretary-treasurer Elizabeth Shuler—what hope the average American still has for economic and social security. And what about the average resident of Detroit, where unemployment has jumped from 6.9 percent in 2007 to nearly 17 percent today?
To be sure, there’s little variation among definitions of the American dream: “That hard work could lead anyone to prosperity, success, and upward mobility” (Kirkpatrick); that each generation achieves more than the last (Goss); that there are “abundant possibilities and second chances” (Zelikow).
Most agree that accessible technologies have created a climate that should be conducive to achieving that dream. Zelikow notes: “The barriers to starting up and growing a business have never been lower … And it has never been easier to get the personal development you need—the education and training in almost any subject—than it is right now.”
Innovative products of the new economy, such as Indiegogo, are also democratizing access to ideas, the tools of invention, and financing. “We use the Internet to blow up the gatekeeping system to put control in the hands of people to fund” ideas they like, says Ringelmann, who started Indiegogo because she was “pissed off at how unfair financing was.”
But Zelikow points to one reason many Americans remain underwhelmed by the opportunities that techonomists tout: “Our institutions are stuck in the past,” he says. “The conversations and decisions in Washington are mostly irrelevant to what the future will look like, to the way we need to reinvent our financial and education systems. The issues that are really going to shape the new economy will not be about whether to change interest rates by 10 points,” he says.
What’s more, Zelikow says, the old structures that made Americans feel secure are eroding. For instance, jobs with benefits were created to provide security in the industrial era. “In the new networked economy, what are the new structures we need to provide? They might be different but not inferior,” he says. “How do we build a future in which America can thrive in the 21st century? That’s a conversation we need to foster more broadly for the country as a whole.”
But Shuler, whose organization comprises 57 unions and 12 million workers, notes that entrepreneurs in a networked economy still need customers to buy their products. “Henry Ford recognized he needed skilled workers who could make enough to buy the cars they were manufacturing,” she says. “As we move forward in the changing economy, do we want to abandon the value set that makes us American: fairness, equality, rewarding a hard day’s work with a decent level of pay?”
Goss pointed to third generations of children growing up in communities with failing schools, graduating without exposure to entrepreneurship or the skill sets needed for jobs in the technology sector. “A significant number of black and brown children will not be able to participate,” Goss says. “We have to be intentional about making connections between schools and work and apprenticeship and create a level playing field to get all young people ready for this exciting time.” She advocates for “helping kids understand that using technology for entrepreneurship is important part of making a living for yourself.”
Ringelmann says the answer is to shift mindsets and values. “Those won’t come from policy,” she says. “We all need to recognize there is an entrepreneur inside of us. Our education system needs to change in that it does not recognize that.” She’s a proponent of an “empowerment” rather than “protectionst” approach to government and family life for giving people the tools and ingredients to create their own success.
Zelikow urges technology-minded businesses to “invest in policies that will broaden participation—make it easier and more flexible for people to get training at any point in their lives … and push to leverage technology to up-skill rather than de-skill people.”
For instance, he points to the way Starbucks is investing in “upskilling” its employees, or to the way a home health care aide of a pharmacy clerk could be upskilled with technology such as Google Glass to communicate with doctors and nurses. “If you leverage technology to empower people at the front lines, you will have a stronger business with employees with higher skills.”
While the panel’s optimism balanced its pessimism, it made clear that achieving prosperity, success, and upward mobility will be possible only if American institutions—businesses, governments, educational systems—wake up to a new kind of American dream.
Read Philip Zelikow’s article for Techonomy about rebuilding the American dream.