In the latest issue of Newsweek, Fareed Zakaria examines what many Americans have recently been wondering: “How Long Will America Lead the World?”
…Americans have replaced Britons atop the world, and we are now worried that history is happening to us. History has arrived in the form of “Three Billion New Capitalists,” as Clyde Prestowitz’s recent book puts it, people from countries like China, India and the former Soviet Union, which all once scorned the global market economy but are now enthusiastic and increasingly sophisticated participants in it. They are poorer, hungrier and in some cases well trained, and will inevitably compete with Americans and America for a slice of the pie. A Goldman Sachs study concludes that by 2045, China will be the largest economy in the world, replacing the United States.
It is not just writers like Prestowitz who are sounding alarms. Jeffrey Immelt, CEO of GE, reflects on the growing competence and cost advantage of countries like China and even Mexico and says, “It’s unclear how many manufacturers will choose to keep their businesses in the United States.” Intel’s Andy Grove is more blunt. “America … [is going] down the tubes,” he says, “and the worst part is nobody knows it. They’re all in denial, patting themselves on the back, as the Titanic heads for the iceberg full speed ahead…” [Link]
I find many parallels between this and the long denied facts surrounding global warming. I saw Gore’s fantastic powerpoint presentation/movie two weekends ago and it struck me how slow to react people can be even when they know they are on the losing side of time. Zakaria goes on to point out the same thing that I mentioned in an earlier post and that Vinod tried to push back on a bit:
The national academies’ report points out that China and India combined graduate 950,000 engineers every year, compared with 70,000 in America; that for the cost of one chemist or engineer in the U.S. a company could hire five chemists in China or 11 engineers in India; that of the 120 $1 billion-plus chemical plants being built around the world one is in the United States and 50 are in China.
There are some who see the decline of science and technology as part of a larger cultural decay. A country that once adhered to a Puritan ethic of delayed gratification has become one that revels in instant pleasures. We’re losing interest in the basics—math, manufacturing, hard work, savings—and becoming a postindustrial society that specializes in consumption and leisure. “More people will graduate in the United States in 2006 with sports-exercise degrees than electrical-engineering degrees,” says Immelt. “So, if we want to be the massage capital of the world, we’re well on our way…” [Link]
Just this morning IBM made a related announcement as reported in the NYTimes:
I.B.M. announced Tuesday that it would triple its investment in India to $6 billion over the next three years — underlining the country’s growing importance as a market for technology products and a source of high-technology workers…“I’m here today to say that I.B.M. is not going to miss this opportunity,” Mr. Palmisano said. “If you are not in India making the right investments and finding and developing the best employees and business partners, then you won’t be able to combine the skills and expertise here with the skills and expertise from around the world, in ways that can help our clients be successful…” [Link]
So is it all doom and gloom? Does America have anything going for it? Zakaria does list a whole host of reasons why America is still on top for the time being. I found one reason particularly interesting. The population of the U.S., unlike many European countries, is growing because of immigration:
The United States is the only industrialized country that will not experience a work-force or population loss in the coming decades, thanks to immigration. Germany and Japan are expected to see their populations drop by 5 and 12 percent, respectively, between now and 2050. China will also face a demographic crunch. By 2040, it will have a larger percentage of elderly people than the United States. The one-child policy has led to something that China’s demographers call the “4-2-1 problem”— four grandparents and two parents will have to be supported by one worker. [Link]
I think (of course I am highly biased) that the coming Space Race with China and India will be a huge boon for America. Historically it has been proven that America is at its best when it rises to meet a challenge.
So what should the United States do? What has it done in the past? First, be scared, be very scared. The United States has a history of worrying that it is losing its edge. This is at least the fourth wave of such concerns since 1945. The first was in the late 1950s, produced by the Soviet Union’s launch of the Sputnik satellite…America’s problem right now is that it is not really that scared. There is an intelligent debate about these issues among corporate executives, writers and the thin sliver of the public than is informed on these issues. But mainstream America is still unconcerned. Partly this is because these trends are operating at an early stage and somewhat under the surface.[Link]
Again, another parallel to global warming. Take a look at Zakaria’s full article. It is a good read.
