| Topic: |
Politics > Politics-USA |
| User: |
"Your Special Friend" |
| Date: |
25 Jan 2004 11:11:07 PM |
| Object: |
When will leaders fess up about global economy? |
http://www.usatoday.com/news/opinion/editorials/2004-01-25-global-economy_x.htm
Posted 1/25/2004 8:15 PM
When will leaders fess up about global economy?
By Alan M. Webber
Peter Drucker, who at age 94 is the world's leading management
authority, recently observed that the United States is already a
diminished economic superpower, challenged by the rapidly rising
strength of India and China. It's the kind of comment that barely
raises an eyebrow coming from Drucker; although he is an authority, it
is just an opinion.
But what if any of the Democratic candidates for president had said
it? For that matter, what if President Bush had used his State of the
Union address to rally the country with such a pronouncement? Instead,
Bush barely acknowledged the plunge in manufacturing employment that
has marked his term and used almost as many words to admonish athletes
for steroid use as he did to announce his paltry "Jobs for the 21st
Century" package.
Naturally, we know why this is: If the president or his challengers
told the truth, they'd be publicly flayed. Because the truth is,
Drucker is right. The evidence is published every day in newspapers,
magazines and even in government statistics. So the real questions
are: Which leader will be courageous enough to tell us the truth, and
what do we do about it once we hear it?
The shape and structure of the economy, which started to change when
Bill Clinton was president, only have become more unrecognizable,
foreign and uncertain. Government policy can have some impact on how
fast the world changes and even on the direction it goes. It is most
effective, however, when it prepares the nation to recognize new
challenges. But to shape that policy, we first have to talk about the
problem.
In case there are still some hard-core economic supernationalists,
consider a few recent headlines that suggest how rapidly India and
China are transforming their economies. A few years ago, it was common
to observe that India had great call centers; U.S. companies were
outsourcing their telephone services to such places as Bangalore,
India. But now, reports The Wall Street Journal, Indian companies are
hiring big names from the United States to help them win high-end
consulting and software contracts. And the strategy is working.
Infosys and Wipro, two hard-charging Indian companies, have won
big-ticket business from such clients as Polo Ralph Lauren, Toshiba
and Tucson Electric Power.
Here's another news flash: Levi Strauss recently closed its last U.S.
sewing plant. Despite a reputation for a corporate social conscience,
the company is shifting its production to China and other countries
with cheaper production costs.
Another Wall Street Journal article describes the new trend in
consumer electronics and high-end TVs: Companies unknown in the West,
such as China's Xoceco, are sourcing parts globally and moving into
advanced markets with less expensive, but high-quality, products. And
IBM is moving 4,700 jobs overseas not blue-collar factory posts, but
white-collar engineering and managerial positions.
The trends are unmistakable: Companies in India and China may have
started out producing and selling relatively cheap manufactured goods
and services, but now they can produce technologically sophisticated,
financially rewarding offerings that are diminishing America's
economic standing.
That is the truth. But presidential contenders seem locked in an
old-fashioned game of blame and shame. Blame India, China and other
nations for stealing "our jobs." Blame past treaties such as NAFTA for
acknowledging the obvious that the economy is globalizing and trade
is an everyday fact of life. And shame on companies for making
economic decisions that reflect the new rules of the global game.
Finger-pointing won't change the facts. So what should we do? The
three-part answer:
Don't hide from the truth demand it. The only way to have a better
economic future is for all Americans to face the facts. Here's one:
We're not going to get back the 3 million manufacturing jobs that have
vanished from our economy. We'll probably lose even more, because
increasingly, as Hewlett-Packard CEO Carly Fiorina recently observed,
"There is no job that is America's God-given right anymore." In a
global economy, jobs will continue to move to where they can be
performed at the highest quality for the lowest cost.
Want jobs? Get skills. The only way to earn a job now and in the
future is to have the skills the work requires. Any strategy to
safeguard our economic future has to begin with training and
education. Bush talked about these two areas, but not the kind of
improvements we need. India and China are upgrading their economies by
raising their workers' skills with training in math, computer science,
engineering and technology. These, too, are areas the United States
needs to focus on. But first we have to improve the basics; far too
many kids in our public classrooms can't read or write, much less read
and write computer code.
The only way to have a future is to invent it. It makes little sense
for politicians to bewail the loss of jobs. The real quest is for the
next source of jobs and economic activity. Some seeds already have
been planted in such fields as biotech and advanced robotics and in
places as diverse as the application of digital technology to
entertainment and new communications opportunities over the Internet.
When it comes to innovation, the role of the government traditionally
has been that of a supporting partner. But there are better and worse
ways to partner. Clearly a massive federal deficit and huge trade
imbalances do little to support entrepreneurs seeking to come up with
the inventions that will spur the economy.
The 1990s saw an economy marked by dazzling creativity and remarkable
new applications of technology. Another round of innovation is on the
horizon, minus the financial manipulations and corruption of Wall
Street.
Drucker has it right only so far, he's pretty much alone in talking
about the problem.
So here's a simple thing we all can do as the 2004 presidential
election heats up: Ask the candidates to tell the truth now, so we'll
have a better chance of creating the economy we want in the future.
Alan M. Webber is founding editor of the business magazine Fast
Company and a member of USA TODAY's board of contributors.
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