Sunday, October 30, 2005

Where Do We Go From Here?

I am concerned about the future. Without being overly pessimistic OR optimistic, but trying to remain realistic, I want to anticipate the things that are likely to happen by extrapolating from current trends, and taking in expert opinions and analysis, do some of my own analysis, and plan around the results of all of that. Few things that happen are completely bad or good within themselves, except by perspective, we may interpret them one way or another. The decline of the British Empire probably seemed like a very bad thing from the British perspective (for those who had the courage to acknowledge it at the time), but it probably benefited others around the globe as their opportunities began to blossom. America’s star began to shine after England’s began to fade a bit. No matter where you are, the place you are in is not the only place to live in the world. The job you are doing is not the only job you can do. Life is big. There are always many possibilities. Change is inevitable, so adapting to change as it happens will allow you to survive. But anticipating change beforehand, will allow you to thrive.

With that in mind, lets look at some of the trends that are happening within the US now and looking at how we compare to other countries and try to extrapolate into the future to see where these trends are likely to lead us. Is the US the best place to stay long-term? If so, where in the US? What will be the better areas to live? The northeast? The northwest? The Mid-west? The south has been where most of the growth has been - is that the best place for the future? Is it better to move into the major cities close to jobs without spending a fortune on gasoline when it gets to European levels at $5 and $6 per gallon? Or will it be better to live in rural areas where we can grow our own food? And what will be the better areas to focus on for a career? Since higher fuel prices will make delivering products long distances more expensive, that will change things so that the economies of scale don't count the same way anymore. Does that mean there will once again be a need for local agriculture for smaller farms to ship locally instead of the mega-farms with hundreds of thousands of acres who have to ship all over the country? What other vocations will the new economics create or support. Where will it make sense to live? If not the US at all, then where?

Let’s look at where we are in the US at the moment. We can start with the scary, negative stuff, then go to the more optimistic side after that.

In a world that revolves ever more around technology, a major key to success in that world is perhaps education. And in that respect, we have fallen behind dramatically.
Americans now stand 49th in the world in education. Our 4th grade students are among the best in the world, but by the 9th grade, we have sunk down to among the worst of the industrialized nations. And yet it’s not for a lack of investment. In America, we spend far more money per capita for education than any other country on the planet. South Korea is at the top of the educational quality scale now, and yet they spend far less on education that we do. Logically then, the problem must not be a lack of resources. It must be either systemic, or cultural factors. I believe it may be both. In high schools here today, the focus is not on learning academics, it is on sports and social activities. Sports are a good healthy pastime for young bodies. They do teach some valuable lessons about teamwork and competition, etc., but schools spend far more attention to football than they do to science and math and other academic subjects. And even among the academic subjects, they seem to have strange priorities. My 15 year old daughter has been taught little or nothing about the history of the world, but she has already has three full term courses on Texas history so far. In the grand scheme of a complete education, Texas history is of marginal value at best. Learning a little more about the other 95% of the world would be far more valuable.
At the systemic level, football, and other sports have become an unhealthy obsession for most schools in this country. Football is a great entertainment, but it will NOT keep us in a leadership position in the world in the next few decades. Football will NOT feed our citizens ten years from now. Also, there is an unfortunate social/cultural tendency to punish the better students for being bright. Rather than a social community that encourages academic excellence, the typical social groups within most high schools tend to consider the brighter kids as ‘geeks’, ‘nerds’, and other short-forms for the social pariah. They are rejected in favor of jocks. This is not a new development, the momentum for this direction has been gaining for decades.
For us to produce brighter, more well-educated people, we would have to change deeply in-grained habits of cultural bias, and also put into place broad, sweeping changes to the overall focus of all our schools away from sports, and social activities and switch them over to the more academic focus that schools in the up-and-coming countries have.
Then there are American colleges. These have long been highly thought of around the world for having the best resources, and track records for success. But that has changed in recent years. Foreign student attendance is down over 55% year over year for the past several years. There are simply much better schools elsewhere in the world now. Our schools have become businesses that sell degree programs in almost whimsical, non-essential areas. And the quality of the core areas has lagged the rest of the industrialized world.

But even if we could achieve the by now almost impossible goal of getting our students up to the level of South Korea, we would still have a problem though – because their educated workers are cheaper than our educated workers. So even if we managed a miracle like we did 100 years ago when we introduced public schooling through the high school level, still that miracle would not be enough any more. We are simply too expensive to compete. That means that once our young people push their way through the school system, they would have a hard time finding jobs to support themselves, because the companies have already outsourced most of those kinds of jobs overseas.

The fact is, we’re just not competitive anymore. We’re not educated well enough, so our human products are not high enough quality, and the prices for our educated humans are too high. However, we can’t just give up. We have to at least stay in the race, even if we cannot win anymore. When Britain’s star faded, they didn’t fall off the map entirely. They remained a viable country with some dignity and some position in the world. They just weren’t the top banana anymore. We could do as well if we play our cards right.

According to a recent article in the New York Times, the military is spending money, time, and effort sending scientists to the American Film Institute to learn how to write movie scripts. Why? Well, because they are hoping to 'sell' science and technology as a career path to America's young people. They want to make it look sexy and interesting to be a scientist. Apparently some part of the government has got the message and is trying to do something about it. This is what propaganda machines are all about - changing the minds and hearts of a nation of young people. We need them to be interested in maths and sciences. We need them to have a core desire for the things that could potentially make us strong again. We need to be turning out the top students again, and in sufficient numbers that we still have a stake and a say in the new technologies, the forces that will shape the future. Expect to see more shows like CSI.

But meanwhile, while we try to interest our young in the hard sciences, countries with inexpensive labor forces are turning out large numbers of well-educated knowledge workers able to work in information-based high-level jobs. Countries such as China, India, Mexico, Malaysia, Brazil, etc. have huge numbers of qualified graduates every year.
China has 3.3 million each year
India has 3.1 million
The US has 1.3 million.
And in Engineering programs the numbers are revealing:
China has 600,000, India has 350,000. We have 70,000, and 35,000 of those are foreign students who no longer have plans to stay here to find work. The other 35,000 graduating are having a harder and harder time finding work in the US because all the jobs are being outsourced overseas for lower wages.

So China has 20 times more engineers graduating each year than we do. That has never happened before. This is new to our experience.

What does that look like after 5 years of producing 20 times as many engineers as we do? And what does that tell us about where the future of technology and innovation will come from? And what does THAT tell us about the future economic prospects of our country versus the others?

If you still believe we are the leaders in the world for technology and innovation, you may be living in the past. That USED to be how it was. We invented things. We created them. Then we manufactured them and sold them all over the world and got wealthy. Then we got greedy and started outsourcing our production to 3rd world countries to save a little on the cost of production, to make them cheaper and keep more profits. Then we outsourced more and more until we outsourced the design functions as well. Then our own abilities to produce those new technologies and innovations were reduced, and the people we exported those jobs to learned those skills. And those countries developed schools to teach the next generation, and the next and the next. They have caught up and now surpassed us.

You don't believe it? How about some examples? Probably the biggest technology product in the world is the computer, right? Virtually all computers now have LCD screens on them. Either separate units for desktops, or built-in for laptops. Chances are you are reading this on one of them right this minute. Try to find an American-made LCD screen. Go ahead. I dare you. That technology was originally invented here. Specifically, the LCD twist technology, which is at the core of it, was patented by Marcel Vogel, a senior research scientist at IBM labs. IBM decided that there would not be a strong enough commercial market for it(what vision, huh?), so they sold it to a small California-based company, which was subsequently purchased by a Japanese firm. That technology then left our shores forever. Now we pay for it with almost every new electronic gadget made from cell phones to computers, but we do not own it.
How about a video camera? The core technology there is the CCD. How many American-designed/American-made CCD units are there? Try to find one. The TV is old technology, isn’t it?. How many TV models are made in the US now? How many are even just designed here (I don't mean the case - I mean the actual television unit itself. The actual technology components) How about a fax machine? A digital camera? There is a CCD in the digital camera too. Have you ever come across a place that fixes digital cameras? Do they have any way of diagnosing problems with the CCD unit? How about calibrating it? No. That technology does not exist here. None of these things do.
The Pacific rim countries are exporting high-technology goods to America now in much the same way we used to manufacture and export TV sets to places like Kenya. They could use it, but had no idea how to fix it or replicate it. They could only buy more from us. We have now become like they were then.

Times have clearly changed. That ringing sound you hear is the alarm clock. Time to wake up. We need to open our eyes and our minds, shake off the sleep, and look around. We have been comfortably numb far too long.

We are 12th in the world in number of broadband connections per capita. South Korea is number one. And theirs are far faster than ours, and they work through almost every cell phone they have. And cell phone networks around the world are far better than ours. By the way, how many cell phones are completely designed and manufactured here in the US? Can we even fix them? Do we even know the details of the technology in them anymore?
Once, in 1990, I was visiting Pittsburg and I tried to buy a cell phone, and when the sales clerk saw from my address that I lived in Toronto at that time, she refused to sell it to me saying that this was advanced technology that couldn't leave the country. What incredible naïve ignorance and arrogance. America now has about the WORST, most backward cell phone networks of all industrialized countries.

One problem is that the leaders tell us about a different America. They have hypnotized us into thinking we are still on top. Still the best. Still no. 1.
It is a dream. An elaborate hallucination perpetuated by those that wish to profit and benefit from our apathy and our willingness to believe that everything is fine and we're still on top, and that the people in charge know what they are doing. Just keep voting them in because everything is fine.

The science of today is the technology of tomorrow. And the technology of tomorrow becomes the economy of the day after.

Yet congress cuts science funding dramatically every year. There are over 1,000 fewer science grants ever year as we spiral ever faster down the black hole into ignorance. We are starting to erode science teaching in schools to go back to teaching religion instead. We are headed in the wrong direction if we want to rebuild our position and our standing in the world. But it may be too late. We may be too far down the slippery slope already.

So what will happen? And what can we do about it? Or, at least, how best should we respond to it?

Well some good will come of this. As America becomes poorer, other countries will get richer. The standard of living will improve for an awful lot of people - and it's about time. For decades, we have had a country with only 5% of the world's population using up 25% of the world's oil production, and over 40% of it's other resources. That kind of inequitable imbalance is unstable, and it was only a matter of time before the pressure of various forces would topple it. The current rash of terrorism is certainly one of those pressure factors. It’s no coincidence that the terrorists are coming from the have-not countries to attack America.

So it seems America will become a little more like the rest of world, finally. Maybe, ten years from now it will not be so common for an average worker to have a 2500 square foot house and two cars, and a few thousand of dollars in the bank, and a net worth of a few hundred thousand dollars. Maybe the average worker in America will have what the average worker in a typical European country has.

But is this the end of America? Well, yes and no. Personally, I think the America we have known, and the world as we knew it has ended, and a new era has begun. But America will continue in new forms.
Don’t rule out America. Americans have certain advantages over other groups in the world. They are more optimistic, for instance. Do not underestimate the power of optimism! It is VERY powerful. Not just in some mystical, mysterious way, but in real, tangible ways. For example, a pessimist might feel defeated and give up when his business idea fails. But an optimist picks himself up after a failure and tries again. And he may try again and again, and again, until he finds something that works. A joint study group from MIT and Cambridge University in England discovered that this is the chief reason why MIT graduates became successful in business while Cambridge students have not had the same degree of success – despite an excellent education. They found that Europeans in general and Brits in particular, tend to be pessimistic. And they tend to believe that if they fail once, they have failed at everything, that they now have a black mark on their record, and should give up ever trying anything big again. The Americans don’t have that. They have a sense of simply trying again until they find something that works.
That one factor alone gives Americans a certain powerful resiliency that will stand them in good stead through the coming decades. This country will not die out strictly from competition.
Also, it is important to note that there is a tendency to overestimate the competition. The fact is that China, India, and other countries are not without their own challenges. They have their own problems that they have to overcome before they take their place as the next pre-eminent global powers. I feel their destiny is inevitable just from sheer size and momentum of growth alone, but the path will not be without its challenges.

America is also morphing internally into something different than it was. It was a country with a majority of people who were white, English-speaking, of European descent. That is changing. Given the current trends of immigration, childbirth rates, and demographic shifts, some demographic economists suggest that the US may be more than 50% Hispanic by the year 2010 or 2011. Also, the trend toward less and less education, more poverty, more racial tensions, etc. is accelerating. Also the average age is getting younger. They estimate that our current average age of 34 will drop to about 24 by the year 2020. This means we are headed deeper into the child-bearing ages, which means an acceleration into those demographic trends.
So part of the factors that will pull America down from it’s position as self-claimed ‘leader of the free world’ will be some internal factors as well as pressures of competition from outside. It seems unavoidable that America will have less in the future than it has had in the past.

But perhaps, the rest of world will finally get its due. This is not just about us losing. It’s as much about the opening up of resources to the rest of the world. It’s about having many more viable places to go and live and make a living. It’s about a whole new world of possibilities. It’s about growth and expansion, and optimism on a more global scale. Then maybe they will hate us a little less once the distance between us has lessened. In technology, they have already caught up and surpassed us.

Remember- Science leads to Technology which leads to Economy. They have already caught up in science and then technology. Caught up and then surpassed us. It looks like they are now poised to surpass us in economics and standard of living as well. Countries that were once far behind us, are not so far behind us now.

Check your rear view mirrors. Objects may be closer than they appear.


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