Car Wash - Spring 2014 - (Page 67)

FIGHTING FOR INNOVATION HANDLING HEADWINDS IS KEY TO CONTINUED INNOVATION, GROWTH BY BECC A VARGO DAGGE T T ECONOMIST ROBERT GORDON garnered a great deal of attention in 2013 for his TED Talk, The death of innovation, the end of growth, based on his August 2012 National Bureau of Economic Research paper, Is U.S. Economic Growth Over? Faltering Innovation Confronts the Six Headwinds. According to Gordon, a professor at Northwestern University, the modern era of innovation cannot bolster U.S. growth to the same degree as the second industrial revolution. The reasons are twofold. First, he argues, most of the big problems facing humanity were solved with inventions of the second industrial revolution, from 1870 to 1900. Electricity, the internal combustion engine, running water and other technologies enabled rapid growth for much of the 20th century. Momentous productivity gains are achieved, for example, when women are freed from the drudgery of carrying water into the home, but they can only be reaped once. Digital technologies of the third industrial revolution have brought incremental improvements that "do not fundamentally change labor productivity or the standard of living in the way that electric light, motor cars or indoor plumbing changed it," wrote Gordon. Second, U.S. economic growth faces six headwinds: an aging population, a faltering education system, income inequality, foreign competition, global warming and debt. Many countries face one or more of these hurdles, but Gordon thinks the combination and severity are unique to the U.S. "My guess is that a Canadian or Swedish economist looking at the past and future of his country would not be so alarmed." Tyler Cowen makes a similar argument in The Great Stagnation: How America Ate All the Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better. Cowen, an economics professor at George Mason University, cites challenges similar to those named by Gordon, plus access to previously uncultivated land, led to "a big and predictable stream of revenue growth across most of the economy." "When it comes to the web," wrote Cowen, "those assumptions are turning out to be wrong or misleading." On one measure, the two are correct: the United States' contribution to global economic growth has declined each year since 1999, while the roles of countries like China, Brazil and South Korea have grown. Yet the U.S. continues to be a global leader in innovation. In the 2013 World Intellectual Property Organization (WIPO) Global Innovation Index, the U.S. ranks fifth overall (Switzerland ranks first, followed by Sweden, the United Kingdom, and the Netherlands). Critics draw attention to assumptions behind Gordon's conclusion. His U.S.centric view overlooks some 3 billion people worldwide without running water, and even the most advanced economies have not reached nirvana. In light of cancer, AIDS, and Alzheimer's disease, not SPRING 2014 | CAR WASH MAGAZINE | WWW.CARWASH.ORG | 67 http://WWW.CARWASH.ORG

Table of Contents for the Digital Edition of Car Wash - Spring 2014

Letter From the ICA
Meet the Board
By the Numbers
Overheard Online
Look Out! Self-Driving Cars Heading Your Way
On the Road, but Still Online
Finding Your Way Through the Mobile Landscape
Take a Tour
Stay Ahead of the Curve
Car Wash Industry Celebrates Centennial Milestone
ICA 2013 Annual Report
Getting to the Point of Biometrics
Fighting for Innovation
Take It From Tech: Entrepreneurial Lessons Courtesy of Google
You Don’t Have to Fail
100 Years
The Innovator’s DNA
Emerging Russian Car Wash Industry Faces Challenges
Rise to the Top
Does a Company Really Need to Innovate?
Watersavers Program Reaches Out During Drought
Blast From the Past
Download It!
Marketing Minute
Ask Champ
Index of Advertisers
Focus on the Member

Car Wash - Spring 2014