Was stumbling over the Net in the hope of finding something worth while to read. Stumbled upon an odd looking blog that had a post titled " Why America Is not Ready". I thought it must be something to do with why America is not ready to invade Iran or something of that sort. Nope. It was a beautifully compiled article on why America is slowly falling out of competition in the world economics.
And guess what. The author was a business student who was to give his international Business paper in an hour. Well, I suppose the pressure brought out the best in him.
I am reproducing certain excerpts of the article with my comments
Why America Is not Ready?The question is almost right, but not quite. We're wringing our hands over the wrong thing. The problem isn't Chinese companies threatening U.S. firms. It's U.S. workers unable to compete with those in China--orIndia, or South Korea. The real question is, "Can Americans compete?"
We're not building human capital the way we used to. Our primary and secondary schools are falling behind the rest of the world's. Our universities are still excellent, but the foreign students who come to them are increasingly taking their educations back home. As other nations multiply their science and engineering graduates--building the foundation for economic progress--ours are declining, in part because those fields are seen as nerdish and simply uncool. And our culture prizes cool.
How true is this. I remember in Middle School that being on the honor roll was not "cool" and being good in science or reading on your spare time automatically put you into the not so popular crowd in School. I think we may be getting away from that now. But at the same time will students in engineers always be seen as the geeky kids, and the math nerds.
Three sub factors are changing the game.
First, the world economy is based increasingly on information, bits andbytes that have to be analyzed, processed, and moved around. Examples:software, financial services, media.
Second, the cost of handling those bits and bytes--that is, of computing and telecommunications--is in free fall. Wide swaths of economic activity can be performed almost anywhere, at least in theory.
Turning theory into reality is the third factor: Low-cost countries--not just China and India but also Mexico, Malaysia, Brazil, and others--are turning out large numbers of well-educated young people fully qualifiedto work in an information-based economy. China will produce about 3.3 million college graduates this year, India 3.1 million (all of themEnglish-speaking), the U.S. just 1.3 million. In engineering, China's graduates will number over 600,000, India's 350,000, America's only about 70,000.
The result is that many Americans who thought outsourcing only threatened factory workers and call-center operators are about to learn otherwise. That is a giant development, because information-based services are the heart of the U.S. economy. With 76% of its jobs in services, America's economy is the most service-intensive of any major country's. Of course many of those jobs can't be shipped abroad:Chefs, barbers, utility and NFL linemen, and many others know they can't be replaced by even the smartest person in Bangalore.
But growing numbers of other service jobs are not safe. Everyone has heard about the insurance-claims processors, accountants, and medical transcriptionists in India and elsewhere who've taken away U.S. jobs by doing the same work for much less money. More alarming is that the value of outsourced jobs is steadily rising. Morgan Stanley is hiring Indian bond analysts, fearsome quants who can make or cost a company millions. Texas Instruments is conducting critical parts of its next-generation chip development--extraordinarily complex work on which the company is betting its future--in India. American computer programmers who made $100,000 a year or more are getting fired because Indians and Chinese do the same work for one-fifth the cost or less.
There is no other fundamental mover of economic development than science and technology," Three centuries of technology breakthroughs are the root of today's abundance in the developed world, and those with a technological edge--America, Japan, and Western Europe--still have the highest standard of living.
Inspite of this a worrisome sign is that the brightest students from many Asian countries are staying home to get their Ph.D.s rather than coming to America, as they did in rising numbers until the mid-1990s. Those foreign Ph.D.s have been the driving force in scores of America's most successful and innovative tech firms, but now we're getting fewer of them, and other countries are getting more. U.S. policy too is moving in the opposite direction. The number of available H1-B visas, which allow highly qualified foreign workers to remain in the U.S. for up to six years, has been cut from 195,000 to just 65,000 a year, based onsecurity concerns following 9/11
The No. 1 policy prescription, almost regardless of whom you ask, comes down to one word: education. In an economy where technology leadership determines the winners, education trumps everything. That's a problem for America. Our fourth-graders are among the world's best in math and science, but by ninth grade they've fallen way behind. As Bill Gates says, "This isn't an accident or a flaw in the system; it is the system."