Mehlman: Half-speed economy will be the new normal
Former Assistant Commerce Secretary Bruce Mehlman shares his predictions for the economy as it begins to reopen.
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New York state law mandates K-12 schools practice 12 fire drills per year. But the state has never required schools to practice remote instruction, leading to predictable failures and avoidable inequities when the coronavirus pandemic arrived and schools closed.
And 19 years after the Sept. 11, 2001, terrorist attacks shut down airspace across the nation, Congress still had no plan for remote operations in a national emergency when the coronavirus hit.
Voters in Wisconsin’s primaries had to literally risk their lives to exercise their franchise because planners never planned for foreseeable contingencies.
NEW YORK CITY IS NOW ONLY PART OF STATE STILL WAITING ON REOPENING
When the pandemic postmortem is written, historians won’t need to look far to find fault. For decades, policymakers underfunded pandemic preparedness and opted for health system efficiency over surge resilience.
Our safety nets are woefully inadequate: 53 percent of American families lack emergency savings, over 33 million have no paid sick leave, and 28 million lack health insurance.
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Across our economy, we see a mixed bag of readiness. Government, health care and education were least prepared for the arrival of the disease COVID-19 that is caused by the novel coronavirus.
In stark contrast to these failures, the more digitized sectors of our economy proved the most buoyant in dealing with the pandemic. Technology companies led the way, shifting employees to remote work before government mandates, and enabling the millions of other Americans to continue working, playing and learning.
Digital readiness begat pandemic resilience beyond the technology sector itself. From retail to banking to communications to manufacturing, businesses that had embraced mobility, the cloud and broadband-enabled services persisted and often increasing productivity despite the lockdowns.
Of course, few of these businesses became digital-savvy in anticipation of a global pandemic. Rather, digital readiness is a 21st-century business imperative, and few companies or individuals can hope to compete without leveraging the power of such technologies.
We see this in the productivity statistics. From 2000 to 2015, the digital industries generated productivity growth of 2.7 percent per year, compared to just 0.7 percent for physical industries. And according to data from the National Science Foundation, digital industries were twice as likely to innovate compared to physical industries.
This contrast will only accelerate after the coronavirus pandemic has ended. In this decade it’s not the strongest companies that will survive nor the most intelligent individuals. The businesses and people who are most digital-ready and adaptable to technological change will succeed.
Survival of the connected-est. The fourth industrial revolution is accelerating, and even more than before the pandemic, software is “eating the world.”
Despite many positive possibilities for workers, consumers and students of the future, this trend threatens to exacerbate the already significant inequality between the digital haves and have-nots. Well before the COVID-19 outbreak and lockdown, we saw how digital divides contribute to gaps in learning, earning and even life expectancy.
Today some children who were struggling to keep up in the physical classroom are denied admission to the virtual school for want of Internet-enabled devices.
Rural businesses without broadband connections found it impossible to apply for and obtain government stimulus loans.
Older Americans in need of health care services but unable to leave home could not access the telehealth providers to whom so many of us have turned.
We can do better. As policymakers focus on helping Americans rebuild our economy and our lives, they can take meaningful steps to close these digital divides and accelerate our comeback by making broadband more available, affordable, accessible and American.
Available
Deployment of broadband to serve rural areas takes investment in infrastructure where market forces alone may not reach – in addition to regulatory approaches that do not discourage private sector investment and spectrum policies that prioritize broadband.
Congress could include such incentives in the next round of COVID-19 recovery legislation.
Affordable
While there are effective existing programs to help make broadband more affordable to low-income Americans, they need greater funding – especially now.
Additional initiatives could ensure that K-12 students have access to computers with Internet access so that no child is denied entry to the Zoom classroom and no family is unable to access government services.
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Accessible
Even when broadband is available and affordable, it remains inaccessible for too many businesses and individuals. Some lack the digital literacy that should be taught in schools. Others reasonably worry about cybersecurity risks or insufficient privacy protections.
Still more find essential government and health care online offerings poorly designed and user-unfriendly.
American
Years of aggressive investment in innovation combined with robust government subsidies and domestic protectionism enabled Chinese technology companies such as Huawei to vie for global dominance in 5G.
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American policymakers have awakened to the economic and national security challenges presented by questionable foreign network equipment deep in the network. They should catalyze efforts by U.S. innovators to develop and deploy alternative technologies that replace expensive proprietary hardware systems with smarter, American-made open standards software alternatives.
The coronavirus pandemic exposed many longstanding failures in our nation’s safety nets and policy priorities. But we know how to fix the challenges. Investments in today’s recovery can yield greater leadership, fairness and innovation in the decades ahead.