— CASE STUDIES —

In 1983, President Reagan’s Education Secretary Terrel Bell released a report titled A Nation at Risk. In no uncertain terms, the report described our primary and secondary educational systems as being in a state of crisis. The report stated, “The educational foundations of our society are presently being eroded by a rising tide of mediocrity that threatens our very future as a Nation and a people.” It further concluded that, “If an unfriendly foreign power had attempted to impose on America the mediocre educational performance that exists today, we might well have viewed it as an act of war.”

More than 35 years later, having been through administrations and Congresses from both sides, we are still in a fierce battle with mediocrity. Granted, test scores do not capture the full measure of creativity and talent that American children seem to consistently develop; however, the ability to produce great scientists, engineers, physicians, entrepreneurs, and computer programmers still depends on a solid foundation of math, science, reading, and critical thinking. And since our spending per pupil is nearly the highest in the world, throwing more money at the problem is not the solution.

The first step is to simply make it a priority to solve this problem. Our current debate is far too divided and is focused on pitting the teachers unions against the school choice movement. The reality is that we need very good teachers and increased opportunities for students. The narrow, one-dimensional approach from both sides is incomplete. Students and teachers need the resources to succeed. For example, No Child Left Behind was full of good intentions and a few good ideas, but suffered from a lack of funding and poor execution.

The charter school movement has provided a good example of new ways to structure education and has also provided examples of what does not work well. Teachers need to be empowered to utilize these and other innovative forms of instruction by involving students more in the learning process and at the same time be held accountable for results. As Bill Gates has openly discussed, one lesson his foundation has learned is that a good teacher that engages students is far more important than a smaller class size.

Balancing the accumulation of knowledge with the ability to synthesize that knowledge in unique ways yields tremendous advantages. We can all benefit from the charter school movement, but we also need good, successful, dynamic public schools and their heroic and far too often underappreciated and underpaid teachers as well. It is both/and, not either/or. This is how we can combine the need to develop creativity with the necessity of learning the fundamentals.

Another area in need of improvement is Pre-K education. Since learning is cumulative, each new level a student reaches that they are not fully prepared for pushes them further behind. According to Kris Perry, executive director of The First Five Years Fund, “The U.S. trails behind almost every developed country in the world when it comes to access to high-quality preschool.”

Lastly, just recently the number of job openings in the U.S. exceeded the number of unemployed. One of the reasons for this disparity is that we have a growing skills gap in which students are graduating without the necessary training to fulfill the requirements of currently available jobs. In the U.S., we spend a fraction of what other wealthy industrialized countries spend on vocational training and apprenticeships. As baby boomers continue to retire, there will be an increasing shortfall of high-skilled, industrial workers.

From Pre-K to job training, we need to think in new ways about how to prepare our next generations for work in the 21st century. We have plenty of examples and a tremendous amount of experience about what has worked and what has not that we could readily utilize if we were focused on solving the problem and thinking about new ways to address this serious need.

For more information, please see the Resources and Supporting Research Material section.

The enormous success of innovation in health care is staggering. It is difficult to imagine today that when George Washington died just over two centuries ago, leeches and purges were considered advanced treatments. Penicillin, which is credited with saving 200 million lives, is less than a century old, as is the polio vaccine, which was first used in the 1950s. In fact, the germ theory of disease only became widely accepted less than 150 years ago.

Despite these enormous advances, we have been far less innovative in the structure and delivery of these miracle treatments. In the U.S., we spend close to twice the average of other wealthy nations on healthcare per family. In just the decade from 1999 to 2009, U.S. health care spending nearly doubled—from $1.3 trillion to $2.5 trillion. Even during the Great Recession of 2009, health care costs rose by 4%.

Even with the additional funds, our outcomes in many areas such as life expectancy, infant mortality, and the successful treatment of many conditions are just slightly above average. Also, unlike in other wealthy nations, life expectancy is actually declining for some U.S. demographics. The United States is expected to drop the most of any high-income country in the average lifespan of its citizens, from forty-third in 2016 to sixty-fourth in 2040, with a lifespan of 79.8 years.

Imagine for a moment that we were as innovative and creative in the structure and delivery of health care as we are in the discovery of new miracle cures for diseases. The only roadblock preventing such a scenario is our unwillingness to look at legacy problems in new ways. In fact, there are a few crucial areas in which fundamental improvement would lead to tremendous advances in outcomes.

The first is affordability. Because of our fragmented system for negotiating with health care providers and pharmaceutical companies, we pay significantly higher rates for treatments and prescription drugs than any other country. No matter how we slice the pie, these persistently high and growing costs dictate that we will pay more. Higher administrative costs also contribute to this problem. The U.S. pays 25% of its health care costs to administration of the system, which is twice the percentage paid by other developed countries.

The second major component is access. By broadening access, we can lower the number of large-ticket items, such as surgeries and life-long drug prescriptions, which result from the lack of early diagnosis and prevention of conditions such as type 2 diabetes and heart disease. In a classic case of pay me now or pay me much more later, the amount of uncompensated care funded by state and federal governments is in the tens of billions annually. This will also lower the inequality of care between the rich and the poor. Costs of care differ greatly between young and old and between genders, so by chopping up our insurance pools, we are reducing our ability to cover these natural variations and preexisting conditions.

To successfully address these issues, we need to increase the level of insurance coverage, broaden access to primary care, and reduce the complexity by streamlining the insurance process and increasing the usage of digital records, thereby reducing the administrative barriers to good care. Better nutritional advice and primary care today means lower costs in the long term.

Single-payer is not the only option for fundamentally transforming our health care system. Many developed countries, such as Switzerland and the Netherlands, effectively utilize private plans with government support. This public-private partnership provides a high quality of care with lower costs. Once again, though, this all depends on our willingness to look at old problems in new ways.

For more information, please see the Resources and Supporting Research Material section.

Since the days before the First Industrial Revolution, increased productivity in factories has been the key to creating the ability for businesses to pay workers more and create middle class incomes. Even before steam power further revolutionized manufacturing, Adam Smith observed that the division of labor was creating a new class of more affluent workers. Counter-intuitively, Karl Marx praised this explosion of human potential, saying that the new manufacturing economy “has created more massive and more colossal productive forces than have all preceding generations together.”

Manufacturing is vital for two reasons. Firstly, it is a good source of well-paying jobs and has been a bedrock of a substantial portion of the middle class. Secondly, as Andy Grove, former CEO of Intel, points out, a great deal of innovation takes place on the factory floor, where design, engineering, and production all intersect. In a 2010 Businessweek article titled “How America Can Create Jobs,” he warned that Silicon Valley was making a mistake by relying so heavily on overseas manufacturing.

This trend of outsourcing has had considerably negative effects. From 1980-2015, the United States lost 7 million of our 19.2 million manufacturing jobs. This comes at great cost both in terms of lost income and surrendered innovation. Additionally, this massive job loss is not a simple problem. Advancing technology and automation are also significantly contributing to the problem. For example, from 1962-2005, the U.S. steel industry lost 400,000 jobs with no loss in output because productivity per worker skyrocketed. These trends are not abating, so we need a new way to think about the problem.

The core issue, as Dr. Grove highlighted, is that we have not made preserving manufacturing a national priority. We have embraced economic dogma ahead of reality, and that has cost us a great deal. Germany is a counter example of the U.S.’s ideological approach. Their small and medium-sized manufacturing companies are the bedrock of their economic model. They have brought together management, workers, and public-private partnerships to forge a global leadership in niche manufacturing sectors. The “Mittalstand,” as these companies are called, are world leaders in many of these sectors, such as machine tools, and export heavily around the globe—even to China.

We can learn much from what has worked in Germany and other countries if we are willing to look at old problems in new ways. By adopting an approach that combines a focus on the importance of domestic manufacturing with “enlightened” private ownership and world-class core processes, we can rebuild the vital manufacturing sector in the United States.

For more information, please see the Resources and Supporting Research Material section.

The U.S. has been called a country of second chances. From the Pilgrims to the pioneers, America has been a place where people can invent and reinvent themselves many times. Alexis De Tocqueville famously made this observation in traveling through the U.S. frontier in the 1830s. A lesser known fact is that De Tocqueville made the long journey from France to study the U.S. prison system. In the early 19th century, the U.S. tried several new approaches to incarceration, seeking to not only punish criminals but also to rehabilitate them.

We have lost this innovative spirit in the field of criminal justice. The U.S. has less than 5 percent of the world’s population, but nearly 22 percent of the world’s prisoners. Further, according to statistics from Bureau of Justice statistics, close to two out of every three released inmates are rearrested within five years. And even though U.S. prisoners are four times more likely to be substance abusers than non-criminals, barely one in five receive treatment.

By applying innovative problem-solving to criminal justice reform, we can fundamentally improve our approach so that people who break the law are both appropriately punished and simultaneously prepared to reenter society in a productive way. These two goals are not mutually exclusive. Instead of turning one criminal offense into a life of crime, we can utilize proven resources such as education, job skills training, drug treatment, sex offender treatment, behavioral therapy, and transition services to prepare prisoners for success on the outside. The simple and less costly solution to overcrowded prisons is to substantially lower recidivism rates.

We spend close to $40 billion a year on prisons. It would be vastly cheaper and more productive for our society to use modern techniques to improve on the 19th-century notion of rehabilitation than to continue this cycle of perpetual criminality.

We can accomplish these innovative solutions if we allow ourselves to look at these old problems in new ways.

For more information, please see the Resources and Supporting Research Material section.