Can America Keep Up?
Why so many smart folks fear that the United States is falling behind in the race for global economic leadership
Lands of opportunity. Lots of other overseas companies are luring the best and brightest away from America, especially students who have come here to study. David Heenan, author of Flight Capital, estimates that several hundred foreign-born professionals leave the United States every day--"exactly the kinds of people we should be keeping our hooks into." Many are lured back home by exploding opportunity, high incomes, and generous government support for scientific research. Singapore, for instance, has set up a huge government-funded biotechnology R&D complex that has drawn leading experts from the United States and elsewhere--partly because it supports stem cell research, which gets little U.S. public funding on account of political battles over the use of fetal tissue, highly controversial among conservatives. "We have no incentives at the national level," says Heenan. "We're losing our glow to some of these folks." Iceland has become a hub for genetic research, buoyed by government policies that permit the collection of anonymous DNA data from every citizen. The South Korean government's push to equip every home with a broadband connection is producing one of the most Net-savvy populations on the planet. "The U.S. used to be the mecca for the innovative technology of the future," says John Mullen, stateside CEO of DHL, the global shipping company. "Now the rest of the world is developing that capability. It's weakening the whole power base of the U.S."
Compared with activist governments in China, India, South Korea, and other countries, which generously subsidize technology and innovation, America's policymakers have generally taken a laissez-faire approach. Some think it's time to take a more aggressive tack. "We like to let market forces prevail," says Bob Cohen of the Economic Strategy Institute, a Washington, D.C., think tank, "but that doesn't assure we have better access to services and technology." Even some corporate leaders, typically wary of government intervention, agree. Yahoo!, for instance, is interested in generating webcasts and other educational services featuring some of the world's best instructors, so that lectures and presentations now offered to a privileged few could reach a much bigger audience. But it probably won't happen in the United States--at least not first--since the country ranks 12th in the number of broadband subscribers per 100 inhabitants. South Korea, Singapore, and several European countries would make better test beds. "The U.S. is not in a leadership position as it relates to broadband," Yahoo! CEO Terry Semel said at a conference in New York last fall. "If it were a government priority ... what it could do in terms of jobs, healthcare, and other things we could do for our country."
President Bush's "competitiveness initiative," supported by several bills pending in Congress, is designed to improve public education, encourage more students to pursue science degrees, and goose technology research. Specific proposals include doubling the budget of the National Science Foundation, offering stipends to graduate students who specialize in math and science, and establishing a permanent federal R&D tax credit for U.S. corporations. But even if millions of dollars of funding materializes, that would do very little to address other major shortcomings. "Everything we're doing is the status quo," argues Ron Hira, author of Outsourcing America and a professor at the Rochester Institute of Technology. "Investing in K-12 . ... How does that help a 43-year-old displaced worker? China and India, meanwhile, are playing a very smart game of industrial policy."
advertisement
