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Losing Our Edge?
April 22, 2004
By THOMAS L. FRIEDMAN
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."
http://www.nytimes.com/2004/04/22/opinion/22FRIE.html?ex=1083673556&ei=1&en=e40601f8b310a0e9
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