Losing Our Edge?

Discussion in 'Economics' started by omcate, Apr 22, 2004.

  1. omcate



    Published: April 22, 2004

    I was just out in Silicon Valley, checking in with high-tech entrepreneurs about the state of their business. I wouldn't say they were universally gloomy, but I did detect something I hadn't detected before: a real undertow of concern that America is losing its competitive edge vis-à-vis China, India, Japan and other Asian tigers, and that the Bush team is deaf, dumb and blind to this situation.

    Several executives explained to me that they were opening new plants in Asia — not because of cheaper labor. Labor is a small component now in an automated high-tech manufacturing plant. It is because governments in these countries are so eager for employment and the transfer of technology to their young populations that they are offering huge tax holidays for U.S. manufacturers who will set up shop. Because most of these countries also offer some form of national health insurance, U.S. companies shed that huge open liability as well.

    Other executives complained bitterly that the Department of Homeland Security is making it so hard for legitimate foreigners to get visas to study or work in America that many have given up the age-old dream of coming here. Instead, they are studying in England and other Western European nations, and even China. This is leading to a twofold disaster.

    First, one of America's greatest assets — its ability to skim the cream off the first-round intellectual draft choices from around the world and bring them to our shores to innovate — will be diminished, and that in turn will shrink our talent pool. And second, we could lose a whole generation of foreigners who would normally come here to study, and then would take American ideas and American relationships back home. In a decade we will feel that loss in America's standing around the world.

    Still others pointed out that the percentage of Americans graduating with bachelor's degrees in science and engineering is less than half of the comparable percentage in China and Japan, and that U.S. government investments are flagging in basic research in physics, chemistry and engineering. Anyone who thinks that all the Indian and Chinese techies are doing is answering call-center phones or solving tech problems for Dell customers is sadly mistaken. U.S. firms are moving serious research and development to India and China.

    The bottom line: we are actually in the middle of two struggles right now. One is against the Islamist terrorists in Iraq and elsewhere, and the other is a competitiveness-and-innovation struggle against India, China, Japan and their neighbors. And while we are all fixated on the former (I've been no exception), we are completely ignoring the latter. We have got to get our focus back in balance, not to mention our budget. We can't wage war on income taxes and terrorism and a war for innovation at the same time.

    Craig Barrett, the C.E.O. of Intel, noted that Intel sponsors an international science competition every year. This year it attracted some 50,000 American high school kids. "I was in China 10 days ago," Mr. Barrett said, "and I asked them how many kids in China participated in the local science fairs that feed into the national fair [and ultimately the Intel finals]. They told me six million kids."

    For now, the U.S. still excels at teaching science and engineering at the graduate level, and also in university research. But as the Chinese get more feeder stock coming up through their high schools and colleges, "they will get to the same level as us after a decade," Mr. Barrett said. "We are not graduating the volume, we do not have a lock on the infrastructure, we do not have a lock on the new ideas, and we are either flat-lining, or in real dollars cutting back, our investments in physical science."

    And what is the Bush strategy? Let's go to Mars. Hello? Right now we should have a Manhattan Project to develop a hydrogen-based energy economy — it's within reach and would serve our economy, our environment and our foreign policy by diminishing our dependence on foreign oil. Instead, the Bush team says let's go to Mars. Where is Congress? Out to lunch — or, worse, obsessed with trying to keep Susie Smith's job at the local pillow factory that is moving to the Caribbean — without thinking about a national competitiveness strategy. And where is Wall Street? So many of the plutocrats there know that the Bush fiscal policy is a long-term disaster. They know it — but they won't say a word because they are too greedy or too gutless.

    The only crisis the U.S. thinks it's in today is the war on terrorism, Mr. Barrett said. "It's not."

  2. The struggle is our own collective psychology:

    We feel entitled to what we have. The rest of the world is hungry for it.

    We won't wake up until it's too late.
  3. pffft, the nytimes is a stupid rag - don't bother reading it
  4. in patents and innovation. We now only innovate MLM scams and how many passengers can we fit into a jammed 747 that is 25 year old junk.
    We focus too much on the military innovation when we can quite use that expensive and awesome power with out obliterate the whole globe.
    We shall go broke before we smarten up..

    P.S. The fact that the Bush team is deaf, dumb is not news to millions...
  5. Re. Education

    I know first hand about losing our edge. I owned a publishing company specializing in education material for the gifted. I closed it in Dec. 2002...sales were in a steep decline. Todays schools educate to the lowest common denominator. Each school might have a dozen ESL & Special Ed teachers, but only one teacher for the gifted shared among several schools.
  6. crizan

    crizan Guest

    We take it for granted that foreigners can do everything better and cheaper than the U.S.

    We awe at China and India, invest in their economies before we invest in ours. We should gear up and kick their economic butts instead. Trust me, even unemployed you're better off in the U.S.

    Look at Dell, more workers outside the U.S. than inside. Is Dell even a U.S. company anymore?
  7. omcate


    Mon Apr 26, 2004 12:29 AM ET
    © Reuters 2004. All Rights Reserved

    By Jeremy Pelofsky
    WASHINGTON (Reuters) - President Bush on Monday will call for making high-speed Internet access more affordable and stepping up hydrogen fuel cell research.

    After a week focused on environmental policy, Bush will use a speech in Minneapolis to promote his high-tech agenda, including plans to provide universal access to high-speed Internet, known as broadband, by 2007.

    He will order federal agencies to make it easier for companies to deploy the service and he will prod Congress to make access to broadband permanently tax-free -- reaching out to Internet-savvy voters, a group sought after by Democratic presidential rival Sen. John Kerry.

    Bush will also tout new hydrogen fuel cell technology as a way to reduce the country's dependence on foreign oil. Bush has been under fire from Kerry for not taking a tougher stand against OPEC oil producers to help reduce gasoline price.


    Someone may have been reading New York Times after all.:p
  8. nkhoi


    don't worry Steve Jobs, Bill Gate are made is USA and so is Mr. Craig.
  9. omcate


    Published: May 3, 2004

    The United States has started to lose its worldwide dominance in critical areas of science and innovation, according to federal and private experts who point to strong evidence like prizes awarded to Americans and the number of papers in major professional journals.

    Foreign advances in basic science now often rival or even exceed America's, apparently with little public awareness of the trend or its implications for jobs, industry, national security or the vigor of the nation's intellectual and cultural life.

    "The rest of the world is catching up," said John E. Jankowski, a senior analyst at the National Science Foundation, the federal agency that tracks science trends. "Science excellence is no longer the domain of just the U.S."

    Even analysts worried by the trend concede that an expansion of the world's brain trust, with new approaches, could invigorate the fight against disease, develop new sources of energy and wrestle with knotty environmental problems. But profits from the breakthroughs are likely to stay overseas, and this country will face competition for things like hiring scientific talent and getting space to showcase its work in top journals.

    One area of international competition involves patents. Americans still win large numbers of them, but the percentage is falling as foreigners, especially Asians, have become more active and in some fields have seized the innovation lead. The United States' share of its own industrial patents has fallen steadily over the decades and now stands at 52 percent.

    A more concrete decline can be seen in published research. Physical Review, a series of top physics journals, recently tracked a reversal in which American papers, in two decades, fell from the most to a minority. Last year the total was just 29 percent, down from 61 percent in 1983.

    China, said Martin Blume, the journals' editor, has surged ahead by submitting more than 1,000 papers a year. "Other scientific publishers are seeing the same kind of thing," he added.

    Another downturn centers on the Nobel Prizes, an icon of scientific excellence. Traditionally, the United States, powered by heavy federal investments in basic research, the kind that pursues fundamental questions of nature, dominated the awards.

    But the American share, after peaking from the 1960's through the 1990's, has fallen in the 2000's to about half, 51 percent. The rest went to Britain, Japan, Russia, Germany, Sweden, Switzerland and New Zealand.

    "We are in a new world, and it's increasingly going to be dominated by countries other than the United States," Denis Simon, dean of management and technology at the Rensselaer Polytechnic Institute, recently said at a scientific meeting in Washington.

    Europe and Asia are ascendant, analysts say, even if their achievements go unnoticed in the United States. In March, for example, European scientists announced that one of their planetary probes had detected methane in the atmosphere of Mars — a possible sign that alien microbes live beneath the planet's surface. The finding made headlines from Paris to Melbourne. But most Americans, bombarded with images from America's own rovers successfully exploring the red planet, missed the foreign news.

    More aggressively, Europe is seeking to dominate particle physics by building the world's most powerful atom smasher, set for its debut in 2007. Its circular tunnel is 17 miles around.

    Science analysts say Asia's push for excellence promises to be even more challenging.

    "It's unbelievable," Diana Hicks, chairwoman of the school of public policy at the Georgia Institute of Technology, said of Asia's growth in science and technical innovation. "It's amazing to see these output numbers of papers and patents going up so fast."

    Analysts say comparative American declines are an inevitable result of rising standards of living around the globe.

    "It's all in the ebb and flow of globalization," said Jack Fritz, a senior officer at the National Academy of Engineering, an advisory body to the federal government. He called the declines "the next big thing we will have to adjust to."

    The rapidly changing American status has not gone unnoticed by politicians, with Democrats on the attack and the White House on the defensive.

  10. india cranks out more engineers than the US. while kids in US watch realworld, american idiots(idols), dream about being of them. people on the other side of globe stay up all night studying and preparing for exams. this is the difference. this is the difference that will set the path of this extreme divergence. soon enough, you will see it in hard numbers. its only a few decades away.

    have you walked around silicon valley during the bubble? how many white engineers do you see around? i'm sure its not proportional to the white population vs the minorities. that tells you something...

    back in the beginning of the ARPAnet(1st gen of internet), how many minority engineers participated in that?

    there's a divergence here... take notes

    what do you think?
    #10     May 4, 2004