Friday, May 30, 2014

Why I Don’t Think This Entrepreneur Tech Boom Will Help the US Economy

Need a Focus on Things, Not Just Ideas

Americans are known as being one of history’s leading modern inventors, building one of best global economies in history. With this new entrepreneurship boom in the software and technology industry the US economy is seeing many great new ideas, resources and services. Just look at the billion dollar ideas that have come from WhatsApp, Facebook, DropBox, and others. With all of that said, I believe the US will not actually build and create sustainable jobs for the economy without change.


The main reasons that the US will not build its economy through these new advances are: a lack of melding inventions and industries, a need for innovation to be integrated with manufacturing, and a lack of training in the workforce.

Radical new inventions are a staple of what the U.S. does well, but melding these new inventions and ideas to existing industries is lacking. The idea for creating technology which stimulates an economy or even entire business sectors lies in permeating these ideas throughout existing products and processes. The U.S. tends to kill or outsource ideas for labored jobs and replace them with knowledge and services professions. Instead of recombining elements of old or flat-growth areas into new, vibrant areas they remove the sector completely. Just look at LCD TVs, sustainable energy systems, or computers, the main hotspots for the knowledge and research of these technologies has left U.S. shores. Contrarily, when China started growing into the manufacturing powerhouse that it is now, Germany didn’t off shore their key knowledge and skills of its automated machinery industry. The Germans instead supplied, adapted and used new technologies to upgrade existing machine systems that could be used for the manufacturing of the variety of goods that were washing up on China’s shores. The difference is seeing the opportunity of a new growth market versus seeing the opportunity for a cheap labor force. 

In order to sustain true economic growth there needs to be a link between innovation and manufacturing. Innovation is not just the concentration of radical ideas as seen in the high-tech arena, but the sustained, widespread productivity gains which develops and grows technology. In the US, you don’t see Programming PhD students running off to join big, existing companies – they join startups trying to hit it big with the next big app. This concentration is creating an edge for companies outside the U.S. The best Programming PhD students outside the United States join Audi, Mitsubishi, Sony, Samsung, Sinopec Group (China’s largest petroleum company), or Thyssen Krupp, each of which is a global leader in its respective industry. Even though many of the base technologies for previously stated companies were invented in the United States, due to the continued Research and Development, or growth and concentration on incremental improvements, foreign countries are far surpassing the inventor's capabilities or expertise.

Continual training is also a requirement to ensure a growing, enduring and innovative economy. To transform new inventions into a market there needs to be a means for helping small or growing companies compete. Previously the United States had places like Bell Laboratories as a place for research and development on a specific place, but the United States has privatized many of its research facilities. There needs to be a renewed concentration on general research. Foreign competitors have founded places like the Fraunhofer-Gesellschaft Institutes, Hirst Research Centre, KITCO India, PaaSage or CERN, which help coordinate and drive efforts for businesses in order to innovate and develop in specific areas of need and concentration. Additionally, to help integrate new advances the workforce must be constantly trained in order to grow and develop the products and processes improving engagement, productivity, value of the workforce and the general knowledge of all workers. This includes both on the job training, formal continuing education and others. This enables and grows the workforce, instead of searching for ways to reduce or eliminate the personnel. Training not only makes an individual competitive in the job market, but improves the overall market with a diverse and engaged workforce.

It is time for the United States to reign in the innovation it is creating and once again use it toward its manufacturing output. Melding innovation and manufacturing will create real economic growth, to empower employees with learning, build more powerful, growing companies and add sustainable value to the global market. Internet services, applications, and services can be copied and manipulated, but when you create a knowledge Mecca for production and ideas, you have created far more. Similar to what San Francisco is to the technology industry, create sustainable hot spots for manufacturing. Innovation concentration breeds companies and products and with the amalgamation of new inventions with manufacturing and the right training, you can create far more wealth for a nation.

-thePonderingNick

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