Fueling the 21st Century Economy

President Obama covered a lot of ground in his State of the Union Address. Childcare. Education. Tax codes. Terrorism. Cybersecurity.

And the theme that ultimately unites all these different areas, no matter how unconnected they may seem sometimes, is something the president touched upon too: The world – and America right along with it -- is shifting from a 20th century economy to “a 21st century economy that rewards knowledge like never before.”

At the moment, America is ably navigating this shift. As the president noted, we’re in the midst of strong job growth – 11 million new jobs over the past five years. In part, America’s strong economic performance is being driven by lower energy prices - the United States is now the world’s largest producer of oil and natural gas.

But as crucial as natural resources like oil and gas have been to America’s economic recovery, we’re living in a 21st century economy now. And in a 21st economy, thanks to increasingly powerful distribution networks, information and goods can get commoditized in record time. Even entire industries can become commoditized. In this kind of highly connected, highly mobile economy, innovation matters more than ever. And innovation arises out of human capital – people. In the 21st century economy, which is itself an outgrowth of what I call the Networked Age, prosperity flows toward countries that have the most creative and adaptive workforces.

President Obama understands this -- and that’s why his vision of America and middle-class economics emphasizes faster Internet access, more affordable higher education, and more apprenticeships.

In short, the president called for investment in connectedness and collaboration.

As a country and as individuals, this is exactly what we should be doing. While global competition and rapidly evolving market conditions have turned the notion of lifetime employment into a 20th century artifact – a topic my co-authors and I address in greater depth in The Alliance - the technologies and platforms that power the Networked Age are creating unprecedented opportunities for all Americans to increase and enhance their economic choices.

Crowdfunding platforms like Kickstarter and Kiva give aspiring entrepreneurs access to capital that traditional banks can’t match. Plug-and-play ecommerce platforms like eBay, Alibaba, Etsy, and Shopify give anyone a chance to sell goods to customers around the world. Sharing economy platforms like Airbnb and RelayRides help people leverage underutilized assets into new revenue streams. LinkedIn gives people the opportunity to hone a professional identity, deepen their relationships with allies and potential allies, and tap into a rich web of real-time information that can help them navigate their careers with greater insight and strategic intent.

The Networked Age rewards specialized skills – the 21st century economy needs software developers, data scientists, and support specialists. As President Obama underscored in his speech, two out of three jobs will require some higher education by the end of the decade. To address this fact, he wants to make community college free, just like high school.

While this may be the right path for some, other options are evolving rapidly as well. Many of the specialized skills that employers are currently seeking don’t actually require four-year or even two-year degrees. Dev Bootcamp and many similar organizations are teaching programming and other high-tech skills in concentrated programs that last just ten weeks. Coursera, Udacity, and EdX are offering an ever-widening range of free or low-cost online courses that teach relevant 21st century skills. All of these options can help broaden access to digital opportunity and make the high-tech world more inclusive and more diverse.

To make the 21st century economy work for everyone and ensure broad-based prosperity, we need big Internet pipes – the Networked Age depends on bandwidth. As the president noted, we need to “build the fastest networks, so that the next generation of digital innovators and entrepreneurs have the platform to keep reshaping our world.”

Unfortunately, the average Internet connection speed in the U.S. today is only around 10 Mbps. For those of who remember the dial-up era, that may seem incredibly fast. But if we truly want to realize the benefits of online education, telemedicine, and all the other promises of a more immersive and three-dimensional Internet, America should increase its average bandwidth capacity by orders of magnitude. 100 Mbps needs to be the new normal.

At the moment, there are more than five million open jobs in the U.S. One way to decrease the “skills gap” that underlies this statistic is through apprenticeships.

Recognizing how effective apprenticeships are – across the U.S. 87 percent of the people who successfully complete formal apprenticeship programs find a job in their field, with an average starting wage of $50,000 – President Obama has made it a goal to double the number of people who are registered in official apprenticeship programs. Last year, he earmarked $100 million for the American Apprenticeship Initiative, a program that will issue grants designed to spur the development of apprenticeship programs in high-growth industries like information technology, healthcare, and advanced manufacturing.

As I’ve covered in the past, employers have shown that they highly value internships – one 2013 poll revealed that they view “an internship as the single most important credential for recent grads.” In other words, relevant, proven experience matters. And formal apprenticeships, which typically last longer than internships, feature more specific training, and pay participants, are another effective and reliable way to help people acquire skills that employers truly value.

So I hope President Obama will continue to seek opportunities to expand programs like the American Apprenticeship Initiative. And, similarly, I encourage business leaders and employers to seek out opportunities to partner and participate in such programs. At LinkedIn, for example, we’ve created a program to help U.S. veterans find employment.

The 21st century economy thus far has been fueled by collaboration and networks of alliance. In his call to “bridge divides” and “unite in common effort,” it’s clear that President Obama recognizes that we are, thanks to the Networked Age, more tightly connected than ever before. This creates new tensions, but it also creates new opportunities to work together in ways that benefit us all.