by James A. Bacon
Education and health care are the two most moribund economic sectors in the U.S. economy, plagued by lagging productivity and poor outcomes. Not coincidentally, both sectors are joined at the hip with government. Democrats are determined to preserve the status quo, while Republicans offer no clear market-based alternative. Is there any reason to think anything will change?
Steve Case, the legendary co-founder of AOL who now runs investment firm Revolution LLC, thinks that a “third wave” of Internet innovation will transform both sectors from the bottom up. He writes the following in the Wall Street Journal today:
While the presidential candidates discuss the merits of abolishing or expanding the federal Education Department, entrepreneurs are revolutionizing how instructors teach and students learn. Venture capitalists see what’s coming. Funding for EdTech startups hit $1.85 billion last year, according to EdSurge, up from $360 million in 2010. Former teachers are leading companies that are unleashing—finally—personalized and adaptive learning. While the pundits debate education policy, the innovators are in the trenches improving classrooms all across the country.
Or look at health care. As the candidates pitch plans to abolish or build on the Affordable Care Act, the real action to improve America’s medical system is coming from entrepreneurs. They are inventing better ways to keep us healthy, and smarter ways to treat us when we get sick. The revolution in health care is being led by the innovators who are working tirelessly to improve outcomes, enhance convenience and lower costs. And again, investors sense this: Last year health care companies raised a record $16.1 billion in venture capital, this newspaper reported, an increase from 2014 of 34%.
But there is no divorcing government from the process, argues Case.
Third Wave innovators … won’t be able to go it alone; they’ll need to go together. They’ll need to engage with governments, as regulators and often as customers. And they’ll need to recognize that revolutions often happen in evolutionary ways. Success will require many alliances, as well as constructive dialogue with regulators.
This entrepreneurial revolution offers Virginians an alternative to the stale and polarized alternatives of the past. Virginia may or may not be where these new companies originate and create product-development, back-office and headquarters jobs. But our approach to public policy will influence where these entrepreneurs do business first. The more flexible and open we are, the greater the likelihood of attracting investment and re-energizing our education and health-care sectors. This is a once-in-a-generation opportunity. Will we take it or squander it?
Leave a Reply
You must be logged in to post a comment.