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Friday, June 26, 2020

MIT Technology Review

MIT Technology Review
fwd: Economy
Your guide to growth and prosperity in the age of technology

Racism and lost Einsteins
06.26.2020
Welcome back to fwd: Economy. America’s ability to innovate has been badly damaged by systemic racism and gender bias. The country needs to do better. (Know a friend or colleague that enjoys stuff like that? You can send them to sign up here.)
Wasted talent: The evils of systemic racism and gender bias are not only hugely destructive to individuals and to society, they’re crippling the US’s capacity to innovate, harming its prosperity. We’re missing out on countless valuable inventions.

Lisa Cook, an economist at Michigan State, has done ground-breaking work in documenting and explaining the damage. Here’s her recent testimony to Congress (pdf) on the topic. It’s also well worth listening to a talk she gave last week (video) as she asks: “what are we missing out on?” The answer, according to her research, is that US GDP per capita would be 0.6% to 4.4% higher if more women and African Americans were part of the innovation economy.

Particularly disturbing are the findings from Cook’s historical look at inventions by African Americans from 1870 to 1940 (pdf); in it, she details how the rising ethnic and political violence of the early 20th century, including the Tulsa race massacre in 1921, destroyed the fledging patent activity in the Black community after 1900. To me, her most shocking finding is this: 1899 is still the peak year for African American patents per capita.

NPR’s Planet Money did a great interview with Cook earlier this month in which she explains both the motivation and challenges of the research (let’s just say, the patent data was hard to find) and the years it took to get the research accepted and published by an economic journal despite the support of several leading economists.

Cook’s findings are consistent with other recent research quantifying how a lack of opportunities for women, minorities, and children from low-income families is hurting innovation. MIT economist John Van Reenen and his colleagues call the possible inventors that never had a chance to fulfill their potential the “lost Einsteins.” They calculate that US innovation could quadruple if people from these groups became inventors at the same rate as men from high-income families. Van Reenen and his colleagues published the findings a couple years ago, but it’s worth going back to the 2018 paper (pdf), as well as watching this presentation Van Reenen gave, which was posted just last week.

Despite the evidence that it’s important to cast a wide, inclusive net for talented and brilliant innovators, the US seems to be going in exactly the opposite direction with the government’s ongoing effort to block immigration, including high-skilled workers. There has been plenty written on the personal and economic pain that policy is producing, but it’s also worth noting the destruction it will cause to the country’s ability to innovate.

One of the clearest examples of the kind of damage we’re talking about comes from the think-tank MacroPolo, at the Paulson Institute in Chicago. Its data breaks down where top-tier AI researchers come from and where they work: 29% are Chinese while just 20% are American, but 59% of these top AI researchers work in the US. Immigration is plainly the lifeblood of AI research in America.

It really doesn’t matter how you do the math, a healthy innovation system depends on recruiting the most talented people. Whether you call them lost Einsteins—or, as Lisa Cook likes to refer to them, lost Katherine Johnsons—excluding people because they’re female or Black or from China or from Guatemala for that matter is not only stupid and wrong, it’s limiting the country’s  prosperity and economic growth.
Must Reads

For months now, a number of leading economists, including Nobel laureate Paul Romer, have been calling for massive and frequent testing as a way out of the covid-19 pandemic. Here Romer and his coauthors provide a detailed plan for how weekly testing in the UK could, along with household quarantine and contact tracing, end the pandemic in that country. They calculate that 10 million tests per day will be needed. The plan includes an outline of the technology and logistics required to get it done.

Something similar could work in the US (pdf); Romer thinks about 25 million tests a day and screening people every 14 days would be sufficient to snuff out the infection. To do so will mean getting the price of a test down from around $100 to $10, he says, and he suggests offering large prizes of around $1 billion for groups able to do that.

How do we recover? Though the numbers are changing rapidly, the magnitude of the damage to the economy from the pandemic is becoming clear. In a recent policy piece, a team of leading economists, including several who helped steer the US out of the last recession, calculate the covid-19 pandemic has shut-down one-sixth of the US economy (pdf) and “displaced one in four American workers.” They recommend a series of further fiscal steps, including increased support for small and mid-size businesses as well as local governments, that would cost $900 billion to $2 trillion.

Tech mobilizations: Lots of innovation experts and some journalists (including yours truly) have conjured up the technology mobilization effort at the beginning of World War II led by Vannevar Bush as a model for how the US can innovate its way out of the current economic crisis. It’s tempting stuff; not only did the scientific research effort during the war come up with some powerful weapons, it also produced synthetic penicillin, steroids, antimalaria drugs, and the flu vaccine.

But it’s worth understanding the impact of the ramped-up research effort, including how it drove the trajectory of technology after the war and how it concentrated research clusters. Here, some researchers take a deep dive into exactly what happened and how it changed our technology future.

Why did the US fail so badly in manufacturing what it needed during the early days of the covid-19 pandemic? There are lots of answers to that, including manufacturers’ reliance on global supply chains and just-in-time production. But here’s a terrific piece in ProPublica that draws out the lessons from an attempt after the 2008 recession to boost much needed lithium-ion battery manufacturing in the country. Things did not go well, and understanding why will be critical as America once again tries to reboot the economy.
FROM THE ARCHIVES
Here’s a look at why tech didn’t save us from covid-19 and what its failure says about the US innovation system.

More on Paul Romer’s plan for massive testing and why it’s really the only way to end the pandemic and save the economy.

In 2009, the federal stimulus bill allocated $100 billion for technology and clean energy projects to help the economy recover. Here are some of the things that went wrong—and no, it has nothing to do with Solyndra.
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WORTH NOTING
Worried how covid-19 will change your business? You’re not alone—more than 90% of executives surveyed said they expect their companies to fundamentally change over the next 5 years. Sadly, only 21% said they felt they had the expertise and resources to pursue new growth opportunities. (McKinsey)

Meanwhile, leading economists are calling for more US government relief. Some 150 signed a statement “imploring” Congress to pass “a multifaceted relief bill.” (Equitable Growth)

John Van Reenen, the MIT economist, has put out a well-argued and coherent plan on “Innovation Policies to Boost Productivity” (pdf) including a $100 billion per year Grand Innovation Fund. (Hamilton Project)
David Rotman
David Rotman is editor at large of MIT Technology Review. A science and business journalist, he has written extensively on chemistry, biotechnology, materials science, and environmental issues. Get in touch with tips or feedback at fwd@technologyreview.com.
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