Business & Tech

scott kirsner | innovation economy

Trump win looks like a loss for the Knowledge Economy

President-elect Donald J. Trump has vowed to revitalize manufacturing in the United States, perhaps at the expense of the health care research and technology that are vital to Massachusetts.
Paul Sakuma/ASSOCIATED PRESS/File 2001
President-elect Donald J. Trump has vowed to revitalize manufacturing in the United States, perhaps at the expense of the health care research and technology that are vital to Massachusetts.

This month’s presidential election featured two major party candidates and two visions of the US economy. I worry that the Knowledge Economy lost and the Nostalgia Economy won.

President-elect Donald J. Trump has vowed to bring manufacturing back to the United States; preserve the jobs of the 54,000 coal miners who still work in this country (down from 250,000 when Reagan was elected); and revitalize American steel and aluminum mills.

The promise of restoring our post-World War II industrial potency certainly appealed to voters.

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At the same time, Trump has disparaged the National Institutes of Health, an agency that funded $2.5 billion of medical research in Massachusetts last year — much of it seeking to develop future cures and treatments. “I hear so much about the NIH, and it’s terrible,” Trump told the conservative radio host Michael Savage in 2015.

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And his views on many other issues that affect the Knowledge Economy have been tough to nail down. Paul LeBlanc, president of Southern New Hampshire University, says that when he was participating in an educational policy conclave in Washington last month, the group tried to reach out to the Democratic and Republican candidates to “try to influence the next administration.”

“We literally couldn’t get names from the Trump side,” he says. “There was no one to pick up the phone.”

In states like Massachusetts, New York, Virginia, California, and Washington (yes, all voted Democratic in this election), the dominant ethos is “get smart or start.” If you want to be earning a decent living in the 21st century, you get the most education you can, ideally in a high-demand field, or you start your own business. I’m not sure what to call the opposite approach: “Drop out and hope”?

Interestingly, nearly every state where a lower-than-average percentage of adults have earned advanced degrees, according to Census Bureau data, voted Republican.

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Russ Wilcox, a serial entrepreneur who currently runs a small Cambridge biotech, Piper Therapeutics, observes via e-mail that “the Nostalgia Economy workers won this round. That is a setback for Knowledge Economy workers, and yet perhaps somewhat fair. In the past twenty years, the educated elites have run up the score, some earning obscene paychecks, and income inequality has surged.”

“I do think that one of the messages from this election is that some people do feel left behind by innovation, change, and disruption,” Steve Case said in an e-mail interview. “And it’s incumbent on us who thrive on these trends to make sure we are doing more to have their benefits be more widely shared.” Case is the founder of America Online and author of the recent book “The Third Wave,” which argues that many of the next generation of great technology companies will be built outside of Silicon Valley, a trend he has dubbed “the rise of the rest.”

That conversation about spreading the benefits of innovation more widely is one that has been a regular refrain since we woke up on Nov. 9. But many of the fastest-growing, most highly valued Knowledge Economy companies not only don’t create jobs in Rust Belt America, but they’re developing robots, software, and autonomous vehicles that are likely to destroy millions of jobs.

“Self-driving trucks make a huge amount of sense for efficiency, safety, and trackability,” says David Hornik, a general partner at the Silicon Valley venture capital firm August Capital. “And if we’re successful in creating self-driving long-haul trucks, a few million people will lose their jobs.” (And what if we’re not successful? Will we bar Japanese or German truck manufacturers from selling their self-driving vehicles here to preserve these “Smokey and the Bandit”-era jobs?)

In this conflict between the Nostalgia Economy and the Knowledge Economy, it’s hard not to think back to the Luddites, those English machinery-smashers of the early Industrial Revolution. If you’d tried to protect the humans doing manual work then from the onslaught of progress, you’d have lost the textile industry.

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But when you have disruptive technologies disrupting people’s careers, you need to double down on education and retraining. And on the campaign trail, that’s something we heard from Hillary Clinton, but not from Trump, who instead talked about tariffs, walls, and getting tougher with trading partners. His message resonated with older, white voters without a college education.

“Leaders across the political spectrum want to support more opportunities for the people left behind,” says Ross Gittell, chancellor of the Community College System of New Hampshire, “and there’s evidence that there is a path — it’s the kind of training and education that a lot of community colleges are in the business of.”

There’s a big question mark as to whether the new administration will seek to support or slash the research and development funding that fuels academic research labs and spawns startups such as the Small Business Association’s innovation and technology grant programs, or the ARPA-E program at the Department of Energy, which supports leading-edge research.

“I’m discouraged if they cut back on investments in education and R&D,” says Erik Brynjolfsson, a professor at MIT’s Sloan School of Management and director of the MIT Initiative on the Digital Economy. It’s possible Trump will see campuses as liberal bastions — students have already been protesting his election, and his promise to begin deporting illegal immigrants — and reducing R&D funding would be a way to punish them.

Wilcox, the biotech exec, says as the Trump administration and Congress discuss investments in physical infrastructure such as roads and bridges as a way to create jobs, Democrats should “attempt to expand that to include American advanced research facilities as a type of infrastructure. Some of those labs could be in the heartland, where there are many fine state universities turning out science PhDs. Other money should flow back to our centers of R&D strength in Boston and California to retain world-class leadership.”

I’m concerned, though, that we in the Knowledge Economy are playing a long game, investing in things that will build our nation’s strength over decades, and the new president and Congress will be hunting for quick fixes.

LeBlanc at Southern New Hampshire University says that much of what Trump said about bringing back the glories of the 20th-century economy was “what he had to say to get elected. The nerve it hit, though, is that the Knowledge Economy has left too many people behind.”

Let’s hope (against hope?) that we’re about to have a productive, fact-based conversation about how to help those people participate in the 21st-century economy — rather than taking a hammer to it.

Scott Kirsner can be reached at kirsner@pobox.com. Follow him on Twitter @ScottKirsner.