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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?"
Stem cell research.
Our puritanical (read: Conservative) stance not shared by other countries like India and the UK will definitely put us behind in this area.
No, you are right. If the economy was up R & D spending would also be up. R&D expenditures are in investment in the FUTURE whereas holding onto the cash and investing it in areas that give an immediate return help bolster the bottom line NOW. With the economy in the shitter companies I believe are holding back on unnnecessary R&D because if they spend the money they might not be able to meet or beat analysts expectations. With so many executive's compensation tied directly to company/stock performance if I were in this situation I would only spend money on R&D that I could afford to lose because R&D is a gamble not a gaurantee. Right now companies cannot afford to throw money away.
Patent litigation. Developing patents then sueing people for using them is going to be the next real business. Forget innovating, we can sue people and get quicker rests at much higher profit margins!
Someone will then patent a "patent trial" and then put an end to it all. (And not a good thing either - it'll be the end of innovation in America)
Slashdot's rate-of-post filter: Preventing you from posting too many great ideas at once.
With that as an example, I think that it's a little shortsighted to look at dollars to dollars and say that the US is coming up short. Maybe it is, but the article doesn't provide the evidence. A better measure of the balance of R&D budgeting is more qualitative than quantitative. What is coming out of R&D? Are we developing products and ideas that have any kind of a chance at hitting the market and actually making a profit? Don't jeer at the search for profitability...where do you think the R&D bucks come from?
I can only speak from my experience at the high tech company where I work, but R&D expenditures are a significant amount of total revenues. Perhaps other companies have different views, but for us, even in a tough time, R&D is the lifeblood of what we do. It's just that when money is as tight as it is now, the spending becomes much more focused.
Using Huawei Technologies as an example of the threat to American tech dominance is certainly a red herring. If Tarsala counts blatent copying of product and documentation as a positive result of R&D spending, then his perception of R&D is simply wrong. Honda didn't copy the CVCC from Ford or General Motors...they created it on their own.
-h-
I always say American IT people are the best in the world, but there are definitely other people trying to catch up. And just like Rocky, its always the person that is hungrier that will overcome and eventually become the new champion.
I think the problem isnt an unwillingness to spend money. The not spending money is a symptom of having non-technical people making technical decisions. Its a reliance on MBAs and CNAs as company decision-makers.
Oh well. Fortune passes everywhere.
Manipulate the moderator system! Mod someone as "overrated" today.
If Honda can do for computers what it did for automobiles, in 10 years my PC will use .01 watts, be completely wireless, measure 4 cubic centimeters, have a holographic display and track my eye movement to move the cursor. (provided I have an X Sesion going. :)
There are 01 kinds of cars in the world. The General Lee, and everything else.
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. Tell me what kind of "research" the local Bells have to take it's place, please. IBM? Shuting down, at least in the US. It's pathetic. It's like these companies think they can just fund a few graduate level slaves or wait for hobbiests to come up with ideas to steal.
DMCA, Hollings, Palladium. What might have sounded like paranoia is now common sense.
In the US research is done for the DoD
Unless I'm not getting what you're saying, I would venture to guess that a very small % of US r&d goes towards DoD activities.
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.
Enough with the auto industry comparo's. How many large computer manufacturers are out there that are NOT US based. How many coming on the horizon are not US based. Anyone with some marginal skill can put a PC together that has similar (if not exactly the same) specs and build quality (if not better) than any pc manuf. can sell. The same is not true for auto's. The two markets are radically different. Yes, foreign companies rule in certain aspects of computing (motherboards, optical media, etc) but the nature of the industry is so different than the auto industry, I don't see how anything other than very gross generalzations can be made.
Anyone hypocritical enough to vote against stem cell research, then take advantages of the fruits of the research, when it is done anyway, is morally forfeit.
There are a lot more factors, even admitted by you.
You said you were in a special school, and advanced math, while your son is not. You say it is one of the finest education systems, but that reputation could be misformulated.
Different public school systems in the same state can have drastically different programs that proceed at really different paces. Look at Freshman at any college (where a lot of people from really different systems have to pick up wherever they can). When I was a college freshman just 5 years ago, I didn't need to take Calculus I, II, or III, and I came from a public school. Meanwhile, a few still needed precalculus, and some even algebra. Some school systems are complete crap, some are quite capable, it truly is a pot luck sort of thing. Also, in the case of the C in Math, that is one class, one teacher. When you start talking about individual teachers, you get a *lot* of difference. Even the best schools occasionally have a really bad teacher or a good teacher goes off the deep end for a year.
I started off in a really rural school district. It was decent, not great, but pretty good with traditional education. Now computers start entering into the system big time as the school system can finally afford them. The faculty lacks experience and thus many of the students knew more about electronics and computers than they did. Teachers with little experience beyond typewriters and basic word processors had to deal with computers that weren't the friendlist things to start with. By the time I left that system, I had been punished a lot for correcting mistakes made by them, including poorly configured printers that printed at about 3 minutes per page, when 5 ppm was possible. They thought I broke it because 'printers don't work that fast, they'll burn up', and reset it to the old mode. A system BSODed and I rebooted it to get research done. They banned me from computers in the school. I left the system and went elsewhere. I became an administrator of a network at another public school, and they encouraged students to become accustomed to the technology, not to be afraid of it.
I think what will cause it is the same thing that caused manufacturing to go oversees. As long as the majority of the US can maintain their standard of living, the lost jobs are 'somebody else's problems'. The money required to live caters to the majority, and thus cheap labor in the US just won't work. Maybe if this tips the scales so that a majority of the US suddenly are faced with these problems, then we will see some correction.
XML is like violence. If it doesn't solve the problem, use more.
I looked through the article (and some other articles linked in the sidebar) but couldn't find any hard numbers showing that other countries are actually spending more.
Now, while I don't have a large compendium of current statistical data at my disposal, I do have quite a bit of anecdotal evidence gleaned from my position as a manager of international sales, where I spend a lot of time visiting foreign companies talking to their executives. As far as I can tell R&D budgets worldwide are being cut in the last couple of years, especially in Asia where the economy has been hit harder than most other places. Let's face it: in tough times every company looks to increase their short-term profitability, and usually that comes at the expense of programs that don't have an immediate bottom line (say, over the next year) written in black. R&D programs are high on that list. While R&D might spark a product line or reduction in cost, companies won't usually start seeing profits from most successful R&D programs for several years.
Even in my small, agile company an investment in R&D dollars usually won't pay off for at least 1.5-2 years, and that's only because we already have a baseline product to structure our development and marketing around. When we were starting from scratch, it took about 3-4 years of development before we started breaking even on those R&D dollars we put in initially.
Look at TV. The NTSC standard: invented in USA. Perfected in Europe as the PAL standard. PAL gives a better quality picture, and has much better error-handling (in the analog sense): a small signal error on NTSC gives chrominance errors (read: green looks red, etc.) while on PAL, I'm not exactly sure, but apparently it only gives luminance errors (meaning, it's a little too dark or light) - somebody with more knowledge could probably clear that up.
The cell phone. Analog cell phones first took off in USA, today USA is struggling to implement 3G while its relatively common in Europe / Asia (this also has somewhat to do with geography and population density, yes...)
Does this mean that the same thing is going to happen with the PC? The PC was basically invented in USA (or at least popularized here) - and what's expected to come next... that's right, Unification. I think the biggest thing to come out of the East or Europe is going to be unified devices. It's already started - Sony equipment all 'talks' to each other through their 'S-link' implementation of IEEE 1394 (aka Firewire). Even though LG (an American company, I believe) is pushing their Internet-aware devices, they're not selling well. I have a feeling that companies not in USA with less likelyhood of sticking to the legacy standards are going to come out with a unified home control system that will knock our socks off. Remember: you heard it here first :D .
Karma: pi (Mostly due to circular reasoning in posts).
A number of years ago I when I was in college Lee Iaccoca (CEO of Chrysler at the time) gave a speech. He was asked why Chrysler does their engineering oversees. In a very obtuse way he basically answered "because they are better".
That, of course, really pissed me off. Not because he was wrong - he certainly wasn't. But the reason foriegn automotive engineers were better was his fault! For 20 years US auto makers did very little to push the envelope of auto engineering. They may not of needed to because of the market, but the real damage was that they lost a culture of skilled engineers.
Skilled engineering is not something you can just create on the turn of the dime. Experience means a lot in engineering. (And I don't simply mean the experience of individual people. I mean the experience of a group where there's always some continuity). If the US auto makers kept trying to innovate in the 60's and 70's, they would of had plenty of skilled engineers who would know how to make better cars, (even if the innovations weren't marketable). Instead, they had no engineers available and had to turn to foriegn companies for help.
Whether the same could happen in the IT industry, I don't know. At the moment the industry is still very competitive innovation-wise. So, it's not a matter of US industries sitting on their asses, like they did with cars. It's more a matter of them farming out to the lowest foriegn bidder. The net result could be same, though.
A 6.8% decline != sky falling. In fact, given the maturity of the innovation curve surrounding IP based technologies and given barriers to entry for silicon / software technologies, it may not be enough of a decline.
If you're in IT, think about it. What new technologies are going to be "really hot" over the next 24-48 months? Wireless? Databases? Operating Systems? Other than Security and maybe P2P, I can't think of any. And while Microsoft has sucked with their security offerings, I'd bet that the moment Groove or Ikimbo or whomever picks up steam there'll be a competing (albeit sucky) technology built into Windows.
None of the top index tech companies are going to be threatened by small or large overseas companies any time soon. I think it was Gerstner who said that "If someone else (like Microsoft) appears in the marketplace and threatens us, we'll simply buy them."
To that extent his automaker analogy is self-defeating
1.) Honda, Toyota, et. al, were all rumored to be on the ropes and acquisition targets by US automakers before the recent slump. While that's not likely to happen in the current economy, those Japanese companies aren't exactly shining examples of market longevity.
2.) US automakers bought a startling number of European companies when privatized. To compete in market spaces where they had poor market penetration, Jaguar, Volvo, Saab, Rover, and Lamborghini (I'm sure I'm missing someone) are for the most part more competitive than they were, and in many cases, helping their parent companies better compete in the luxury space.
To me, this just smacks of silly alarmist thinking - like someone needed a topic for the day.
"oohhh... I didn't know Schopenhauer was a philosopher!"
Seem plausible, but what's to say that it's not the other way around? (Anybody that's studied correlations can tell you that correlations say nothing of causality...)
What if the economy is in the crapper because US corporations are more enthused about keeping the status quo than of pushing new and innovative technologies. Even bloody Intel is saying "bah... 64 bit processing is too much trouble than it's worth to really push the technology"
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.
Microsoft still refuses to believe in any uses towards Open-source programming, when what you're doing is combining the needs of regular every day power-users... even now Linux amongst other projects is looking towards the desktop and slowly rendering Microsoft a $150 waste of time.
Even our good friend Dubya would rather spend a crapload of money on fighting in the Middle East over oil than push technologies that would render necessity for Middle-Eastern Oil completely useless.
There's a lot of evidence to suggest that lack of Technological push is what's going to bring down the American Economy... so a correlation doesn't necessarily imply that America's low technological push is simply a state of the environment.
Karma: Non-Heinous
"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."
Of course,
- now the Big Three, Toyota, Honda and the rest all own each other
- a sizeable portion of the Hondas made in the world are assembled here
- the economy that spawned all those Toyotas and Hondas has been in the crapper for 15 years
- the economies that tried to 'out-Toyota Toyota' (Korea and the other little tigers) have been in the crapper for 5 years
Maybe their prospects aren't so great after all...
Everyone will start to cheer when you put on your sailin' shoes.
R&D helps to increase productivity, and improve services as we all know. But there is no incentive for an organization to invest dollars into the R&D machine.
Spending money to make a better product only works as long as your competition is not also doing the same. Said another way, R&D provodes no clear competitive advantage for companies unless the competition cannot afford to finance R&D spending.
Successful companies(like Microsoft) can afford R&D spending because they have no significant competition in thier dominated market(OS). Concurrently, most of thier R&D money is spent trying to take over other markets.
Programmers, engineers and scientists are (mostly) mercenaries who sell themselves to the highest bidder. This puts the best and brightest into the hands of the monopolists. The capitalistic basis of "fair competition" is becoming more and more scarce as a result.
The increasing efficiency of these organizations is also reducing the pool of independant competing companies. There are very real examples of how individual programs have replaced the function of entire companies. As our economy becomes dominated by fewer, and more powerful companies the competetive gap between companies within the same market segment will become so prohibitive, as to render "free market capitalism" a thing of the past.
The current rash of IP and patent sweeps being declared by established companies will only exacerbate the problem further, ensuring an almost dynastic future for key blue-chip american businesses.
Bottom line, R&D expenditure is a luxury like never before. Only the top companies can afford to make R&D expenditures, and the number of such companies is getting fewer and fewer. Programmers, engineers and scientists trying to sell the merits of research are going to be largely ignored.
The government has a defect: it's potentially democratic. Corporations have no defect: they're pure tyrannies. -Chomsky
I'm not so sure that increased R&D spending due to economic is necessarily a Good Thing (tm). I've been in R&D for years and before the Dot.Bomb money infiltrated our devision our department was small, we worked hard for the progress we made and basically it was fun. When all the money started floating about upper level management started having delusions of grandeur, we got into technologies that were not our core compentices, we made dubious business deals to make devices that didn't really make sense in the market. We hired many programmers and consultants that our existing managers had no idea how to motivate. Suddenly the lab began to resemble the world according to Scot Adams. Now that the bubble burst, our original technology has been sold twice (in three years) and several of the projects I've worked on have been canceled. Most of the dead wood has been pruned away and what reamins are a couple of small groups that will wind up having to move to continue research. Hindsight being 20-20 I don't think we should let ourselves become distracted and concentrated on continuing real development in the areas we were working on to begin with. Bottom line: increased spending is not automaticaly a Good Thing, increased productivity is...
Nothing in the world is more dangerous than sincere ignorance and conscientious stupidity.
At the company that I work, we've been constantly telling our R&D departments that they shouldn't worry about the down-turn because we are here for the long-run, and we aren't going to rob profits tomorrow to make analysts happy today. That is until we had 8 straight losing quarters (about to be 9, with rumors of $7-900 million lost this last quarter running around the plant), dropping from $3 billion in cash to borrowing $500 mil. And cutting 10% of the workforce via layoffs. At this point we simply can't *afford* to think soley long-term, we need to be thinking in terms of "what will keep the lights on for the next year?". It sucks, but sometimes that's the way it has to be.
You may already have stood in such a line without knowing it. Many medical texts still use illustrations and diagrams from Pernkopf's Atlas (Atlas of Topographical and Applied Human Anatomy) to this day.
The Atlas is based on things learned during the commission of atrocities. Its author was a supporter of the regime responsible for those atrocities.
And yet, its contents have been used to save lives for 60 years, perhaps even including yours.
> For me the question is not *what* but who we're doing research on, and in the case of stem cell research, we've stepped over the line.
Do we throw out anatomy because it has benefited from what virtually the entire population of the planet agrees were war crimes performed on adult sentient beings?
If not, why should we throw out a technology that could lead to cure for Parkinson's, as well as the growth of replacement organs (possibly without an attached host body!) on the objections of a few religious fundamentalists ("life begins at conception / glob of undifferentiated cell has a soul" stage) or somewhat less-fundamental fundamentalists ("life begins when it looks cute / fetus" stage)?
It's not as easy a call as you might think, is it? :)
For the record (no point in bitching about bioethics unless you have the balls to make a stand - and while I disagree with your stand, I congratulate you on having one) I believe what Pernkopf did was grossly unethical, but I have no reservation and feel no guilt about being treated by doctors who learned from his work. I have no reservations about stem cell or fetal research. I see no contradiction between these two positions.
50 years from now, today's bioengineers may be looked upon as ignorant barbarians committing mass murder, or as the saviors of the human race. My position on bioengineering is the result of a moral choice, and I'm willing to accept any guilt on my conscience should I facts cause me to revisit it in the intervening half-century.
As market dynamics force a greater focus on shareholder value over solid profit models, and on the short term over the long term, industry is pushed more and more towards a strategy that focuses on the short term bottom line.
This is very true, but there is a trend, starting among academic economists but moving into the mainstream, away from this kind of short-term thinking. 80 years ago it was well understood that the value of a stock was precisely the value of its assets plus the net present value of its future dividend stream, and that way of looking at market valuations gives investors a reason to value companies that make good strategic choices, even if it's at the expense of short-term profits. Over the last 40 years or so, the idea of "growth" stocks became widespread -- the idea that the value of a company is determined not by anything so mundane as its future earnings, but, essentially, by what investors think other investors will be willing to pay for it. This approach is epitomized by Microsoft, a company that never intended to pay any dividends (yes, I know they're paying a dividend now).
The result is investors that jump in and out of positions, which in turn forces companies to focus on short-term goals in order to keep their stock price up -- particularly since the wealth of most executives is tied directly to their employer's stock price.
However, not only is the "growth" stock theory proving to create a market that is volatile and irrational, but the fundamental assumption underlying the idea has taken a real pounding of late. The assumption is: "Executives are better at managing investors' money than the investors themselves are."
If the company takes its profits and pays out dividends, investors are then free to reinvest those dividends however they see fit. On the other hand, if investors allow a company to retain profits, they're betting that the company's executives can do a better job of managing the investors' money than the investors can. In a nutshell: investors are trusting the executives with all of their money, without any real way of evaluating the results.
The recent spate of scandals has really rocked the "trustworthy executives" theorists on their heels. As investors realize that no amount of board oversight can really keep the executives honest, they'll come to the conclusion that the best thing to do is to take the profits out of the companies and force the executives to run a tight ship and to publicly raise money when they need it.
Note to ACs: I usually delete AC replies without reading them. If you want to talk to me, log in.
An interesting point to the work being outsourced is that eventually they (Chinese,Indians) have an opportunity to explore - "this doesn't have to be this way". At a certain point Honda realised that engines need not be big block Hemis to get power - variable valve technology was the result (V-TEC).
Big companies overlooking innovation is not a new thing. Before M$ there was IBM. Before Ford there was Diamler-Benz. The promise of America is the Wright Brothers. Infact the nation of America is a proof of success that resulted from "country doesn't have to be this way (monarchy, imperialist etc)".
So the question is not R&D budget though education certaily is. But - whether there is a healthy environment for backyard inventors to explore the "this doesn't have to be this way" opportunities. My faith is beginning to shake. Patents are suffocating, monopolies lobbying the congress to maintain status quo is quite discouraging, smart kids are being sent to jail instead of being mentored.
Asia is already a device/mobility haven. It is sad that I hear/read about these marvels as the British used to narrate their experiences of exotic lands. Unfortunately for America, there is no central point where cash an be infused to jumpstart "it". The hope is that USA will find a new frontier while IT/tech sector is commoditized.
What happens when most of the R&D in tech is taking place overseas (and it might be argued that most of the R&D going on right now is taking place outside of the USA) and they have these very strict IP laws in place? The IP laws were put in place to protect American interests (presumably) but what happens when they become a serious stumbling block to the US economy (well, in a more obvious way than it already is). Imagine if BT had been able to enforce their hyperlinking patent and had begun demanding licensing fees of every company in the US?
I think this is an ideal situation to slap congress around to the fact that IP laws need to be changed to a more reasonable framework. Reward the inventor, yes, but granting monopolies isn't going to help society or the economy in the long run.
Not just answers, the correct questions.
I think you underestimate the rational basis for "growth" company valuation.
It is true, that in the absence of dividends, which was almost the definition of "growth stock" during the bubble, it is hard to see why holding a stock is worth anything. There is, however, a floor on the value of the stock, which is that some other company could buy 51% of the stock and collect the profits as if they were dividends. Also, at some future time, the growth will slow down, and the company will start to pay dividends as their sector has matured. In the meantime, they ought to be investing their cash in expansion, or get left behind.
The thing that leads to irrationality is when the future revenue growth rates are overestimated, either for the particular company, the overall market segment, or both. Being overly optimistic on the future cash flow in an exponentially growing way greatly increases the present value. A classic cause of this is ten companies, all of which project gaining 50% market share in their fast-growing segment (e.g. long-distance network traffic). Any one company can get enough true believers to value their stock on that basis.
As with any rational formula, Garbage In-->Garbage Out.
The reason the UN is useful is it gives the small countries of the world a stake in the system, and a way to make it feel like they can restrict the actions of the few (one) powerful countries. In the absence of the UN, the countries of the world will feel compelled to group together, excluding the U.S., in order to balance the overwhelming power of the U.S.
Look at what happened to Germany when Bismarck was no longer around to reassure the weaker powers that Germany was not a threat---eventually, every other country was so nervous that they set themselves up to start World War I, which wasn't good for Germany.
Nixon understood, for instance, that China and Russia together would pose too great a geopolitical opponent to U.S. dominance. So he cultivated better relationships with each than they had with each other.
The current administration seems to think that we can offend everybody and basically bully them into being allies because we are on the side of "good." No one else in the world believes, as Bush apparently does, that it is our Christian duty to provide "God's gift" (if it's really God's gift, then why can totalitarians take it away?) of Liberty to the Iraqis.
When we sit back and think that even little countries, not even mentioning China or North Korea, have more resources than al Qaeda, and therefore pose more of a potential threat than this apparently all-consuming menace, we realize that the U.S. has the most to lose in the absence of international order.
Is the U.S. going to occupy the whole Middle East as soon as our huge presence in Iraq gives a oh-so-inviting target for terrorists? Or is the U.S. going to run away from the mess it creates, leaving a cesspool for Islamic fundamentalists?
Kuwait and Saudi A. have been conquered in every sense of the word that counts. They sell the U.S. all the oil it wants, they produce more to keep prices down, they host U.S. military bases, and except for the Israel-Arab conflict they're generally pliant allies. Saudi A. even agreed to let the U.S. use airbases in the upcoming Iraq action.
Regarding research, I think Dubya wants to sink a billion or so into hydrogen powered cars. The military is spending a lot on military r&d so it's not like all r&d is drying up. If I were in charge I'd grant a large tax deduction for "green" cars such as hybrids, to make them more competitive. The market works pretty well but an anti-tax here and there can't hurt.
For that matter, an anti-tax on corporate r&d would be advisable. Every dollar a company spends developing new products, processes, techniques, etc. should come out of its tax burden, not out of its bottom line. The benefits are (1) more R&D (even allowing for the inevitable fraud), (2) more researchers are employed, and (3) companies are more likely to survive long term.
it's = "it is"; its = possessive. E.g., it's flapping its wings.
GW could not get ANY benefit during the course of his presidency, even if elected for a second term in a straight blood-for-oil trade. It would take over 3 BILLION barrels of oil at $30-35 ber barrel before it would even match the $100B estimate for the cost of the war, and that would only work if we flat out stole the 3B barrels.
Oil companies won't be footing the bill for the invasion of Iraq; American taxpayers will. The cost benefit ratio is actually quite good when you realize that.
I don't think anyone's that the war would be of any benefit to the *United States* itself. It'll be of huge benefit to oil companies who will take very good care of Bush et al when they're no longer in office. They get all the benefit of the invasion and none of the costs.
Russias size is far from a benefit keeping up basic infrastructure like road and rails costs the Russians nearly 3x what it costs us and the lousy wheather means Russia imports lots of its food. Russias population is 1/2 that of the United States so give them a break. Tiny nations have it easier. All they need to do is focus on 1 or two industries like Israel whose mainstays on research driven industries like pharmaceuticals, computers and defense. They sell the chinese spy planes in exchange for grain and rice.
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.
I think this coincides with what I'm saying. It's moreso the overeager capatalist ventures in mind. It's moreso that there's a lot of execs who are more interested in keeping things under their control than branching out and being more interactive about it. It's interesting, because there's this general belief that Communism doesn't work because everybody's too greedy to make it work. I think the same is true under capitalism. Capitalism can drive towards new ventures and the like because... get this... THAT'S WHAT PEOPLE WANT! The entire idea behind capitalism is that you supply what is demanded at a reasonable price. The problem with this being that it's not what's happening. People don't want to shell out $20 for a CD anymore. However, now the corporations are more interested in quarterly returns and the like, so they're just gonna go for short-term effects that placate everybody within the company. So they not only undercut general development but the capitalist system itself.
Apologies for the left-wing rant there. I suppose there's not too much we can do about it, but I'm just offering possibilities. I'm neither a Business Major nor do I understand much about business management beyond a couple of classes. But it's my opinion... your mileage may vary.
Karma: Non-Heinous
I'm a medical device consultant. My American clients want me to help them commercialize technology they have licensed. Most of it is from Europe and Australia.
My clients in China and India want to beat the EU and USA companies with better tech done cheaper. And they aren't counting on labor costs to get the cost reduction, they are counting on superior smarts.
And now I've got a company based in South Africa that wants to take a technology from Egypt and one from Cuba and develop a new surgical treatment that combines the two. Manufacturing will be in Vietnam. And I'm the only American on the team.
You don't need to read theoretical articles. Next time you download a printer driver, check out where the programming was done. American domination of the globe is a temporary abberation, soon to be remedied in the traditional manner.
"Don't expel your beverage through your nostrils when the really rich demand the impossible. There's a fortune there for
> The price of Kuwaiti and Saudi and Iraqi oil is
> set by OPEC.
That price is influenced by supply. Any oil producer can alter supply.
> Did you hear me?
Yes. Thanks.
> It's set by OPEC.
But the US is instrumental in determining supply (and demand, obviously). It allies with, or threatens (through war, proxy war, terrorism, coups and assassination attempts), oil producing nations. The more influence the US has over oil producing nations, the more power it has over oil prices.
> Why is this so hard for people to understand?
I can comprehend it just fine, but thanks for asking.
> We currently only import about 2% of our total
> oil from Iraq, compared to about half that 20
> years ago.
That may be, but Iraq has some influence over oil prices. When the US can install a friendly dictator (like Saddam Hussein was) Iraq will do to oil prices (as far as it is able to) what America (American oil companies) wants it to. I would be surprised to see an imporvement in the human rights situation (of course, the sanctions will be lifted, which will reduce hunger in Iraq, but dictatorship and torure will most likely not stop).
> Tell me, how is this about oil?
Bush is *not* about to go to war because of the oil issue. Bush *has* chosen Iraq because of oil. Precious little else distinguishes Iraq from other human rights violator states, which have weapons of mass destruction and which support terrorism.
I agree with you that the previous analysis was too simplistic. Alas, so is yours. :-) And so will be mine.
First off, there's GDP, which is one thing, and GDP per capita which is quite another. In that race, China and India are nowhere to be seen among the leaders, while the US (in 2000) had a spectacular lead over almost all nations (yeah, there's Bermuda and Luxemborg, but those have caveats attached, too). But that's not quite the real story, either, since the distribution of income among individuals is a big deal, too. Denmark has a per capita GDP that is smaller than the US, but a rather more even distribution among households, to the point where may US residents would be thrilled to switch places.
On the other hand, even GDP per capita misses something absolutely huge here, namely the growth rate of GDP (per capita or not). In that race, you find that the US is not especially close to first place. China is growing on the order of twice as quickly as the US, and that kind of advantage catches up with you pretty quickly.
A point to make here is that the US numbers include a big contribution from immigration while China and India have essentially negligible rates of immigration (but noticeable rates of emmigration). To the extent that they (and Mexico) can grow rapidly relative to the US, we might see either increased immigration to these countries (repatriation at least), or reduced immigration from them to the US. Economic growth also still has room to reduce fertility rates in India and China (and many other places) as well. Forecasting population growth, as you mention, is an utter crapshoot in even the medium run.
In my more optimistic moments, I see a future where growth outside of the US is sufficient to raise standards of living for most, which will tend to increase the chances for peace and stability. When I'm pessimistic, I just look to differences in ideology, and imagine what will happen when some countries are wealthy enough to have armies that can really do damage...
Babar