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09.07
Competitiveness in a Global Environment
By George Zobrist
Globalization now has 3 billion
eager participants in competition with the
United States.
Is our history unfolding like Queen Victoria’s era? Great Britain
was on top of the world and no one thought
that they would be replaced by another
superpower. Is history repeating itself
with U.S. dominance? Only time will tell.
The following reflections draw upon an
article in Newsweek (12 June 2006) and various
referenced links (appended below).
According to Intel’s Andy Grove, “America is going down the tubes, and the
worst part is that nobody knows it. And Jeffrey Immelt, CEO of General
Electric, muses about the growing competence and
cost advantage of countries like India, China
and possibly Mexico, saying, “Its unclear how
many manufacturers will choose to keep their
businesses in the United States."
There is growing concern over the
decline in the support of engineering and
science within the U.S. The numbers are
debatable — and frequently are debated — but
some estimate hold that
China and India graduate 950,000
engineers/scientists each year, while the United
States
graduates around 70,000. There is a growing
sense that
we are in a period of cultural and intellectual decay,
where we are moving away from the basics (i.e., the three R’s) to one
of instant gratification, deification of movie
stars and athletes, conspicuous consumption (rather than
saving), and leisure. More people will graduate
this year
with a sports exercise degree than an electrical
engineering degree.
A number of historical trends since WWII
have prompted individuals to voice growing
concerns about the U.S. decline, including:
-
The Soviet Union’s launch of
Sputnik in the late 1950s, signaling the end
of U.S. technological superiority
-
The 1970s witnessed a
considerable increase in oil prices and the
feeling that Western Europe and the Middle
East would be future powers
-
In the 1980s, it was widely
expected
that Japan would be the dominant economic
force
These fears never fully
materialized,
mainly because a flexible, resourceful, and
resilient U.S. population was concerned enough
about our impending decline to prevent it.
The problem today is
that we aren't scared enough at the
mainstream level. No serious solutions are being
presented for the impending scenario. While the
politicians talk about solutions, they are not
yet
ready to address dramatic changes, in, say,
entitlement programs, various subsidies and so
on. Without major overhauls, programs like
Social Security could bankrupt the country in a
relatively short amount of time. The solutions will be a product of
government policy — very difficult policy
choices — which likely will result in unpopular
solutions. A major concern is that when the
population becomes scared enough they will try
to have policies put in place that will cause
more harm than good (e.g., protectionism).
If these policies are
implemented where would that leave many of the
third world countries that depend upon exporting
goods to the United States? And wouldn’t our exports be
affected by retaliation? While they may have
cheap wages by our standard, it probably is a
relatively decent wage in their country. There
are some proposals that include “caveats” like
allowing unions, abolishing slave labor, and
other items in trade policies — although some
contend these won’t raise their wages much.
In time, wages will increase, but it will take
generations. According to a recent Wall
Street Journal article
(7 July 2007), wage adjustments are already occurring for some
software engineering jobs that
were outsourced to India, where wages have risen
dramatically. And other article contend that Japan and Korea are also
outsourcing to other countries with lower wages.
Several individuals were polled
on their ideas to recharge the United States:
-
Fix our schools
K-12 is the last large governmental
monopoly, are there better ways to manage
the educational system
-
Spend more on research
In the mid-1960s, the United States was spending 2% of
the GDP (in terms of Federal dollars) on R&D
— it is now
spending about 0.8%.
-
Change the culture
Need to encourage creativity that’s not just
artistic, but also functionally and
technologically sound
-
View rivals as partners,
not adversaries
If we keep to our current course, the Chinese economy will
overtake the U.S. economy in 10-20 years; we will need
to view them as partners, not as rivals
-
Get away from political
labels
We must look at future versus past, not
Democrat vs. Republican, or Conservative vs.
Liberal
-
Bring back offshore jobs
Encourage craft-based manufacturing jobs
to be brought back to U.S. from off shore
-
View immigration as a
strength
Immigrant rich society has a definite
advantage
-
Understand the fiscal
realities
Federal investment in non-defense R and D is
crowded out by spending on health care and
retirement — also, our huge appetite for
energy, consumption habits and meager
savings levels
There is conundrum in all this,
in that these trends and features have been
around for quite awhile and do not seem to have
an impact on the “bottom line”, as of yet.
Maybe, we are in a slow-steady decline like in
Queen Victoria’s day.
There are numerous links were
articles can be found on competitiveness, a few
are listed below:
Dr. George W. Zobrist is
professor emeritus at the University of
Missouri-Rolla, Department of Computer Science,
IEEE-USA's Member Activities editor, and former
editor of IEEE Potentials.
Comments may
be submitted to todaysengineer@ieee.org. Opinions expressed are the
author's.
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