4/15/2011 America's tech decline: A reading guide

America's tech decline: A reading guide

A growing body of literature says America's best days may not be ahead
Patrick Thibodeau

April 14, 2011 (Computerworld)

WASHINGTON -- The U.S. imagines itself as the world's leader in technology, and for good
reason. American tech dominates many world markets.
Yet just about every report that looks at where America is and where it is going sees this nation in
decline or at risk of it.
It's a theme that has been picked up by President Barack Obama and Secretary of Energy
Steven Chu, who won a Nobel Prize in
physics. Both have warned recently that
the nation is facing a "Sputnik moment,"
with a shrinking share of the world's
technology export market.
This view also arises as the U.S. continues
to lead the world in new tech directions,
such as cloud computing. U.S. tech firms
are building highly energy-efficient data
centers at shopping-mall-size scales to
serve global customers.
Even India's rise as a technology center
would not be possible without the U.S.
India's big offshore companies continue to
earn more than 50% of their revenue from
North America. If it wasn't for Apple, China wouldn't be manufacturing iPhones and iPads.
The impact of U.S. innovation continues to be enormous and surprising, creating such
technologies as social networking. Facebook and Twitter proved to be important tools in
reshaping the Middle East.
So, what's up with the World Economic Forum, which this week ranked Sweden as the No. 1
country in its annual "Global Information Technology Report"? Did the report's authors mistake
Ikea for IBM?
The U.S. placed fifth for the second consecutive year in the forum's annual report -- behind
Singapore, Finland and Switzerland.
The report maintains that "there is no area on the globe that has an inherent advantage" in the
digital economy. The rankings are based on those countries it believes are making the best use
of new technologies and high-speed networks, and it also measures the percentage of
households with PCs, the percentage of mobile devices with data access, political environment,
and so on.
The value of comparing the U.S. against four front-running countries with a combined population
of 26.6 million (California has almost 37 million residents) is probably an open question.

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It would not be difficult to poke a stick at the World Economic Forum's tech rankings. But there's a
growing body of evidence that indicates that the U.S. is in decline or in danger of waning. These
reports and cogent opinions analyze R&D spending, education, the business climate and many
other things, and they are increasingly influencing the debate in Washington.
Here's a look at some of the assessments.
1. The paper "Rising Above the Gathering Storm, Rapidly Approaching Category 5," originally
published in 2005 and updated last year, was prepared for the presidents of the National
Academy of Science, National Academy of Engineering and the Institute of Medicine.
In the five years since the original report, its authors have concluded that "the nation's outlook
has worsened." The report cited problems in education, particularly in math and science, and
federal spending. It's filled with observations, such as: "Of Wal-Mart's 6,000 suppliers, 5,000 are
in China," and, "Only four of the top 10 companies receiving United States patents last year
(2009) were United States companies."
2. Unlike many people in government positions, the DOE secretary doesn't speak from the safety
of rigidly prepared text. But a richly illustrated presentation he prepared for a talk last fall at the
National Press Club outlined his concerns about America's tech decline, particularly in
manufacturing. He made numerous comparisons between the U.S. and China and included a
quote from Chinese Premier Wen Jiabao in 2009: "We will make China a country of innovation."
3. The report "The Atlantic Century: Benchmarking EU and U.S. Innovation and Competitiveness,"
from the Information Technology & Innovation Foundation, found that of the 40 countries it
compared to the U.S, all of them made faster progress toward a knowledge-based economy than
the U.S. did. The report ranked China first.
"It is a quite serious problem," said Robert Atkinson, of the ITIF, in an interview, "because if we
can't compete on the innovation side and the technology side anymore, then what do we have
left?"
4. In a provocative essay in BusinessWeek last year, "Andy Grove: How America Can Create
Jobs," the former chairman and CEO of Intel challenged the idea that the U.S. could thrive as its
ships jobs overseas.
Wrote Grove: "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?"
5. A Pew Charitable Trust report last year pointed out that U.S. investment in clean energy was
lagging. Clean energy is an industry the government has cited as important to future growth.
"The United States is on the verge of losing its leadership position in installed renewable energy
capacity, with China surging in the last several years to a virtual tie," according to the report
"Who's Winning the Clean Energy Race?"
6. The World Economic Forum's "Global Competitiveness Report 2010-11" examines what it calls
the "12 pillars of competitiveness" among nations. The report lowers the U.S. ranking by two
places, to fourth, with the U.S. trailing behind Switzerland, Sweden and Singapore. China moved
up two notches, to 27 from 29. The U.S. still has a commanding lead, but the forum sees
"escalating weakness" in the U.S. economy, namely from its fiscal deficits.
Bonus read: Lawmakers in Washington almost shut down the government recently over a series
of contentious budget riders that had nothing to do with technology. But to learn what Congress
did to the less visible issues in areas such as science, research and technology funding, keep an
eye on the Computer Research Association's policy blog, written by Peter Harsha.
Patrick Thibodeau covers SaaS and enterprise applications, outsourcing, government IT
policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at
@DCgov or subscribe to Patrick's RSS feed . His e-mail address is
pthibodeau@computerworld.com.

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