A traditional infrastructure plan that invests in roads and bridges could increase employment in the short term, but the Trump administration and new Congress should also focus on the building blocks of innovation, such as research & development and technology-enabled “smart” public works because they can support a more robust economy long term, contends the Information and Technology Innovation Foundation (ITIF), Washington, D.C.
“Just as physical infrastructure undergirded the U.S. economy in the industrial era, scientific and technological innovation is an essential building block for sustained growth as we look to the future,” says ITIF President Robert Atkinson. “The U.S. economy is saddled with stagnant productivity and chronic underinvestment, which are slowing growth and preventing us from raising people’s living standards. Filling potholes and repairing sewers would certainly create jobs in the short term, but we also need investment that will address these structural issues for the long run. Increased productivity is the only path to better standards of living, and traditional infrastructure stimulus won’t be enough to get us there.”
In a new ITIF report, “Investing in ‘Innovation Infrastructure’ to Restore U.S. Growth,” Massachusetts Institute of Technology/Washington Office policy advisor Peter Singer argues that traditional infrastructure spending can stimulate short-term job growth, but it won’t address the lack of investment that is holding back sustainable, long-term growth. To address the structural issues of lagging productivity and underinvestment, he urges policymakers to invest in research funding; advanced-technology development; research infrastructure; “smart infrastructure;” and, pre-competitive, cooperative advanced-manufacturing research institutes. Support of this kind of innovation is needed to get the economy back in high gear for the future.
“[President] Trump’s campaign focused on getting the United States out of its low-growth rut,” Atkinson observes. “We hope his infrastructure plan will look beyond easy, short-term answers and also instead invest in what the country needs to have sustainable growth that improves living standards across the board.”
“One key reason Donald Trump was elected president is because he stressed the importance of growth and getting the U.S. economy out of its structural stagnation, low-growth rut. We believe that such a goal is not only desirable, but possible to achieve,” Singer writes. “But if the major policy tool is spending money to repair roads, bridges, and water pipes, robust growth will not be restored. To do that requires much more innovation and the private sector investment that comes when companies want to significantly ramp up. That will not happen at the pace we need without significant increases in investment in innovation infrastructure.
“Making expansion of ‘innovation infrastructure’—the new infrastructure around such areas as R&D investment, advanced technology development, scientific infrastructure, and advanced manufacturing—needs to play a key role in any Trump administration policy attacking the structural problems of low productivity and investment, which in turn affect GDP growth and quality job creation,” Singer concludes.