What Fruits Will Reduced R&D Bear For The U.S.?

lucabrasi999 writes "Here's an interesting commentary from Mike Tarsala at CBS.Marketwatch.com regarding R&D spending by U.S. companies as it compares to overseas firms. It compares today's US tech firms to the Big Three Automakers of the 70's, while saying the overseas tech firms are similar to the Toyotas and Hondas of the 70's. In other words, US Tech firms are about to be taught a lesson in global capitalism. I think Mike is 100% correct. What do you think?"

Comments

Re:Yep

[dasmegabyte]

I learned a long time ago in eco 101 that the reason Japanese companies often did so well during recessions is that when times got tough, they sunk more money into R&D and borrowed from the bank when they needed to. They would take a loss, knowing that it would be more than compensated for in the future.

It seems that American companies are trashing their R&D divsions and trying to cover up for it by making themselves "more efficient." With "efficiency" meaning layoffs, cutbacks and product reductions.

"Times are tough" doesn't seem like much of an argument for allowing a company to atrophy. But it's the argument all these C*Os are making. Why are we still paying these idiots to ignore broad economic trends and basic numbers? Is it because they look sharp in those $10,000 designer suits?

The Population Myth

[Infonaut]

The country with the larger population will have the biggest market and thus the strongest economy.

That's a far too simplistic analysis.

Myth 1) Population rules all, which is why China (#1 population) and India (#2 population) should have the most powerful economies in the world.

Reality) China's GDP ranks 7th, behind that of the US, Japan, Germany, UK, France, and Italy. India's is 12th.

Myth 2) The United States, because of all of those damned immigrants and teenage mothers, is increasing its population at a staggering rate.

Reality) The predicted population ranking in 2015 will still be in order of size: China, India, the United States. The annual population growth rates of these nations between 1995 and 2000 are .90%, 1.69%, and 1.05% respectively. Accurate predictions for, say 2040, are hamstrung by the repeated failures of earlier population forecasts, as this paper delineates.

Larger population does not equal strongest economy. Japan has the 9th largest population and 2nd largest economy. Enormous Russia has the 6th largest population and 15th largest economy.

Population densities, education, economic infrastructure, and a variety of other factors are far more imporant than simple comparisons of size.