Editorial: America needs new innovation

To help bridge the economic divide, we must create something bigger than a social networking app.

photo by: Journal-World Photo Illustration

Lawrence Journal-World Editorial

The bull that roams Wall Street is old, but is becoming less impressive with each buck.

Wednesday was a milestone day. It was the day the U.S. stock market set a new record for the longest-running bull market in history. A bull market generally is considered a period where stock prices increase without ever suffering a decline of 20 percent or more. This bull market began on March 9, 2009, and surpassed the dot-com boom that ran from 1990 to 2000.

For the roughly half of Americans who have money invested in the stock market, the bull market has been a real positive. For the other half, they probably haven’t noticed. It is not like their paychecks have soared along with the market.

The paycheck market has been more of a donkey than a bull — stubborn. Many companies just aren’t budging when it comes to meaningful pay increases. An August Labor Department report found the cost of living was up 2.9 percent from July 2017 to July 2018, while wage increases during that time period totaled 2.7 percent.

But Wednesday’s anniversary was useful for reflection. The Washington Post published an article that looked at the most valuable companies on the stock market now and then. Before the financial crisis that preceded this bull market, the top four most valuable companies on the stock market were: ExxonMobil, General Electric, Microsoft and AT&T. Today, all four are technology companies: Apple, Amazon, Google and Microsoft, according to the Post article.

In some regards, it is positive that the U.S. economy has such a heavy tech dominance. Technology most often leads to new innovations and new products that will keep an economy dynamic and strong for years to come. Certainly, the U.S. economy has greatly benefited from some of these companies.

The smartphone revolution that Apple largely led has improved productivity and created a lot of tech jobs in the process.

By making the internet manageable to search, Google benefited both businesses and households by bringing troves of information to our fingertips.

Microsoft forever changed the office environment and made any number of tasks easier to accomplish by the software the company developed.

Today, however, Amazon is probably the company that is producing the most innovation that can really lead to greater productivity. It is likely that the retail industry will look very different in the next decade than it does today due to technology that Amazon is developing currently. However, while it may make the retail industry more productive, it may lead to a loss of jobs in the sector. It will be disruptive, and painful, but probably impossible to prevent. The market ultimately will take the most productive path.

That won’t do much to heal what seems to be a growing economic divide in America. Rather, it will create an even larger class of people who are struggling to find new skills for a new world.

America needs to find the world’s next great invention. It needs to be something more significant than a social networking app. Facebook recently has seemed to be more trouble than it is worth. Whether it be in energy, transportation, health care or some other sector, the world is ready for its next great leap. Think what electrification did for the country, or the invention of the automobile. What can America produce that will provide that type of boost to our economy and our quality of life?

We shouldn’t let this old bull fool us into believing we don’t need to find it.

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