How America Is Squandering Its Innovative Potential

Brookings Institution: “…we aren’t yet playing with the whole team. That was a clear takeaway from a paper released this summer, from a team led by Alex Ball and Raj Chetty, that examines the lifecycles of 1.2 million U.S. inventors (defined as patent holders or applicants).”

“Overall, children who are white, rich, male, and exposed to invention early in life are much more likely to invent than children who are non-white, poor, female, and socially and geographically isolated from innovation.”

“…this report is worrying for two reasons. First, it reinforces a growing body of evidence that United States remains far from providing equality of opportunity to all kids—in this case the opportunity to share in the fruits of invention—which is itself a collective moral failure.”

“Second, the constrained supply of inventors in the United States should worry anyone engaged in debates about the country’s innovation engine and future productivity. Clearly, America wastes a lot of potential talent by not—to extend the president’s metaphor—pulling more inventors off the bench in certain communities. Or, as the authors ask: ‘How many ‘lost Einsteins’ could there be due to inequality of opportunity?'”

New A.I. Traffic Signals Could Be a Game Changer

IEEE Spectrum: “Traffic congestion costs the U.S. economy $121 billion a year, mostly due to lost productivity, and produces about 25 billion kilograms of carbon dioxide emissions, Carnegie Mellon University professor of robotics Stephen Smith told the audience at a White House Frontiers Conference last week. In urban areas, drivers spend 40 percent of their time idling in traffic, he added.”

“The big reason is that today’s traffic signals are dumb. Smith is developing smart artificial-intelligence-fueled traffic signals that adapt to changing traffic conditions on the fly. His startup Surtrac is commercializing the technology.”

“In pilot tests in Pittsburgh, the smart traffic-management system has gotten impressive results. It reduced travel time by 25 percent and idling time by over 40 percent.”

Startups Have a Crazy New Idea for Saving Money: Be Nice to Workers

Quartz: “Companies like Managed by Q (office cleaning and services), Juno (a ride-hailing competitor of Uber’s), and a few others are attempting to make a name for themselves as the nice guys of the gig economy. They’re promising better wages and, in some cases, benefits and equity. In Silicon Valley, where efficiency is often prized beyond all else, it might seem unusual to choose to spend more on workers who can be had for less. But what if—contrary to all gig-economy wisdom—keeping workers happier is saving money, too?”

Successful Companies Don’t Adapt, They Prepare

Harvard Business Review: “In 1960, Harvard professor Theodore Levitt published a landmark paper in Harvard Business Review that urged executives to adapt by asking themselves, ‘What business are we really in?’ He offered the both the railroad companies and Hollywood studios as examples of industries that failed to adapt because they defined their business incorrectly.”

“Yet today, the railroads don’t seem to be doing too badly. Union Pacific, the leading railroad company has a market capitalization of over $80 billion, about 60% more than Ford or GM. Disney, the leading movie studio company, has a market capitalization of about $150 billion. That doesn’t seem too shabby either.”

“While nimble startups chasing the next trend are exciting, the truth is that companies rarely succeed by adapting to market events. Rather, successful firms prevail by shaping the future. That can’t be done through agility alone, but takes years of preparation to achieve. The truth is that once you find yourself in a position where you need to adapt, it’s usually too late.”

Are Americans Better Off Than They Were a Decade or Two Ago?

Ben Bernanke and Peter Olson: “Economically speaking, are we better off than we were ten years ago? Twenty years ago? When asked such questions, Americans seem undecided, almost schizophrenic, with large majorities saying the country is heading ‘in the wrong direction,’ even as they tell pollsters that they are optimistic about their personal financial situations and the medium-term economic outlook.”

“While thinking about the question, we came across a recently published article by Charles Jones and Peter Klenow, which proposes an interesting new measure of economic welfare… The bottom line: According to this metric, Americans enjoy a high level of economic welfare relative to most other countries, and the level of Americans’ well-being has continued to improve over the past few decades despite the severe disruptions of the last one. However, the rate of improvement has slowed noticeably in recent years, consistent with the growing sense of dissatisfaction evident in polls and politics.”

More Evidence Expanding Medicaid Increases Emergency Room Visits

Washington Post: “According to the new study, people who gained Medicaid visited the emergency room about 65 percent more often than individuals who did not gain Medicaid in the first six months — and the trend continued out to two years. The estimates of increased emergency department use at 12 months, 18 months and 24 months are ‘similar and, for the most part, statistically indistinguishable from each other,’ the authors wrote.”

“People covered by Medicaid were more likely to both see a physician at a regular office visit and also go to the emergency room, casting doubt on the idea that people were using health coverage to shift their health care to a primary care doctor.”

A Possible Solution to One College Cost Problem: Free Books

The Hechinger Report: “College students in Rhode Island will save a collective $5 million a year if a plan to replace traditional textbooks with free materials is effective.”

“‘Today’s college students, on average, spend more than $900 a year on textbooks,’ Rhode Island College president Frank Sánchez said in an interview with The Hechinger Report. ‘That just gets in the way of them staying in school.'”

America’s Innovation Crisis

Danny Vinik: “…what if it turns out that America isn’t as entrepreneurial as our leaders like to believe? And that the smaller U.S. safety net, which reflects a national belief in self-reliance, is one reason?”

“By many measures of innovation, other countries come out ahead of us. South Korea has the most patent applications per million people. On the World Intellectual Property Organization’s annual innovation index, Switzerland takes the top spot. Measuring innovation is inherently difficult, so different metrics produce different results. But by most measures, the U.S. comes in around fifth.”

“That’s no surprise to economists, who have been sounding the alarm that the U.S. is facing an ‘innovation crisis’ that threatens America’s future economic prosperity. Fewer startups are opening their doors and older firms increasingly employ a larger percentage of Americans. Instead of a dynamic economy driven by the frequent birth and death of firms, the U.S. economy is instead filled with aging behemoths—less creative destruction and more old stagnation.”

The Left vs. A Carbon Tax

Vox: “This is not an election year in which it is easy to get attention, unless your name rhymes with Gump. Nevertheless, it’s worth taking note of a colorful, contentious, and counterintuitive political drama playing out in the top left corner of the country.”

“Here’s the situation. There’s a carbon tax on the ballot in Washington this November, meant not just to put the state on the path to its climate targets but to serve as an example to other states.”

“The measure, called Initiative 732, isn’t just any carbon tax, either. It’s a big one. It would be the first carbon tax in the US, the biggest in North America, and one of the most ambitious in the world.”

“And yet the left opposes it. The Democratic Party, community-of-color groups, organized labor, big liberal donors, and even most big environmental groups have come out against it.”

President Obama Explains Why You Can’t Run the U.S. Like a Startup

Tech Crunch: “Last week, the White House held its Frontiers Conference in Pittsburgh, with a focus on what the U.S. Government is doing for the future, in areas including space exploration, smart cities and more effective police accountability. President Obama ended the conference with a speech that included some real talk for startup founders and others in Silicon Valley who might think the White House and government in general could stand to borrow more heavily from the tech industry’s modus operandi.”

Obama: “The final thing I’ll say is that government will never run the way Silicon Valley run because, by definition, democracy is messy. This is a big, diverse country with a lot of interests and a lot of disparate points of view. And part of government’s job, by the way, is dealing with problems that nobody else wants to deal with.

So sometimes I talk to CEOs, they come in and they start telling me about leadership, and here’s how we do things. And I say, well, if all I was doing was making a widget or producing an app, and I didn’t have to worry about whether poor people could afford the widget, or I didn’t have to worry about whether the app had some unintended consequences – setting aside my Syria and Yemen portfolio – then I think those suggestions are terrific. That’s not, by the way, to say that there aren’t huge efficiencies and improvements that have to be made.”

Key Facts About the Latino Vote in 2016

Pew Research Center: “Here are key facts about the Latino vote in 2016.”

“Among Latino registered voters who are ‘absolutely certain’ they will vote, one-in-five will be voting for the first time…”

“Hispanic registered voters have grown more dissatisfied with the nation’s direction.”

“Hillary Clinton has more enthusiastic support from older Latinos than from Millennial Latinos.”

“Three-quarters of Hispanic registered voters say they have discussed Trump’s comments about Hispanics or other groups with family, friends or coworkers.”

Immigrants Helped Bump Germany’s Fertility Rate to Its Highest in 33 Years

Quartz: “In May 2015, Germany’s five-year birthrate had plunged to the lowest in the world, edging Japan out of the bottom slot. But things may be looking up slightly on the baby front, according to the latest figures from the German federal statistics office.”

“The rising rate is some cause for celebration, but even the influx of migrants—which has already slowed considerably since the Balkan route closed and Turkey agreed to stop refugees from coming to Germany—may not be enough to stop Germany’s dangerous population decline. Demographers say the rate needs to be at 2 births per woman for a population to maintain itself.”

Does Economic Growth Kill People?

Washington Post: “Everyone wants economic growth, right? It’s part of every politician’s package of promises. Expanding economies make people richer, and study after study shows that the wealthier lead happier, healthier lives.”

“Yet in recent years, accumulating evidence suggests that rising incomes and personal well-being are linked in the opposite way. It seems that economic growth actually kills people.”

“Christopher Ruhm, an economics professor at the University of Virginia, was one of the first to notice this paradox. In a 2000 paper, he showed that when the American economy is on an upswing, people suffer more medical problems and die faster; when the economy falters, people tend to live longer.”

“In other words, there are great benefits to being wealthy. But the process of becoming wealthy — well, that seems to be dangerous.”