Monday, February 14, 2011

Can we Innovate without Producing?

On Friday I heard a speaker lament about how losing the manufacturing base in the US: "You can move a foundry easier than you can move an Internet company." An article in the New York Times has as its headline New York Times headline reads When Factories Vanish, So Can Innovators acknowledging the last metal flatware (think forks and spoons) plant to close in the United States.

On the other hand watch Austin Goolsbee explain Obama's National Wireless Initiative (via CCC blog).

Note the emphasis on job creation with almost exclusively service sector Internet jobs.

What's driven manufacturing overseas is not the Internet but the Box. Yet somehow we can continue to innovate,  with Microsoft, Google, Facebook, Twitter and Groupon all US made and continue to employ most of their workers in the US. Apple has had great hits with its physical devices like the iPhone and iPad but they are manufactured overseas. Even the next great fork design could easily come from the US even if those forks are made in China.

Our economy won't be won by keeping inefficient foundries in the US rather by improving on what we do best. As Obama puts it in the State of the Union.
Our free enterprise system is what drives innovation.  But because it’s not always profitable for companies to invest in basic research, throughout our history, our government has provided cutting-edge scientists and inventors with the support that they need.  That’s what planted the seeds for the Internet.  That’s what helped make possible things like computer chips and GPS.  Just think of all the good jobs -- from manufacturing to retail -- that have come from these breakthroughs.
Half a century ago, when the Soviets beat us into space with the launch of a satellite called Sputnik, we had no idea how we would beat them to the moon.  The science wasn’t even there yet.  NASA didn’t exist.  But after investing in better research and education, we didn’t just surpass the Soviets; we unleashed a wave of innovation that created new industries and millions of new jobs.
This is our generation’s Sputnik moment.  Two years ago, I said that we needed to reach a level of research and development we haven’t seen since the height of the Space Race... We’ll invest in biomedical research, information technology, and especially clean energy technology -- an investment that will strengthen our security, protect our planet, and create countless new jobs for our people.
Today Obama releases his budget for 2012 that should have dramatic cuts in many programs but growth for scientific research. It's going to be interesting.


  1. Assertion: "[America in 1957] had no idea how we would beat [the Soviets] to the moon."

    That is not strictly true. A reasonably comprehensive technological roadmap was in-place, set forth by the 1953 Strategic Missile Evaluation Committee, chaired by John von Neumann, and commonly called the "Teapot Committee."

    Useful references to this epoch include Richard Barber's The Advanced Research Projects Agency, 1958--1974 (1975), James Killian's Sputnik, Scientists, and Eisenhower (1979), Stephen Johnson's The Secret of Apollo: Systems Management in American and European Space Programs (2002), and Neil Sheehan's A Fiery Peace in a Cold War (2009).

    Of these, Barber's account is perhaps the most detailed, and Sheehan's is the best-written and most comprehensive. Regrettably, none of these works are available on-line.

    However, the International Roadmapping Committee (IRC) has made available (what amounts to) a distillation of lessons-learned, albeit in the specialized context of the semiconductor industry, in the form of an on-line document titled The 'More-than-Moore' White Paper.

    A seven-word summary of these works is this: "Successful enterprise roadmaps require solid computational foundations."

    Nowadays this is true of pretty much every global-scale enterprise.

  2. cough cough ... jonny sidles ... here it comes again ... an entire essay response or shall we say book response ?

    dude, u gotta get your lengthy responses under control.

  3. One important issue is the link between design and manufacturing. Are you going to be able to churn out successful fork designs for a long time if so much fork manufacturing expertise is lost that US workers no longer have any good idea what it takes for a design to be implementable efficiently ?

    Of course this is not strictly a US problem, it is faced by many advanced economies (maybe not Germany, though).

  4. Another useful reference available on-line is the Time Magazine's cover story for April 29, 1957, titled The New Age, which appeared seven months before Sputnik.

    The historical lesson is that the foundations for America's 20th century "Sputnik Moment" were well-laid *before* Sputnik ... and so we may ask, what foundations for our 21st century "Sputnik Moment" are *already* well-laid?

  5. The sobering answer to Pascal's question is "no."

    Another sobering technical and economic reality is that corporations as varied as IBM, GE, GM, Shell, DuPont, Boeing, and Intel are no longer in any substantial sense of the word exclusively "American", rather their corporate loyalties now are as globalized as their markets.

    Are computer science and complexity theory in North America isolated from these changes? Absolutely not.

    Is there, nonetheless, plenty of urgent work for people to do, and plenty of opportunities for enterprise, in every nation around the world?

    Absolutely "yes", and our quantum systems engineering roadmap is consciously conditioned upon this perceived 21st century opportunity, to balance enterprise reality with mathematical naturality.

    All who are pursuing alternative, broader, or just plain better roadmaps for fostering global-scale enterprise ... well ... please post them.

    As Lance says: "It's gonna be interesting." Not just the President's budget, but the future of the STEM enterprise.

  6. Hey peter, I learned something from what John Sidles wrote.

  7. To answer Lance's question, I think we do have to produce in order to innovate. We have to have some people in our society who still know how to build things who share our values and are closer than a half planet away, to help us not become helpless. I don't mean to insult anyone's education (you're all smarter than I am), but I've known a few very highly educated people who can't find their way around town after ten years, cook a meal or pay a bill if someone doesn't do it for them. Now companies are unlearning skills too--completely abandoning any notion of self-sufficiency. That kind of specialization and helplessness only works if you know you'll always have helpful trading partners. I'm not advocating the other extreme--I'll just point out total self-sufficiency hasn't worked for North Korea. There has to be a balance, and we have to never put all our eggs in one basket.

  8. My physics college with lots of NASA connections had this to say about whether we had any idea how we'd beat the Soviets to the Moon:

    If by roadmap he meant the basic physics, then yes.

    If by engineering and computational capabilities for the trajectory, then an absolute NO.

    In Intro Astronomy or Intro Physics (better) one can [do] the simple first order calculation of Hohman transfer orbit of least energy. In advanced mechanics one can make a first order calculation of a direct approach to the Moon. But none of that is sufficient to actually steer your spacecraft [...] but materials needed for the engineering of a safe trip to the Moon did not exist. Titanium was barely starting to be used in aeronautics, a key item needed for spaceflight. There were no ablative materials for efficient heat shields.

    The upshot is that a lot of people in NASA (even those who had been toying with the idea of going to the Moon during the Eisenhower years) were stunned when Kennedy proposed Apollo and then had the immediate reaction of "how the hell are we going to do this in less than ten years." They then went home, had a few drinks perhaps, and got busy...and the rest is history.

  9. Those who like their technology history undiluted will enjoy reading the on-line Discussion at the 258th Meeting of the National Security Council, September 8, 1955 (25 months prior to sputnik).

    One may wonder: What is John von Neumann's role at this meeting? Why is he so particular about the wording of the resolution to be passed?

    A big part of the answer, is that the substantive issues discussed at this meeting, are conditioned upon the mathematical theory of combustion and shock waves (due largely to von Neumann) and to the computations associated to that theory (also due largely to von Neumann).

    Are any similarly powerful theories available nowadays? It seems (to me) that our ability to simulate quantum dynamical processes nowadays plays a role similar to our ability in the 1950s to simulate combustion and shock wave processes, and that this still-strengthening dynamical capability is the main near-term payoff of quantum information theory; with quantum computing as a more distant future possibility.

  10. Some data to enrich the discussion.

    1. Macrodata: GDP by sector country by country: In USA GDP by sector is: agriculture 1,2%, industry 22%, services 77%. In EU the figures are similar: 6%, 25% and 69%. Japan: 2%, 23 %, 75%. Russia: 4%, 33%, 62%; India: 16%, 28%, 55%. China: 10%, 47%, 43%; Brazil: and 6%,26%,67%. Mexico: 4%,33%,62%.

    2. Micro data: Take the Forbes Global 2000 and check what big companies (that probably accounts for a big percentaje of global GDP) do. In USA, EU taken as a whole or Japan:
    --some deploy, mantain and manage networks: energy, finance and insurance, education and health, telecom and transportation, construction and distribution (i.e. Walmart);
    --some manufacture goods which move across these networks: raw materials-mining-primary energy, CPG (consumer packaged goods: agribusiness), chemipharma, automotive, ITC equipments, defense engineering (big sector in USA), information-media.

    USA (313 millions of population has 536 companies in this list, EU-5 (Germany, France, Uk, Italy and Spain, population 312 millions) 274companies in the list (322 if we add the 48 companies from Switzerland), and East Asia-5 ( Japan, South Korea, Taiwan, Malasya and Philippines) 331; R.P. China 113, India 56.

    The trend for bigger and bigger companies in most infraestructure and industry sectors is not arbitrary, it is explained by economies of scale and risk managment. Most companies in USA understand this, does not think anymore in national terms and are leading globalization, of which the BPO abroad that you talk about in your post, is an epiphenomenom.
    Infraestructures (services) by they nature do not, in general delocalize.

    In EU, SA, SEA language and cultural differences are a big barrier for companies to grow through merge and acquisitions and for clustering. And China can not fully benefit due to their economic and political system.

    Without language barriers and political frontiers (and both are related) we would see this trend keep on going until most economic sectors would end by beeing served by very few companies if not only one per sector, competition beeing done between sectors and not within sectors and people moving freely from megalopolis to megalopolis.

  11. The problem with companies that don't produce anything is that the number of employees they need is low. Twitter has about 150 employees. Facebook has about 1000 employees. Groupon (surprisingly) has 3000 employees, but spread across almost 30 countries and I don't know how many in the US. Even Google, which has roughly 30,000 employees [worldwide], is not very big by historical standards (e.g., compared to General Motors, or even compared to IBM in its heyday.

    Meanwhile, plumbers can make more than programmers while working fewer hours.

  12. A meta-observation is anonymous' post (immediately above at 9:13 am) describes plainly the sobering economic realities that the STEM community's "Bloggers of Record" (in Lance and GASARCH's memorable phrase) seldom acknowledge in author-signed posts.

    Perhaps this silence reflect a primary social function for bloggers-of-record: to acknowledge problems *and* to articulate consensus solutions. At present there are no consensus solutions, and thus younger CS/CT/QIT researchers are on-their-own.

    This practical reality has become, in itself, a de facto consensus view throughout the STEM enterprise (although reasons exist to reject it, some of which I have posted above).

    It seems to me that we all owe thanks to Lance, for raising this immensely tough topic explicitly.

  13. We could always start a global scale enterprise.

    Call it the Crystal Ball Project.

    Organize it around the question: Can Spaceship Earth accomodate 10 Billion passengers?

  14. Jim, the experimental aspect of *that* enterprise has already started ... our children will learn the answer to the question you pose. It will help if our computational tools evolve to be better-matched to the challenges of that enterprise.

  15. John, That is what I worry about. Shouldn't we be pass the experimental stage?

  16. Jim, von Neumann's 1955 conclusion was:

    "The most hopeful answer is that the human species has been subjected to similar tests before, and seems to have a congenital ability to come through, after varying amounts of trouble."

    It *is* disquieting that this tepidly hopeful answer was the best that von Neumann could find, and that it is difficult to name a better answer originating in the subsequent 56 years.

  17. John Sidles for President!
    STEM for Change!

  18. John, I think the British call it mucking through.

    I was thinking more in terms of thriving and not just surviving.

    Thanks for the von Neumann pointer.

  19. You're welcome, Jim. You might enjoy also the context that von Neumann's daughter Marina von Neumann Whitman provides in her introduction to John von Neumann: selected letters (available on Google Books).