Uh, pertaining to your evidently biassed interpretation of history...the President's Science Advisory Council Chairman just reported as follows:
The situation is "very, very different" from the one that existed with Japan in the late 1980s and early 1990s, Scalise warned the White House advisory group. "With a small population, Japan reached a saturation point in terms of its ability to take on more of what was going on in the tech world much, much sooner than China will," said Scalise. "It will be a factor of 10 or 15 difference in that regard. So this is going to be a much more prolonged problem to contend with as opposed to Japan."
But an even more important difference is the fact that China has a "cultural tradition" of entrepreneurship, while Japan does not. Because Japan works by management consensus, the country has been unable to topple U.S. high-tech leadership. The United States has successfully out-innovated Japan.
"That is not true with China," said Scalise. "There is a true tradition of entrepreneurial energy in China and we are going to see a lot of companies, a lot of new things, going on there because of that. That is going to be very different."
China has another growing advantage: a very well educated technical workforce. Both China and India are graduating some of the most talented scientists and engineers in the world, Bob Herbold, executive vice president of Microsoft, told the PCAST meeting in a presentation on the future of the science and engineering workforce.
Last year, China graduated 219,600 engineers, representing 39 percent of all bachelor's degrees awarded in the country. By comparison, the United States graduated 59,500 engineers, or 5 percent of all bachelor's degrees (1,253,000). But 58 percent of all degrees awarded last year in China were in engineering and the physical sciences, as compared to 17 percent in the United States (a figure that is dropping by about 1 percent per year).
"We are on the decline in the production of science, technology, engineering and mathematics graduates at the bachelor's level, and the job needs are, in fact, declining equally as fast, if not faster," Herbold told the meeting. "Probably the number-one finding that this group should carry forward and make sure that the President and the White House and the U.S. government and the U.S. citizenry is aware of is the fact that we have a shift here of monumental proportions in terms of jobs and capabilities and competitiveness on the part of other countries to seriously bite into our industrial base," said Herbold in a chilling presentation. "As you stand here and you say, 'Well, what are we going to do about it?' It is not an easy problem...Given all of those statistics, over the short term, it is clear we are going to lose a lot of jobs that are science, technology, engineering and mathematics based. Over the medium term...the only savior here has got to be the incredible innovation capability of this country to create new things because we have seen other industries move out of the country before and it's clear this one [high-tech] is now moving."
Scalise noted that in today's world a comparative advantage has little to do with physical assets such as ports and more to do with human capital -- a "very transportable element," he said. "Therefore, that comparative advantage is fragile and has to be addressed as being a fragile comparative advantage. If it is ignored, then we don't necessarily ever get the advantage from all the work, all the investment that we have been putting in."
Bobbie Kilberg, a PCAST committee member and president of the Northern Virginia Technology Council, relayed a story to the group from a discussion that she had with an executive from a major high-tech firm. He told her that by 2010, 90 percent of his company's R&D, design and manufacturing will be conducted either in China or India. "I said, 'Well, what can we do about that?' And this guy said, 'Not much. We are not coming back. Unless the government prohibits us from going, we are gone,' " Kilberg said. Tax incentives would not keep his company in the United States and there is little the United States can do to compete with low-cost and highly trained labor in India and China. "I was really at a loss when this fellow said that the tax policy is not going to make any difference and that labor is better educated and cheaper," said Kilberg. "How you deal with that is a real key challenge."
Former National Science Foundation director Erich Bloch and MIT president Charles Vest both called Scalise's presentation "disconcerting."
Ralph Gomery, president of the Alfred P. Sloan Foundation, said: "I don't think the federal government can just stand by and watch this happen."
Wayne Clough, president of Georgia Tech, said it is important for PCAST to note the tie-in to the U.S. defense capability. "If we don't mention the 'defense' word and we just focus on economic competitiveness, we probably are missing a piece that we should address," said Clough. He added later: "We need to also remember as we write this report that this transfer of jobs is going on in other sectors as well. We are seeing this happen in any service sector, technical services, engineering, design, accounting -- many other sectors. That is where you really get nervous. How many of these sectors is it really going on in?"