How Steve Jobs Can Save the Economy

Apple-style innovation is what we need to break out of stagnation.


He's gone, but Steve Jobs may turn out to be one of those rare characters whose exalted reputation continues to grow after his death. And the late CEO of Apple might yet exert a beneficial influence on the U.S. economy.

The outpouring of emotion following Jobs's death on October 5 was obviously extraordinary, an indication of the many ways Jobs touched people with his iconic products and intuitive designs. Colleagues praised his unique vision and drive. Business school professors marveled at his ability to innovate. Apple customers recounted the many ways the skinny guy from California in the ubiquitous black turtleneck made their lives better and richer.

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The questions now is whether the legacy of Steve Jobs will be limited to the company he created and the inventions he left behind, or whether his death might occasion something larger--such as a broader pursuit of the kind of purposeful creativity Jobs embodied. At the moment, the U.S. economy could use about a thousand—maybe a million—Steve Jobses. We face deep problems—like a huge overhang of debt and a loss of economic inertia—that could hamstring the economy indefinitely if business as usual continues. Without some kind of disruptive intervention, there's a good chance America will drift into a state of chronic mediocrity, and no longer be the land of opportunity it has been for many decades.

The solution is innovation—something Steve Jobs excelled at. Jobs repeatedly found new ways to solve problems and went far beyond that, devising machines from the Macintosh to the iPad that enhanced people's experiences in ways they had never anticipated. Mohamad El-Arian, co-CEO of the bond firm Pimco, wrote recently that "Jobs did more than navigate paradigm shifts; he essentially created them. He was a master at converting the complicated into the simple. Rather than being paralyzed by complexity, he found new ways to deconstruct and overcome it. And he eschewed the search for the single 'big bang' in favor of aiming for multiple breakthroughs."

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This describes the approach we need to take toward fixing the economy. The way out of our current jam is strong economic growth that will make everybody better off. But that's very unlikely to happen unless clever new policies somehow boost spending or an unforeseen new dynamo emerges, the way the Internet did in the 1990s. Meanwhile, there's no single reason we're stuck in what could turn out to be a long period of stagnation. Globalization and the breakneck pace of technological change have a lot to do with it, but poor policymaking, workers with the wrong skills, overpaid CEOs, and an arcane tax structure are factors as well. It's foolish to think there's a simple "big bang" solution to such a complex problem, such as building more roads, taxing the rich more, or cutting taxes for everybody. It's also foolish to condemn any single idea as "wrong," because an eventual solution will require a lot of different ideas, and some will be more effective than others. "Don't be trapped by dogma," Jobs himself advised the Stanford class of 2005, in his now-famous commencement speech there.

It's worth recalling that in addition to his many successes, Jobs tried a lot of other things that didn't pan out. The first couple of computers he built at Apple barely sold, and they're largely forgotten. But they laid the groundwork for the Macintosh, which was revolutionary. After leaving Apple in 1985, Jobs started another computer company, called NeXT, which built highly capable machines that turned out to be way too expensive for their intended market, and also sold poorly. But that experience taught Jobs how to think more about consumers and listen more closely to talented people around him.

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Steve Jobs also changed his mind when better ideas came along—a trait, signifying intellectual confidence, that's desperately lacking in Washington. As James Surowiecki pointed out in the New Yorker, Jobs intently preferred a closed architecture for his creations, so they'd run entirely on Apple software and not be corrupted by somebody else's inelegant or overcomplicated touch. But that would have severely limited the appeal of mass-market gizmos for listening to music, consuming media or communicating. So Jobs grudgingly opened up his devices to third-party formats, allowing the iPod to play MP-3 files, and the iPhone and iPad to accept apps from outside developers. That's what made those devices runaway hits, consolidating Apple's market power. Instead of merely producing machines, Surowiecki says, "he presided over the creation of new market ecosystems."Entrepreneurs know the value of changing course and learning from failure, especially in Silicon Vally, where Jobs was a fixture. But in other places—especially Washington—a single failure is often considered a disqualifying event. The 2009 stimulus package didn't accomplish what it was intended to, so we couldn't possibly try that again. Politicians of both parties are basically afraid to take decisive steps to reduce the national debt, because they fear voters won't forgive them if they do what's necessary: Implement tax increases and benefit cuts. Instead, they cling to rigid ideas that never seem to change, even though circumstances do. And they continue to peddle the fantasy that if only somebody else makes a sacrfice, you, dear voter, will continue to get everything you feel entitled to. This is the mentality of somebody hawking trinkets in a bazaar, not somebody trying to devise a new system that works better than the old one.

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The new Jobs biography by Walter Isaacson will allow anybody who's interested to learn how the maestro behind Apple thought big, harnessed creativity, and saw solutions that others didn't. It will probably be a gargantuan bestseller. Jobs was sui generis, of course, but his genius for innovation is something that many of us can learn from. With luck, we will, because we need as much of it as we can get.

Twitter: @rickjnewman

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