The Economist magazine on disruptive innovation policy

Back here, I said that we need new policies for a disruptive age.

My main point was:

Neo-Schumpeterians (innovationists) set themselves too easy a task if they say that the maximisation of the production of innovation will be good for growth and competitiveness in the long run but can give no guide to governments on transitions in periods of disruption (Brian Wixted)

Back in January 2014, no less than the Economist magazine said.

Anger about rising inequality is bound to grow, but politicians will find it hard to address the problem. Shunning progress would be as futile now as the Luddites’ protests against mechanised looms were in the 1810s, because any country that tried to stop would be left behind by competitors eager to embrace new technology. The freedom to raise taxes on the rich to punitive levels will be similarly constrained by the mobility of capital and highly skilled labour.

The main way in which governments can help their people through this dislocation is through education systems. One of the reasons for the improvement in workers’ fortunes in the latter part of the Industrial Revolution was because schools were built to educate them—a dramatic change at the time. Now those schools themselves need to be changed, to foster the creativity that humans will need to set them apart from computers. There should be less rote-learning and more critical thinking. Technology itself will help, whether through MOOCs (massive open online courses) or even video games that simulate the skills needed for work.The definition of “a state education” may also change. Far more money should be spent on pre-schooling, since the cognitive abilities and social skills that children learn in their first few years define much of their future potential. And adults will need continuous education. State education may well involve a year of study to be taken later in life, perhaps in stages.

Yet however well people are taught, their abilities will remain unequal, and in a world which is increasingly polarised economically, many will find their job prospects dimmed and wages squeezed. The best way of helping them is not, as many on the left seem to think, to push up minimum wages. Jacking up the floor too far would accelerate the shift from human workers to computers. Better to top up low wages with public money so that anyone who works has a reasonable income, through a bold expansion of the tax credits that countries such as America and Britain use.

Innovation has brought great benefits to humanity. Nobody in their right mind would want to return to the world of handloom weavers. But the benefits of technological progress are unevenly distributed, especially in the early stages of each new wave, and it is up to governments to spread them. In the 19th century it took the threat of revolution to bring about progressive reforms. Today’s governments would do well to start making the changes needed before their people get angry.

Couldn't have said it any better myself, but have they been reading this blog?