Demography Strikes Again
By William A. Reinsch
May 29, 2018For only the second time since I’ve been writing this column, I’m going to pause for a commercial break so I can tell you about a new book the Scholl Chair at CSIS has released in partnership with the Fraser Institute: Demographics and Entrepreneurship: Mitigating the Effects of an Aging Population.
This book looks at one of the most important issues facing the United States today—our ability to lead the world in innovation. Our ability to come up with new ideas and turn them into new technologies and products is unmatched in the world, and it is critical for our future global competitiveness that we keep it that way. The United States is not the low-cost producer of many products, so a lot of our economic strength rests on developing products and capturing market share ahead of everybody else. In other words, we need constantly to run faster, and with 95 percent of the world’s consumers outside our borders, we need to run faster globally, not just domestically.
Our global leadership is continuously under challenge from many directions, most notably China right now, and if we lose our lead, it might well be for good. That means we need to pay close attention to getting innovation right. A standard principle in that regard is the need to protect our intellectual property (IP) from theft or forced transfer. Indeed, the next publication the Scholl Chair will be releasing will be our own study of Section 337 of the Tariff Act of 1930, which empowers the International Trade Commission to exclude imports that infringe our patents.
Before we can protect our intellectual property, however, we need to have some to protect—it is the ongoing creation of new IP that is the key to innovation. And essential to that is the entrepreneur—the creator/disruptor who thinks outside the box, sees new possibilities and turns them into realities, and the coordinator who sees profit opportunities in new ideas and makes them happen.
Demographics and Entrepreneurshipis about making sure we have lots of those people, and its basic conclusion is that we may not, that entrepreneurship is a province of the young, and that aging populations like ours will see a steady decline in entrepreneurs. From that conclusion, which is documented with detailed demographic data, the book goes on to discuss what we can do about it, focusing on a range of policies—taxation, regulation, immigration, financial markets, and education—that collectively can stimulate entrepreneurship in our economy.
Many of the book’s recommendations are about removing obstacles—taxes and regulations, for example—and some will point out, correctly in my view, that pro-entrepreneurship policies need to be balanced against policies that achieve other important government objectives, such as our national security and the general public welfare. So, not everyone will agree with every policy suggestion, but collectively they do provide a roadmap for maintaining our competitiveness, and we would do well to study the recommendations closely, as the stakes are high.
Demographics and Entrepreneurship is available online and can be downloaded here. Next week we will return to your regularly scheduled programming. Fortunately, with all that is going on, no summer reruns will be necessary.
William Reinsch holds the Scholl Chair in International Business at the Center for Strategic and International Studies in Washington, D.C.
Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).
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