Innovation doesn't create jobs, Greenspan says

Innovation doesn’t create jobs, but less uncertainty about the economy will, Alan Greenspan, former chairman of the Federal Reserve System, told an audience of government and industry IT managers at a Washington, D.C., forum Aug. 23.

“Can innovation create jobs? The answer is that is not its focus,” Greenspan said during a keynote session at Meritalk’s Innovation Nation Forum moderated by Mike Moss, the morning anchor of WTOP-FM.

Going back to the days of the Enlightenment and into the Industrial Revolution, innovation has always been about turning work into more output and production, Greenspan said.

Related coverage:

Which agencies rank as the most innovative? The least?

“Jobs are created in that process and what happens in private industry as technology decreases unit costs and especially labor costs, profits go up, companies expand and then they hire people,” he said.

In fact, “innovation reduces jobs, and there is no way getting around that syllogism,” Greenspan said.

“I think the important issue is to structure your laws and incentives where everyone has an equal chance,” said Greenspan, who was chairman of the Federal Reserve System from 1987-2006. There is no way a market society can guarantee jobs all the time, he noted.

However, less uncertainty will spur more long-term investments that in turn will create more jobs, Greenspan said, hours before a 5.9 magnitude earthquake shook the Washington, D.C., Convention Center where the forum was held.

About the Author

Rutrell Yasin is is a freelance technology writer for GCN.

inside gcn

  • cybersecure new york city

    Cybersecurity for smart cities: Changing from reactionary to proactive

Reader Comments

Mon, Dec 26, 2011

Speaking of jobs... worker own coops have been around for years...and now, the UN has declared 2012 as year of the coop..the time to development worker owned manufacturing cooperatives to create jobs all across this nation is now...the resources to design and guide the development of coops exists across the planet...there are localized organizations capable of managing the development of the appropriate cooperatives...what is needed is national leader(s). A leader to utilize the inherent qualities of worker owned manufacturing coops to manifest a national movement to create jobs for the low and middle class working class, a movement designed to return manufacturing jobs to America and to strengthen democracy as the movement naturally shifts the focus of jobs in America from corporations to cooperatives

Sun, Sep 11, 2011

You will never see the innovation of thought coming from Alan Greenspan except the thought of rogue greed. He studied the financial history of Amercia and had to have known that the very off basket derivatives took down the 1907 stock market and where outlawed. What a Money W@#$% !!!!!!

Mon, Aug 29, 2011 Realist

Considering the relationship between the Federal Reserve and Wall Street, I wouldn't be surprised to see if Greenspan was lobbied (BRIBED) to exploit his expertise to shill for inflation. Here there are two major fallacies promoting a lie, the first is "Appeal to Authority" and the next is "Appeal to Ignorance". Quantitative Easing doesn't work. Inflation doesn't work. Innovation has proved to create VALUE (not currency but VALUE). The innovation of energy (ELECTRICITY ANYONE?), the automobile, communications, television, infrastructure, medicine and information technology created a vast amount of value. As a matter of fact, innovation was the reason why the US became a world leading superpower.

Sun, Aug 28, 2011 johan vercruysse brussels belgium

one of the papers in the (tough to read) oxford handbook of innovation confirms that process innovation does not create jobs. Only product innovation does. However, the company or the country that is innovative in processes can create jobs for itself. Bottomline: if there is no innovation in processes in (y)our country, jobs will go where there is innovation.

Fri, Aug 26, 2011 earth

I am sure Hewlett and Packard didn’t create any jobs when they expanded out of their garage. And neither did Steve Jobs. Certainly no jobs were created by Microsoft as it left the confines of a garage. Surely you are reading this from a mimeograph instead of some derivative of an IBM pc. Did that guy Dell create any jobs? No, innovation neither creates jobes, nore sets the conditions to create any jobs. The Rich. Now they create jobs. Evidently all overseas as as they got richer unemployment just sunk like a rock in the US. So lets kill innovation in the US and send all our money to the rich so that China can enjoy full employment. After all: In fact, “innovation reduces jobs, and there is no way getting around that syllogism,” Greenspan said.
Can we please have a reality check on the people that are running this country? If they have lost touch with reality then fire them. PLEASE

Show All Comments

Please post your comments here. Comments are moderated, so they may not appear immediately after submitting. We will not post comments that we consider abusive or off-topic.

Please type the letters/numbers you see above

More from 1105 Public Sector Media Group