President Barack Obama said in his State of the Union that the US needs an economy “built to last”. Unfortunately, in his populist rhetoric, Mr Obama missed an opportunity to tee up the conversation the US must have during this election season: How do we restart dynamism in our economy, delivering productivity growth and raising living standards?

The narrative that answers this question has three parts: innovation, investment and inclusion.

Innovation is the ultimate driver of living standards and future jobs. It comes in two forms. First, “non-destructive creation” – the development of entirely new products and business models. Policies that support this include strong federal backing for basic research and financial sector regulation that considers incentives to lend as well as financial stability. Instead, the Dodd-Frank Act will limit the flow of credit to all but the largest and safest borrowers.