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Aug. 30, 2005 The U.S. economy is still doing fine, in spite of tough competition in manufacturing from China, and competition in things like "call centers" from India, and so on. High unemployment could cause an avalanche of bankruptcies, as it did in 1929, when people couldn't afford to buy things, and that led to a vicious circle with still more unemployment. However, our jobless rate is now quite low, because new enterprises keep hiring the people thrown out of work by globalization. (Our unemployment rate is about 5%, while France and Germany each have about 10%, and many other countries have much higher rates.) Our successful new enterprises require "creativity," in which we certainly lead the world. Most new companies that make really innovative things get started here, even though the later manufacturing operations might move elsewhere. (Recent examples are "wireless wi-fi" for your computer's printer and for your home theater, and also the iPod.) Most new entertainment (music, movies, etc.) is created here, and that's a huge exporting business. Most new medical diagnosis machines and also pharmaceutical chemicals are invented here --- certainly a fast-growth field. In fact, it's hard to think of any good new thing that is sharply innovative, but that did not start here! I suggest that it's important to understand this, and to make sure it continues. Following are the four things I would pick as the most important causes or our creativity. (1.) Almost all of us are descendants of people who went to great trouble to CHANGE their situations, by coming over here. I think there is a subtle trend in our national character toward encouraging what's new, compared to the national character of the "old country." We're more tolerant of a slight rebelliousness in our children, and more tolerant of motions toward changing one's "class," compared to people who stayed in the old country. (2.) Our education system is more TOLERANT of challenges to the teacher's authority, compared to other countries. Of course, this can have disadvantages: our kids are not learning math so well. But on the other hand, the kids are far more likely to start up a new computer operation here, and then hire a bunch of workers. The whole world still views our colleges as being the best. Where else are there schools like Harvard, MIT, Yale (where there are amazingly multi-talented students), Columbia and Princeton on the east coast, and CalTech, Stanford and Berkeley in the west? For example, note that former students and profs at Columbia University have won 47(!) Nobel prizes. And it's almost unbelievable that Hewlett-Packard (where Silicon Valley really began), Yahoo, and Google were each started by a pair of Stanford University students. (Yes, they were all still students! If you don't believe me, look up each of those three companies in wikipedia, and then look up each of the six guys who started them.) Can any other country in the world match that? (3) In no other place in the world can you raise VENTURE CAPITAL as easily as in California. That's to buy stock in your new company, but it's just as important that you can also buy a little factory building here, by getting a mortgage from a bank. And you can mortgage your house to buy the factory's initial machinery in America, but not anywhere else in the world. (When I was teaching "adult ed" courses in Amsterdam each summer, I used to ask the European beginning-management students, "Why don't some of you guys do that?" They laughed, "Here? You gotta be kidding, Prof!") (4) We have a fairly honest PATENT and copyright office in the U.S, imperfect as it is. It's sometimes a big pain here, but in other countries it's ridiculous. By contrast, one thing that will severely retard creativity in China is that you have to bribe the officials to get a patent there, and copyrights are just a joke --- they pirate everything. It's almost hopeless to create something in Asia and get it protected. I suggest that each of the four things listed above be kept as healthy as possible. It's not just a matter of financial support for them, as much as philosophical support, although we do need both. Too much of a good thing can become bad (like "freedom"), but we need to think hard about keeping the optimum amount. ---------------------- (Readers of this might also be interested in clicking on ESSAYS and skimming through the things I wrote April 24, 2005 and April 18, 2004.) ------------ About the author: Dan Shanefield is a retired engineering prof, who worked at Bell Labs and then at Rutgers University. He wrote the book "Industrial Electronics for Engineers, Chemists, and Technicians". Visit his website or email Dan Shanefield: shanefield@ieee.org Tell a friend about this site! ------------ |
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