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.

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“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.

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