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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?"
And it's because the economy is in the crapper, not in spite of it.
If the economy was similar to what it was a few years ago, then sure, R&D dollars would be up a lot.
Am I the only one that sees this correlation?
Sent from your iPad.
GM only has the cadillac.. and you shouldn't have to go top end to get an innovative machine.
I am going to hell and I am going to take all of you with me.
Of course they will..
I am going to hell and I am going to take all of you with me.
Private companies then exploit this and make money.
Also, due to the efficiency of the US capital market and the enormous US home market new technology is rapidly developed in the US but perfected elsewhere. But the same speed to start things also drives an outlook that is only quarterly at most US firms which kills quality after a while.
The perfect example is the car industry. The US just got big and for a long time the only US car innovations are the cupholder and the SUV. ABS, fuel injection, constant 4WD multiple valves and other improvements do not come from Detroit. Another is large jets.
Why should computing be any different ?
He draws some interesting parallels, but it would be nice to have some numbers to back up his statements. It is easy to talk doom and gloom, and everyone is quick to jump on that bandwagon, but lets see some hard data.
He may be right though, but would that be so bad? I am an American, and I love America, but I would like to see a world where there there is a little more balance of economic power. Would that be so bad for the average American?
I have a friend who is my economic guru and we talk about this quite a bit. Yes, because there is an administration that is not focused on the economy, everyone is holding on to their money. Thusly, no R&D. We've actually made the car comparison a quite a few times.
Another thing we talk about though, is the fact that as other countries 'catch up' technologically to us, there will be less and less reason for companies not to outsource all their tech needs. This already happens to a great extent in the manfacturing industry and China. For tech, we see a lot of farming out to India, especially since they're are lot of competent English speakers there.
How can U.S. firms compete with this? I don't think they can and ultimately, another industry will move more and more off shore. This doesn't mean, however, that the U.S. will not find other markets.
I think that if there are more and more highly skilled people in other countries around the world that can do the same tech work our skilled workers do here, then the next place is space. Unfortunately, we're not jumping on that and now we have a European agency headed to the moon and China talking about mining it. Welcome to the future of the transnats. Like hi-tech, the U.S. has the opportunity to drive this one for a while. The question is will they?
the west invented the car -- asia enhanced it. again, the computer revolution was invented in the west and asia will enhance it. now our nascent industries are nano-tech and bio-tech. many years from now asia will 'enhance it'
It says to me the US has learned nothing from the British. Get too content with being the global big dog and the next thing you know you're not number 1 anymore. Considering how many people india has, and how education is playing a bigger role each year, they could replace the US.
What get's me is US greed is handing them the spot too.
I see this as more a case of America going through growing pains.
As a sort-of new nation - lets say 'teen-ager', America is full of innovations and also full of free-market idealism - the American worker has a big say about thier working environment.
The individual can have some kind of say.
When compared to the east, with cultures that have been around for thousands of years, there's a very different work ethic where the individual is unimportant. So much so that bosses will take lunch with the lowest staff.
The free-maket idealism coupled with the individuals say costs american companies more.
The eastern work ethic coupled with the unimportance of the individual creates a very efficient working environment.
A slashdotting - you get the stick first and then the carrot !
Um, HELLO, if someone is getting a pink slip doesn't that imply some sort of deficiency? This entire article hinges on "Foreign Students == Good"! Why is the author's solution for us to go over to India and China to grab talent when foreign companies are coming to the US? Isn't that playing into their hands? This part makes no sense.
But the improved R&D money thing is fine. Sure. But what has gotten the HPs and IBMs? Answer: undercut by Dell. If that is not a "lesson in global capitalism" I don't know what is. And as far as I know the Big Companies that DO have the money to do R&D... *gasp* do it.
What this author doesn't seem to realize is that many US firms are coming to grips with cost undercutting. Maybe proprietary HW meant something back in 1990 but not any more. So companies cut those groups and buy the same whitebox stock from Taiwan. The author seems to think that this is just some Anti-R&D attitude, when all it is is the proper reaction to a market reality
What is music when you despise all sound?
This same line of discussion has come up here many times before. One comment I have seen frequently runs along the lines of: "Well, buddy, don't be a pussy. It's all competition, and if you're good enough you'll still have a job".
Well, guess what, guys? Unless you're a genius - and I suspect most of us aren't (in fact, I'd suspect most of us are slightly above average to being very good at what we do, but we're not mostly very good) - we're going to lose our jobs. Because a decent Indian programmer making $5K a year looks a hell of a lot better than a great American programmer making $50K a year.
We have a window of less than ten years, I think, in which to react to the possible destruction of American IT. Because humans elsewhere are just as smart. Only thing is, they get paid like shit.
You think you can compete because you're better? Dream away, my son.
I thought the whole deal about patents was that there were supposed to encourage companies to invest in research because they could expect a payoff. And didn't I read somewhere recently that patent applications are up?
So which is it? Is real innovation down because of a screwed up patent system? Or because of a lack of money? Or just hubris on the part of US companies that think they know the one true way for everything?
Personally I do believe innovation is suffering right now. And I don't think the patent system is helping. Instead companies are pumping out patents on everything old under the sun while few are spending money on something truly new.
Why? The reality of innovation is that new things are almost always built on old foundations. When those foundations might have 2,000 different patents the incentive to try new combinations of things is reduced because you don't want the hassle of infringement. Or at least it seems that way to me. Your mileage may vary...
- -
Are you an SF Fan? Are you a Tru-Fan?
I agree with him although I think R&D will be more affected by this country failed education system more than the lower funding. Last night, I spent time with my youngest son who is in 7th grade doing his homework. He has only just now gotten to porportions granted he is not in advanced math but still by the time I was in 7th grade we were doing pre-algebra and that was really review since I had learned a lot of in 5th grade along with others at my grade level (Special elementary school but still).
Even scarier, he is making a C in math and science and he is one of only 4 kids in those classes that is passing. Our education system is very broken in this country and will only get worse if Bush has his way. My son goes to Houston Independent School District home of the finest education system hence why we kicked Rod Paige up to Secretary of Education. After all HISD students pass the state test or conviently transfer to another school or not drop out code even if the principals have to lie.
Rabi Satter
Totally right, these cheap bastards wouldnt know a pot of gold if it was right in front of them. Seems they are too busy trying to pay their morgages and attempting to recover from investing in corporations like AOL and web-crap that never had any revenues but the name just sounded so cool...
Been spending a few weeks out here in the valley and its a sad, sad scene... you got CEO's borrowing lunch money after finishing their double shift as receptionist for some dude who aint paying him anything more than miniumum wage - and even that check comes late.
Really sad, I'm think i'm moving to Europe where people are friendly, intelligent, and 90% of the population isnt over 250lbs
Doesn't everyone have to steal techs from the Psilons to keep pace?
Degaussing scares the bad magnetism out of the monitor and fills it with good karma.
The return on investment for sound R&D has been well established. Of course, there is a world of interpretation in that little qualifier "sound" but the fact remains that R&D investment is critical to continued, sustainable growth - particularly in the tech world. Unfortunately, the narrow-minded focus on the quarters earnings doesn't permit this kind of rationality that could speed economic recovery. It makes about as much sense as refusing to change the oil in your car because you're short on cash, but hey, that's business.
It Is the Nature of Information to Transgress Artificial Boundaries
fact: government only takes, rarely provides [stimulus to the economy]
The government can, however, stimulate consumption. To do this, it can take money that would otherwise be used for non-consumption purposes and give it to people whose existing cash flows don't meet their needs for food, clothing, shelter, medicine, and other basic necessities.
Since consumption drives the economy, there are times when doing the above makes great sense. Yes, that means the government uses the threat of force to take a fraction of the money onwed by one group and gives it to another group. Libertarians hate that.
But, in the end, it is a better system than the old one, where the middle and lower classes joined together and killed the upper class and redistributed its money when things got really bad. This way, everyone gets to live and, by and large, the wealthy even get to stay wealthy.
Its all about population. The US will someday have a larger population than both India and China combined. Both of those countries birth control policies are working. Meanwhile the US population continues to grow. Already we're creaping up on Western Europe and will surpass it in the next 40 years. Not only does the US continue to attract excess immigration, the native US population continues to reproduce at above replacement levels.
The country with the larger population will have the biggest market and thus the strongest economy.
Mac OS X and Windows XP working side by side to fight back the night.
"Research has been getting the axe for the last thirty years anyway. Look at Lucent, the sad remnant of Ma Bell's labs. They have some 3,000 employees who must strugle to support 250,000 pensioned retirees."
You see those 250K pensioned retirees were the ones that were doing the brilliant nobel prize quality work back in the day when bell labs was not a "remnant" Part of their job benefits was that the money they invested (and lucent matched) to their pension fund would come back to them after they retired. Its your attitude that is causing the new attitude, work people until they retire and *cheat* them out of their legitimately earned pension funds ala enron ala PGL. Obviously its more "economical" to not pay pension funds to the retirees but how many of those retirees who made bell labs what bell labs was before it was a "sad remnant" do you think would actually have worked there back in the day if they had an inkling they may be taken away at will?
-avi
Unfortunately, R&D in the USA isn't about innovation, but more about getting patents on all the up and comming technologies before they happen. That way you can lock out competitors and squeeze a ton of royalities out of industries that will require all the up and comming technologies. However there are some times where good things happened - IBM wrongly assumed that they would be able to controll all the interfaces on the IBM compatable PC. When they were wrong, it created an economic explosion of companies that creating plug-in cards and periphials.
Because of patnets, researchers working for companies are often forced to be greedy and secretive about things they discover. There is little in depth sharing of knowledge and collaberation until the lawyers and bean counters give the ok. One big side effect of this is that a large amount of innovation in US society has been shifted to the University sector, which has made it extremely important in US society. Unfortunately, now even many Universities are getting greedy with patent controlls killing the goose that laid the golden egg.
However, the really good news is free (as in freedom) software. Never in the history of human existence has there been such a sharing of knowledge, spread of basic tallent, application of standardized orgin, economic colaberation, and the likes. It is having a strong effect of shifting R&D from the university sector back to the private sector. If we lift the monopoly on patents, I think the same thing will happen in other technology areas.
Look at the rumors surrounding SCO and the BSD-derived code in Windows, Mac OS X and GNU/Linux that SCO thinks it "owns." A court ordered licensing fee would set back the free and open source software movements, even if replacement code is eventually written. Developing nations do not have these restrictions, and will benefit enormously. Without a change the U.S. will be come less relevant.
Europe traditionally taxes engine displacement, hence all those little-bitty motors. Detroit traditionally didn't have that constraint, and "Detroit Iron", i.e. large displacement V-8 engines is a cheap way to get powerful, smooth-running, long-lasting engines. As far as fuel economy, there is nothing that says that you can't, within limits, gear a large displacement engine really tall to get comparable fuel economy to a much smaller displacement engine. Perhaps the smaller displacement engine weighs less and takes up somewhat less space, allowing for a lighter vehicle, and the reduced mass of the smaller engine may produce faster engine warmups. Also, fewer cylinders can produce some economy gain from friction and heat loss considerations. Also, these highly tuned small displacement engines have much peakier torque curves, so it is not clear how much the high horsepower contributes to having a quick, fun-to-drive car (unless listening to a tiny engine spool up is fun). So, I think the notion of high horsepower per cc is overblown.
You must have missed the last State of the Union address where Bush said he wanted $1.2 Billion put towards developing fuel cell technologies. I know, I know, it isn't the same as the military budget, but it shows that he isn't ignoring the alternatives, as you implied. See it here: link.
Boom Shanka
Innovation is down because the innovators are too busy freaking out over how they will pay their mortgage. As soon as the general populace is no longer preoccupied by trying to survive, innovation will continue. However, it is a nasty catch-22.
:P
(For reference, please see the Dark Ages and the Renaissance.)
Jason Fisher
How much of current American properity is due to military dominance? If this dominance ceases to matter (or just plain fades) will we continue to be properous?
Consider..
The UK was once the world's economic and military powerhouse.
Its dominance was challenged in the late 19th century by Germany. The practical arts of manufacture and commerce were not valued in British society at the time - not the case in Germany. German advances in chemical engineering and aircraft made it a formidable adversary in WWI.
Growing military importance of aircraft dimished the importance of the British fleet in maintaining world domination - a technical advance passed by this great empire and removed its monopoly on military power.
Despite this, in 1950 UK was still a major exporter of durable goods, a surprising portion of autos and consumer goods were still made there. This soon vanished.
By the 1960's, the premier UK businesses were service oriented - advertising, finance, etc. They had lost all real edge in "goods" manufacture.
Sometime in the 1980's the former world power found its GDP surpassed by former defeated WWII opponent Italy.
Control over an empire may have masked deficiencies in how the UK innovated and marketed innovations. Once the empire dissolved in the 1950's a serious decline began.
Any lessons here?
If your children ever found out how lame you are, they'd murder you in your sleep
The RIAA is going crazy over MP3 sharers instead of understanding that digital encoding and mp3s are the wave of the future, not to mention the internet is a highly more effective distribution center than anything else out there.
.
Why do you suppose they are fighting the internet as a distribution method? Because it is more efficient than current methods. They don't want better efficiency, because profit is made in the friction of distribution.
Think about the areas of greatest profitability in the market today, and tell me where they are made. Meanwhile, let me say where I think it lies: with distribution. The Wal*Marts, the Amazons, the Sam Goodies of the world make a lot of money through distribution.
Microsoft still refuses to believe in any uses towards Open-source programming . .
The problem with Free/Open Source software is that it removes the friction of distribution. Microsoft has dominated the market by controlling the distribution chain from day one. At every point where another competitor has threatened to enter the distribution chain (say, DR-DOS), they have choked the distribution points (in the case of DR-DOS, by making per-processor licensing deals with each distributor).
The more friction you can create and maintain, the more money you can make. The advantage of a monopoly is that you are the only controller of the distribution chain.
For all information, the internet approaches frictionless distribution. This is what scares the MPAA, and Microsoft, and the broadcast television companies: in the future, they will be unable to extract Ceasar's share from the distribution chain. That is why they are fighting so hard to introduce friction in the form of legislation.
This is also why capitalism is butt-useless for information, as artificial friction must be introduced into the system (in the form of copyright and patent law). These laws worked when capitalism was based more on physical objects (books, records, films), but now that the information has become more important than the distribution method, capitalism in its current form fails miserably.
The technological push you mention as necessary for the American economy is much deeper than simply increasing innovation or R&D. We must embrace the social aspects of this technology as well, and not introduce unnecessary friction into the system resisting the technology.
I don't mean we must accept all new technology as good. But "Hurts Profits" != "Bad."
For an interesting take (and a surprising relevence) check out "The Third Wave," by Alvin Toffler. It's an older book, but his predictions have been frustratingly accurate.
Microsoft is to software what Budweiser is to beer.
I don't think R&D issues are related to the patent system as much as they're related to the education system (or lack thereof)
I believe murder is wrong because I deem "human rights" to be something inherent in "human beings". I'm not going to go into cogito ergo sum and all that; I'm going to assert that sentience is the defining property of a human; it's what differentiates us greatly from the cow, and somewhat less-greatly from the octopus, whale, or chimpanzee.
Adult humans are clearly sentient. Infant humans are probably sentient, or have a very high probability of attaining sentience within a year or two. The (clinically, as opposed to the sense of having an MBA) brain-dead human is not sentient. Agglomerations of developing human cells are not sentient, and only have any potential for sentience with a large investment on the part of the host organism. Spammers are neither human nor sentient.
All cultures have strong taboos governing murder, and most cultures have equally strong taboos governing infanticide. The taboo against "pulling the plug" on the comatose is not universal, nor is the taboo against abortion. (In fact, both of those "taboos" are so non-universal that they are better considered social conventions.) And most of us would be ineligible to serve on a jury in the homicide trial of a man charged with the slaughter of a spammer; how could any user of email bring back a guilty verdict when no crime had been committed?
Are you on crack? R&D gives a company direction, when its current projects are finished. R&D is where all of those new features and ideas come from. Some of it may be seing what youe competitors are doing, and other parts might come from trying to reshap your produts to use new technologies to better meet your customer's needs. Hell, R&D even provides motivation for the staff by giving them something new and exicting to work on.
-jj-
Dude, have you owned a Honda (or Toyota) in the last 10 years? You can't beat them for reliability without spending double their price for a German car. Which seems to be the point you make in the rest of your post, about bang for your buck. My Honda won't beat your Mercedes in most categories, but you spend DOUBLE to get a 10% better car. Now if I said "Yugo" instead of Honda and "Low price is everything" instead of "I get one hell of a car for the price of an average car", then you would have a point.
But I didn't, so you don't. Instead, you made my point for me.
>>"If you are strapped for cash, you'll go with not only what is cheaper but what gets you the most bang for your buck."
There are 01 kinds of cars in the world. The General Lee, and everything else.
This question's been asked before. Plenty of Holocaut survivors and relatives have basically answered that they'd prefer people benefit from those atrocities if possible, since it at least means their sufferring had some value and meaning.
The problem is that Focused Spending (tm) has become too Focused. Focussed spending helps you generate next year's version of today's product. It doesn't help you develop the next complete revolution.
.... and it leaves no room for long-term research for the future.
Focussed Spending (tm) didn't invent the transistor at Bell Labs. Bell spent on fundamental research and crazy ideas, and ended up inventing a huge fraction of the world we live in today.
But now, it's become Lucent Technologies, with a publicly stated goal of "incremental" rather than "fundamental" research. No more Transistor-level revolutions from them - Lucent just makes sure next year's cell phone is a little smaller, cuter, and cheaper.
The space program "wasted" truckloads of money on, admittedly, a glopbal-scale pissing contest with the USSR.
In the process, it invented more technologies than you can name. These improvements in materials, power, communications, etc. are the bread and butter of hundreds of profitable corporations in the US. The cost of the space race was returned to the us economy 100-fold the last thirty years.
Fundamental research is being carefully scoured from US companies. Mostly because it doesn't pay off fast enough... in the new, faster, lower-margin economic reality that has grown in the past 15 years in the US, spending money on something that will pay off in 10 years will get your company KILLED DEAD in the market.
Cutting the competitive edge closer in business is a cultural shift the US has seen in the last 10 years. It results in employees working 80-hour weeks, wrecking their marriages, kids raised without parents around
So it's up to the universities and national labs. But, inspired by the improvements in efficiency in business in the 1990's, our research institiutions are starting to think the same way. Schools are run more like businesses now, and are forming more and more partnerships with businesses to fund and help direct research.
Fundamental research is not dead in the US, but it IS dying slowly. And true fundamental discoveries in the US are what have pulled most countries ahead. An assortment of technologies, social insights, and/or mathematics alternately made China, Egypt, Greece, and Rome powers in their day. The renaissance pulled the standard of living up in Europe and made western civilization dominant. The industrial revolution made England the #1 world power for quite a while. Electronics, nuclear power, and all the spinoffs of space technology were discovered in the US, making it the dominant world power for the last 60 years.
Fundamental R&D in the 21st century is expensive. We'll see fewer discoveries in the garage (like the laser). Now, it takes the will and money of an entire nation to really make it happen. And the US, while certainly ahead in research for the moment, is systematically pulling back from it. Europe is slowly headed into the lead in high-energy physics research, China in some areas of biotech. India and China
are systematically increasing their mindshare resources by sending students to US academic institutions and wooing them back home with large salaries and shiny new labs.
If the United States as a nation does not recover from it's increasingly myopic focus on Captialism-as-a-priori-virtue and short term profit returns as a primary goal, IMHO it is unlikely to still be the dominant world power in 2060. It's time to start "wasting" piles of money on research, high-energy physics, and the space program again. Make sure environmental research, medical/biotech, neuroscience, and materials science are well-funded, too.
I'm not under any illusion that science research in the US is gone. I'm a science grad student in California, I see the cool shit that happens here every day. But I don't think the trends bode well for the long term. Other countries could pull ahead, 20+ years from now. 20 years after that, the US has a big problem.
Lots of Focus (tm) is great for next week. But it'll murder the next generation.
I stole this sig from someone cleverer than me.
As to the "humanness" of 8-year-olds, I think we're all in agreement. However, I do question your "humanness", when you suggest that some of the said 8-year-olds should be made to suffer from debilitating diseases because the research that could provide a cure has been outlawed, due the moral discomfort of an overzealous minority of people. The only immorality I see is that living, breathing, sentient human beings are made to suffer for the non-existent rights of a collection of cells.
This is not to say I believe a child in the womb does not deserve protection. But we are not talking about a child or even a fetus. We're talking about a collection of cells. Perhaps, if the "people" you are talking about had names, or thoughts, or hell, even heartbeats, I would be more receptive to the question of who and not what we're doing research on. Until then, the only arguments against stem cell research are theological, stemming from the notion that cells supposedly have a soul.
It is my belief that our future generations will look upon our refusal to wield the benefits of stem cell research with the same disdain we hold for our ancestors who believed the way to rid the body of disease was to bleed the evil "spirits" out.
We want some answers and all that we get
Some kind of shit about a terrorist threat
- Ministry
Except that the Bush administration is well on its way to banning ALL stem cell research. Including the research on stem cells drawn (or manufactured) from adults. Consenting adults. Consenting, rational adults. Consenting, rational adults unharmed by the procedure. Why? Because their knee-jerk puritanical reaction is biotech == bad.