I have been in the investment and high tech job creation business
for almost 50 years, and I have learned a very fundamental lesson:
When someone tells me they can solve my problem, I don’t believe him
until he can tell me what caused my problem. Neither of our
political parties can do this and, thus, their solutions in this
presidential election season are clearly not credible.
So what is the fundamental cause of continued high
unemployment? It is because we are being out-competed by other
countries. They are winning and we are losing. Their
employment in productive jobs is growing while ours barely grows at
Why is this?
We live in an increasingly interconnected world. We
cannot change this or stop it; no one can—certainly not Republicans
or Democrats. We now have a lot more potential customers but a
lot more real competitors, too. And the rules are the same as the
rules of competition between companies in the U.S…the rules that I
have lived with as a venture capitalist for 50 years. When the
winners get too big and too fat, more nimble competitors come along
and knock them off. In our domestic economy this is a good
thing, even though it means that people lose their jobs all the
time. It’s called creative destruction, because we create more
jobs than we destroy.
Big Blue lessons
This is how we grow and how we create more jobs through the creation
of many new companies (a few even backed by my firm). Some big
companies like IBM get knocked off their game (by companies like
Apple) but become more creative and find new ways to compete. Others
like Univac (a big competitor of IBM in the computer mainframe days)
In the competition between countries we need to be IBM and not
Univac, but like IBM we have to be willing to change. If we
simply want things to be the way they were in the “good old days” we
are destined to have high unemployment.
How do we be more like IBM? The answer is simple, but hard to
execute: we have to find new ways to become competitive. This
- Our citizens must be as well or better educated than our
- We have to reinvigorate what has been a core U.S. comparative
advantage: our capacity to innova
- We have to be more productive than our competitors – this
requires continuing to invest in infrastructure which we have
failed to do enough of.
- And we have to be willing to work as hard as our competitors
and accept the same pay for producing the same output.
Yet, in the face of this, what are both political parties