Re the comments from Aliali/ENG: Unfortunately you are right as well. I cannot speak as to Andy's change of heart or not. But that does not change the ultimate outcome he highlights if we stay on our present course. Mass unemployment is an ugly thing and causes even uglier outcomes. No amount of offshoring of any technology or labor costs can justify ripping the fabric of a nation apart, and company managers and shareholders must regain rational thought and actions relative to the problem. Wall Street is to blame as well with their relentless focus on performance at any cost, and their insidious "expectations" when not one of them could run the companies they "cover" for even a microsecond. And of course those of us who either permit it, or passively let it happen are to blame as well. Hypocrites seem to rule, at least for the time being. And that bodes ill for the nation as well as our industries.
Disparity: You're preaching to the choir. I do think that it is interesting that a late 18th/early 19th century economic theory (Ricardo) that was developed with items like suits and shoes is being applied to 21st century circumstances. Moreover, our trading "partners" (like China) aren't practicing free trade, they definitely are practicing merchantilism. They may be going through the free trade motions, but by dictating the value of their currency they bypass the spirit of free trade.
I think we should give China 6 months notice that we are enacting tariffs, and maybe give the excuse that we need to raise cash to repay the money we borrowed from them (sadly very true), and rig the game to at least be equitable, if not advantageous.
H1B scam. Yup, that's a croc. Considering all the out of work engineers in the US right now it is very unseemly to bring in more to have more people fighting over the same jobs.
I can't forget about the blatant age discrimination. Companies will hire interns, who they of course have to expend huge resources and time to train and bring up to speed, but they won't hire experienced engineers who can be up to speed quickly.
I think it is shameful the way that some companies treat engineers little better than fast food workers. What in the world are they thinking???
I suppose the idea now is to get by.
I disagree with Andy Grove about one thing. I do think it is still possible to have "Eureka" moments in the garage and come up with a great idea. I know these days it is usually done by teams, but you never know.
I disagree with Andy Grove. Google rose from two guys at Stanford with an idea to become one of the big Silicon Valley employers, and it will not be the last. There will be many more in IT, clean tech, biotech and other tech branches that haven't even been invented yet.
Rational incentives and tariff structures could be used to enhance American engineering and manufacturing. The MAD rush to end tariffs and other restrictions made the off shore rush inevitable for our corporations.
The damage is done and there are unintended consequences. Management is rewarded far outside rational metrics while American engineers over 50 are losing jobs and becoming long term unemployed because they dare to ask for a miniscule fraction of what a CEO makes. This inequity is part of the problem, particularly when aggressive and bright young people look at career paths. Clearly the populations of students who have the potential to become the best CEOs and the best Engineers are not the same but there is overlap. Live better by a factor of 100 or be scraping to do any work, after 50, because engineering looked more interesting? Tough choice for a smart kid.
All of Grove's points are correct. Not only in regards to the scaling of jobs for the US economy, but also the specific issue for engineers of the scaling of innovation. The start-up process itself will falter if US engineers don't have jobs which train them in the innovation process. Some start-ups are founded out of a school, but many are founded after engineers develop some maturity and experience in design and development. If the entry-level jobs are gone, then there will be a graying of project leaders and senior engineers with an eventual dwindling of that population and the related capacity to innovate on a broad scale.
At the same time, the underlying issue is a significant disparity in labor rates between the US and other countries. That discrepancy may be compensated by capital investment in equipment, but a tradeoff between capital equipment and US labor rates doesn't help address the US employment problem. Similarly an import tax, to be meaningful, has to be a large fraction of the differential between labor rates. That will raise prices significantly to the US consumer at a time when income is flat or declining. Further, past experience with import taxes and quotas in the auto industry (Toyota, Nissan, Honda) shows that only helped other countries move up-stream and did little to protect US jobs.
Eventually labor rates will equalize if this process continues, but eventually we're all dead too. Somehow we need to create a positive-sum situation out of something that is currently a zero-sum situation.
This from reader "Aliali/ENG: What hypocrisy! Intel under Grove worked hand in hand with Microsoft to bring hundreds of thousands of foreigners here to do jobs that should have been done by citizens! Is he waking up to the situation or just mouthing platitudes? Tell him to talk to Microsoft, which still is working with their Democrat buddies in Congress to bring foreigners here under H1B visas while U.S. citizens can't find jobs.
Oh and the Democrat media are the biggest of hypocrites. Telling us we would have a "service economy" as though that would be a wonderful thing! Services don't heat your house or clothe your family or keep food cold or cook your meals - manufactured goods do those things. The Democrat media keeps hurling accusations against "big business" or "corporate whatever" or simply "Bush did it", but the fact is Democrat Bill Clinton signed GATT, Democrat Bill Clinton signed NAFTA, and the Democrat unions and media instead of working for justice just want to steal what other people have. Greedy Democrats working with the greedy RHINOS to destroy our county's political and economic systems and impoverish the people here who work for a living.
Ask Grove how many foreigners he brought to the US when he was in charge of Intel! Ask Grove which companies he invests in and do they try to keep jobs in the U.S. I'm tired of hypocrites. We have Obama's Eric Holder refusing to prosecute Black Panther members that used clubs to keep whites from voting, but the same Eric Holder is bring suit against Arizona for trying to protect its citizens. Hypocrites!
In management we say employees will respond to reward system. This is also true for company management and shareholders. They want to make more money for themselves by outsourcing or bringing more cheap foreign labor in to Us to save cost.
We need to accept that an average engineer in the US is not likely to create something better than a top engineer in Beijing or Bangalore while they demand much lower salary. (And very likely, the US engineer's health insurance alone may cost more than the salary in China or India.)
Our corporate tax (reward) system should give credit for the salary cost that companies pay on their US (citizen) employees. And this should only apply to salary up to $100k so the incentive is to hire more employees, not to reward top management.
For the US, our living standard will continue to decline relative to other countries unless we can create something to sell to other part of the world. It can be an airplane, a song or a movie, but not financial tools to move money around and get a cut. For a company to stay competitive, it just needs to define a product that a group of US employees can create that can't be done by any other group of people elsewhere.
Unfortunately, Mr. Grove is currently correct. But is is not sufficient just to put tech engineers back to work. Our focus should be on innovation of value (not novelties) which will create US employment over a wide range of worker skills - not on something that has to be shipped offshore to make it economically viable.
I hope readers of this comment will read the article at the link provided. A major take away message from Mr. Grove has to be the following:
"You could say, as many do, that shipping jobs overseas is no big deal because the high-value work -- and much of the profits -- remain in the U.S. That may well be so. But what kind of a society are we going to have if it consists of highly paid people doing high-value-added work -- and masses of unemployed?"
"Since the early days of Silicon Valley, the money invested in companies has increased dramatically, only to produce fewer jobs. Simply put, the U.S. has become wildly inefficient at creating American tech jobs. We may be less aware of this growing inefficiency, however, because our history of creating jobs over the past few decades has been spectacular -- masking our greater and greater spending to create each position."
Current political trends in the US will not help the situation, and in fact, will lead to further growth in unemployment.