Building the future economy requires more than adjusting tax rates, increasing spending, or modifying regulations. These tools influence economic outcomes, but they do not determine the economy’s underlying capacity to create new industries, expand technological leadership, and generate sustained improvements in living standards. The central challenge is not simply managing economic activity, but strengthening the productive foundations that allow the economy to continuously evolve and grow.
Historically, the United States excelled at this form of capability-building. Public investment in scientific research, higher education, infrastructure, and mission-driven technological development created entirely new sectors, from aerospace and semiconductors to computing and biotechnology. These investments expanded the nation’s productive frontier, enabling businesses to develop new products, workers to acquire valuable skills, and entire regions to participate in the creation of high-value economic activity. Broad-based prosperity was not accidental—it was the result of deliberate, sustained investment in the economy’s future capacity.
In recent decades, however, this capability-building model has weakened. Innovation has become increasingly concentrated in a small number of industries and geographic regions, while many parts of the country have seen their industrial ecosystems erode. Public investment in foundational research and long-term technological development has declined relative to the size of the economy. As a result, productivity growth has slowed, the pace of new industry formation has diminished, and opportunities for upward economic mobility have become less widely available.
Rebuilding broad-based prosperity requires restoring the nation’s ability to create, adopt, and scale new technologies and industries. The ideas presented in this section focus on expanding the productive capabilities of the economy—strengthening innovation systems, supporting technological development, and building the institutional capacity required for sustained economic transformation. By rebuilding these foundations, the United States can ensure that the economy remains dynamic, competitive, and capable of generating rising living standards for future generations.
Economic growth isn’t just about tax cuts or trade deals. It depends on a nation’s ability to make increasingly complex and valuable things. Dani Rodrik’s “productive capabilities” approach shows how smart public investment can rebuild middle-class opportunity where people already live. LEARN MORE
Many of America’s most important innovations—from the internet to modern medicine—originated in publicly funded research. Mariana Mazzucato shows how government can act as an entrepreneurial partner, driving innovation and shaping markets to create long-term economic growth and opportunity. LEARN MORE
Prosperity depends on the productive knowledge embedded in workers, firms, and institutions. Ricardo Hausmann’s economic complexity framework explains how regions expand into more sophisticated industries by building capabilities step by step. This approach strengthens long-term growth, resilience, and opportunity. LEARN MORE
Technological change does not occur in a vacuum. Daron Acemoglu’s research shows that public policy, market incentives, and institutional choices influence whether new technologies enhance human productivity or replace workers. By encouraging innovation that complements human skills, economic policy can ensure that technological progress strengthens growth and expands opportunity. LEARN MORE
Artificial intelligence has the potential to dramatically increase productivity, but its impact depends on how it is deployed. Erik Brynjolfsson’s research shows that AI delivers the greatest economic benefits when it enhances human capabilities rather than replacing them. Supporting widespread adoption and complementary workforce investments ensures AI strengthens growth and expands opportunity. LEARN MORE
Major technological revolutions unfold in predictable phases, with early gains concentrated in a few sectors and regions. Carlota Perez’s research shows that broad prosperity emerges only after institutional reforms enable widespread adoption and deployment. Strategic public investment and institutional adaptation are essential to ensure the digital revolution benefits the entire economy. LEARN MORE
Markets alone often fail to produce optimal innovation and broad-based economic growth. Joseph Stiglitz’s research shows that public investment, strong competition policy, and effective institutions are essential to ensure innovation strengthens productivity and expands opportunity. Strategic policy can align market incentives with long-term economic development. LEARN MORE
Advanced economies did not develop through markets alone. Ha-Joon Chang’s research shows that public investment, institutional development, and strategic industrial policy played a central role in building productive capabilities. Sustained economic growth requires deliberate efforts to strengthen domestic industries and technological capacity. LEARN MORE
Economic systems must be designed not only for efficiency, but for resilience in the face of uncertainty. Mark Blyth’s research shows that diversification, institutional strength, and adaptability are essential to sustain growth and withstand shocks. Building resilience ensures long-term stability and economic security. LEARN MORE
We use cookies to analyze website traffic and optimize your website experience. By accepting our use of cookies, your data will be aggregated with all other user data.