Is America Losing Its Edge?
Giving up on high-tech manufacturing could stifle innovation
America's dominance of the technological landscape is shrinking fast, says Richard Elkus, a longtime Silicon Valley exec (he introduced the first VCR). The problem, he argues in Winner Take All: How Competitiveness Shapes the Fate of Nations, is that by abdicating high-tech manufacturing, America handed more astute nations the tools to produce the next big technological leap forward. Excerpts from a chat with U.S. News:
What's your book's thesis?
When the Second World War ended, the United States represented basically every product and technology that existed. Over time, manufacturing that was fundamental to innovation left the country. There are just not a lot of productive assets left that offer us that same kind of economic strength.
Specifically, what makes homegrown electronics so important?
The industries I'm talking about—information technology, displays, semiconductors, and consumer electronics—infuse virtually every other product and market. If the U.S. loses its ability to be a leader in the world of information, its other goals are not possible.
Can't innovation still thrive?
Innovation doesn't come out of the ether. It takes all kinds of individual products and technologies converging before something pops up that you would've never thought possible. It comes out of understanding, technologically and otherwise, how things really work. In the U.S. now, if you have a really good idea, you'll commercialize it in Asia, so the [knowledge] benefit doesn't accrue to the U.S. We're losing the technological base to advance the state of the art.
Can America regain the lead?
It took maybe $2 million to set up a line in the 1970s to make televisions. Today, to build up a single facility to make flat-screen displays costs $3.5 billion. Now, to try and catch up, the costs are absolutely huge.
How do we fix the problem?
Management has to convince investors that it's worthwhile to keep a reasonable portion of the productive base in the U.S.
Long-term thinking isn't Wall Street's forte.
That's why you have to have a government, starting with the president, that can convince the American people—and, in particular, the investing public—that this logic really does work. It has to come from the top, because individuals invest for the short term.
Reader Comments
Our Country has been going in the wrong direction for at least thirty years now and our domestic situation is getting worse as time goes by because the powers that be systematically repress the changes that are necessaary for a better society....under a freer economic system we would not have this stupid dependence on foreign oil to run our great nation...our founding fathersmade a very important point of going to war to protect the independence of american colonists against the exploitation of the British,.... we have to go back to free enterprise with competition and eliminate fascist economic theories like monopolies and cartels, then we will go back to being one of the most progressive and hopefull nations of the world as we were in the past.....cordially , Steve
america is losing its edge?
Between the donminence of homosexuality and feminism America has lost its womanhood and manhood!
No kidding. It seems to be in vogue to consider computers and Silicon Valley as "high tech" and industry and manufacturing as old low tech parts of the rust belt economy, but in truth most highly technical R&D in the areas of engineering and science has historically been done in labs associated with industry and manufacturing, such as Bell labs, for ex., out of which came the transistor. No industry, no labs or engineering departments, no R&D.
I would blame three factors. 1. Hired to invent--a perversion of intellectual property that excludes most professional R&D people from any patent incentives--thus no innovation. 2. Immigration. US was tops in the 60's before mass immigration greatly lowered the quality of research. 3. Labor costs. Manufacturing has been migrating to lower wage countries like China, and where the manufacturing goes, also goes the engineering and research to continually improve products and processes. The front runner has just an enormous advantage in technology since technology builds on itself and can be protected with patents. Once the lead is lost, getting it back is nearly impossible as many manufacturing processes and equipment are the result of decades of engineering work and research.
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