Photograph by A. R. Coster/Topical Press Agency/Getty Images

While it is true that socialism lost the Cold War, it has clearly won the Internet. And no, I’m not talking about the now-widely cited Pew poll stat that more Millennials have a favorable view of socialism than capitalism. I’m talking about the basics of how the internet works. To understand what I mean, consider Linux, an operating system built largely upon the principle of “from each according to its ability, to each according to his needs.” When it first rose to prominence,
Microsoft

CEO Steve Ballmer called it a cancer. Yet more recently, Microsoft’s current CEO announced that the company loves Linux.

Everywhere you look, open source is powering modern society. From basic technologies like Apache and MySQL to highly specialized ones like Spark and Cloud Foundry. Tesla, quite famously, has open sourced its patents for electric cars. It’s not a stretch to say that proprietary technology these days is really the stuff we build on top of open source.

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What’s ironic is that all of this communal activity isn’t driven by beret-wearing revolutionaries plotting in coffee houses, but by many of today’s most powerful and profit-driven corporations, who act not out of altruism, but self-interest. The fact is that technology firms today who do not actively participate in open source communities are at a significant competitive disadvantage.

For example, Chris DiBona, Director of Open Source at Google, once told me, “We released Android as an open source product because we knew that was the fastest way to grow adoption, which enabled us to preserve the relationships with customers for businesses like search, maps and Gmail.” That is the reality of today’s marketplace. You collaborate in order to compete effectively. Businesses that don’t accept that simple fact will find it difficult to survive.

Science’s commitment to communal effort is not at all new, but is a thread running deep in America’s long history of technological dominance. And it’s not all about private companies competing with each other, either: it’s about how the market can benefit from public investment. When Vannevar Bush submitted his famous report, “Science, The Endless Frontier,” to President Truman at the end of World War II, he argued that scientific discovery should be considered a public good crucial to the competitiveness of the nation. The crux of his argument is that such efforts build capacity through creating what he called “scientific capital” and pointed out that “New products and new processes do not appear full-grown. They are founded on new principles and new conceptions, which in turn are painstakingly developed by research in the purest realms of science.”

Bush’s report led to the development of America’s scientific infrastructure, including agencies such as The National Science Foundation (NSF), National Institutes of Health (NIH) and DARPA, that powered our commercial dominance throughout the 20th century. Look inside an iPhone or any other major technology product today and you will find that most, if not all, of the crucial components started out in some government lab.

This success was based on a profound distinction that many still fail to grasp even today. There is a fundamental difference between the type of capacity building that Bush described and the competition-fueled activity that can maximize that capacity in a private enterprise system. (It is also important to note that Bush, a co-founder of Raytheon, was also a very successful entrepreneur).

For example,
Boeing

and Airbus are arch-rivals, but actively collaborate at the Composites Institute, one of 14 manufacturing hubs set up during the Obama Administration. They do so not out of any great love for each other, but to gain access to the knowledge of expertise of the other participants, such as Oak Ridge National Laboratory and Purdue University, as well as over 100 other companies, including chemical giants
DowDuPont

and
BASF
.
By doing so, they are building their capacity to more effectively compete.

That is just one of many efforts that are crucial to our future competitiveness. Another, the Joint Center for Energy Storage Research (JCESR), brings together National Labs, research universities, and private sector companies to develop advanced battery technologies. Another, the Critical Materials Institute (CMI) was set up to develop alternatives to materials that are subject to supply disruptions, such as the rare earth elements.

Yet perhaps the most important factor in our future success is the capacity of the American people themselves. As global competition increases exponentially over the next century, we desperately need to build the next generation of scientists, engineers, and entrepreneurs. We can only do that if they have access to nourishment, education, and healthcare.

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Yet that is not the reality today. Food insecurity is rampant on college campuses. (In fact, one group of community college administrators told me it was the number one reason students drop out. Student loan debt is hurting entrepreneurship. The number of children without health insurance is rising once again (by 5% in 2017). Clearly, if we expect to compete in the 21st century, the situation is untenable.

We have real problems to solve. Perhaps the first is a very fundamental one: How can we best build the capacity to maximize our prosperity, competitiveness, and well-being?

Greg Satell is a speaker, innovation adviser, and bestselling author of Cascades: How to Create a Movement that Drives Transformational Change. His previous book, Mapping Innovation, was selected as one of the best business books of 2017.

Email: editors@barrons.com

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