What the World Needs Now

What the World Needs Now
The above graph is from a Pew Research Center report on the American public’s global focus. More and more see China as the world’s leading economic power. David Leonhardt at the Economix thinks we have an irrational awe of China. He points out major innovation (GE, GM, Apple) has all occurred here and that 25% of Americans have college degrees compared to 5% of people in China. Several of the commenters tell Leonhardt where he’s missing the point:
the reason for this “awe” is simple enough and is NOT irrational. jus as in the stock market, what matters is THE DIRECTION AND SIZE of growth, not simply the CURRENT situation. the world is moving very fast, and anyone who simply rests on their laurels or worse, goes backwards will not remain in a good spot for long.
in this case, china is VERY deserving of their “awe”. the ability of the country to lift so many people from poverty in so small a time frame is unprecedented in history.
And an even better economic argument:
[The] innovation argument is always taken up by people who write, but know little about innovation, and is utterly despised by people who actually do innovation. See Andy Grove, Ralph Gomory, and every engineer I know.
Innovation follows production. We outsource an industry, we lose that expertise and are no longer a serious player — look at rare earth metals, display technologies, and many things in between.
We indeed are still strong in some areas, but are rapidly losing ground with enthusiastic participation of American upper management.
So it’s perhaps no surprise that in this environment a two day workshop by several government agencies just concluded in Washington DC looking at long-term technology vision for US manufacturing. One thing they are looking at is one thing that is central to continued western economic success but also a wake up call to people like Leonhardt who continue to think that if we develop the idea here but it is produced elsewhere that we can somehow benefit from that innovation. Or that that kind of development is particularly creative or that it will even lead to future developments.

“The reality is that innovation happens when you try to make something,” added Kaigham J. Gabriel, deputy director of DARPA. “To innovate you must make.”

The workshop was attended by mostly engineers and technicians which is a nice change to entrepreneurs or managers. Much of the effort that went in was to reduce cost in manufacturing as well as develop new and better manufacturing methods to stay on the cutting edge. But in the end they also came to the conclusion that government funding should expand to an economic driver as well as specific mission objectives. However, I think the gut feeling from the group was more important than specific objectives. You have to make stuff to stay fresh and creative. When we ship all our manufacturing overseas we lose the lessons one learns in product development and lose potential future ideas that could further drive economic growth. Not to mention the public is more concerned with jobs and stability and growth rather than non-specific medals of past glory. Taking US workers out of the equation might have saved on short term costs but what will it cost us in innovation, creativity and long term growth.


That’s been my personal feeling: ideas are not just airy-fairy things that come out of nowhere. Innovation comes from thinking about different ways to use something or make something or fix something. If you don’t work with it, it’ll be hard enough to grasp the fundamentals of how it operates let alone trying to come up with a great new idea.

If it turns out that having large-scale production geographically close to R&D is important, the next question is how to make this happen. Should companies see the benefits and take action or should governments discourage trade?

I am skeptical of the idea the geographical location is that important. It’s very easy ship things long distances, and it’s even easier to ship data.

When we invent a machine that does a manufacturing task, it’s not all the different from finding a human being in another location who wants to do that task for money.

Even for those who want all manufacturing to be local, I’m not sure how to get there from here. The very concept of a nation state as we know it may be going obsolete (over the course of a century or more) because of communication/transportation technology. The only thing that might stop it is and end to cheap energy, but I think we’ll find ways to keep cheap energy coming.


The problem with your argument is that people aren’t machines. By outsourcing core competencies, the engineers overseeing the foreign plant can easily take the lessons learned on someone else’s dime and use them to start competing companies. If you take your CAD file and program the toolpaths, a CNC mill doesn’t have the ability to “learn” from the design and innovate on its own.

Seeing data that’s been processed and formatted by someone else doesn’t replace seeing a process first hand. And more importantly, being able to see the process first hand is a lot faster than waiting for parts to get shipped (even with next day air), or flying 18 hours to see the process first hand. You might save money in the short run via cheap labor, but if you’re working in an industry where there is room for innovation and invention, you’re shooting yourself in the long run. There’s also an effective “activation energy.” When the plant is a 2 day trip (including jet lag, time zones, etc) away, you’re less likely to *want* to go there and innovate than when it’s on the way to your car. And even if you want to go, you’ve got to convince the manager that the trip is worth the expense…and you’re not going to get to go again unless you make some progress as a result of your first trip.

Making t-shirts overseas makes sense, because the design is not outsourced and there’s nothing really revolutionary in the manufacturing. Setting up factories in China to make aircraft? All you need now are Chinese aerospace engineers who learn from their experiences and you’ve made yourself a competitor.

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