[FoRK] [brian@juvensa.com: [GRG] Its more than just Stem Cells - Can Americans Compete? - Part 2]

Eugen Leitl eugen
Tue Jul 19 03:11:14 PDT 2005


----- Forwarded message from Brian <brian at juvensa.com> -----

From: Brian <brian at juvensa.com>
Date: Mon, 18 Jul 2005 22:38:53 -0700
To: Gerontology Research Group <grg at lists.ucla.edu>
Subject: [GRG] Its more than just Stem Cells - Can Americans Compete? - Part
	2
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Reply-To: Gerontology Research Group <grg at lists.ucla.edu>

Combine all those trends and the picture isn't encouraging for America.
Though the U.S. is still the world's biggest and strongest economy by
far, many Americans, from hourly workers to CEOs, feel as if they're
getting sand kicked in their faces. They know they need some serious
muscle building to match the other guys on the beach. And they're
remarkably agreed on how to do it.
 
The No. 1 policy prescription, almost regardless of whom you ask, comes
down to one word: education. In an economy where technology leadership
determines the winners, education trumps everything. That's a problem
for America. Our fourth-graders are among the world's best in math and
science, but by ninth grade they've fallen way behind (see table). As
Bill Gates says, "This isn't an accident or a flaw in the system; it is
the system."
 
The good news is that we've overhauled the system before. A century ago,
as America changed from an agricultural to an industrial economy,
something called the high school movement swept the country. City and
town leaders realized that an eighth-grade education, which was all that
most people got, was no longer enough. They built and staffed high
schools but rejected the European model, which prepared a small minority
of young people for college, opting instead to prepare a majority of
young people for life and work. This was a revolutionary concept, and
many European authorities thought it foolish. But as research by
Harvard's Claudia Goldin and Lawrence F. Katz has shown, by 1940,
America was far and away the world's best-educated nation, a critical
element of its post--World War II economic dominance.
 
We responded to a changing world again in 1958, after the USSR orbited
Sputnik while our rockets kept blowing up on the launch pad. Congress
passed the National Defense Education Act, which appropriated federal
money for education in math, science, and foreign languages. It worked,
along with America's grass-roots response to the threat. We went to the
moon, science and engineering became cool, even glamorous, and we gained
a wide technology lead.
 
Now we need to revolutionize our schools again. As the world's richest
country, we certainly have the resources, but we seemingly lack the
will, while many of our competitors are obsessed with education. In
China it's common for middle-school students to attend school from 7:30
A.M. to noon, then from 2 P.M. until 5, and again from 7 to 8:30 P.M.
Contrast that with a nation where millions of parents are happy to let
their kids spend hours hanging out at the mall or playing Grand Theft
Auto on their Xbox or watching Pimp My Ride on MTV. To be sure, many
upper-middle-class parents live in wealthy school districts with
excellent schools, and they're making private tutoring firms like Sylvan
Learning Centers and Kumon into fast-growing businesses. But for most in
the broad middle class or below, a top-notch K--12 education is a world
away.
 
Evidence is mounting that the way to begin reform is for legislators to
establish high standards for public schools and make the schools more
accountable to parents. But even if that notion becomes a movement, it's
not clear that better education will guarantee U.S. economic dominance.
If we could somehow get our high school math and science scores up to
South Korean standards, which would be a gargantuan achievement, then by
that measure we'd be as good as they are--but they'd still be cheaper.
 
A prescription urged just as widely is immigration reform. A critical
element of America's economic dominance has been its attraction for the
world's brightest, most ambitious people, but today's immigration laws
favor family reunification far above talent, intelligence, or
credentials. If Albert Einstein wanted to move in today but had no U.S.
relatives, he'd have to get in line behind thousands of poorly educated
manual laborers who did. In a global economic competition, that policy
seems crazy. John Doerr, the legendary Silicon Valley venture
capitalist, recommends that every foreign student who gets a Ph.D. at a
U.S. university should also get a green card (granting permanent
residency) stapled to his or her diploma. But U.S. policy is moving in
the opposite direction. The number of available H1-B visas, which allow
highly qualified foreign workers to remain in the U.S. for up to six
years, has been cut from 195,000 to just 65,000 a year, based on
security concerns following 9/11.
 
U.S. spending on R&D will also have to increase if the country wants to
remain technologically dominant. The Task Force on the Future of
American Innovation, a group of academic societies, high-tech companies,
and industry associations, concludes in a recent report that "the United
States still leads the world in research and discovery, but our
advantage is rapidly eroding, and our global competitors may soon
overtake us." Aggregate R&D spending by six fast-growing economies
(China, Ireland, Israel, Singapore, South Korea, Taiwan) is on track to
exceed U.S. spending in a few years. Industrial R&D continues to
increase, but 71% of that spending is on development, not the kind of
basic research that created the transistor and the laser. Federal
funding of research in the physical sciences has been declining as a
percentage of GDP for 30 years. The Council on Competitiveness,
consisting of CEOs, university presidents, and labor leaders, wants
federal research spending increased substantially, to 1% of GDP--about $
110 billion a year.
 
Incredible as it seems, America's infotech infrastructure is no longer
world-class. We rank only 12th globally in the number of broadband
connections per 100 inhabitants. Look closer and the situation is even
worse. South Korea is not only more wired (No. 1 globally) but its
connections are far faster than ours and are available not just through
wires but also through virtually every cellphone. And speaking of our
cellphone infrastructure--please don't. Anyone who travels globally
knows it's awful by world standards.
 
Fixing all these problems would be a project of overwhelming
proportions, yet it still might not make American workers competitive in
today's global labor market. The reason, again, is cost. American
workers are enormously more expensive than their peers almost anywhere
but in Western Europe. So they must confront what may be the most
important question of their working lives: How can they be worth what
they cost?
 
As increasing numbers of them find that they can't be, at least in the
short run, the result could be political upheaval. A return to
protectionism is looming. When the end of global textile quotas earlier
this year caused the rapid loss of 17,000 U.S. jobs--a tiny number in a
nation of 141 million workers--the administration found a loophole in
the trade treaty and quickly reimposed restrictions. Senator Charles
Schumer (D-New York) introduced a bill to impose a 27.5% tariff on
Chinese imports, and five Republican Senators signed on as co-sponsors.
The Central America Free Trade Agreement, the impact of which would be
minuscule in the U.S., is struggling to pass Congress. (No one in
Washington seems to think NAFTA would stand a chance of approval today.)
 
If it all sounds terribly gloomy, it's important to remember that
gloominess has a very poor record in predicting the U.S. economy. Many
traits that have helped us meet previous challenges are still with us:
flexible labor markets, the world's most highly developed capital
markets, and a culture that moves on from failure and embraces new
ideas. Companies aren't standing still. Trilogy, a business software
company in Austin, realized almost three years ago that hiring
programmers in the U.S. no longer made sense because it could get them
in India for one-fifth the cost. So it offered to help its U.S. coders
learn higher-level work, becoming business experts who could help
Trilogy customers make more money--for example, by showing Goodyear how
to price tires more intelligently. As a general principle, learning
higher-level work is what American workers have to do.
 
And exactly what work would that be? No one is sure, though history says
not to panic. Economic crises rarely reveal their solutions, but the
solutions usually come along. When U.S. business went through the trauma
of restructuring in the 1980s, millions of middle managers got cashiered
and wondered what they'd do next. Undreamed-of new industries developed
(cellphones, biotech, Internet services), and by the mid-'90s the
unemployment rate was the lowest in decades.
 
That's history. It offers hope but no assurances. History says the rise
of China, India, and other developing economies could someday lead to a
new equilibrium that's better for everyone. With resources deployed
globally to their best use, prices could come down and living standards
could eventually increase everywhere. After all, America's rise didn't
impoverish Europe. On the contrary, the success of each continent helped
the other get richer.
 
What happens next in the U.S. depends on how workers respond. Trilogy
CEO Joe Liemandt recalls what happened when he told programmers he
wouldn't need them as programmers anymore: "We told them they could
react in one of three ways. They could get really pissed, they could be
in denial, or they could work with us to retool their skills. And we had
people in each group."
 
It's time for a massive, urgent American response to the global
challenge. As Cisco chief John Chambers says flatly, "We are not
competitive." Where to start? Venture capitalist John Doerr, one of
America's most passionate competitiveness campaigners, calls education
"the largest and most screwed-up part of the American economy." He'd
start there. GE chief Jeff Immelt has attacked America's newly
restrictive student visa rules. Others focus first on R&D spending or
the broadband infrastructure. But the greatest challenge will be
changing a culture that neither values education nor sacrifices the
present for the future as much as it used to--or as much as our
competitors do. And you'd better believe that American business has a
role to play--after years of dot-com-bust- and scandal-driven reticence,
more corporate leaders need to summon the courage to lead.
 
While optimism has always been the best guide to predicting the U.S.
economy, today's situation is unprecedented. Global product markets have
been with us forever and continue to expand. Global capital markets are
still developing--watch out, Unocal and Maytag. But global labor markets
on a broad scale are a new phenomenon that could, for better or worse,
transform the country. How we respond--in our businesses, our
government, and our culture--will shape America in the deepest way.
 
FEEDBACK gcolvin at fortunemail.com
 
BOX STORY:
 
Don't worry about U.S. companies. Worry about U.S. workers.
 
BOX STORY:
 
Math Problem
 
U.S. students have fallen behind in mathematical achievement. Here's how
15-year-olds rank against their peers, by country:
 
1. Finland
 
2. South Korea
 
3. Canada
 
4. Hong Kong
 
5. Netherlands
 
28. United States
 
BOX STORY:
 
The time has come for a massive, urgent American response.
 
GRAPHIC: THREE COLOR ILLUSTRATIONS: ILLUSTRATIONS BY R. SIKORYAK, IN
HOMAGE TO, THE CLASSIC CHARLES ATLAS ADVERTISEMENT, COLOR PHOTO: SCOUT
TUFANKJIA--AP, PROGRAMMERS PROTEST, in New York against the outsourcing
of jobs to places like Chennai, India (below), where tech workers learn
Excel.; COLOR PHOTO: BOTTOM: SAMANTHA APPLETON, [See Caption Above];
COLOR PHOTO: MICHAEL REYNOLDS--LANDOV, MOVING UP, In China, these
desperately poor girls in Guyuan county get tuition help from a fund for
improving women's education.; COLOR CHART: FORTUNE CHART / SOURCE:
NATIONAL SCIENCE FOUNDATION, Learning Curve Foreign doctoral candidates,
who once flocked to U.S. universities, increasingly stay home. Chinese
students who earned doctorates at universities in ... Chine -- 7,000 +
U.S -- 2,000+ South Korean students who earned doctorates at
universities in ... South Korea -- 2,000+ U.S. -- 1,000 Taiwanese
students who earned doctorates at universities in ... Taiwan -- 1,000
U.S. -- 1,000
 

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