Chapter 3: U.S. Innovation and Energy Independence
U.S. Innovation and Energy Independence
MR. INSANA: Now, Chris, maybe one of the most misunderstood changes or certainly least appreciated changes is the move in the United States towards energy independence. I mean, a lot of things have happened in the last several years--600,000 jobs created in the sector, the biggest increase in oil production in the history of oil production in the United States last year, and people don't necessarily fully appreciate what energy independence means and what it means to technological innovation here at home. So when you look at those two themes, how do they play into this transformational process?
MR. CHRISTOPHER WOLFE: In a couple of ways. So I think first to answer your question, we haven't seen all the benefits yet because gasoline prices are still relatively high. So consumers I think look at something like that and say where are the benefits for me. But it's a little different at the corporate level, particularly when you think about the industrials and the manufacturing base in the United States--lower energy costs. While energy's not a huge cost to manufacturing, it's still important...
Lower energy costs should help to bring
more manufacturing back to the U.S.
So lowering those costs does have the potential to bring back manufacturing from where it had been leveraged and exported to over the last ten years in Asia, certainly back to America, the western hemisphere, and in certain cases, all the way back to the United States.
MR. WOLFE: To bring that full circle, though, to Candace's point about innovation, really what happened in that industry is that innovation around fracking, 4D drilling, sideways drilling and seismic technology that really allowed access to a lot more reserves and particularly on natural gas, there's a couple of things around that that are important.
One is that innovation had a very long tail to it. It may result ten years on in a change to manufacturing in the US. And two is when you think about it, it's kind of narrowly focused- -it's actually on natural gas. In the short run it may cost jobs in the coal industry--it's actually started to do that. But in the long run it provides a bigger benefit to all of society.
MR. INSANA: And Chris, with respect to that innovation, we're starting to hear things about 3D printing which may not only be changing manufacturing but could change healthcare rather dramatically and so ...there's still so much coming in the pipeline that people aren't aware of yet.
MR. HYZY: To Candace's point before about research and development, it's really not even being picked up in this whole new wave of what revenue growth could be like in the future. We've talked about energy before.
See our A Transforming World report for
more insights into U.S. Innovation
3D printing's another, robotics in the factory, the fact that energy and technology coming together through fracking and other things should enable our country to grow at a higher growth clip than what anyone is expecting in the next decade.
Most importantly, however, if you look at the American landscape of private enterprise right now, particularly those companies in the S&P 500 and for the most part in the Dow ...and when you look at a global growth curve of 4% plus and even higher in the future given the middle class that's coming, the US is set up very well for the changing globe that we're about to go through.
MS. BROWNING: I mean, I would just add onto that, if you look at the United States today, we are still granted more patents to U.S. citizens and corporations than any other country in the world and we spend more on R&D than China, Japan, South Korea and Taiwan combined. Think about that. Nobody talks about that.
This chapter of “A Transforming World” takes on the state of American innovation, as well as the potential for energy independence in the near future.