A recent speech by Treasury Secretary Geithner has been getting press coverage as it focused on his views on our economic relations with China. Those comments were an important statement that the relationship needs to change. (For the entire speech, see below.)
But in response to questions, according to the Wall Street Journal, he also spoke about the upcoming budget:
He said it was important to do that “but still preserve the capacity to invest more in things that will be essential to our competitiveness.”
“So the debate we should be having has to be fundamentally about how to make sure that we’re preserving the capacity to spend more – more wisely and more strategically in research and development, in education, in incentives for investment and in public infrastructure.”
I hope that this focus on investing for competitiveness also includes the recognition that it is not simply about throwing more money at the problem. Our strategy needs to change as well. The comments on China reflect a little bit of that. But we also need to go beyond the standard areas as public education, R&D and infrastructure to carefully look at also the policies and investments needed to foster the broad range of intangible assets.
We need to look at how we constantly upgrade the skills and knowledge of our entire population and create a learning society — not just look at the formal education system. We need to look at the process of creating new goods and services (innovation ) — not just R&D. We need to look at the organizational infrastructure that makes our workers and companies competitive — not just the physical infrastructure of road and communications networks.
In sum, we need a comprehensive look at the I-Cubed Economy in the 21st Century — not just one that recycles the policies of the 1980’s and 90’s. So while I will applaud references to education, R&D and infrastructure in the State of the Union, I will be looking for a broader vision for the future of the US economy.