Look to nature's way

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By Harold Raveche

Nature's design provides vital clues for the Obama administration and Congress to follow as they craft an unprecedented overhaul of our nation's financial system. No less than the future of capitalism is at stake.

The life cycle of U.S. capitalism, as we know it, began with the Industrial Revolution and reached its peak in terms of productivity and employment after World War II. It lasted little more than a century.

Biomimicry is the fashionable term now given to emulation of the order of the natural world, which has been an unfolding, 3.8-billion-year expression. The human body, for instance, has adapted in an environment bounded by the high sky and the hard ground and to changes as big as wars and as small as viruses.

The frail, cyclical and recent development of the financial system pales in comparison to the steady, relentless evolution in nature. Nature's progress provides an insight into curing a present disease that might best be called affluenz -- a breakdown in the body politic to regulate the excesses of capitalism.

An immune system is the body's ultimate regulator in fighting disease. DNA enables a cell to carry on the work of life.

Government and financial regulators failed to inoculate economies from the affliction of neglect. Full-throttling the government's money-printing presses is a reflexive, fight-or-flight political response, not a restorer of health. We are inoculating ourselves against economic harm with the wrong cure. The value of human capital is missing from the equation. It needs to balance financial capital, but it remains overlooked in the political and economic recovery room.

An unhealthy immune system cannot fight disease and may even speed the onset of a breakdown -- which is precisely what happened in the financial markets.

U.S. and global leaders seeking to cure what ails are well-intentioned, but in their haste, they are violating that Hippocratic admonition to do no more harm.

Human capital is the DNA of the economy and should be the center of focus in the cure. The true cure, not the political placebo, is about the workers, entrepreneurialism, education and competition on a global scale. The U.S. is barely in the game anymore.

Enormous sums of money are applied like magic potions to the American education system, yet the U.S. entry-level work force, especially from urban and rural areas, lacks math and science skills to compete with the advanced international work force.

The federal government must provide matching funds for partnerships between school districts and colleges and universities to prepare a new cadre of teachers well-qualified to teach math and science. Teachers must help educate aspiring engineers and scientists from our richly diverse black and Latino communities so tomorrow's work force looks like America.

The nation's human-capital base also must be nurtured at the executive level. Leading MBA programs have boasted of success for grooming recent business leaders and chief executives. Such schools also must shoulder responsibility for the sad fact that corporate profits in the past several decades were obtained largely through mergers, acquisitions, the sale of valuable assets, staff reductions and the pursuit of an endless array of high-risk financial instruments. This once-venerated degree has become the master of business absence.

Perhaps our nation's MBA programs must be replaced by different training that provides the missing elements of entrepreneurship, innovation and ethics. Tomorrow's business leaders must learn the importance of their corporations nurturing human capital and of giving back to the community.

Just as mitochondria produce energy for human cells, entrepreneurs and innovators provide the energy for the U.S. economic system. Scaled to the size of a cell, the U.S. economy needs millions and millions of mitochondria. Without the nurturing of this vital dimension of our human capital base, there is no hope for rebuilding a healthy U.S. economy. No dose of government spending or bailouts will make up for the lack of innovators and entrepreneurs.

Evolving technology is increasingly important to every business and for all of our national priorities, such as health care, energy, transportation infrastructure and homeland security. To develop of a new cadre of engineers and scientists who will provide the ideas for tomorrow's products and services, federal and state governments must provide funding for research and development partnerships between business and our nation's research universities.

Just as human cells need nourishment, entrepreneurs and innovators need capital to pursue their ideas. It is very wrong for the federal government to increase the tax on the venture capital that feeds innovation.

Congress and Mr. Obama have a profound opportunity to remake and revitalize the U.S. economy. The models they can follow are many. Following the path of nature may be just the medicine the U.S. economy requires.

The options are stark and clear: Do we want an inflexible and stifled state-controlled economy or a vibrant and responsive free-market system that has human capital as its resource for competing in the global economy? Biomimicry provides the answer.

Harold Raveche is president of the Stevens Institute of Technology in Hoboken, N.J.