Bernanke Positive About The Gains Fueled By Future Innovation – But There Is Also Innovation Driven By New Ways Of Utilizing Existing Resources – Think Of Wellness Education and Internet Delivered Higher Learning

By Paolo von Schirach

May 18, 2013

WASHINGTON – According to the WSJ, Fed Chairman Ben Bernanke in an address at Bard College indicated that he is very optimistic about innovation-led future growth. He acknowledged that, beyond the always booming IT sector, we have not seen many technological breakthroughs in the last 50 years. Even allowing for improvements here and there, today we use pretty much the same laundry machines, dishwashers and vacuum cleaners we knew 40-50 years ago. And they are all powered by the same coal or gas generated electricity. Ditto for automobiles. Yes, they are safer and more fuel efficient; but they have not morphed into something our grandparents would not be able to recognize. Same for civil aviation. We use the same jet airplanes that went commercial in the 1960s.

New technologies?

However, Bernanke believes that we have barely scratched the surface regarding the transformative benefits of IT. By the same token, renewable energy is a very new sector. We have yet to see what it can deliver in terms of cheap, clean energy. And then there are the hidden promises of bio-technology. And so on, and so forth.

Of course, Bernanake is right, at least in principle. A prolonged period without any major technological advances is no conclusive evidence that “the age of innovation” is over. We are lucky to live in America, a society in which enterprise is possible, while innovators can realistically expect to be financially rewarded for their efforts. All this creates  powerful incentives to experiment and try something new.

New use of existing knowledge, tools

That said, let me point out that we are conditioned to think about innovation mostly as the invention of new “things”: technological contraptions that “do” amazing things, until now impossible. But innovation is also about different ways of thinking that would allow a better and more efficient allocation of resources for human gain using known technologies.


Let me offer a few examples. The concept of “Wellness Education” as it relates to health care may sound faddish. Yet, consider that a disproportionate amount of US truly extraordinary health care costs are due to life style-caused preventable diseases, (like those deriving from obesity). Therefore, it should be self-evident that if the general population grasped that their health depended in large part on good diet and plenty of exercise we could see at the same time a healthier more productive population, people living longer disease free, and a dramatic decline of unnecessary health care costs. We are talking about hundreds of billions every year.

And, please do keep in mind that all this would happen without the aid of any new cure for this and that. No need of miracle drugs or ground breaking diagnostic equipment. Just sensible, yet truly transformative life style changes caused by education on how to change personal habits for real, personal gain.

Internet driven high quality education

And then we have IT enabled distance learning. This field is still in its infancy. But its transformative potential is just extraordinary. For centuries we have been used to the idea that good education is a precious commodity available only to the very few lucky enough or rich enough to attend elite schools. There they would have the unique privilege to sit in classes where the best minds would deliver most insightful new knowledge. 

Well, it turns out that now it is quite possible to “bottle” those lectures delivered by the best minds, with all the advantages of meaningful  interactivity, and make them available to millions, perhaps tes of millions, via the internet — and not juts to the hundred or so rich students whose families can pay extravagantly high tuition. 

Various experiments already conducted demonstrate that this new way to have distance learning is possible and that the results in terms of quality of the experience are pretty much the same for those who attend the lecture and those who watch on their computers. In other words, I can get great benefit attending classes at Stanford. But a student somewhere in India or Mozambique can gain just as much by watching the very same lectures delivered to him/her via the internet. Which is to say that existing technology, properly customized, already allows us, for the first time in human history, to make high level education (once the prerogative of the few) available to millions.

And what can be the transformative impact of new, quality knowledge spread far and wide? Who knows really. Who knows what new ideas this unprecedented abundance may generate. Who knows how new generations of scientists, technologists and intellectuals may be able to interact with one another, within and across countries, with the distinct possibility of speeding up the slow moving technological innovation process.    

Innovation is also about changing our mind set

All this amounts to saying that, while we wait for the hoped for transformative technological breakthroughs Bernanke talked about in his address at Bard College, it would be foolish not to take advantage of what is already available. But do keep in mind that in the examples I outlined the challenge is not in any lack of new technology. The challenge is to innovate our way of thinking about existing resources.

Yes, “innovation” is not just about new “things” bright people can conceive.

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