The Trump Economy: Back to the future…or Forward?

Jan 12, 2017

By Marshall Aronow, CEO, MetTel

We have just endured one of the most divisive elections in our nation’s history and now it’s time to usher in a new administration. Regardless of your political sentiments the reality is that Mr. Trump will be our President this month. It is in our best interests as businesses and consumers to give him a chance to prove himself.

The central question for the President-Elect: Is he the president that will lead us into the future or attempt to revisit some idealized points in the past? The Back to the Future approach worked for another pivotal administration, that of Ronald Reagan, who managed to spark enthusiasm with images of a bygone era, while pushing forward ambitious concepts such as the “Star Wars” Strategic Defense Initiative that called for greater investments in innovation. That was then.

This is now. The US economy has been growing too slowly for anyone’s comfort level, currently an annualized rate of 2.4 percent compared with a 5 percent rate two years ago, which does not qualify in the top 100 economic growth rates in the world at the end of full year 2015. This is not acceptable by anyone’s standards.

There has been much debate about what impact a Trump Administration will have on the economy. The stock market has responded enthusiastically with the Dow and S&P reaching all- time highs in the first three weeks following the election. While this expresses confidence in his overall platform, what is this optimism based on?

Generally speaking, Mr. Trump has taken a very pro-business stance; a key tenet of his campaign platform was to cut taxes, reduce regulations and pump funds back into business.  A business owner himself, he understands that we would rather pay lower taxes and use those funds to drive employment and R&D rather than have the political party in office take that money and dictate the terms and conditions on how it can be used. He’s made pragmatic overtures to friends and critics alike as evidenced by his summit with technology industry leaders to open a dialogue on growing the economy and extending our innovation edge.

Though Trump’s tax plan for business is a breath of fresh air, it’s not enough for the Federal government to lower taxes and simply walk away to sustain economic growth. In his victory speech, Trump emphasized the need to rebuild highways, bridges, tunnels, airports and the like while employing millions in the process. Repairing our physical infrastructure and creating jobs are two clear priorities but these are temporary, if necessary, fixes to patch yesterday’s economy.

A crucial foundation for our future prosperity is communications.  The reason innovations in cloud computing, mobile smart phones, the Internet of Things (IoT), and automation are in such high demand is the value they bring in making business (and life) faster, easier, and less costly. If we want to move into the future and create a new paradigm for growth, we need to establish a whole new digital infrastructure that aligns to high paying, high demand careers.

The government should join business in playing a significant role driving investments in digital infrastructure. The business of tomorrow will greatly benefit from ubiquitous smart hubs, dedicated IoT towers and high speed WI-FI that power the inevitable Internet of Things, 5G networks and other advancements.

Mobile networks are spurring advancements down to the industry and consumer levels.   Think healthcare, insurance, logistics, retail – nearly every industry is being transformed by the power to remotely monitor and manage business processes and consumer experiences – only IF we have the digital infrastructure. The rate of that transformation and its economic benefits are dependent on the build-out of digital highways and data transmission and analysis facilities working seamlessly and automatically much as our railroads, airports and commercial shipping lanes have done.

The digital economy of the future will not be led by Americans if we don’t provide the requisite training and education. Yes, expanding and diversifying our technical population with more women and minority innovators is a big part of that.  But that’s not all. Technical retraining is needed for the many manufacturing workers Mr. Trump so passionately champions.

As reported recently in The Wall Street Journal, a new study co-authored by the University of Southern California, University of British Columbia and university of Manchester (UK), provides empirical evidence to this issue. The research paper, “Disappearing Routine Jobs,” indicates that the shift from an industrial economy to a digital one focused on high-skilled knowledge work—is decreasing the labor-force participation rate. To counter these trends, the U.S. must invest in raising the skills of the workers most likely to be affected by the disappearance of routine jobs, according to labor market experts.

It’s not enough to rail against “bad trade deals” or globalization. Those jobs that left the US for other countries will not return in the same form nor in the same numbers.  Automation, robotics, artificial intelligence, software design and many other advancements have changed the industrial workplace forever.

We should look at this moment as an opportunity to ensure our country maintains its historical leadership as the most innovative and advanced economy in the world.

So are we going to turn the clock back and look for quick fixes and short-term returns? Or will the Trump Administration live up to its campaign credo for profound and lasting change that can bolster our economy and workforce for today and tomorrow?

If the answer is the latter, the new government will find willing partners across the communications industry, including this author. Let’s work together as a team – government and business – to go forward together – rather than back – to the future.

Mr. Aronow is Chief Executive Officer of MetTel, a leading provider of digital infrastructure, communications and technology services based in New York City.

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