The 2 I's that keep America chugging along

The best professor I had in business school was the wisest. He once commented that only two things fuel the American economy: immigration and innovation. I was reminded of that last summer when I went to the InterSolar Conference in San Francisco—most of the vendors there were either German or Chinese . . . with Indian, Canadian, and Japanese companies having a strong presence as well.

Take our energy policy. Our dependence on fossil fuels made sense generations ago during the industrial age, and frankly, as with cholesterol, sun exposure, chemical dumping, and deforestation, we just didn’t know any better. We do know now, but we’re so behind other countries on the renewable energy front . . . and companies here in that space (many of which have been started by immigrants) are struggling to find a footing and funding. Meanwhile, cloudy Germany is the leader in solar technology, the Chinese and Japanese are exploring fuel options using technologies that we can’t even pronounce, and the country with the most flex-fuel vehicles isn’t the US (thanks or no thanks to corn ethanol), but . . . is in South America (more on that country later!)

Remember that business school term, “economies of scale” (no, not cheap reproductions of Louis Vuitton crocodile suitcases) . . . as long as the USA is married to cheap, polluting fossil fuels, there’s no incentive to focus on other sources of clean energy . . .meaning those innovators who want to market their new technologies have no market, which means the prices remain high, which means there are no incentives for consumers or businesses to take a hard look at more sustainable energy—and construction—and water conservation approaches.

Take Obama’s announcement on new fuel standards last week. Hasn’t this been discussed since the 1970s? The automobile manufacturers and unions resisted for years, and we know how the results turned out. I know it was like pulling teeth to get all these folks around the table to finally agree to some tepid new standards, but it’s a step. But is it too late? In a recent online discussion in which I participated, an executive across the pond made this statement which is spot on: “When oil prices rise again, American truckers won't be able to deliver essential goods and America hasn't exactly got a good railway network alternative. Cheap energy has destroyed American innovation and created a very wasteful culture.”

I won't go into the immigration debate now--but it's a fact that most new companies with the most cutting edge technologies in any industry are founded by immigrants . . . combine an anti-immigrant government policy with a poorly thought out energy agenda, and the future certainly doesn't look sunny.