Left: George Kozmetsky’s diagram (still on display at the IC² Institute) illustrating how an entrepreneurial ecosystem can promote shared prosperity; Right: An AI-generated image illustrating the expected outcomes from a well-being economy.
The Setting …
The world sat at the edge of globalism in 1977 — inching from the bi-polar depths of the Cold War toward multi-lateral cooperation with the economic ascendency of countries in Asia and the Americas. The U.S., still recovering from Watergate, approached the last part of the decade with new dynamism from its bicentennial, boasting a stable economy, an optimistic new President, a growing technology revolution, and abundant energy.
The future successes in Middle East Peace and the tremendous disruptions of energy embargos, stagflation, and the Iranian Revolution were just out of view. The Texas Longhorns, powered by Heisman Awardee Earl Campbell, fell one game short of a fourth national championship crown, finishing 4th in national polls after an unexpected loss to Notre Dame in the Cotton Bowl. Into this setting, the IC² Institute was born.
A New Type of Think Tank
The Institute was a new type of think tank: “An international, trans-disciplinary ‘Think and Do’ tank devoted to solving unstructured problems to accelerate wealth and job creation and shared prosperity at home and abroad…” [1] Initially the Institute focused its attention on the study and practice of two things: 1) science and technology’s contribution to economic development and new enterprise growth; and 2) shared prosperity through economic wealth creation.
The catalyst for the Institute’s founding was the vision and energy of Dr. George Kozmetsky — the Dean of the College of Business at The University of Texas. Kozmetsky saw the need to understand and respond to the rapid growth in technological innovation and reverberations this created across society, and global and local economies. A strange mix of futurist and pragmatist, Dr. Kozmetsky emphasized the imperative for change:
“To prepare for the twenty-first century, countries and communities will have to implement new strategies that will take into account globally competitive market systems. The next millennium must be a round of collaboration and competition between different forms of market-driven economies. Shared prosperity at home and abroad must be the goal.[2]
I+C+C: An evolving view of capitalism
Two names were used early in the Institute’s history; interestingly both reflect the concept of shared prosperity: first, “The Institute of Constructive Capitalism” — reflecting the view that capitalism must be an economic system which would not “merely earn a profit for shareholders, but also help solve society’s problems.”[3] And later, “The Institute of Creative Capitalism” asserting a form of capitalism that “truly establishes the community of humanity as the goal of society” and where wealth is “distributed in a manner which makes it possible to increase the standard of living of all the people.” In 1985, the Institute’s name morphed into the moniker, “innovation, creativity, and capital” (or, “IC²”) to highlight the three components Dr. Kozmetsky viewed as critical for constructive change.[4]
Shared Prosperity — Its Meaning
The concept of shared prosperity was embedded early in the DNA of the Institute and its activities. Indeed, this concept was an important contribution to how the Institute envisioned the disruption of the practice of capitalism.
Dr. Kozmetsky was once asked by a student about what started his re-visioning of capitalism. He was swift to answer, recounting the feelings he and his wife shared as they listened by radio to the nightly riots in the Watts District of Los Angeles during the summer of 1965. At that time, Dr. Kozmetsky was a successful executive living in Brentwood overlooking the Pacific Ocean, and his company Teledyne recently realized a successful initial public offering and looked toward a successful corporate future. awakened in him and his wife the desire to leave the life of industrialists and return to the academic world and dedicate the necessary “energy to bring about the changes” that needed to happen.[5] From this point on, for Dr. Kozmetsky, profit and corporate success as ends in themselves were insufficient; a more satisfying form of capitalism was needed.
It was Kozmetsky’s view that society as a whole and the companies comprising the private sector should not define success merely as increasing GDP or a company’s positive balance sheet, but through their track record to solve meaningful problems and engage in the imperative of social responsibility. Profit comes with responsibility, including philanthropic and service activities that “profit” society. It was acknowledged that the “old” form of capitalism had clearly-defined, bounded measures of success while shared prosperity, with its collaborative, networked, and innovative approach, offered “fuzzy goals” and multidisciplinary outcomes. This inherently made the concept challenging to communicate and realize. But one can see the concepts of corporate social responsibility and the “triple-bottom line” emerging from this vision.
Definition Through Action
Perhaps the best way to arrive at an apt definition of “shared prosperity” is to examine some of the Institute’s impactful projects. Four projects are detailed below; each helps to define shared prosperity through a concrete project.
- Cross-Border Institute for Regional Development (1999): The CBIRD program was a bi-national collaborative initiative between Texas and the states of Northeastern Mexico focusing attention on critical problems facing the Border region, including education and training, infrastructure, affordable housing, quality of life issues, human resources, and financial capital. To accomplish this, a “one region-one future” vision was adopted and a highly networked and collaborative team from both nations formed to create sustainable and accountable development. Critical to its success was to open dialogue between the U.S. and Mexico about the conservation of natural resources along the Border, including water, air, and land.[6]
- EnterTech (2002):[7] The problem of digital divide was a constant concern for Dr. Kozmetsky. Workers must develop both understanding of and skills to use new technologies if they were to participate in the emerging economy. Through a grant provided by the Texas Governor’s Office and Workforce Commission, as well as support from local companies, Institute researchers developed a curriculum to bridge the divide. The three-year program saw 67% of those completing the 45-hour program gain employment or continued with further education. One-third of welfare recipients who participated in the program left public support behind and were noted as highly productive by their employers.
- Small-biz.XLR8 and Small-biz.HUB (2017-present): In 2017, The Bureau of Business Research conducted Texas-wide studies to understand how minority-owned businesses differed in growth pattern and success. Through these findings and interviews with diverse business owners across the region, the Institute developed two trainng programs to address the needs identified: HUB Readiness Training Program, a capacity-building program for owners of Historically Underutilized Businesses in Travis County and Small-biz.XLR8 — a program helping traditional small businesses grow, add employees and impact local economies through market expansion.
- The Rural Economic Recovery Initiative (2020-21), conducted by the IC²’s Bureau of Business Research, highlighted the importance of human-centered, community-wide input on local economic development priorities, especially in the wake of the economic crisis brought on by COVID. The project was state-wide in scope and engaged 80 UT students who performed community asset mapping, stakeholder interviews, and delivered 67 assessment reports to community leaders at this critical time for new planning.
These programs illustrate the functional definition of “shared prosperity — implying the imperative of an innovation economy to:
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- Encourage companies to actively participate in social responsibility programs and value measurable outcomes outside of quarterly profits;
- Empower underserved business leaders to grow their companies and profits;
- Skill individuals to enter or re-enter the workforce with improved economic opportunity;
- Enhance the quality of life (housing, food access, environmental conditions) of people living in vulnerable regions;
- Improve collaboration among institutions, states, and nations such that benefit flows to residents and local economies;
- View environmental resources as critical to human and economic well-being.
Towards A Well-Being Economy
It is interesting that from the Institute’s founding, capitalism has been viewed as an essential system, yet one that is moldable to the needs of the constituents it serves as a system — people, communities, companies, and the planet.
Today, 45 years after its founding, the IC² Institute returns to its roots of advancing shared prosperity but we are expanding our considerations beyond corporate action, to include all economic players — government, private sector, universities, and the community — to advance well-being. A key aspect of this initiative is a broader definition of well-being than previously contained in “shared prosperity,” including new indices of social progress in the areas of human and societal health, resiliency, community, opportunity, sustainability, and equity. We envision a well-being economy, where new, previously unseen economic opportunities are brought into focus by using a well-being lens.
Innovation and technology remain central to the Institute’s new mission, for they accelerate opportunities for benefitting companies, their employees, customers, and communities. Dr. S. Craig Watkins, Director of the IC2 Institute said,
“Today, there is a growing call and need to leverage new technologies and our data-driven world to cultivate an innovation economy that is predicated on inclusion and social impact. I see a future in which IC² will be a hub for producing the knowledge, networks and talent needed to do just that.”[8]
AI and Health
The Institute has chosen the role of artificial intelligence (AI) in healthcare as its initial focus area. AI may seem like science fiction as its potential uses permeate our daily news feed — but it is not hype. AI can play predictive, preventative, and personal roles in healthcare, a market segment that impacts the well-being of virtually every person.
Despite the considerable attention devoted to Health AI, many populations are overlooked in its development and potential benefits. As it focuses on AI and health, the Institute is funding new faculty research, learning with healthcare companies, listening to health workers and patients alike, and convening thought leaders to design strategies to deploy AI for the benefit of historically underserved communities. These efforts will make important contributions to The University of Texas at Austin’s 2024 theme, “The Year of AI.”[10]
The focus on AI and health, and the broader well-being economy initiative, reflect the longstanding mission of IC² to lead through research and transform society through real-world application of learnings. Our research and programmatic initiatives centered on the well-being economy offer a bold and renewed vison for remolding capitalism yet again to meet urgent and broader human and community needs.
2024 is already exciting. Stay tuned for updates.
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Footnotes
[1] Text from former website: www.ic2.org provided by: Phillips, F. Toward an Intellectual and Theoretical Foundation for ‘Shared Prosperity’. Syst Pract Act Res 18, 547–568 (2005). https://doi.org/10.1007/s11213-005-9466-2
[2] Kozmetsky, G. in forward to R&D Collaboration on Trial: The Microelectronics and Computer Technology Corporation. Gibson, D.V. and Rogers, E.M. Boston: Harvard Business School Press. 1994.
[3] Jones Monty. 2018. A Civic Entrepreneur : The Life of Technology Visionary George Kozmetsky First ed. Austin: Dolph Briscoe Center for American History University of Texas Press. p. 299.
[4] Jones, p. 305.
[5] Jones, p. 141.
[6] https://news.utexas.edu/1999/04/07/cross-border-institute-for-regional-development-launched/
[7] Jones, p. 353-354.
[8] https://news.utexas.edu/2021/12/14/s-craig-watkins-appointed-new-director-of-the-ic2-institute/
[9] https://news.utexas.edu/2023/11/16/ut-designates-2024-the-year-of-ai/#:~:text=In%202024%2C%20UT%20will%20prioritize,across%20and%20beyond%20UT%20Austin.