TCS Daily


Success in the Global Economy: An Agenda for the Future

By Jerome C. Arnett, Jr., MD - December 11, 2007 12:00 AM

Against the backdrop of America's election season, one question should rise to the top of the public debate: What does America need to do to succeed in the global economy? The answers offered by political candidates in the months ahead will have repercussions for decades.

The near-term economic signals are mixed. According to the U.S. Commerce Department, slower sales and higher energy and labor costs are forcing many companies to reduce spending and hiring. Tighter credit policies are making it harder for businesses and consumers to borrow. The long-term outlook is also uncertain, given the inevitable rise in global economic competition.

In such an environment, it is absolutely critical for Democrats and Republicans to offer smart solutions that re-energize the American economy. One set of issues revolves around how to modernize the major pillars of the economy, such as the tax code, regulation, healthcare, retirement security and infrastructure. Most experts agree that our existing policies are better suited to the realities of the 20th century than the 21st. The challenge is finding realistic, bipartisan approaches that ensure economic fairness and security for all Americans while simplifying bureaucracy and reducing costs. Increased use of information technology can help make all economic sectors more efficient and productive.

Another set of critical issues is how to improve U.S. economic competitiveness by addressing such issues as education and innovation. Specifically, the US must reverse the troubling shortage of math, science, and engineering talent by taking steps to increase the number of math, science, and engineering graduates, as well as improve the number and quality of K-12 math and science teachers. Congress and the President would also be wise to encourage research, development and commercialization of new technologies, including a permanent extension of the R&D tax credit and stronger protection of patents and copyrights.

One thing the United States must not do is back away from its historic commitment to global trade. The reasons why are very clear. More than 95% of the world's consumers live outside the United States. One-sixth of U.S. manufactured goods are sold abroad. One in every three acres of U.S. farmland is planted for export. The combined effects of the major trade agreements of the 1990s have increased the purchasing power of the typical American family by $1,300 to $2,000 per year.

Any way you look at it, global trade delivers real value to American workers, farmers, and businesses. Congress and the President must work to revive global trade talks, approve two-way trade agreements with key nations, and encourage greater exchange by helping to harmonize technology standards with our trading partners.

Likewise, the United States must not close the spigot of foreign investment in our economy. Despite the occasional controversy about particular mergers and acquisitions, overall, foreign direct investment helps the U.S. economy in many ways. For example, U.S. affiliates of non-U.S.-based companies employ more than 5 million U.S. workers, and an additional 4.6 million U.S. jobs indirectly depend on foreign investment. On average, U.S. subsidiaries of foreign firms pay 36 percent higher wages and salaries than their U.S. counterparts, and such firms invested more than $150 billion in 2005 in U.S.-based research, development, plants and equipment. A recently enacted law should help ensure that foreign investment continues to flow into the United States and should be implemented with care.

Finally, policy makers must continue to maintain a healthy environment for economic growth and job creation, including lowering the overall tax burden, simplifying the tax system, avoiding needless regulation, and relying on market incentives to achieve social goals.

Long after today's "hot button" issues have passed into history, the choices made by elected leaders about how to keep the United States globally competitive will affect the lives of all Americans and billions of people around the globe. For the sake of our own prosperity and that of future generations, we must demand that political candidates present rational, workable solutions to build a stronger America.

Mary Arnold is Vice President for Government Relations at SAP America and a member of the Independent Women's Forum's board of directors.



7 Comments

That's not even their main agenda
This author seems to think that global competitiveness is the main goal of politicians, when it's clearly not. If it were, they would do things like have the lowest personal and business taxes of all countries, the freest trade regime, like total free trade with any country, sound money instead of fiat currency, etc. But instead we see them maneuvering for more personal power, expanding their own little empires, jockyng to be on more influential committees, enhancing what they think of as prestige, calculating the minimum time needed to get those cushy life long meal tickets. All this while many people consider them on the level of used car salesmen.

Stop insulting used car salesmen!
They can't force you to give them your money.

The author is living on Planet Fantasy
Here is a perfect example:

"Specifically, the US must reverse the troubling shortage of math, science, and engineering talent by taking steps to increase the number of math, science, and engineering graduates"

When I was in high school in the late 1980s, guidance counselors advised us to get into 'computers'. It was good advice, as I've had quite a career as a software engineer.

But today, they are telling the kids to stay the hell away from the career path. At least the ones who don't want to get sued most certainly are. Why? Offshoring.

And I tell young people the same thing! "It was great for me but don't even think of following in my path. I have to worry about myself, frankly."

When someone makes a career choice, they are making a major decision that entails a long-term & expensive investment and thus requires some long-term certainty in order to even consider making it.

For example, if you were told that ANY house you were to buy would be swept up in a Dorothy-Goes-To-Oz type tornado between the date of purchase and ten years after the date of purchase -- and told you can't buy insurance to mitigate this risk -- would you even bother buying a house? Or, would you demand a steep price discount (say 80%) from the seller? And, then there's the 'career industries' that will demand special moral hazard abuses by the government to ameliorate those problems (like federal insurance for housing deliberately built/bought in hurricane zones), wouldn't there? Same thing with careers.

So, everyone in the real world involved in the engineering profession is acutely aware of this. Students choosing career paths are likewise wising up. The only way to reverse that trend is for some artificial guarantee either be put into place or some social insurance to compensate for the risky career choice be enacted. The first requires protectionism and the second would probably be prohibitively expensive. But authors like this article who clearly don't agree with either solution remain clueless or purposely ignore this reality since it doesn't fit their theoretical model of the world. It's amazing, really.

And no, Roy. I am not signing up to your socialist bandwagon by my talking about these solutions (protectionism and expanded social welfare). I am against them myself even though I personally would benefit from them directly if enacted. What I take objection to is the author who seem to write as if these aforementioned realities forcing people to stay clear of engineering and the sciences doesn't exist at all or don't take them as seriously as she most certainly should.

Engineers in demand
Many companies have come to the realization that their baby boom engineers will retire soon.

One issue with engineer's career path is many companies don't reward those who want to be engineers. They reward managers, technical and personnel.

People do what it takes to get promoted and make more money. Engineers are a flexible lot and can do many things so they become project engineers and section heads.

Hahahahahah!
Yeah, engineers who keep their mouths shut and don't ask for much. In the past, this was younger, single engineers as opposed to older, married w/family engineers.

Now, it's dirt cheap Indian, Chinese and Eastern European engineers who don't know what they are doing as opposed to any decently paid American engineer who does. The competitive economics of the situation in the corporate board rooms dictate so.

The exception is start-ups, but they go for the younger, single kind who will slave 80+ hours a week for the stock option crapshoot.

My best option is to hold out until the managers retire, so I can move up make a living off of BSing. Problem is, most of my managers are baby busters like me. The tech industry out in the SF Bay Area don't have a lot of baby boomers in it, actually.

offshoring
my company had been heavily involved in offshoring.

It's been a disaster. I'm currently involved in a project to re-write everything that was produced by these guys. What they produced was useless. Much of it wouldn't even compile, even though we had been assured that it was running and had passed all tests.

One guy assured us that he had 13 years of 'C' experience, yet I found this line in his code.

if(flag1 == flag2 == flag3 == true)

What he wanted was

if((flag1 == true) && (flag2 == true) && (flag3 == true))

I mean it. The errors that they made would get a freshman flunked.

and THAT is the one silver lining for you and me
..but the management in my particular situation is in the 'outsource or else' mantra because the parent company has such a hardware mentality even though we are software division (a prior start-up they purchased). If we point things like this out (and we do) they display more denial of reality than a member of the Church of Al Gore freezing his butt off in Oklahoma. Oh well.

Oh, and they just put in charge as tech lead of our next major release the on-site manager of the outsourcing firm. Aside from the blatant conflict of interest, management is advertising loud & clear just what they think of us 'overpaid' regular employees.

Hey Marjon! Are these little anecdotal stories Mark and I sharing giving you a different perspective than those mainstream media talking points you cited? :)

Seriously: As a rule of thumb, you can take these stories, multiply them by a thousand (and that's conservative) and imagine that about 40% of those are unbelievably worse than what we've shared. THAT will get you close to the truth about all this 'worker shortage' BS. Or, at the very least, it provides plenty of ammo to my previous point of the reason why young people shouldn't touch this career path with a wireless ten foot pole.

TCS Daily Archives