Innovation Files: Where Tech Meets Public Policy

The COVID-19 pandemic has brought into sharp focus the digital divide affecting millions of American families, especially those in low-income households. One of the most pernicious challenges is the divide between those with reliable access to computers and high-speed Internet in their homes and those without. Rob and Jackie discuss how local governments are on the front lines of addressing this challenge—and what the federal government can do to support healthy and inclusive digital ecosystems nationwide—with Joshua Edmonds, Director of Digital Inclusion for the City of Detroit, Michigan.MentionedRocket Mortgage, “Detroit’s Vision To Be Fully Connected: Here’s How The City Is Bridging Its Digital Divide,” Forbes advertorial, August 12, 2020. Connect 313, City of Detroit Digital Inclusion Program. RelatedRobert D. Atkinson, et al., “Digital Policy for Physical Distancing: 28 Stimulus Proposals That Will Pay Long-Term Dividends” (ITIF, April 2020). Robert D. Atkinson, Mark Muro, and Jacob Whiton, “The Case for Growth Centers: How to Spread Tech Innovation Across America” (ITIF, December 2019).

If Netflix’s “The Social Dilemma” is to be believed, social media giants are surely responsible for the breakdown of our mental health, politics, and the economy. Generations of fear mongers have found reasons to believe new technologies—from books and bicycles to video games and email—are to blame for society’s ills. Rob and Jackie take a deep breath and discuss these predictable cycles of technology panic with Dr. Amy Orben, an expert in the history of technology panics at Emmanuel College, University of Cambridge.Mentioned:Amy Orben, “The Sisyphean Cycle of Technology Panics,” Perspectives on Psychological Science, June 30, 2020.Amy Orben, “The Sisyphean Cycle of Technology Panics,” video lecture, July 1, 2020. Related:Robert D. Atkinson, et al., “A Policymaker’s Guide to the “Techlash”—What It Is and Why It’s a Threat to Growth and Progress” (ITIF, October 2019).Daniel Castro and Alan McQuinn, “The Privacy Panic Cycle: A Guide to Public Fears About New Technologies” (ITIF, September 2015).

For too long, economic policy in the U.S. and Commonwealth nations has been guided by the “market efficiency” school. The result has been a widespread unwillingness to view government roles as critical to boosting innovation, growth, and competitiveness. It’s time for a new approach, which Lord David Sainsbury, author of Windows of Opportunity: How Nations Make Wealth, calls the “production capability” school. Under this school, the key question for economic policy is how well it enables enterprises to be more innovative and efficient. Rejecting the old doctrine in favor of the new is perhaps the most economic important task for our time. Rob and Jackie discuss this and the role for government in “picking winners” at the level of technologies and industries with Sainsbury.Mentioned:Lord David Sainsbury, Windows of Opportunity: How Nations Make Wealth (Profile Books, 2019).Robert D. Atkinson and Stephen J. Ezell, Innovation Economics: The Race for Global Advantage (Yale University Press, 2014). 

Innovation is central to addressing global climate change while increasing economic growth, boosting international competitiveness, and strengthening energy security. Yet out of a $4 trillion budget, the United States only invests about $8 billion a year—or 0.04 percent of GDP—on clean energy research and development. Rob and Jackie discuss the urgent need for innovation in the clean energy sector—and “must pass” legislation that will accelerate progress—with Colin Cunliff, senior analyst at ITIF’s Clean Energy Innovation Program.Related:Colin Cunliff, “An Innovation Agenda for Deep Decarbonization: Bridging Gaps in the Federal Energy RD&D Portfolio” (ITIF, November 2018). Colin Cunliff, “Omission Innovation 2.0: Diagnosing the Global Clean Energy Innovation System” (ITIF, September 2019).Colin Cunliff, “An Innovation Agenda for Hard-to-Decarbonize Energy Sectors,” Issues in Science and Technology, Vol. XXXVI, no. 1, Fall 2019.Colin Cunliff, “Accelerating Energy Innovation in the 116th Congress: 10 Priorities for 2020” (ITIF, January 2020). 

A vocal group of alarmists worry that the pace of automation—particularly advances in robotics and artificial intelligence—will soon displace human labor to such an extent that many workers will be left with nothing to do. Never mind that generation after generation of technological innovations in industries ranging from textiles to steel to banking have always produced the opposite result: expanding the labor force, not wiping it out. Rob and Jackie delve into the evidence with Dr. James Bessen, executive director of the Technology & Policy Research Initiative (TPRI) at Boston University School of Law and author of Learning by Doing: The Real Connection Between Innovation, Wages and Wealth.Mentioned:James Bessen, Learning by Doing: The Real Connection Between Innovation, Wages and Wealth, (Yale University Press, 2015).James Bessen, et al., “Firm-Level Automation: Evidence from the Netherlands,” American Economic Association, AEA Papers and Proceedings, 110: 389-93.Robert D. Atkinson, “How G7 Nations Can Support and Prepare for the Next Technology Wave” (ITIF, March 2018).Technology & Policy Research Initiative (TPRI), Boston University School of Law.Related:ITIF’s @Work Series: “Employment in the Innovation Economy.”Robert D. Atkinson, “Robots, Automation, and Jobs: A Primer for Policymakers” (ITIF, May 2017).Robert D. Atkinson, “Robotics and the Future of Production and Work” (ITIF, October 2019).Robert D. Atkinson, “How to Reform Worker-Training and Adjustment Policies for an Era of Technological Change” (ITIF, February 2018). 

The U.S. Labor Department’s jobs report in February 2020 showed the country’s lowest rate of unemployment in 60 years. Two months later, it showed the highest rate of unemployment in 80 years. As The Wall Street Journal put it, “The coronavirus pandemic is forcing the fastest reallocation of labor since World War II, with companies and governments mobilizing an army of idled workers into new activities that are urgently needed.” Rob and Jackie discuss this “reallocation shock”—and which sectors will fare well or bare the brunt—with Nick Bloom, the William Eberle Professor of Economics at Stanford University, who also co-directs the Productivity, Innovation and Entrepreneurship program at the National Bureau of Economic Research. Mentioned:Jose Maria Barrero, Nick Bloom, and Steven J. Davis, “COVID-19 Is Also a Reallocation Shock,” University of Chicago, Becker Friedman Institute, working paper No. 2020-59. U.S. Bureau of Labor Statistics, Monthly Labor Review. Nicholas Bloom bio: William Eberle Professor of Economics, Stanford University.

There’s a lot of doomsday hype around artificial intelligence in general, and the idea of so-called “killer robots” has been especially controversial. But when it comes to the ethics of these technologies, one can argue that robots actually could be more ethical than human operators. Humans can commit war crimes. They can deliberately kill innocent people or enemies that have surrendered. Humans get stressed and tired and bring any number of biases to the table. But robots just follow their code. Moreover, U.S. adversaries are deploying these technologies quickly, and stakes are high if we don’t keep up. Rob and Jackie discuss these technologies—and the risks of sitting out the AI arms race—with Robert J. Marks, Distinguished Professor of Electrical and Computer Engineering at Baylor University, and Director of the Walter Bradley Center for Natural and Artificial Intelligence.Mentioned:Robert J. Marks, The Case for Killer Robots: Why America’s Military Needs to Continue Development of Lethal, e-book (Walter Bradley Center for Natural and Artificial Intelligence), https://mindmatters.ai/killer-robots/. Forrest E. Morgan, et al., Military Applications of Artificial Intelligence: Ethical Concerns in an Uncertain World (RAND Corporation, 2020), https://www.rand.org/pubs/research_reports/RR3139-1.html.The Defense Innovation Unit (DIU), https://www.diu.mil/.

Congress is rightly considering substantial reforms to federal data-privacy law. In particular, there is a pressing need to preempt states from subjecting organizations to multiple, conflicting privacy rules. The debate now is not over whether to pass new legislation, but how to design such a law to protect consumers while encouraging continued innovation. Rob and Jackie discuss one proposal with its sponsor, Rep. Suzan DelBene (D-WA), honorary co-chair of ITIF. MentionedRobert D. Atkinson, Daniel Castro, and Doug Brake, “Technology Should Be Part of Any Stimulus Plan,” ITIF Innovation Files blog post, March 13, 2020. Office of Rep. Suzan DelBene (D-WA), “DelBene Introduces Legislation to Protect Consumer Privacy,” news release, March 29, 2019. ITIF, “DelBene Privacy Bill Would Protect Consumers Without Undermining Innovation,” news release, March 29, 2019. ITIF, “ECJ’s Irresponsible Decision in Schrems Case Will Wreak Havoc on Global Data Flows,” news release, July 16, 2020. RelatedDaniel Castro, Ben Miller, and Adams Nager, “Unlocking the Potential of Physician-to-Patient Telehealth Services” (ITIF, May 2014).Daniel Castro, “5 Lessons the U.S. Can Learn from European Privacy Efforts,” Government Technology, July-August, 2019.

There has been a global consensus for nearly a century that countries should tax multinational companies in the jurisdictions where they create value, not where they generate sales. But that consensus has begun to fall apart as digitalization has made it easier to serve regional markets remotely and Internet companies have successfully capitalized on the opportunity. A growing number of countries, from the United Kingdom and France to Chile and Australia, are now looking to impose “digital services taxes” (DSTs) on a select few of these Internet companies—mostly American—on the dubious theory that users are creating a significant share of their value, so their profits should be taxed where their users reside. Rob and Jackie discuss the dangers of this approach—and how policymakers can protect U.S. firms—with trade expert Clete Willems, partner at Akin Gump Strauss.Mentioned:Clete Willems, “Digital taxes are an even bigger threat to the US economy during the pandemic,” CNBC, May 27, 2020.Joe Kennedy, “Digital Services Taxes: A Bad Idea Whose Time Should Never Come” (ITIF, May 2019).Robert D. Atkinson, Nigel Cory, and Stephen Ezell, “Stopping China’s Mercantilism: A Doctrine of Constructive, Alliance-Backed Confrontation” (ITIF, March 2017).Related:Joe Kennedy, “Comments to the U.S. Trade Representative Regarding Section 301 Investigations of Digital Services Taxes” (ITIF, June 2020).

The changing nature of labor markets—and how best to prepare people and society for the jobs of the future—is one of the most crucial public policy challenges that policymakers around the world will face in the coming years. This was already the case before COVID-19, but disruption from the pandemic has made things exponentially more challenging. Rob and Jackie discuss how Congress can address these challenges with Rep. Derek Kilmer (D-WA), chairman of the House New Democrat Coalition.MentionedRobert D. Atkinson  Jeffrey Brown, “The Future of Work: A Guide for Transatlantic Policymakers” (ITIF, December 2018). New Democrat Coalition, “A Future that Works,” policy agenda.Office of Rep. Derek Kilmer (D-WA), “Kilmer, Thompson, Klobuchar and Sasse Introduce Bipartisan Legislation to Help Workers Save for Critical Skills Training they Need to Compete in the 21st Century Economy,” news release, January 31, 2019. Office of Rep. Derek Kilmer (D-WA), “Kilmer, Brooks, Sewell, Thompson Introduce Bipartisan, Bicameral Legislation to Help Unemployed American Workers Access Skills Training Programs During Coronavirus Pandemic,” news release, May 20, 2020. New Democrat Coalition, “New Democrat Coalition Chair Statement on Rep. Beyer’s Proposal to Implement Automatic Stabilizers for Unemployment Benefits,” news release, May 5, 2020. Robert D. Atkinson, “How to Reform Worker-Training and Adjustment Policies for an Era of Technological Change” (ITIF, February 2018).Rep. Kilmer’s podcast: Quick Questions About Congress With Kilmer.