While the 21st-century economy holds the potential for incredible growth, individual achievement, and economic mobility, these possibilities are by no means guaranteed to be widely shared. Far too many Americans feel vulnerable in this economy and see few avenues for advancement.
Growth in GDP and wages since the Great Recession has been sluggish, and recent technological innovations and improvements in the labor market have not translated into a more robust economic outlook. Future economic competitiveness and performance require the ability to understand a number of key trends contributing to this outlook from lower productivity growth to the changing demographic makeup of the United States and adapt.
This paper sets out to “confront the new economy” by identifying those outdated policy approaches that are limiting the economic potential of our increasingly innovation-driven economy.
A chief concern is how to better support the new and growing businesses and entrepreneurs that are vital to innovation and a faster-growing economy. In particular, we must recognize that many government programs, policies, and regulations were designed and implemented in an economy far different from the one we have now and will have in the future. This paper sets out to “confront the new economy” by identifying those outdated policy approaches that are limiting the economic potential of our increasingly innovation-driven economy.
We frame this discussion in two parts:
- Assessing the key trends that affect both recently sluggish growth and future economic performance; and
- Identifying specific, outdated policy approaches that either contribute to those trends or, if addressed by policymakers, could mitigate them.
These two sections rely heavily on reviews of existing academic research by staff of the Bipartisan Policy Center and a series of interviews BPC conducted with more than 40 stakeholders, academics, and policymakers. In addition, BPC hosted two roundtable discussions: one in Washington, D.C., with members of the National Small Business Administration, and one in Denver with an array of local business and political leaders. The discussion of outdated policy approaches included in the second part of this paper reflects a synthesis of our information-gathering effort.