MEMBER POST: The Next Wave of Innovation Will Come From America's Forgotten Communities
In a New York Time’s article titled Tech Is Splitting the U.S. Work Force in Two, written by Eduardo Porter in February of this year, it was argued that the technology sector is breaking our economy in ways that are destabilizing our society, at large. In his piece, Porter argued that while the technology sector has promised a future where we’ll be capable of doing meaningful work we care about while being paid livable wages, we’re really just getting lulled into a world where robots do all the work and a small handful of individuals aggregate the majority of the wealth leaving the rest of us to live off some “yet-to-be-invented welfare program... a Silicon Valley pipe dream.”
This, Porter argues, is splitting the American labor force into two worlds: one where an increasingly small group of highly educated professionals are obtaining the majority of the wealth and reinvesting it into discovering even more ways to automate more work, and one where a sea of previously middle-class, less educated but hard-working individuals are getting pushed into dead-end jobs with little hope for upward mobility—the death of the American dream. And he’s not entirely wrong.
Recently, research from David Autor of the Massachusetts Institute of Technology and Anna Salomons of Utrecht University discovered that over the last 40 years, jobs have fallen in every single industry that introduced technologies to enhance productivity. The only reason employment didn’t fall across the entire economy is that other industries, with less productivity growth—jobs like hotels, restaurants and nursing homes—picked up the slack. “The challenge is not the quantity of jobs,” they wrote. “The challenge is the quality of jobs available to low- and medium-skill workers.”
Their work also demonstrated that while automation might not fully displace jobs, which follows the thinking of many mainstream economists, it does tend to reduce the value of jobs significantly. For example, if a majority of the person’s work can be automated, why would a company pay that person the same wages as previous eras where they were more mission critical to the task? The answer is that they won’t. So, while the robots may not take all of our jobs, we’re left to ask ourselves one simple question: while there may technically be jobs, does it really matter if the job’s value is reduced to near zero? Reduce the value of a job enough and you might as well just get rid of it. And it’s not just researchers that are concerned.
In a lecture at the National Bureau of Economic Research five years ago Lawrence Summers, a former Treasury secretary and presidential economic adviser, discussed the cognitive dissonance he was having with the impact automation might have on our economy. In his lecture, he mentioned how he used to believe the Luddites were wrong and that believers in technological innovation were right. He then continued to say, “I’m not so completely certain now... the cost of automation to workers and society could be substantial. It may well be that,” Mr. Summers said, “some categories of labor will not be able to earn a subsistence income.” One can easily imagine how such an amplification disparity in wealth and loss of opportunity would only exacerbate current social ills such as workers dropping out of jobs and getting hooked on painkillers, to mass incarceration and families falling apart.
However, it doesn’t have to be this way. What several of the world’s most prominent business leaders are realizing is that the future of innovation lies in accelerating local, emerging economies and enabling people to participate in meaningful ways. Why? Well, while we idealize the companies established in Silicon Valley, there’s much to be learned from companies in smaller markets.
For one, distance creates a freedom that is impossible to achieve in a high-pressure, hyper-focused environment like The Valley. Getting away from such pressures and allowing our minds to wander often leads to insights that may not have been discovered otherwise. And two, success is often found when someone notices something the rest of the world was incapable of seeing and decides to capitalize on it. When someone lives in a bubble Silicon Valley, it’s easy to miss opportunities that may otherwise be obvious to outsiders. Combined, these factors are leading to a rise of innovation outside The Valley in the form of hyper-local, sustainable business models that are being created to solve real problems in people’s lives, not just get them hooked to a screen. However, one of the biggest problems facing these entrepreneurs is a lack of proper resources—lack of funding, connections to experienced advisors, and the talent necessary to bring their ideas to life.
And this is exactly where some of the world’s most future-focused business leaders see an opportunity. Humans still have value and will for quite some time. Those who can discover meaningful ways to enable and catalyze communities outside of major tech hubs, especially in ways that work synergistically with our new machine partners, will reap the benefits for many years to come. That’s why this author, as well as many major business leaders, believes the future of innovation resides in accelerating emerging communities and working to raise all ships so that we, as a nation, can creatively discover ways to sustain ourselves. This sounds like a big task, and it is, but if you look closely it’s not so hard to see that this is becoming more common that many may realize.
Chris Koehn, Founder and CEO of Second-61 in Cañon City, Colorado has been working for years on what he calls “rural reshoring.” The purpose of Koehn’s work is to help people find their purpose in meaningful work that allows them to become self-sufficient and empowered market actors who are actively participating in building the future instead of having it pushed on them and being told their problems will be resolved by an imaginary basic income concept. Accelerating this movement towards a decentralized workforce is something Koehn feels is mission critical to the prosperity of the United States economy. He believes that by providing job opportunities and retraining communities that may otherwise get left behind or looked at as outdated, businesses can achieve both cheaper labor (unlike San Francisco where low-income is $117,400) and lower overhead costs while also feeling proud that they’ve reinspired economic growth in some of our nation’s hardest working communities.
As ambitious as Koehn’s work is, it’s not the only success story out of the Cañon City area. Supported by TechSTART, an innovation hub created by the county’s economic development center to support rural entrepreneurs, the Upper Arkansas region is also home to companies like Bravrr, a wearable sensor device that helps with the management of bruxism and River Science, a high achieving watershed management and river restoration non-profit run by Marie Curie Fellow, Luke Javernick. Companies like these have greatly increased the need for qualified technical talent in the Upper Arkansas region, pushing the area to develop some surprisingly progressive educational programs to prepare its students.
In doing so, Cañon City High School was awarded the fourth Pathways in Technology Early College High Schools (PTECH) grant in the state, and the only rural PTECH grant in the country. This program provides tech-based internships for their STEM focused students, giving successful participants two years of free college through the completion of their Associate's Degree. Nearby Pueblo Community College works closely with local industry partners to ensure students in their CIS program are "workforce ready" on graduation day, and was recently designated a National Center of Academic Excellence in Cyber Defense Education by the National Security Agency and Department of Homeland Security.
But it doesn’t stop there. Across the state in Telluride, Colorado, there’s also Greater Colorado VC doing the same for western Colorado. As one of the first venture funds focused explicitly on rural regions, Greater Colorado VC has identified nearly 200 business focused on growth almost entirely in Western Colorado including companies that have won accolades in the outdoor industry like Western Rise to companies creating software to help governments track and collect on short term rental fees like MuniRevs as well as companies like Agile Space Propulsion, which is building rocket engines and thrusters. Companies like these have the promise to not only compete globally but have a very real economic and social impact in their own small communities.
Continuing inward, the midwest is the home of Silicon Prairie, a large network of emerging technical communities, including Nebraska, Iowa, Kansas, Missouri, Illinois, Minnesota and Oklahoma. A light skim through the content at Silicon Prairie News (SPN), an organization intent on amplifying the work of the region’s technology companies, and it’s clear to see the midwest is bustling with activity. There are larger success stories like Hudl, Opendorse, and BuilderTrend as well as emerging stories such as CoSchedule in Bismarck, ND; Quantified Ag in Lincoln, NE; OpsCompass in Omaha, NE; EquipmentShareColumbia, MO; c2Renew in Fargo, ND; Swanleap in Madison, WI; Oseberg out of Oklahoma City, OK; and H2W Apparel in Council Bluffs, IA. All of these companies started with a focus on solving local market needs in meaningful ways and have seen their success blossom from there.
Enabling The Future of American Prosperity
By definition, a local, sustainable business isn’t made to make anyone a billionaire. But it can. Many globally-recognized businesses started as small ventures focused on filling a local, niche market need only to realize a larger potential long term. Even so, the world doesn’t need more billionaires, it needs more people solving problems in sustainable ways. In a conversation I had with Marc Nager, founder of Startup Weekend, globally, and Greater Colorado VC, locally, in Telluride, CO, he mentioned his reasoning for working with local communities was that “it’s about helping people build the life they want to live, in a local, sustainable way instead of being forced to find work in a big city where the cost and scale of population is unsustainable.” When business and social incentives align, it’s a beautiful thing.
As mentioned in this article, model societies exist. These communities are competing with the big hubs and have a desire to push further, but they need opportunities to move forward. They need to be recognized beyond just another small town or developing community. And it is up to business leaders to see these communities for what they are: both a great business opportunity and a way to strengthen our country’s economy, as a whole.
Enabling the economic stability of emerging communities is the next wave of innovation, and it's coming on strong. As we discover and accelerate emerging markets around the globe we have to keep in mind that all revolutionary innovations that exist today started small and that one of the biggest problems modern innovators face is a lack of proper resourcing. By enabling these communities there is an opportunity to discover unique solutions created in smaller markets that not only open up an opportunity for communities to create new jobs but also spur competition and innovation in ways that may not otherwise exist—something our world desperately needs. The question that needs to be answered is this: in ten years from now, will you look back and be able to say you were there first?
I am Founder and CVO of the Better Ethics and Consumer Outcomes Network (BEACON), and a former Experience Design Consultant for Google. I have won international awards for my work, including Cannes Lions, Clios, D&ADs and more. I also write for international publications like Forbes, Smashing Magazine, InVision, Adweek, and more. In 2017 I decided to step away from my role consulting with Google, due to ethical concerns. Since leaving, I have been focused on bringing technology literacy to the masses, which has led to my book, called Automating Humanity, and BEACON, both of which are focused on increasing technology literacy, discovering opportunities for purpose-driven innovation, and moving communities forward in the age of automation.