Examining The Most Innovative Eras in U.S. History

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Today it might seem like a given that power lines in your neighborhood and electrical sockets in your house provide the same current to anyone who plugs in.

But the idea of standardized service for electricity and for railroads, along with the notion of "a common carrier," was once something new—and rare. In the case of railroads, establishing train lines as "common carriers" set the stage for massive transformations of the economy.

It's something Edmund Phelps, economics professor at Columbia University and winner of the 2006 Nobel prize in economics, thinks brought in one of the most innovative eras of American history—a time we stand to learn a few lessons from as we try to keep our workplaces from stagnating today.

Phelps's most recent book is “Mass Flourishing.” He argues that in order to grasp innovation we must look back in time—not forward.

"Suddenly in the 19th century you have people coming together in cities and working together in factories, offices and companies," says Phelps. "The whole character of work was completely transformed—this was the birth of innovation in the world."

Phelps says that while there are still pockets of considerable innovation in the American economy, the U.S. is now a pale shadow of what it once was. 

"The aggregate rate of innovation as measured by its impact on productivity is much, much smaller than the country had between the 1820s and 1940, or even 1960," he says. "We have to explain to young people that business is not just some sort of getting through the day by solving the problems of the day. Its an opportunity to exercise creativity and imagination."

How can the innovation mentality of yesteryear be fully realized today? Listen to the full interview to find out.