The U.S. needs to boost spending on innovation and education to create the highly educated workforce and new technologies needed to compete in a global marketplace increasingly dominated by low-cost competitors such as China, according to the chief executive officers of Google Inc., Coca- Cola Co., Alcoa Inc. and the former head of IBM.
The U.S. should increase spending on research and development in government, private industry and academia, said Klaus Kleinfeld of Alcoa and Louis Gerstner, former chief executive officer of International Business Machines Corp., appearing today on CNN’s “Fareed Zakaria GPS.” It should boost education standards and make teaching a more rewarding career option, said Gerstner.
“Skills training, career training, has got to be more important, more relevant and more focused in America, said Gerstner. “We’re not producing workers who have the skills to move up the next step. We’re not in America investing in the skills of our workers to allow us to compete in those industries today.”
The U.S. faces increased competition from developing countries such as China, India and Brazil, and millions of U.S. manufacturing jobs have migrated overseas as American companies set up off-shore facilities or went out of business. With unemployment hovering near 10 percent, pressure is mounting on politicians to enact measures to restore growth and the long- term competitiveness of the economy.
Made in the U.S.
“The real problem we have now is we have other countries that are copying us -- Singapore, Korea, China and so forth, that have very directive industrial policies around sectors,” said Google’s Eric Schmidt, 55. He said the U.S. should be more proactive in making sure new technologies developed in the U.S. are also commercialized there.
The Defense Department’s establishment in 1958 of the Advanced Research Projects Agency to generate defense technologies was a key element in fostering innovation after World War II, and such programs should be strengthened, said Schmidt. He pointed out that the post-war surge in science and technology was largely driven by the needs of the Cold War, and amounted to government industrial policy.
“America and the American dream are still very much alive. The foundation is there,” said Kleinfeld, 52, who manages the world’s largest aluminum producer. “Currently we have a scientific revolution going on like we have not seen before.”
Gerstner, who headed IBM from 1993 to 2002, harkened back to the sense of national mobilization that came with fighting Nazism and Communism, which helped to spur innovation and economic growth.
Sense of Urgency
“I don’t see a sense of urgency,” said Gerstner, 68, currently a senior adviser at the Carlyle Group LP in New York. “I don’t see a sense that we’re in a competitive battle here for jobs, for leadership in industry.”
Muhtar Kent, 57, chief executive officer of Coca-Cola, said was he was “a little apprehensive” about the next 18 months while he was “bullish” longer-term.
He said in the 1980’s, when the U.S. feared being eclipsed by Japan, the U.S. “reinvented itself, it innovated and re- innovated and created 25 million new jobs. The U.S. has that capability.”
Schmidt said the recovery from the recent recession will be lengthy as Americans lower their debt burdens.
“The typical deleveraging cycle is about a seven-year cycle,” said Schmidt. “We are in about year three of that.”
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