Innovation Should Mean More Jobs, Not Less

Creating new jobs is a good way to get America's economy moving again. That's not the controversial part of President-elect Barack Obama's economic stimulus plans. As usual, the devil is in the details. And innovation advocates fear that if the devil runs amok, a short-sighted emphasis on jobs over long-term productivity may bog down the economic recovery. The problem, as they see it, is a centuries-old misconception that innovation is synonymous with automation, which in turn leads to the elimination of jobs. "If you invest in a technology that makes something more efficient, the fear is that people will be put out of work," says Kevin Efrusy, the venture capitalist whose firm Accel Partners is the lead funder of several important Silicon Valley start-ups, including Facebook. "But it's just the opposite. When anything becomes cheaper, we consume a lot more of it. The overall economic effect is, you create and expand entire new industries and employment goes up." While creating jobs by upgrading the nation's physical infrastructure may help in the short term, says Robert D. Atkinson, president of the Information Technology and Innovation Foundation, "there's another category of stimulus you could call innovation or digital stimulus — 'stimovation,' as a colleague has referred to it." Although many economists believe that a stimulus package must be timely, targeted and temporary, Atkinson's organization argues that a fourth adjective — transformative — may be the most important. Transformative stimulus investments, he said, lead to economic growth that wouldn't be there otherwise.