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

He's got some good points, except

[Anonymous Coward]

this tidbit:
"Instead of sending future tech wealth abroad, we need to open our doors to more top foreign scientists. We're sending H-1B visa holders home with pink slips and a basket of skills they learned from U.S. companies. We should be giving the brightest of them research fellowships working for the Department Homeland Security."

Gimme a break - there are plenty of highly qualified American citizens. Why exactly should we entrust national security to people who are not part of the shared American destiny? An H1-B is BY DEFINITION temporary. Personally, I think part of the solution here is to reduce the number of H1-B holders, not put them in charge of the candy store...

Re:Bound to happen...

[dismal scientist]

I suggest getting another friend as your economic guru. Saying that a reduction in R&D is because the president isn't supposedly focused on the economy is quite a stretch. The oversimplification that people are holding on to their money is a strange notion. If people are holding on to their money, then where's their money? Anywhere (anywhere!) besides in the mattress provides capital to people\businesses and the people\business that are perceived to have the best ideas for creating more capital get the money.

If you have to do something with your $1000 bucks, you want to give it to a guy who will probably turn it into $1010, or to a guy who will turn it into $1050? $1050 of course. If that guy is a house-builder, so be it. If he represents a company that wants to do some R&D for some product, so be it.

If you just put your money in the bank, then they lend it out for you, to whomever they think will give them the best return. If you buy a DVD player, proceeds for that go to the manufacturer and they then decide how much of the proceeds should go towards R&D to provide either the same product for less (increasing their profits) or to create a new product or to be paid out to their shareholders or whatever. They will determine what will give them the best return on investment.

If a business needs funding for research, they can go to investors. Investors use either their own money or the money of others that they represent. These "others" can be stockholders (or other types of funds) or members of some groups (like a bank) that is looking for a place to invest their money.

If overseas companies do more R&D than US companies than that means they have a different expectation of what the returns will be for their R&D. Some industries are positioned to gain more from R&D (like manufacturing) than other industries (like services). So you would exect to see Indonesia perhaps doing more R&D than Meryll Lynch, or Accenture, or AOL.

Where's the president's role? Market forces are way bigger than what the president (any president) can influence. Laws only foster economic growth in three ways: protection of property rights, lowered transaction costs, and general peace. However, laws can significantly curtail growth by doing things that negatively affect the three things mentioned.

So what should the president do to "focus" on the economy. Actually, I think we should pay for ever citizen to attend an Economics 101 class.

Re:Never fear...

[Angry White Guy]

So you are on my side then...

Here's one for you: Why do they have any more right to life than I do? Had this been in place, I most likely would not have to bother with you right now, and as an added bonus, you might have saved my life. I'm winning on all fronts.

I might be morally bankrupt by your standards, but hey, those are your standards, and whatever ideologies you subscribe to, guess what: I don't.

Sure I'll never be the one to pull the trigger on any of these people's lives, but don't you dare have the presumption to judge my morality based on what you consider to be right and wrong. You are not fit to. There have been atrocities committed on your behalf, keeping you in the state that you are. I don't hear you bitching about how many people have been killed on your behalf, just to keep communism out of Afghanistan, communism out of Cuba. You bitch about what Hitler did, but did your country allow any of the mentally retarded and mentally ill NOW! The slow of learning, street-children, the poor, negroes, jews... (your words) into their country before WWII? No, nobody did. How many people were mistreated making your clothes, your shoes, your pc? Lots. You still bought it.

You know what makes me sick? Moral fuckers like you who seem to clutch onto their bible as the first, last, and only rules, then proceed to bash it into the skulls of everyone.

You go preach, I'm gonna sit here watching my television made by exploited workers, eating my food which has caused massive deforestation of the rainforest, wearing my Nikes, and not giving a flying fuck what you think.

And I'll give you a hint on production: You put out better products when you have a gun to your head. Ask the Chinese. Do you own anything from China preacherboy?

Might as well stay logged in,
AWG