Mr. President: Your recent interest in innovation and competitiveness takes me back many years.
In the seventies, the story was the environment — how we were running out of resources. Today, it is climate change. All of it true but over-enthused scientists do have a habit of crying wolf more often than offering practical solutions. But it was the 1980s that you now bring to mind. The talk then was of "innovation and entrepreneurship, education and competitiveness". Of course, nothing was done — the story then was the private sector could and would do everything; the focus became deregulation which first led to the "Savings and Loan" debacle, and we know what happened after Glass-Steagall was repealed.
Now in the two years since I have been writing this letter, I have never mentioned my work. Long retired, my penny's worth is hardly important. But if you want to find out the characteristics of entrepreneurs, the kinds of ventures likely to be successful, the types of firms likely to be successful at innovation … it's all there in models and statistics — some of it difficult for me to follow after these many years even though I wrote it.
However, I found a couple that are readable, and very relevant to the present and to your job creation effort. The first is a newspaper op-ed from Sunday, May 6, 1990 — yes, it's a long time ago. No one listened then and it is most unlikely any serious effort to effect change will be undertaken this time — forgive the skepticism but it is borne of past experience. Anyway, the article, "Why U.S. trails in competitiveness" appeared all those 21 years ago in "The Dallas Morning News". Still, the recommendations hold true today, and, sad to say, the predictions of inaction have come true.
Shortly thereafter, I found myself in Norway overseeing the analysis of an innovation survey of the country. Our Technology Policy Group performed a merely investigative and advisory function but the Norwegians proved to be nimble — their per capita G.D.P. is now two times ours ($84,453 versus $47,132 according to the latest 2010 IMF figures, and estimated at $88,400 versus $47,100 in the CIA World Fact book).
The second article, "Problems and Policies for Transitional Economies" was a short aside divorced from the main Norwegian innovation project. It is relevant now in terms of bringing in high-paying jobs, and its general conclusions still hold true; now similar to what the Chinese are doing in places like Chongqing, in the Chongqing New North Zone The article appeared in the International Journal of Technology Management (vol. 8 pp. 513-526) in 1993. It identified then the technologies of our current industrial cycle as biotechnology, energy generation and conservation technologies, microprocessor applications including information and production technologies. It examined and discussed alternative means employed to develop new industry and to grow new jobs around new technologies. Among others, it assessed also the well-known Japanese MITI approach, probed its weaknesses, and offered a remedial alternative.
As a general conclusion, innovation by itself does not produce jobs. We know because the U.S. is a leader in innovation. What we must offer in addition is a competitive manufacturing environment and an educated and trained work force. To be in the running, we have to face East Asian High School graduates classed equivalent to our Associate degree, rigorously trained German manufacturing workers who undergo an excellent apprenticeship system, and Indians and Chinese willing to work for much less. It is a daunting task and a long-term prospect; the short term counter to current unemployment problems clearly lies in repairing our decayed, grade D (according to the Institute of Civil Engineers) infrastructure.
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