A few years back, when the layoffs in our industry began to accelerate, I made a tongue-in-cheek comment: “Who will buy the products when everyone is unemployed?” As it turns out, things aren’t as bad as I suspected; they’re far worse.
Several news items caught my attention recently. One was Lilly getting rid of 5,500 workers to cut costs; the other was an item about the increase in outsourcing. These reminded me of a historical precedent.
It is purported that the grain industry in ancient Rome crashed because it was cheaper to bring wheat from Africa by boat than schlep it overland from Italian farms. (It is also alleged that Egyptian over-farming to supply the Roman Empire helped bring desertification, but I’ll leave that to Greenpeace and their ilk to discuss.) It could be argued that better roads (a core competency for the Romans, after all) would have been a better investment, but who wants to spend capital?
A similar argument would be that adapting PAT-based production would be better than firing a goodly number of workers and using old-fashioned techniques where the labor is cheaper. Why spend all that money to set up modern PAT monitoring systems when you can get what you need from overseas?
One sidebar to the current state of our Union is the downsizing of research in the U.S. The grad student population had changed greatly since I was a grad student. There are a huge number of students from Asia, Eastern Europe, and South America. One professor told me that, without them, most grad schools might shut down.
Ignoring the economic meltdown, a disproportionate number of school kids dream of the big bucks. Even after the 2008 implosion, Wall Street is still giving massive bonuses; despite the cost of medical school (and insurance), doctors are still driving Mercedes. Scientists? Well, my father’s advice to me still stands: “You want to be a chemist? Be sure to marry someone who is willing to get a job.” (One chilling statistic: of the 130,000,000 jobs currently in the U.S., only 20% pay more than $60,000; the other 80% pay an average of $33,000. This does not make for a goods-buying middle class.)
Why would a student rush to get an advanced degree in a field that has been downsizing steadily for years? Well, if you come from a developing country, it is a step up. Thus, the large number of foreign students. But, what about side effects of the cutbacks? Well, there have always been spinoffs from basic research. For one example, consider just Bell Labs. While making phone-related discoveries, the scientists gave us FAX’s, long-distance television transmission, photovoltaic solar cells, the transistor, UNIX, and cellular telephones. As recently as 2001, Bell labs had 30,000 researchers; under Alcatel-Lucent, it is down to 1,000 . . . a maintenance level (at best), not one geared for innovation.
Many of the new companies established in the U.S. over the years have been from “spin-offs” from other programs. When we launched the space program in the late 1950’s, it was intended to “merely” get ahead of the Soviets (remember them?) in rocketry. What were some spin-offs? Let’s see: computer graphics, microprocessors, advanced semiconductor design for parallel computing (and local area networks). The Apollo program alone gave us advanced fuel cells, water purification techniques, freeze-dried food (forget Tang), digital imaging processing (for CAT scans and MRIs), to name a few.
Now, when we get our computer batteries (for our Japanese or Chinese-built computers) from Japan, because we didn’t have the “horsepower” to develop and build them here, it does not bode well for electric cars. Will the Japanese really give Ford or GM a good price for them to compete with Honda or Nissan? Really?
In our rush to quick profits we are mortgaging our future. But, is that a problem to the multinationals? Seems to me they can spend Euros, Yen, and any other currency as well as dollars. Our home-grown companies are slavishly following suit to make Wall Street happy with “this quarter’s profits” instead of considering the future.
Existing companies cannot be totally blamed for not using capital to ensure other companies foundations, but some thought needs to be given to the next generation of business. Perhaps the “Stimulus Package” (Illiud latine dici non potest2) could be aimed at basic research and, if they can spare some pocket change, be matched by industry? It is time not to follow the Roman model, but to start thinking about going back to the old paradigm. In short: Hannibal ante portas!3
Latin Cheat Sheet
1. What forbids a laughing man from telling the truth?
2. You can't say that in Latin.
3. Hannibal is at the doors! The enemy/danger is at the doors!