This Economist Says There Will Be No More Big Innovation. He's Wrong.

Coming up with a world-changing innovation in 2017 is like trying to find actual news on cable TV.?

It's just not going to happen.??

That’s essentially what Robert J. Gordon, an economist and professor at Northwestern University, argues in his book?The Rise and Fall of American Growth: The U.S. Standard of Living Since the Civil War .??

According to Gordon, we shouldn’t expect the growth of the 20th?century?to happen again?because the really big innovations?we?saw?in?that century can’t be repeated. You can only invent the automobile?or the airplane once. You can only put a telephone, clean drinking water, indoor plumbing, and electricity in every house one time.??

After that type of innovation, anything else is just an incremental improvement. An iPhone is only marginally better than a landline, because they basically serve the same purpose. Self-driving cars are just a better version of a car. In other words, if it can fundamentally change our world, it’s already been invented.

Robert J.?Gordon?has?a PhD from MIT, has written some really thick books, and is a (very) smart guy.?

But Robert J. Gordon?is wrong.

The idea that the economy is all tapped out of big innovation and that we are doomed to a long period of stagnation, followed by inevitable decline, is dangerous. That sort of thinking results in a zero-sum perspective of the economy, where more and more people need to fight get their slice of a pie that can’t grow.

Gordon’s argument also ignores the real source of economic opportunity: Humanity’s ability to create and solve problems.

The automobile and the airplane were solutions to a problem, and that problem was how difficult?it was to move people and goods from Point A to Point B. Telephones, clean drinking water, indoor plumbing, electricity, and even management technologies like the assembly line and modern organizational structures were all invented to solve problems.?

To buy?Gordon’s argument, you need to believe?humanity has run out of problems to solve—which is crazy.??

Humanity is good at nothing if not creating problems to solve, and where there are problems to solve, there is opportunity for economic growth.??

Whether you believe climate change is God’s will, man-made, or the Earth’s natural warming cycle, the fact that every year seems to be the new hottest year on record tells us at some point, regardless of whatever the cause is, human beings are going to have to adapt to very different environmental conditions.??

Climate change isn’t the only problem we’re going to have to deal with. Every year we have more people?living on?the same amount of planet. Those?people will need food, clean drinking water, and roofs over their heads. We have yet to eliminate malaria, AIDS, or cancer. We will eventually run out of?fossil fuels.?Education hasn’t yet made its way to every child in the world.

That might sound like a list of calamities, but it’s also a list of economic opportunities.?

Big economic opportunities.?

The kind of economic opportunities Robert J. Gordon believes we’ve run out of.??

Of course,?in the United States the explosive growth?of?the 20th?century?was greatly aided by public policy that funded research and?development.?For much of those years?the federal government invested heavily in basic?R&D. That investment is now lower than it’s been in any year?since 1953 .??

The growth of the 20th?century was also the result of economic policies that emphasized the middle class.??The idea that making the rich richer would somehow make everyone better off didn’t get put into practice until the last twenty years of the 20th?century, which, not surprisingly, are the years where we begin to see the economic well-being of most Americans stagnate or decline .??

In other words, economic growth didn’t stagnate because all the big innovations already happened. The economy stagnated because political leaders told us economic growth?depended on the wealthy?trickling their wealth down on the rest of us, rather than a collective investment in knowledge, learning,?and research.??

Telling a false story of growth-via-trickle, and our choice to buy that story, is an active choice. It’s a choice that makes it harder for big innovation to flourish.??

We can make a different choice.??

When we finally reject that?story, and recognize growth happens?when?we?collectively?invest in the things that create growth, we’ll see that saying “All the good ideas are gone” in 2017 is just as ridiculous as saying the same thing in 1717.??

?Jack McKissen is the founder of?McKissen + Company ,?and was recently named one of LinkedIn's "Top Voices on Management and Culture" for the second year in a row.