US LEADS IN
I’VE spent the last week traveling to two of America’s greatest innovation hubs and the trip left me feeling a combination of exhilaration and dread. The excitement comes from not only seeing the stunning amount of innovation emerging from the ground up, but from seeing the new tools coming on stream that are, as Amazon.com’s founder, Jeff Bezos, put it to me, “eliminating all the gatekeepers” – making it easier and cheaper than ever to publish your own book, start your own company and chase your own dream. Never have individuals been more empowered, and we’re still just at the start of this trend.
“I see the elimination of gatekeepers everywhere,” said Bezos. Thanks to cloud computing for the masses, anyone anywhere can for a tiny hourly fee now rent the most powerful computing and storage facilities on Amazon’s “cloud” to test any algorithm or start any company or publish any book. Startups can even send all their inventory to Amazon, and it will do all the fulfillment and delivery – and even gift wrap your invention before shipping it to your customers. This is leading to an explosion of new firms and voices. “Sixteen of the top 100 best-sellers on Kindle today were self-published,” said Bezos. That means no agent, no publisher, no paper – just an author, who gets most of the royalties, and Amazon and the reader.
It is why, Bezos adds, the job of the company leader now is changing fast: “You have to think of yourself not as a designer but as a gardener” – seeding, nurturing, inspiring, cultivating the ideas coming from below, and then making sure people execute them. The leading companies driving this trend – Amazon, Facebook, Microsoft, Google, Apple, LinkedIn, Zynga and Twitter – are all headquartered and listed in America. Facebook, which didn’t exist nine years ago, just went public at a valuation of nearly $105 billion – two weeks after buying a company for $1 billion, Instagram, which didn’t exist roughly a year and a half ago.
So why any dread? It’s because we’re leaving an era of some 50 years’ duration in which to be a president, a governor, a mayor or a college president was, on balance, to give things away to people; and we’re entering an era in which to be a president, a governor, a mayor or a college president will be, on balance, to take things away from people. And if we don’t make this transition in a really smart way – by saying, “Here are the things that made us great, that spawned all these dynamic companies” – and make sure that we’re preserving as much of that as we can, this trend will not spread as it should. Maybe we could grow as a country without a plan. But we dare not cut without a plan. We can really do damage.
I can lose weight quickly if I cut off both arms, but it will surely reduce my job prospects. What we must preserve is that magic combination of cutting-edge higher education, governmentfunded research and immigration of high-IQ risk-takers. They are, in combination, America’s golden goose, laying all these eggs in Seattle and Silicon Valley. China has it easy right now. It just needs to do the jobs that we have already invented, just more cheaply. America has to invent the new jobs – and that requires preserving the goose. Microsoft still does more than 80 percent of its research work in America. But that is becoming harder and harder to sustain when deadlock on Capitol Hill prevents it from acquiring sufficient visas for the knowledge workers it needs that America’s universities are not producing enough of.
The number of filled jobs at Microsoft went up this year from 40,000 to 40,500 at its campus outside Seattle, yet its list of unfilled jobs went from 4,000 to almost 5,000. Eventually, it will have no choice but to shift more research to other countries. It is terrifying to see how budget- cutting in California is slowly reducing what was once one of the crown jewels of American education to a shadow of its old self. And I fear the cutting is just beginning. As one community leader in Seattle remarked to me, governments basically do three things: “Medicate, educate and incarcerate.”
And various federal and state mandates outlaw cuts in medicating and incarcerating, so much of the money is coming out of educating. When we shrink investments in higher education and research, “we shoot ourselves in both feet,” remarked KR Sridhar, founder of Bloom Energy, the Silicon Valley fuel-cell company. “Our people become less skilled, so you are shooting yourself in one foot.
And the smartest people from around the world have less reason to come here for the quality education, so you are shooting yourself in the other foot.” The Labor Department reported two weeks ago that even with our high national unemployment rate, employers advertised 3.74 million job openings in March. In an effort to overcome that, and help fill in the financing gap for higher education in Washington State, Boeing and Microsoft recently supported a plan whereby the state, which was cutting funding to state universities but also not letting them raise tuition, would allow the colleges to gradually raise rates and the two big companies would each kick in $25 million for scholarships for students who wanted to study science and technology or health care to ensure that they have the workers they need.
This is not a call to ignore the hard budget choices we have to make. It’s a call to make sure that we give education, immigration and research their proper place in the discussion.