Testimony of the Honorable Robert S. Walker

Before the Joint Economic Committee

"The Economy in the 21st Century"

June 12, 1995

Mr. Chairman, thank you for the opportunity to testify on the "21st Century Economy."

Since the end of the Cold War we have been struggling to define the best application of government resources to carry forward the technological process made necessary by our national strategy during the Cold War era.

We need to create an opportunity for every American by leading the transformation to a Third Wave, Information Age Society that will be the growth of a global economy.

The Information Age will create opportunities in a wide range of areas: computer worldwide electronics, molecular medicine, breakthroughs in material technology, exploring and manufacturing in space, microminiaturization, and virtual reality.

A space based economy is the economy of our future, the Third Wave future. We will be living and manufacturing space. Americans will no longer look at space as alien but as the new frontier. We will see economic development of space by using free market principals espoused by commercial providers. We will be working together to create strategies and ideas that will make us respond in ways that enhance America's lead in space and aeronautical research.

We are also looking at a knowledge based society. A society that is actively involved in the information era. We already have living proof that America can succeed in the 21st Century. All around us scientists and entrepreneurs are inventing a better future. All around us corporations are re-thinking and re- engineering to produce more, better, and faster, with fewer resources. All around us the private sector and private citizens are changing, adapting to today's competitive realities.

A successful 21st Century America is a Pro-Entrepreneur, Pro-Science, and Technology, Pro-Savings and Investment America that is inventing the best products with the highest values in the world.

Second Wave Industries accumulate more and more and get bigger and bigger. Third Wave organizations are subtracting functions instead of adding functions and are subcontracting functions so that they remain quick, efficient and productive.

We need to decentralize some of the power by placing it in the hands of more people. Third Wave organizations are empowering their employees because these employees often have information and responses to crises and opportunities faster than those on the top.

Third Wave organization want all employees to think, question and take risks; an employee who shows individualism.

Now what we need to do is re-engineer government to follow third wave principals by cutting waste, lowering costs, increasing productivity and quality. This will also have the benefit of allowing us to lower taxes on entrepreneurs and investors so that we can create more economic growth.We need to begin this restructuring of government in order to keep up with the rest of the world and the changes in the future. Government should be lean and flexible. It has been my hope ever since I arrived in this body , that Congress and the Executive Branch be more forward looking institutions. It seems to me that we are always trying to solve yesterday's problems. Instead as a government we should be looking at ways to anticipate what lies ahead and enact policies that are future oriented.

Government structures should be based on Third Wave realities. We should not only down size government but change what is outdated. Many of the charters for the current cabinet agencies are based on our First Wave or Second Wave principals. We need new department enabling legislation that would follow Third Wave principals in which government promotes science, trade, telecommunications, information and education.

For example, one of the restructuring options which should be considered is the combination of the Departments of Labor and Education. Because of rapidly changing technology we need to create a system of effective lifetime learning.

No longer can one expect that the education one receives in one's youth will be sufficient to enable one to maintain the skill levels necessary to perform optimally in the work place.

That is why a Department of Education and Labor which emphasizes the need for continued lifetime skill improvement will be a necessity for American's competitiveness in a rapidly changing world economy.

Another Executive Branch reform that I have long advocated is the creation of a Department of Science. To me, this would be the focal point for future oriented programs within the Federal Government.

As we enter the 21st Century, science will play an increasingly important role as a driver of economic growth. As we have seen in the recent past, inventiveness has been a key to job creation.

A Secretary of Science would be the member of the President's Cabinet who would work with the other Cabinet secretaries to assure that new ideas are brought to bear on the policy deliberations of the Executive Branch's most important policy-making council.

The department I am proposing would combine the science elements of the existing Commerce and Energy Departments as those two agencies are terminated. It would also incorporate into the new department the National Aeronautics and Space Administration, the National Science Foundation, the Environmental Protection Agency, as well as the United States Geological Survey. These organizations would no longer be separate independent agencies.

Mr. Chairman, for the first time in many years we are looking at a major restructuring of the Executive Branch of government. We should take this opportunity not only to downsize what everyone acknowledges is overly large but also out of date. Many of the charters for the Cabinet agencies were formulated in the 19th century. When the Department of Agriculture was created in 1862, over half the population lived and worked on the family farm. Today's economy is not only based on our agrarian heritage but it is to an increasing extent anchored science, trade, telecommunications, and information. As we reduce the size of government we should rationalize what remains into cohesive units which address problems as they exist today.

Economic change can open vast new horizons of growth and employment. Political change can open the doors for more hope and opportunity. Cultural change can create a foundation of values on which tho build a future. Technological change can provide the means to pursue our dreams.

The challenge we face is to mold those changes in ways that lead to hope rather than to hate; foresight rather than fear; virtue rather than victimization; vision rather than vitriol. That challenge is not just for politicians and policy-makers. It is a challenge for all Americans in an era of revolution.