Competing in a flat world

Competing in a flat world

Summary: “We’re creating a country where people outsource their intellect to other countries, expecting the Indians, for example, to do all hard work while they sit at home and watch TV on broadband.” That’s  what Esther Dyson, CNET's Release 1.

TOPICS: Emerging Tech

“We’re creating a country where people outsource their intellect to other countries, expecting the Indians, for example, to do all hard work while they sit at home and watch TV on broadband.” That’s  what Esther Dyson, CNET's Release 1.0 editor, had to say about the U.S. falling behind other countries in innovation.  She cited inventor Dean Kamen, who said the problem in the U.S. is not the supply of education, it’s the demand.

In the U.S., sports programs and easy diplomas are a focus, not an aspiration to excel in science and engineering or other academic subjects, she said. “The teachers are there, but students aren’t interested. They don’t see education as a pathway to success.” Bono and baseball stars are role models for boys, she said. We are a long way from when becoming an astronaut or engineer was cool, especially when we have video games, cell phones and other distractions to replace investigating the real world of science.  

Venture capitalist John Doerr attributed lagging U.S. innovation to a neglected education system, failure to invest in R&S, not pursuing policies to promote broadband, not pushing for more trade, and the failing healthcare system.


From left: John Doerr, Esther Dyson, Charlie Rose

Dyson’s and Doerr’s remarks came during an interview with Charlie Rose at the TechNet Innovation Summit about the implications of the flat world, popularized in Tom Friedman’s book “The World is Flat,”  U.S. competitiveness and where the Internet is heading.

Rose asked Doerr to list his top challenges to innovation and globalization, and how he would address them. “First and foremost is within four years to add 100,000 more scientists to innovation pool. Second, get to energy independence in five years through innovation and new policies. Third, use early detection and innovation in life science to achieve pandemic preparedness.”

Doerr advocated stapling a green card to every foreign student who comes to the U.S. to earn science and engineering degrees to help them stay in the U.S. He called the current policy that forces those students to leave the country a bit of “post-911 insanity.”  He cited "Rising Above The Gathering Storm: Energizing and Employing America for a Brighter Economic Future," a recent report from the National Academy of Sciences that outlines the issues and offers some solutions. Following are highlights from the report that illustrate the depth of the problem.

For the cost of one chemist or one engineer in the United States, a company can hire about five chemists in China or 11 engineers in India.

Last year chemical companies shuttered 70 facilities in the United States and have tagged 40 more for closure. Of 120 chemical plants being built around the world with price tags of $1 billion or more, one is in the United States and 50 are in China.

U.S. 12th-graders recently performed below the international average for 21 countries on a test of general knowledge in mathematics and science. In addition, an advanced mathematics assessment was administered to students in 15 other countries who were taking or had taken advanced math courses, and to U.S. students who were taking or had taken pre-calculus, calculus, or Advanced Placement calculus. Eleven countries outperformed the United States, and four scored similarly. None scored significantly below the United States.

In 1999 only 41 percent of U.S. eighth-graders had a math teacher who had majored in mathematics at the undergraduate or graduate level or studied the subject for teacher certification -- a figure that was considerably lower than the international average of 71 percent.

Last year more than 600,000 engineers graduated from institutions of higher education in China. In India, the figure was 350,000. In America, it was about 70,000.

In 2001 U.S. industry spent more on tort litigation than on research and development.

TechNet, a bipartisan, political network of tech CEOs, is pushing an agenda on trade, education reform, global competitiveness, broadband deployment, opposition to stock option expensing and reform on abuses of class action lawsuits on Capitol Hill and in state legislatures.

Dyson attributed the current situation in part to a lack of leadership (like President John Kennedy galvanizing the country and young minds around landing a man on the moon) and a lack of moral courage to tell people that they have to work harder. It's not about out-innovatingChina or India, it's about getting our own house in order, she said.

On the future of the Internet, Dyson gave notice to the people who are creating inefficiencies in the value chain and benefiting from them today. As the Internet continues to evolve, the erosion of power from the center will lead to the elimination of the gatekeepers and middlemen, she said. We already see that happening in many industries, most notably with music, but it will spread to any kind of information that travels via the Internet.

Topic: Emerging Tech

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  • They don?t see education as a pathway to success.

    This, from a panel of people who all have more suits than pencils.

    Here's a clue, suits: students don't see [i]technical[/i] education as a pathway to success because they have examples like you: the real successes in our society, the ones who are in management, law, and politics. Why be a techie wage-slave when you can get rich like Carly Firorina?

    This panel consists of a bunch of suits complaining of the difficulty recruiting peons. Nothing really changes: the ruling class is always disappointed in the lower classes' lack of appreciation for their place in society.
    Yagotta B. Kidding
    • I'm with you all the way on this one

      Tech work is suffering on two fronts here. The first is the end of the dot-com era. During the dot-com days, a smart person who could sling some CGI & SQL code could make $60k right out of college and get a bunch of stock options which might make him pretty well-to-do, if that salary wasn't enough. India and China didn't have this environment. Now, in those countries, techies are leading extremely nice lifestyles doing our offshored work. The last large company I worked for paid their non-technical call center agents only $1 an hour less than the technical call center agents. That is a whopping $2000 a year more to do a job where a degree and prior experience was preferred and practically demanded, versus knowing how to type and read and speak English. That doesn't sound like a great career choice, does it?

      Tech work has become, and will continue to become, more and more like factory work. Processes are being imposed, the work is getting broken down into smaller and smaller chunks. This makes workers easily replaceable. As they become more easily replaced, it is easier for a company to offshore or outsource the work. This drives the pay rates down, as less experience and knowledge is needed to do a job. Jobs become extremely specialised, creating a sense or career lock-down amongst employees. It's hard to enjoy your job when you don't see any future in your current work, and the resume you've been building only leads to more of what you're doing now. It also makes the tech work much less atttrative to intelligent, creative people.

      Like Yagotta said, why go into tech when the people who make the big bucks are the MBA and law school grad folks? Why work on the factory floor when you can be the person who runs or owns the factory? As tech becomes more and more like factory work, and pays less and less, with increasingly little job security, it will eventually only appeal to the hard core techies, the people who would do it for peanuts just to be working in the industry. Sounds a lot like our education system as well, now that I think about it. And look how well that industry works as well, compared to our overseas compitors who actually value their teachers and treat them as a benefit to society as opposed to just another cost center.

      Justin James
      • I think

        The *average* software engineer makes quite a bit more money than the *average* lawyer, and has a lot less school debt.

        It's all about perception, which is all about media attention.

        People also focus on extremes. Very few people in IT strike it rich, but most get to be upper-middle class.
        • disagree with you there

          "Very few people in IT strike it rich, but most get to be upper-middle class."

          Guess it depends on how you define "upper-middle class"...11 years in IT and havent yet hit upper-middle class in my estimation. Also, are you weighting dual income earners with no kids equally with single income households and dual with kids?

          I am seeing IT devolve into a dead-end career choice with wages/salaries dropping to match.

          Thinking of going for an MBA rather than anymore certs or IT education, though I love IT. Just doesn't seem to be worth the long days, on-call rotations, 3 a.m. calls from a server in the NOC, dealing with those people who just refuse to TRY to learn how to use a computer...and finacially falling further and further behind...and we do not live an "upper-middle class" lifestyle (my car is 15 years old, but paid-for, a very modest house, 5 and 10 year old TVs, etc). My wife recently had to go back to work just to pay the bills, incurring day-care cost, leaving kids at home after school until we get home and so forth...something we for the last 6 years had been able to avoid via frugality, but no more. There is nothing left to cut out of the budget, no extras to cut...hell, I even skip meals most days of the week....yup, MBA is looking rather good these days.
    • You took the words off my mouth ...

      ... and are certainly not Kidding. Are you american, y any chance ?
  • hiding in plain site

    They said it upfront...."they" want a "flat world"....meaning that the standard of living is the same, the cost of an engineer is the same, whether in India, China, the EU or the US. The question remains unanswered....who's standard of living do "they" want us all to live within? The US? India? Except them, of course,....Same story throughout time, the "elite" mastering the masses at the lowest common above starvation...long live the American experiment of a commoner's culture and equality...just devolving back to the norm or "mean", as all systems eventually do.
  • hiding in plain site

    They said it upfront...."they" want a "flat world"....meaning that the standard of living is the same, the cost of an engineer is the same, whether in India, China, the EU or the US. The question remains unanswered....who's standard of living do "they" want us all to live within? The US? India? Except them, of course,....Same story throughout time, the "elite" mastering the masses at the lowest common above starvation...long live the American experiment of a commoner's culture and equality...just devolving back to the norm or "mean", as all systems eventually do.
    • ramped up world

      As recent articles I've seen about India indicate to me, the flat world ramps up steeply once people there realize life is a lot nicer with good health care, and there is more demand for highly qualified people than supply :) They start realizing they have leverage, and the flat world ramps up quickly. So they want to raise their flat world standard of living, which creates a world that's flat, but at a plateau much higher than people-are-an-expense employers are comfortable with.
  • cause or effect?

    Why isn't cause and effect being taken into account? How do the 100,000 engineers earn a living? These people whine about how lazy and uninterested Americans are. But consider: why would anyone take the risk (either paying up front, or taking out loans they may never be able to repay) of going to college for 4, 6, 8, 10, or more years to get a degree in a field where there are no jobs and dim prospects for the future? I tell you what would motivate people: Guaranteed jobs. Why don't the whiners set up a foundation that will guarantee a job to anyone who completes a college program in computer science, engineering, etc? Then we'd see how many motivated people there were in America. Microsoft could do something like this with all their cash, i.e. investing in the future of America's technology sector (and therefore investing in their continued relevance). Instead, they give a huge lottery-like divident out, rewarding short-term stock trading. I challenge anyone whining about technology in America to put some money where their mouths are!
    • Free market, sadly

      I actually like this idea a lot, but I also am a bit of a socialist utopian. In our current free market economy (nothing wrong with that either, I may add), having companies pay for the education of their workers is backwards. In a capitalist economy, workers are a resource, just as oil, coal, iron, etc. Would you build a factory that was nowhere near the natural resources you need to build things if the cost of transporting those resources is very high. In the case of people, the cost of relocating people is astronomical, and in many cases, the people will not relocate. If there was a global lack of technically educated people then yes, it would make sense for companies to develop their own talent pools. But with a large supply of educated people available overseas, companies have no motivated factor whatsoever to develop US talent, especially since the overseas workers' educations are comparable to what you would find in the US, and work for less money too.

      Justin James
    • All about $$$$$

      Regardless of what corporations are spouting as the problem, it is as simple as money. Why pay a US worker 60,000 a year for a job they can get done somewhere else for 30,000(Lets "assume" same quality). No matter how you slice it, we can't compete with low wages. The textile industry is a perfect example and how long ago was that outsourced? Now if we could only outsource Congress!!
  • It isn't about numbers

    The Soviet Union churned out mathemeticians and engineers by the boatload in the seventies and eighties. How much innovation did this result in? It's the entrepreneurial environment that really counts - the incentive and ability to actually do something with those great ideas. This is where America scores - and many of the products that America makes money with weren't even invented here. America's strength is in turning innovation into cash, and that doesn't take 100,000 more engineers.
    In reply to the people who complain about the disincentives to study engineering or math, the people who are passionate about science will want to study it regardless of whether it brings the highest monetary rewards.
  • Really or no kidding

    We talk and talk and talk about a problem we could have done skomething about. It is to late to turn it around our schools are turning out people who know how to follow not lead. We reward failure and punish success in America because we don't want to hurt someones feelings. It really don't matter if the person can really do the work ar not. Promate him or her because we don't want to hurt their feelings. Don't make them EARN it, give it to them.That is the problem here in the old U. S. A. Not anything else.
    • Really? Who's kidding whom?

      Promoting kids rather than hurting their feelings has turned out whole bunches of people who - many of whom offer services creating programs or websites, who have NO IDEA of grammer, punctuation or spelling. And THEN they expect someone to give them a job, or they wonder why their own business flops!!! Oh, well....
  • Right Problem, Wrong Reasons

    Improve Broadband to inspire more engineers and tech types in this country? Baloney... Ask these so called experts who is building those billion dollar plants in other countries. Look in the mirror my friend our worst enemy is ourselves Our kids are not stupid just disinterested in tech. And who can blame them. Why should they knock themselves out for a tech education when our very own companies are hiring offshore Indians at the entry level instead of us. Give more Green Cards to foreigners to study and stay here. Baloney...It is a ruse to lower the existing salaries of tech here. Ask any Indian studying here today. And they are already itching to go home and make a killing. All of our free trade agreements are working against us here. Until an engineer's time costs the same everywhere in the world you can kiss our supremacy in tech good bye. Now if you really want to solve the problem. Start taxing the consumption of these foreign services which benefit companies here to equalize our competitiveness here. Multi nationals who derive most of their profits here should pay for the privilege of making profits here at the expense of not using workers here. And if they threaten to leave. Then LET THEM...and tax them more if they continue to sell here. Let that banana republic they go to defend their interests in other countries that revolt due to their insensitivity. If we all truly believe we want a better world for all then our CEO's have to start thinking more like Henry Ford instead of Sam Walton!
    • Ease up on Sam Walton

      When he ran Walmart it went out of it's way to buy American. Whole towns, whole industries depended upon Walmart to keep them in business, and Walton found a way to do that, sell cheaper than anyone else and build new stores across the country, all while becoming the richest man in America, before Bill Gates. Then he died and the suits took over and of- shored every thing. Sam Walton is probably pinwheeling in his grave.
  • Work Ethic

    From 1986 to 1988, I managed a group of software technicans (programmers, engineers, computer scientists) in Australia for a large computer manufacturer. Our task was to develop the requirements for a re-engineered commmercial banking system. The department was composed of Indians, Sir Lankians, Taiwanese, British, and Aussies. I was the only Yank. They were all well educated, smart, and thorough. When on the job, they were diligent and hard working. Only the Taiwanese and I were used to working 40 hours week, understood the need for occassional overtime, expected no more that two weeks paid vacation a year, expected no more that 10 paid holidays a year, and expected fixed work hours. The others expected much more "flexibility" than this in their work environment. The Brits were the worst. They expected to work no more than 30 hours per week and have six weeks of vacation per year and have holidays to match school holidays.

    Bottom line: They all worked hard and well when they worked, but generally they didn't want to spend much time working.

    We seem to be developing the same malise in this country in regards to work. This coupled with lack of technical education will result in the USA not being a world leader within 30 years. Fortunately, I won't be here to see it.
  • why is the high-tech biz still clueless?

    Lots of good posts here regarding the idiocy displayed the TV panel suits, but one important thing is missing: Nobody has mentioned the "pre-employment patent agreements" that most tech types must sign as a condition of getting a job.

    This exploitation has been around so long that apparently all of industry feels it will go on forever...unchallenged.

    I say that unless and until these agreememnts are HISTORY (with the exception of conditions in personal contracts that high-level business PARTNERS sign) all discussions about finding and inspiring current and future technically talented EMPLOYEES are moot.

    Of course intelligent students see the pitfalls of a high-tech career: the speed at which "new" skills become obsolete, the ease with which they could be replaced, the huge personal expense and sacrifice of mastering on college-level science/math courses.

    But the TV panel discussion flits from one dainty irrelevance to another without ever acknowledging the elephant in the room.
  • ignorance and arrogance

    "Dyson attributed the current situation a lack of moral courage to tell people that they have to work harder. "

    This is shockingly arrogant and ignorant. No mention is made of the perverse incentives that John Doerr and his ilk have created. It doesn't matter how hard I work, when my job can be done at a tenth of the price in India. It doesn't matter how hard I work, when the venture capitalists require that startups cut costs by outsourcing as much as possible. Why study science or engineering when the employment opportunities dwindle every day ? Why should I tell my sons to take up a difficult career for low salaries ? The business money in the USA goes to CEOs, VCs and pundits, not to people who actually do the work at the coal-face. As long as this is the case, university students (who are not dumb or lazy, Ms Dyson's belief system notwithstanding) will choose the careers that promise a reasonable remuneration, not just personal satisfaction.
  • Problems with Outsourcing?

    STOP it!!!!!!!:| ...No more problems:D.........