Is Lack of Innovation Our Impediment To Growth?

Jeff Reeves makes that case, via Ritholtz:

It’s cause and effect — a lack of business spending means a lack of jobs and a lack of consumer power. And most economists and politicians would assert that the cycle works both ways.
But theoretically, shouldn’t the reverse also be true — that consumers spending more will enrich businesses, who continue to grow and hire and spend? What happens when corporations break the deal; when consumers spend but businesses don’t?
That might be part of the problem we are seeing right now.
After all, businesses have some $1.9 trillion in the bank just sitting idle — or if you want to get creative with accounting, perhaps as much as $5 trillion in cashcounting other assets and overseas money.
After all, CEOs are darkly pessimistic while consumers are upbeat.
After all, America is stuck in seeking “efficiency” through cutting and not “empowerment” through big ideas, as a New York Times column puts it.
As to how we break this cycle and enrich both sides instead of just one … that’s anybody’s guess.
So if you’re a consumer wondering about the best investments right now, it might be worth looking inwardly instead. There’s a decided lack of innovation and opportunity in corporate America right now, so invest in yourself — start your own business, or noodle away on what could be the world’s next big idea.

Business has been extremely resistant to expanding payrolls, and that has caused a lot of our "uncertainty."  Somehow, employees need to get a greater share of the fruits of their labor in order to sustain growth.  Instead workers are working more hours for pretty much the same pay, leaving the gains in productivity in the hands of the businesses, where it isn't getting reinvested.  It's a painful setup, but a good partial explanation of our lack of growth.  Businesses haven't exactly been the risk takers they see themselves as.