Spurring innovation and competition in the U.S. economy

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., June 19, 2018. REUTERS/Brendan McDermid - RC1FC4D89340
Editor's note:

Sarah Miner contributed to this post.

Over the last 200 years, the U.S. economy has grown from its pre-industrial roots to become the largest and most dynamic economy in the world. Much of that explosive economic growth came from America’s intrepid entrepreneurs and vigorous market competition. But according to recent data, the dynamism that spurred the growth of the last two centuries years is in decline.

On June 13, the Hamilton Project at Brookings hosted an event that brought together a wide array of policy experts, entrepreneurs, and CEOs. They convened to tackle the question of how to spur innovation and competition in an economy plagued by declining dynamism, and they offered new insights and ideas for the future. Watch the event in its entirety here, and take a look at some highlights below.

The role of artificial intelligence in creating a competitive economy

“I would think a dystopian vision for the future would be one where AI didn’t replace a lot of the jobs we have right now,” said Jason Furman, former chair of the White House Council of Economic Advisers and now a  Harvard economic policy professor. He noted that technological innovations in the past may have eliminated certain jobs, but they’ve also paved the way for new industries with even greater potential for job growth.

How do mergers and acquisitions affect a company’s ability to innovate?

Steve Case, co-founder of AOL, addressed the recent court ruling that allows the merger of AT&T and Time Warner. He pointed out that as companies get larger, they tend to get less agile, and spoke about his own experience with AOL, which went from 200 employees to 90,000.

Virginia’s economic transformation

In 2014, when Terry McAuliffe took office as governor of Virginia, the state’s economy had been harmed by defense sequestration in the federal budget. McAuliffe explained how he undertook an ambitious and successful recruiting campaign to bring new companies and jobs to Virginia, without relying too heavily on monetary incentives.

In conjunction with the event, The Hamilton Project released three policy proposals that offer solutions for how to increase dynamism and competition. The topics of the proposals include data and identity portability, scope of practice regulations in the health sector, and reforming state policies to remove barriers to new businesses entering the market.

The proposals were released along with a new Hamilton Project report on competition and dynamism in the economy.

Watch the full event.