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Viewpoints: What Are We Doing?

Norbert Junreithmayr

 

 

 

 

 

   

Has America lost its way? This is a question, not a statement, because I could be wrong. The following are some of my thoughts.

The US is still the greatest country in the world, but the world's largest and most diversified economy seems to be losing ground when it should be gaining ground. I am not talking about just this last year's numbers, because strictly by the numbers the US is still number one both economically and socially. I am talking about the long-term view. With all that has happened in the last two years, one would think the focus would shift slightly to a long-term one with sustainable goals. But from the outside it does not seem so.

Rather, it seems the concern is still next quarter's profits and stock price, not where will the company be in 10 years. What are companies investing in to be sure they are strong five years from now? It almost seems like long-term investment is still seen as a negative (think two-year payback), because every dollar spent on long-term improvement reduces this quarter's profit by a dollar, and that hurts the stock price—which in turn makes everyone think the economy is bad.

This begs the question: What is the economy? America as a country seems to want out of manufacturing, and has thrown in the towel. America should not sell itself short. It can, and does, compete in manufacturing in every way. In the last 30 years we have heard "we don't need manufacturing because we will be a service economy." Then it was the "information economy," then the "Internet economy," then the "new economy," and most recently the "green economy." And each time, when the economy tanks, you see renewed concern about manufacturing. Recently I read a magazine article on the "innovation economy." The article alluded to the dream that the only way we will create jobs in the future will be for the government and business to fund "pure research centers." With no defined goal, what are they going to research? If business sees a need from which it can profit, business will do the necessary research. That is how a capitalist system works.

President Obama wants to spend billions on research into wind power, which is laudable, but what is the goal? We already know how to build wind turbines. GE ships one every four hours. Siemens, Vestas, etc., are all designing and building ever bigger and more efficient turbines. We already know where the wind is: the Dakotas, Texas, and anywhere offshore. So what will they research? It sounds like just a windfall for the universities, who already have too much money and not enough responsibility for their research outcomes.

I am not opposed to research. In fact, when you look at what we design and sell, we are the leaders in research for the multitasking market. But we do research with a clear goal in mind, and with full responsibility for the outcome, be it good or bad. "Research for the sake of research" is just a canned response when you can't come up with anything better to say.

Sometimes we need to get back to basics. To create wealth you need to "make it" (manufacturing), "mine it" (raw commodities), or "grow it" (agriculture), but the US seems to believe it can be done without these activities. An economy cannot sustain itself by selling hamburgers and health care. (Unless you consider that the former creates a need for the latter.) Art, law, healthcare and the like is what you do with wealth after you get it. These things do not create wealth. Besides, for a healthy economy, blue-collar people need jobs too.

Even Ben Bernanke says the US needs to undergo "a shifting of resources out of sectors producing nontraded goods and services to tradables." That is, not shuffling securities around. Some would argue that in the last 25 years the US has created more wealth than in the previous 25 years. But isn't the last 25 years also the time the US went from being the world's biggest creditor nation to being the world's biggest debtor nation? If wealth is created on credit, it cannot be sustained. The US is still great. But if it wants to be great 50 years from now, the pundits need to step back and ask, 'what are we doing, and why are we doing it?'

 

This article was first published in the December 2009 edition of Manufacturing Engineering magazine. 


Published Date : 12/1/2009

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