Thursday, September 17, 2009

How America Can Grow 20 Million New Jobs in A Decade

Bell Labs

Steve DeAngelis of Enterra Solutions can always be counted on to produce some of the most thought provoking and timely blog posts of anyone in the game. These next two posts address a favorite subject of mine, innovation and how in relates to education.

Steve opens with this troubling news.

"New York Times' columnist Bob Herbert claims "the biggest issue confronting ordinary Americans right now — the biggest by far — is the devastatingly weak employment environment. Politicians talk about it, but aggressive job-creation efforts are not part of the policy mix. Nearly 15 million Americans are unemployed, according to official statistics. The real numbers are far worse. The unemployment rate for black Americans is a back-breaking 15.1 percent. Five million people have been unemployed for more than six months, and the consensus is that even when the recession ends, the employment landscape will remain dismal. A full recovery in employment will take years. With jobless recoveries becoming the norm, there is a real question as to whether the U.S. economy is capable of providing sufficient employment for all who want and need to work. This is an overwhelming crisis that is not being met with anything like the urgency required" ["It’s Time to Get Help," 8 September 2009]. Adrian Slywotzky, writing for BusinessWeek, asserts that we are looking in the wrong direction for help. He insists we need to stop looking at politicians and business leaders for help and start looking to scientists instead ["How Science Can Create Millions of New Jobs," 7 September 2009 print issue]."

Steve's post is long and deserves a full reading as well as the articles he linked. The most troubling data comes from the second article where Slywotzky's lays out the following.

"Name an industry that can produce 1 million new, high-paying jobs over the next three years. You can't, because there isn't one. And that's the problem. America needs good jobs, soon. We need 6.7 million just to replace losses from the current recession, then an additional 10 million to keep up with population growth and to spark demand over the next decade."

Slywotzky points to a massive drop in R and D by almost every major industry in the country as the root cause of a decline in innovation and cutting edge inventions. The follow statistics should make every American sit up and take notice.

"The PC, Internet, and cellular industries, born in the 1980s and 1990s, more than offset the loss of high-paying jobs in consumer electronics, steel, and other sectors. But in recent years, outsourced software and manufacturing jobs have largely been replaced by millions of low-wage service jobs in fast-food, retail, and the like. Compounding the effects of outsourcing and extended recession, the ongoing destruction of old business models (think print journalism, the music business, and landline telephones) will slash a large number of high-value jobs in the coming decade. The result? A broken demand structure. Of the roughly 130 million jobs in the U.S., only 20%, or 26 million, pay more than $60,000 a year. The other 80% pay an average of $33,000. That ratio is not a good foundation for a strong middle class and a prosperous society. It's time to identify—and fix—the root of the problem."

That last statistic should run tremors up the spine of everyone on both sides of the political spectrum. How can 20% of the population continue to carry the tax burden as spending explodes in all sectors? Currently over 40% of tax filing Americans have no tax liability, leaving a smaller and smaller percentage to carry the water for everyone else. Our middle class is shrinking along with the dollars spent to develop new products. One thing not mentioned in this article is the fact that much of the money for research and development since World War II was fueled by the World War II and the Cold War. The Microwave was developed from a magnetron invented in the 40's for radar. The Internet was developed for military communication. The list goes on to include almost every major innovation in the past fifty years. The answer is not a return to that kind of military industrial complex system, but as Steve paraphrases.

"Slywotzky says today's situation is analogous to that found in America following the Second World War. America's best minds had been put to work trying to produce materials that could win the war at the expense of basic research. The country was able to turn around because it was able to redirect its efforts following the war. As a result, America became the anchor of the global economy. China, which hopes to become the anchor of the global economy, has also committed itself to research and innovation. If America hopes to keep up, it needs to follow a strategy similar to that recommended by Slywotzky."

Read the rest:Science and Jobs

Steve continues to focus on this important message in this next post where he writes.

"Luke Johnson, who runs a private equity firm called Risk Capital Partners, recently published an op-ed piece in the Financial Times in which he claims "Inventors are our greatest heroes" [2 September 2009]. He explicitly makes the claim because he believes that society under-appreciates the people who spend their time inventing the things that make our lives better."

We have lost our focus when our greatest heroes are those who entertain us with sporting exhibitions, musical notes or outrageous behavior.

Illustrating that this issue has finally gotten the attention of the White House is this from my blog friend, the intrepid Dan of, who offers this in summation of his post on education.

"By encouraging (through various means) schools to focus on core classes, we can move away from teaching mere hobbies into creating a strong, 21st century workforce."

Read more: Better Curricula.

I have written at length about the challenges facing America. We face the kind of crossroad that Poet Robert Frost wrote about in "The Road Not Taken" (poem), when he took the road that appeared more difficult, only to find in the end it was worth the journey. A refocusing on our future and a real commitment to send more future captains of industry to the engine room, instead of sending thousands to the bridge, armed with only an MBA.

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