Headlines in the Midlands
Global Corner: Country of Denial
By Jerry Smith
January 29, 2012
In the November column of "The Global Corner", a case was made that the United States would prevail over its competitors, including China. The principal argument was the U.S.'s superior business environment that allows for innovative and emerging technologies, strong attributes not easily found in other countries. However, one might wonder whether the U.S. can overcome an accompanying problem by replacing "Imagined in the U.S.A." versus "Made in the U.S.A.", to borrow a phrase from a recent article by Thomas Friedman.
One of the great innovators of this generation, Steve Jobs, weighed in on this subject last year. One story that has surfaced relates to Job's answer to President Obama's question, could the 70 million iPhone, 30 million iPads and 59 million other Apple products currently being manufactured overseas be produced in the U.S., instead? Jobs answered bluntly and succinctly, "Those jobs aren't coming back".
The current administration in Washington and those who would challenge its leadership are singing in harmony about creating jobs to turn the economy in a positive direction. But we are a country in denial if we do not fully recognize our failure to implement countermeasures to compete with the Asian model.
Here are a few ideas:
• Train & educate more domestically qualified technical/engineering workers and relax visa requirements for foreigners completing engineering studies in the U.S. so they can remain in the U.S. to work after their studies.
• Address supply chain efficiencies (increase speed and flexibility).
• Grant "tax holiday" to allow overseas corporate profits to return to the U.S. (most are already taxed by host countries) allowing for more capital investments here.
• Reduce government regulations that have little to do with safety and environment (even some environmental and safety laws fly in the face of common sense).
• Reduce taxes and/or provide tax incentives for small businesses on a permanent level or at least on a long term basis, rather than short term extensions in order to reduce uncertainty and spur growth.
These are not new ideas or solutions and some were even alluded to in the President's recent State of the Union address.
Thinking out of the box often requires knowing what is in the box. Glaringly, we have huge numbers of unemployed people drawing unemployment checks. Why not institute a program of free technical training and educational courses for the unemployed? A few hours a week learning basic engineering principles in existing classes training related to today's technology needs would not be an expensive investment or too time consuming for the unemployed. Making such training a requirement in order to draw unemployment benefits has political fallout, but the intent is sound. Training and education are keystones to developing a new cadre of skilled workers in the technical sectors of our economy.
Our manufacturing base, still the most productive in the world, has taken a drastic turn since 1960. In the line-up of top ten employers in 1960 were GM, Bell System, Ford, GE, U.S. Steel, Bethlehem Steel and the non-manufacturing entities, Sears, A&P and ESSO. In 2010, the line-up includes only two manufacturers and even they are questionable: IBM and Hewlett-Packard. The other eight are Wal-Mart (with a whopping two million employees), Kelly Services, UPS, McDonald's, Yum! Brands (Taco Bell, KFC, Pizza Hut), Target, Kroger and Home Depot. Hard to deny where the jobs are!
If the readers would like to take a look at possibly one of the largest manufacturing firms in the world and one you've probably never heard of - check out Foxconn. Hint: it is not a U.S. company!
Jerry Smith is an export trade consultant and Vice-President of International Business Development, South Carolina Manufacturers Extension Partnership. For more information concerning this article, contact: jsmith@scmep.org
