A Laptop in Every Backpack

Clean Technology and Competitiveness 2.0

Clean technology clearly holds great promise for future economic growth.  However, as development of new clean technologies accelerate in the United States, it remains an open question whether US firms and workers will capture the economic activity or whether the bulk of the benefits will flow elsewhere.  The issue cropped up in the recent passage of the cash for clunkers law which will reward consumers for trading in clunkers for newer fuel efficient cars.  The law will benefit American consumers and carmakers but also benefit carmakers and overseas suppliers selling into the US market.  And, indeed, it shadows the entire issue of clean technology driven growth. While the transformation to a clean economy will pay important environmental and security dividends no matter what, how the economic promise of clean technology ultimately gets divided will vary by country. 

Call it Competitiveness 2.0.  It is the subject of a penetrating article in the current Harvard Business Review by two Harvard professors, Gary Pisano and Willy Shih entitled "Restoring American Competitiveness: Why America Can't Make a Kindle". The professors examine a wide range of technologies from computer equipment to software to clean technology and find America at a growing competitive disadvantage. Both the data they cite and the case studies they include should serve as a wakeup call to anyone thinking about clean technology and the future of the US economy.

While innovative ideas continue to flourish in the United States -- think Twitter, Ning and Facebook--the US has become a technology laggard among the OECD countries in critical measures. The US trade deficit is old news but the authors point out since 2002, the US has been running a deficit even in high tech goods and services. The main export of the US is capital.  And there are precious few bright spots in the technology firmament. 

In the case of the Amazon's Kindle reader, which the authors examine in detail, though engineers in California designed the product, there is simply no US capacity to make the components.  (If the US lacks the capacity to make a Kindle could it make a military computer in a pinch?)  In aircraft, Boeing continues to lead the world but it now relies on a network of global suppliers and has cut its American workforce.  Managing this complex supply chain led the company to delay delivery of its Dreamliner.  All but the highest end computers are now made abroad. And even complex software tasks, from writing software to using it for engineering, are moving overseas.

In clean technology, leadership in battery technology lies abroad. GM's Volt, scheduled for introduction next year, for example, will source batteries from South Korea. While a few companies such as Tesla are developing advanced auto technologies, the US lags Asian and European companies in hybrid and other technology.  With most growth in the world's auto sales likely to take place in China, India and the developing world, companies like Tata and Chery (originally a Chinese knockoff of Chevy) will have a homefield advantage. Chinese, Japanese and Korean companies dominate all PV production of solar cells except in thin films -- the most advanced and promising technology where US firms still lead the way. In smart grid technologies, US companies face roadblocks in the form of an excessively complex and highly regulated utility industry.  Installing new smart grid meters and retrofitting old buildings only gets you so far in terms of new jobs and new businesses.  All told, while the US has the potential, thanks to our still- unmatched system for financing innnovation, to develop the technologies of tomorrow we are, all too often, behind in the technologies of today.

What are the sources of our competitiveness problem? America continues to lag in primary and secondary education. Our universities may be the best in the world, but most of the spots in top PhD programs now go to more motivated students from overseas.  (Community colleges are a US strength that can be scaled as Rob Shapiro has argued and the President recognized today in calling for their expansion.)  The relentless search for low wages continues to send capital out of the US. American firms still can receive tax breaks for moving jobs overseas. Short term thinking, driven by the next quarterly results dominates corporate strategy.

On the macroeconomic level, the US continues to stress consumption over production. This bias, which derives from a strong dollar that keeps imports cheap as long as others lend us the money to buy them, encourages overseas instead of domestic production. A weaker dollar and shift toward a producer and investment-led economy would temporarily lower standards of living, but may be what is required to create the foundation for long term growth. Recently, former NEC head, Laura Tyson, proposed just such a shift in national priorities. While these are complex questions, a real debate over our priorities -- toward consumption--or production is in order. 

In the 1990s, the US made major strides in reversing its competititiveness deficit so that by decade's end it was leading the global economy. However, as Pisano and Shih make clear, those strides were temporary and the problem has returned.  The competitiveness issue, the authors show, is far more problematic today than  at any time in American history.  And if this issue is not satisfactorily addressed, the US will not see wages, standards of living or other metrics of welfare rise. As NDN has long argued and as the HBR authors note as well, stagnant wages combined with rising expectations led to the absurd borrowing that precipitated the latest financial crisis.

In short, if the US is to reap the economic rewards of a clean technology revolution, we need to seriously examine our competitiveness posture and take the steps needed to put us back on track to leading, not lagging the global economy.

 

An Excellent Day of Discussion on mHealth

Yesterday, NDN, CTIA, the UN Foundation, and the Vodaphone Foundation partnered to release a study on mHealth for Development. Following a morning program focusing on the domestic benefits of mHealth, and specifically its ability to impact chronic disease, the evening program focused on mHealth in the developing world.

The evening session featured speakers very close to NDN. Simon opened the presentation, framing the conversation broadly around the power of mobile and reading from the 2007 paper he coauthored with Alec Ross, now the Senior Advisor on Innovation to Secretary of State Clinton:

A single global communications network, composed of Internet, mobile, SMS, cable and satellite technology, is rapidly tying the world’s people together as never before. The core premise of this paper is that the emergence of this network is one of the seminal events of the early 21st century. Increasingly, the world’s commerce, finance, communications, media and information are flowing through this network. Half of the world’s 6 billion people are now connected to this network, many through powerful and inexpensive mobile phones. Each year more of the world’s people become connected to the network, its bandwidth increases, and its use becomes more integrated into all that we do.

Connectivity to this network, and the ability to master it once on, has become an essential part of life in the 21st century, and a key to opportunity, success and fulfillment for the people of the world.

We believe it should be a core priority of the United States to ensure that all the world’s people have access to this global network and have the tools to use it for their own life success. There is no way any longer to imagine free societies without the freedom of commerce, expression, and community, which this global network can bring. Bringing this network to all, keeping it free and open and helping people master its use must be one of the highest priorities of those in power in the coming years.

The evening continued as Ross spoke, largely about his work at the State Department, noting that “networks are as, if not more, important than states and governments.” Following Ross, Tom Kalil, the Deputy Policy Director of the White House Office of Science and Technology Policy spoke, reviewing the conclusions he drew in the paper he wrote last year for NDN affiliate, the New Policy Insitute, on Harnessing the Mobile Revolution. In October of 2008, Kalil wrote:

that the explosive growth of mobile communications can be a powerful tool for addressing some of the most critical challenges of the 21st century, such as promoting vibrant democracies, fostering inclusive economic growth, and reducing the huge inequities in life expectancy between rich and poor nations.

The benefits of mobile communications are particularly profound for developing countries, many of which are “leapfrogging” the traditional fixed telecommunications infrastructure. As a result, billions of people in developing countries are gaining access to modern communications of any sort for the first time. There is no doubt that mobile communications are having a significant impact on the way Americans live, work and communicate with each other. But the impact is no doubt more keenly felt by the African mother who can call ahead to determine whether a doctor is available to treat her sick child before traveling for hours.

Following Kalil, former Senator Tim Wirth of the UN Foundation introduced the study on mHealth and Development, which is available here.

Progress Seen on NDN, Larson Effort to Provide Free Computer Training to American Workforce

The bill, based on a proposal from our own Dr. Robert Shapiro that would offer free computer training to all Americans through the nation's community colleges and introduced by House Democratic Caucus Chair John Larson, H.R. 2060 The Community College Technology Access Act of 2009, continues to gain momentum. The bill is growing stronger in the House of Representatives, as it now has 34 cosponsors and has been referred to the House Subcommittee on Higher Education, Lifelong Learning, and Competitiveness. The cosponsors are:

Rep Blumenauer, Earl [OR-3]
Rep Bordallo, Madeleine Z. [GU]
Rep Castle, Michael N. [DE]
Rep Costello, Jerry F. [IL-12]
Rep Edwards, Donna F. [MD-4]
Rep Ehlers, Vernon J. [MI-3]
Rep Grayson, Alan [FL-8]
Rep Grijalva, Raul M. [AZ-7]
Rep Gutierrez, Luis V. [IL-4]
Rep Hare, Phil [IL-17]
Rep Himes, James A. [CT-4]
Rep Honda, Michael M. [CA-15]
Rep Kennedy, Patrick J. [RI-1]
Rep Kilpatrick, Carolyn C. [MI-13]
Rep Langevin, James R. [RI-2]
Rep Markey, Betsy [CO-4]
Rep Matsui, Doris O. [CA-5]
Rep McGovern, James P. [MA-3]
Rep McIntyre, Mike [NC-7]
Rep Miller, Brad [NC-13]
Rep Murphy, Patrick J. [PA-8]
Rep Napolitano, Grace F. [CA-38]
Rep Pierluisi, Pedro R. [PR]
Rep Polis, Jared [CO-2]
Rep Reyes, Silvestre [TX-16]
Rep Ros-Lehtinen, Ileana [FL-18]
Rep Ross, Mike [AR-4]
Rep Roybal-Allard, Lucille [CA-34]
Rep Sablan, Gregorio [MP]
Rep Schwartz, Allyson Y. [PA-13]
Rep Sestak, Joe [PA-7]
Rep Sires, Albio [NJ-13]
Rep Smith, Adam [WA-9]
Rep Wu, David [OR-1]

It's a great bill, and we applaud Chairman John Larson for his leadership in building a 21st century economic agenda for America by ensuring that our workers have the tools to compete in the interconnected era of globalization.

Unpublished
n/a

Obama: Upgrade Worker Skills Through Community Colleges

In the now oft-quoted and talked about David Leonhardt interview of President Barack Obama in this weekend's edition of the New York Times Sunday Magazine, Obama made an argument about worker skills that we here at NDN quite enjoyed:

I think everybody needs enough post-high-school training that they are competent in fields that require technical expertise, because it’s very hard to imagine getting a job that pays a living wage without that — or it’s very hard at least to envision a steady job in the absence of that.

And so to the extent that we can upgrade not only our high schools but also our community colleges to provide a sound technical basis for being able to perform complicated tasks in a 21st-century economy, then I think that not only is that good for the individuals, but that’s going to be critical for the economy as a whole.

NDN couldn't agree more. In fact, just two weeks ago, House Democratic Caucus Chairman John Larson introduced H.R. 2060, The Community College Technology Access Act of 2009, which is based on a paper written in 2007 by NDN Globalization Initiative Chair Dr. Robert Shapiro called Tapping the Resources of America’s Community Colleges: A Modest Proposal to Provide Universal Computer Training. The legislation offers free computer training to all Americans through the already existing infrastructure of the nation's approximately 1,200 community colleges.

President Obama has a long track record of supporting such proposals. During the presidential campaign, then-Senator Obama endorsed the idea as part of his platform, and we're pleased to see that the idea of community colleges as a crucial resource for improving worker skills is in his agenda for creating economic prosperity.

This proposal is part of a broader argument that NDN has been making for some time, that in the globalized, interconnected, technology-dense 21st century economy, facility with and connectivity to the global communications network is central to the life success of any worker or child. The 21st century economy is idea-based, in that most of the value of the large companies at the center of U.S. economy is now determined not by their physical assets, but by their intellectual property. Thriving in such an economy requires 21st century skills.

This argument is expounded upon in a paper written by NDN President Simon Rosenberg and Alec Ross, then with the One Economy and now a Senior Advisor on Innovation to Secretary of State Hillary Clinton, that would put A Laptop in Every Backpack of American sixth graders. Additionally, Tom Kalil, now Associate Director for Policy of the White House Office of Science and Technology, continued this narrative, authoring a paper entitled, Harnessing the Mobile Revolution, for NDN’s affiliate, the New Policy Institute. This paper argued that the explosive growth of mobile communications can be a powerful tool for addressing some of the most critical economic, political, and social challenges of the 21st century.

Stay tuned to NDN's Globalization Initiative for additional work on 21st century skills and technology. We believe, just as President Obama started to spell out in his recent interview, that tapping the resources of America's community colleges, putting a laptop in every backpack, and ultimately connecting all Americans and the rest of the world to the global communications network can and must be a hallmark of the economic agenda going forward.

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