Closing the Gap: Two Years Later

Dec. 12, 2017: Thanks as always to Robert Reich for his thoughts during coffee. If Bob's hopeful, I'm hopeful.

It was two years ago last week that Bob stood on the stage at the Closing the Gap conference that Heidi Kleinmaus and I produced with our collaborator, Jeff Greene. We held the conference in Palm Beach, Florida, a mile from Mar-a-Lago. Bob said at the time that people in the heartland were ticked off, and they were likely to elect an outlier.

Here's the full roundup from that event, which also included speakers like Tony Blair, Tom Friedman, Nouriel Roubini, Andrew McAfee, Ford Foundation's Xav Briggs, and Tim O'Reilly. And, in the audience, people like Wilbur Ross, now Secretary of Commerce.

Event Roundup - Closing The Gap: Solutions for an Inclusive Economy, Dec 12, 2015

The coming waves of change to our economy were echoed by the wave-themed pole banners lining the driveway to the Tideline Resort, as more than 300 participants converged on Palm Beach, Florida, for the inaugural Closing The Gap conference from December 6 through 8. As host Jeff Greene, founder of the Greene Institute, said when he took the stage at the start of the event, the demise of the American dream - in the face of oncoming disruption to our workforce by technology and globalization - is “the defining issue of our time.”

A pre-conference breakfast session set the stage, with former Indiana governor and senator Evan Bayh, former House Majority Leader Eric Cantor, former New York governor David Paterson, former LA mayor Antonio Villaraigosa, and Congressman Alan Grayson explored “What's the Role of Government in Closing the Gap?” in a conversation guided by Policylink founder Angela Glover Blackwell. There was general agreement that it’s not just an issue of government doing more to close the gap, but of government enabling both individuals and organizations to do more.

Pulitzer Prize-winning columnist Tom Friedman then kicked off the main conference with a keynote presentation entitled “The World Is Fast,” providing a series of stories illustrating how the combination of globalization, automation, and climate change all are contributing to a constant series of seismic changes, not just in the U.S., but around the world. MIT’s Andrew McAfee then helped the audience understand much of what we’ve called “the problem domain” with statistics that underscore the growing gap between “have-lots and have-nots” (as Greene called it), and added “monopoly capitalism” and a variety of economic conditions as sources of our current and coming challenges.

UC Berkeley’s Robert Reich, former Labor Secretary under Bill Clinton, provided more in-depth perspective of the “winner takes all” dynamics that reward incumbent businesses and penalize workers, and noted the need for a new kind of contract between workers and organizations to compensate for eroding protections and the disruptions of automation and globalization.

To illustrate just how rapidly technology is about to alter our economic landscape, Stanford visiting professor Vivek Wadhwa cited a litany of advances in medical technology that are poised to transform the healthcare industry, which currently comprises more than 17% of our economy. He then took the audience on a whirlwind tour of a near-term future in which “every industry will be impacted… Disrupted… Wiped out.” But he offered hope in the ability of entrepreneurs to do what only governments and big research labs used to do before: To solve our grand problems.

Harvard history professor Niall Ferguson brought the focus back to present day by offering his analysis of current fiscal policy. He maintained that there really isn’t a worldwide problem with economic inequality, and that in fact there is no golden era of equality to which we might return. He pointed to our current low inflation rate as the principal cause of economic malaise, pondered the possibility of another domestic recession on the horizon, and opined against the growth of regulatory restrictions on American businesses.

In a lively onstage conversation refereed by Greene, speakers McAfee, Wadhwa and Reich all provided more explanation of their prescriptions for the economy. Ferguson ably shouldered the mantle of the country’s conservatives, until Omega Advisors’ Lee Cooperman commandeered the microphone from the audience, supporting Ferguson’s contention that less government intervention would result in far greater economic opportunity for all.

Participants then dispersed to four breakout sessions, each designed to dive more deeply into some aspect of our great challenges. “Are Robots & Software Really Eating Our Jobs?” continued the discussion begun by McAfee and Wadhwa, reaching the general consensus that there will indeed be a major shift in our workforce, with no clear idea what will make up for the economic impact of automation. “Can We Fix Education?” focused on the hope for a K12 system that, according to Collective Shift’s Connie Yowell, needed to change from a “sorting function” to one that enhanced the interests and skills of each child. “Corporate Social Responsibility: The Next Business Imperative” explored the rationale for corporations to embed social purpose into the fabric of each organization, with Black Girls Code founder Kimberly Bryant talking about the need not just to expand “the pipeline” of qualified workers, but also to change employer hiring practices to be more inclusive. And “Can Data Tell Us Where We Can Have the Greatest Impact?” leveraged the experience of non-profits like Mauricio Lim Miller’s Family Independence Initiative to show how data allows resources to be more accurately focused on key challenges.

After lunch, Opportunity@Work’s Byron Auguste briefly detailed his initiative’s work to follow through on the commitments of major U.S. organizations to employ 100,000 workers. The Economist’s Matthew Bishop then brought back Ferguson to an onstage conversation with Nouriel Roubini of Roubini Global Economics. The two pundits wasted no time in sparring over everything from the existence (or not) of the American Dream, to our current taxation system. Financial titans Thomas Peterffy and Paul Singer then briefly joined Bishop to offer their own prescriptions for kickstarting the economy, with Singer suggesting one solution that is rapidly gaining the support of conservatives and progressives alike: Some form of universal basic income.

Duke University’s Dan Ariely offered insights from his ground-breaking research to help participants understand why it is so difficult for millions to get ahead in today’s economy. With the support of CTG sponsor MetLife, Ariely announced the CommonCents Lab, an initiative that will apply behavioral economics to identify new ways to help millions of Americans improve their saving and spending habits.

CTG then relocated to the historic Flagler Museum, the former home of American industrialist Henry Morrison Flagler, for a reception and banquet. In a wide-ranging keynote discussion with Greene, former UK Prime Minister Tony Blair talked about the rise of extremism, the polarization of politics, and challenges to economic mobility around the globe.

Day two of Closing The Gap began with another wide-ranging discussion, this time between Greene and sports legend Mike Tyson, who talked about rising from humble beginnings to a place on the world stage.

Next, “The Big Idea Hour” - a title originated by CTG participant Yossi Vardi - allowed participants to hear a range of world-changing ideas in a brief period of time. John Sculley, author of “Moonshot!” and former CEO of Apple and Pepsi, began by talking about recent advances in healthcare technology as examples of game-changing technologies that could have a profound impact on our near-term future. A series of speakers then stepped up to the challenge of reimagining a major component of our economy and our society.

. Government: Georgetown University’s Sonal Shah, founder of the White House Office of Innovation, suggested that the only way to reshape government is to require it to become “citizen centric,” in the same way that successful startups remain “user-centric” in all of their activities.

. Business: Tim O’Reilly, founder of O’Reilly Media, who recently produced an entire conference on the future of business, suggested that organizations need to become far more dynamic and nimble to respond to increasingly-rapid changes in market landscapes, and that the traditional mentality about jobs needs to be re-cast into a focus on compensated work.

. Education: Connie Yowell, president of Collective Shift and co-founder of LRNG, offered a vision of a K12 educational system designed around the Passions of kids, interaction with their Peers, and their possible Purpose in life.

. Income: Author Gerald Huff provided a brilliant overview of the Universal Basic Income earlier suggested by Singer, scoring substantial points in a subsequent audience poll.

. Philanthropy: Clara Miller, president of CTG sponsor Heron Foundation, talked about the need to reinvent philanthropy from its most basic assumptions, invoking the Golden Rule to take the audience back to the fundamentals of giving.

. Metrics: And in an understated presentation in which some participants may have missed the critical importance of his announcement, the Economist’s Matthew Bishop provided an overview of recent research and a new metrics framework for tracking the social performance of countries.

Another set of breakout sessions explored several recurring themes of the conference. “Can We Bring Government Into the 21st Century?” included Cantor, Paterson, O’Reilly and White House entrepreneur Lisa Gelobter discussing strategies for implementing entrepreneurial programs to serve as high-visibility examples for making government more nimble. “How Can Partnering Change the Game?” involved Miller, Yowell, Tupperware’s Yolanda Londono and Xavier de Souza Briggs of CTG sponsor Ford Foundation in a conversation highlighting best practices for knitting together business, education, government and foundations to create initiatives that can scale. And Auguste, Blackwell, Vemo CEO Tonio DeSorrento and “What Color Is Your Parachute?” author Dick Bolles talking about strategies for helping change the dynamics for youth in college and in the work world.

The closing session was limited in time, but allowed us to get a variety of final thoughts about the kinds of work needed to be done going forward. SVN CEO Kevin Maggiacomo used his own company’s gender inclusion efforts as an example of the choices that leaders can make to help close the gap - while still managing successful businesses. Author and Global Ambassador from Singularity University Salim Ismail took the participants on a rapid-fire view of the future, detailing technologies that could reshape entire industries. Roubini offered an insightful synthesis of the conference’s key takeaways. And Ariely again came onstage, this time to illustrate key insights about the dramatic disparities between the economy we have, the economy we think we have, and the economy we want.

The final “town hall” session offered the opportunity for speakers and audience members to detail the most important areas on which to focus going forward. Star Jones of the Professional Diversity Network talked about the need to bring a variety of disenfranchised groups into the dialog, and several speakers and participants focused on bringing the core issues of CTG to the attention of media and presidential candidates, and bringing those issues into the public dialog.

Key Takeaways

There were several recurring insights from the event.

• We are indeed going through “the Big Shift” (coined by John Hagel at Deloitte): Framing for the importance of the historic shift in the U.S. economy was provided by the University of Virginia’s Phillip Zelikow, former project director of the Markle Foundation’s pivotal ReWork America initiative (and also the former director of the 9/11 Commission). Zelikow suggests that we are undergoing a transition in our economy that is as fundamental as the shift from an agrarian to an industrial society – but in a blindingly-fast period of time.
• The Problem Domain versus The Solutions Domain: While it’s critical to have healthy discussion about the problems we face, so there can be agreement on the issues that need to be addressed, it’s even more important to regularly shift the dialog to the kinds of solutions that can address those problems at scale.
• Balance the dynamic tension between near- and long-term challenges: As author Gerald Huff observed, people tend to approach “the gap” with either a near-term focus on the specific challenges of today, or with a longer-term perspective on the seismic waves of change that are coming. Yet it’s clear from the dialog at CTG that both are necessary, and the fundamental challenge is to balance both - working to solve near-term needs while also making our economy as resilient as possible for the impact of tomorrow.
• Robots and software are indeed eating our jobs, and we need to know more - now. The oncoming wave of automation is destined to have a profound impact on our economy. A November 2015 McKinsey study said that "...as many as 45 percent of the activities that individuals are paid to perform can be automated by adapting currently demonstrated technologies" - that is, we could automate them today. The report goes on to say that "...although we often think of automation primarily affecting low-skill, low-wage roles, we discovered that even the highest-paid occupations in the economy, such as financial managers, physicians, and senior executives, including CEOs, have a significant amount of activity that can be automated." Of course, it doesn't mean those tasks will be automated - that's each employer's choice - but it does mean that no new technologies need to be invented to make all those tasks go away. It also doesn't mean that 45% of all jobs will go away - again, it's an employer's choice - but it strongly suggests that 45% of wages could be affected. So, what should scare everyone is that these activities represent about $2 trillion in annual wages - equal to one third of the total wages & salaries in the U.S. in 2010.
• The Gap is widening: The majority of speakers agreed that upward economic mobility has indeed become limited to a comparative few, and that the disparity between the “have-lots and have-nots” continues to widen, a gap confirmed by statistics shown by MIT’s Andy McAfee. Harvard’s Niall Ferguson was the only dissenting voice, pointing to a global reduction of economic inequality - but it’s far easier to bring people up from a few dollars a day, than it is to re-start an economic engine that’s reliant on economic policies designed to enhance the income and wealth of the few.
• We can make different choices. At the end of the day, economies and businesses are the result of choice. Each of us can contribute to a more inclusive economy by our own actions, and we can choose to champion the practices and policies that can revive the American Dream, so that we collectively can work to bring back upward economic mobility in our country, and begin closing the gap.