Andy Grove has done a good job of throwing light on a big problem. The Great Recession ended, the downslide stopped, but the jobs never came back. America still has an urgent need to move from 10% unemployment to 5%. I couldn't argue with the sense of urgency Andy Grove feels.
But
Vivek Wadhwa offers better solutions. Vivek's thoughts are more forward looking. (
Tweet from Vivek)
I was surprised by the stimulus bill in 2009. It was big on roads and bridges and so very small on broadband. Here was America's chance to make one big leap towards becoming a full fledged information economy, and it put most of that money into old school roads and bridges.
America has to think in terms of how to become a country that is 75% college educated. That asks for a rethink of what a college is in the first place. Universal broadband, textbooks online, journal articles online, lectures in video format online, massive online and offline socializing. There is much demand for jobs in the education and health sectors.
America has always created new industries, and it has to continue doing so. Even old jobs, and old products have to be imbued with new technology to create new stuff. Electric cars are still cars, but they are the new kind.
China seems to be taking the lead on one of those next generation industries: clean tech. But if America could have collaborated with Russia in space exploration during the thick of the Cold War, China and America are not even at war. Win win situations have to be created.
Putting the country to work with goals of universal education and universal health could lead to job creation programs like during the New Deal.
America used to be a country where most people were farmers. America could not forever have been a country where most people were factory workers. That would have been one stagnant country. The Great Recession has also been an opportunity to reinvent this country and take it onto a new path. It is time to create new companies, new jobs and new industries all over again.
The jealousy of hundreds of millions in China rising out of poverty is a false jealousy. That jealousy is self-defeating. Those are hundreds of millions of new consumers that America could take a bite at. Look at it that way.
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BusinessWeek: Andy Grove:
How America Can Create Jobs
Startups are a wonderful thing, but they cannot by themselves increase tech employment. Equally important is what comes after that mythical moment of creation in the garage, as technology goes from prototype to mass production. This is the phase where companies scale up. They work out design details, figure out how to make things affordably, build factories, and hire people by the thousands. Scaling is hard work but necessary to make innovation matter. ..... In 1968 two well-known technologists and their investor friends anted up $3 million to start Intel ..... We had to build factories, hire, train, and retain employees, establish relationships with suppliers, and sort out a million other things before Intel could become a billion-dollar company. Three years later the company went public and grew to be one of the biggest technology companies in the world. By 1980, 10 years after our IPO, about 13,000 people worked for Intel in the U.S. ....... Some companies died along the way or were absorbed by others, but each survivor added to the complex technological ecosystem that came to be called Silicon Valley. ...... Today, manufacturing employment in the U.S. computer industry is about 166,000, lower than it was before the first PC, the MITS Altair 2800, was assembled in 1975 ....... Meanwhile, a very effective computer manufacturing industry has emerged in Asia, employing about 1.5 million workers—factory employees, engineers, and managers. ....... The largest of these companies is Hon Hai Precision Industry, also known as Foxconn. The company has grown at an astounding rate, first in Taiwan and later in China. Its revenues last year were $62 billion, larger than Apple (AAPL), Microsoft (MSFT), Dell (DELL), or Intel. Foxconn employs over 800,000 people, more than the combined worldwide head count of Apple, Dell, Microsoft, Hewlett-Packard (HPQ), Intel, and Sony (SNE) . .......for every Apple worker in the U.S. there are 10 people in China working on iMacs, iPods, and iPhones. ..... Five years ago a friend joined a large VC firm as a partner. His responsibility was to make sure that all the startups they funded had a "China strategy," meaning a plan to move what jobs they could to China...... there was a time in this country when tanks and cavalry were massed on Pennsylvania Avenue to chase away the unemployed. It was 1932
BusinessWeek: Vivek Wadhwa:
Why Andy Grove Is Wrong About Job Growth
his proposed solution—levying a tax on the products of offshored labor—will do nothing more than resurrect the ghost of the 1930s Smoot-Hawley tariff. Many historians credit this tariff with igniting a global trade war that contributed to the Great Depression. ...... We cannot recapture a bygone era. ...... Intel ... 72 percent of its revenue now comes from abroad. ....... I doubt that even the most depressed regions of America would want to be home to factories that pollute the environment, pay minimum wage, and work at the profit margins of these sweatshops. ...... From 1977 to 2005, existing companies were net job destroyers, losing 1 million net jobs per year. In contrast, new outfits in their first year added an average of 3 million jobs annually. ...... the cycle of destruction of old industries and the creation of the new has given the U.S. its greatest global advantage. Protecting old industries isn't the best way to reduce unemployment; it is a sure road to downsizing. ....... globalization will disrupt industries and cause job losses in one industry while creating jobs in another. ....... We need to have the concept of lifelong education become part of our culture. Education doesn't end when you graduate from college; that is when it begins. ....... most high-growth companies are founded by middle-aged workers who have extensive industry experience, want to capitalize on their idea, and want to build wealth before they retire ....... we need to recruit the world's best and brightest to the U.S. and do all we can to keep here those already in the U.S. ........ during the recent tech boom, immigrants founded more than half of Silicon Valley's startups. In recent times, they have contributed to more than a quarter of U.S. firms' global patents and helped boost U.S. competitiveness. These skilled workers tend to be highly educated, to understand foreign cultures and markets, and to be highly entrepreneurial. ........ building mechanisms to break the innovation logjam at the source—the nexus between the scientists who make the discoveries, the universities that market the discoveries to the world, and the entrepreneurs with domain experience who could take these discoveries and turn them into products. ...... China, India, and many other countries have learned the secrets of America's success—its open economy and capitalist ways. They are trying very hard to become like us. Let's not become like they used to be.
