By and large we are exporting our intellectual property so foreign companies and subsidiaries around the world can engage in manufacturing. Unfortunately, when manufacturing exits a country R&D funding dwindles in direct response, thereby creating an enormous problem. This has been and will continue to be an acute problem for the United States moving forward. With countless manufacturing jobs already gone what the American economy thrives on is intellectual property, particularly in the form of innovation.
This is an issue that has come to mind are the result of a recent article in POLITICO titled As factories die, income gap grows. This article starts by telling the tale of a married couple from Reading, Pennsylvannia, Dave and Barbara, who back in 2008 were making $22 and $19 an hour respectively working for Baldwin Hardware, a unit of Stanley Black & Decker Corp. Layoffs came, long term unemployment followed, and now the couple are among the tens of millions of Americans who are under employed. They had to run through all their retirement savings to stay afloat, and now they each make $10 an hour; Dave as a janitor and Barbara cleaning houses while she looks for something permanent.
The American story of lost manufacturing jobs dates back for decades. Bruce Springsteen’s song My Hometown, which is actually about my hometown of Freehold, New Jersey, immortalized the tale of a textile mill closing down, jobs leaving and never coming back, which leads to vacant stores throughout the town. The line ? Foreman says these jobs are going boys and they ain’t coming back” ?has proved to be eerily prophetic, repeated in once thriving manufacturing and industrial communities all across America.
My own view of government precludes me from sharing the ultimate goal of a government should initiate a National Network for Manufacturing Innovation (NNMI). I tend toward the Jeffersonian view of government — that government which governs least governs best. I am also a big believer in the power of incentives. In all walks of life what is obtained is what is incentivized. If employees know how they will be evaluated, for example, even a mediocre employee can achieve high marks by performing tot the evaluation. Tax policy is another excellent example, as is the patent system.
For better or for worse, the United States has not incentivized manufacturing. In fact, the incentives associated with manufacturing are to off-shore manufacturing rather than do it in the United States. There are too many bureaucratic hurdles to opening a business in the U.S., particularly a manufacturing facility. Anyone who doubts this needs to read Great Again: Revitalizing America’s Entrepreneurial Leadership.
Several weeks ago, on December 11, 2011, U.S. Commerce Secretary John Bryson set out his vision for how the Department of Commerce can best partner with the business community to support President Obama’s jobs agenda. If the past is any indication of the future, President Obama and it senior team will do whatever they can leading into the new year to jump start the economy and get Americans back to work.
At his speech at the U.S. Chamber of Commerce, Commerce Secretary Bryson outlined his top three priorities to help American businesses “build it here and sell it everywhere,” focusing on supporting advanced manufacturing, increasing our exports, and attracting more investment to America from all over the world. The key to emerging from the Great Recession is, of course, manufacturing. Manufacturing jobs have left the U.S. in favor of more business friendly climates in other countries, taking with them U.S. jobs and U.S. intellectual property. But moving into a Presidential election year will government be able to do anything that is at all likely to help?
It is that time of the year when we frantically look for appropriate and interesting holiday gifts to give to friends, family and clients. Christmas comes each year predictably on December 25th, but Hanukkah moves around and this year will start at sundown on December 20th, so time is running short, particularly if you are like me and you are going to be purchasing many (if not most or even all) of your gifts online. Amazon.com has a great deal on shipping too — it’s called Amazon Prime and the annual fee is $79. Amazon Prime gives you free two-day shipping or $3.99 per item on one-day shipping for all eligible purchases. Not every purchase is “eligible,” but those things sold directly from Amazon seem always to be “eligible.” So you won’t spend an arm and a leg in shipping fees even if you wait to the last minute!
With the economy still unsettled, extravagant gifts aren’t likely in many budgets. That means creativity will reign supreme. With a little extra thought you can give a really cool gift to that special someone, whether they are a patent attorney, inventor, law student or computer geek. With that in mind, below are some suggestions in order to help you find some fun, thoughtful and appropriately cool gifts for the geek in your life. The best part is the price means that one or more of these items should fit almost any budget.
The U.S. Chamber of Commerce conducted two small business focus groups on April 1, 2011, in Philadelphia, as well as a national survey of small business owners through interviews with 900 businesses April 8 – 12, 2011. The findings from this study make up the inaugural quarterly “Small Business Outlook Survey,” and paint an unfortunately bleak picture of the collective outlook of small businesses moving forward.
Small businesses are the backbone of the nation’s economy and those that are most likely to engage in job creation. Unfortunately, the small businesses surveyed tell a tale of little or no job creation over the next 1 to 3 years, and in fact suggest there will be more layoffs coming. The respondents see too much uncertainty in Washington, DC, too many regulations and a number of other matters (i.e., the deficit, debt, health care and taxes) as significant impediments to job creation. This on the heels of a disappointing jobs report for June 2010, downward revisions of the number of jobs created in April and May, and unemployment rising to 9.2%, this Chamber survey only piles on the continuing terrible news for the economy. With Congress bickering over the obvious — namely that we simply cannot spend money we don’t have and need to start spending less than we bring in to cut the deficit — it doesn’t seem there is likely to be any good news on the horizon.
Pat Choate and Hank Nothhaft, at the Met Club, June 14, 2011.
I was lucky enough to receive a review copy of Great Again several months before it became available. I have also had the pleasure of getting to know Hank Nothhaft and his co-author David Kline over the past year or so, frequently exchanging e-mails discussing a variety of innovation and patent related issues. It has been exceptionally difficult to keep quiet knowing what Hank and David were writing about, and then reading the nearly finished manuscript. Simply put, everyone in the innovation industry and patent community needs to read Great Again. Every Staffer on Capitol Hill and everyone working in the White House needs to read Great Again. While Members of Congress are no doubt busy with a great many things, they too should read Great Again, but at the very least Members of Congress and those in the Executive Branch, including President Obama, should at a minimum read the Introduction, which is just 12 pages long.
Last week LinkedIn soared to unexpected heights as it debuted as a publicly traded company on the New York Stock Exchange. Priced at $45, LinkedIn shares more than doubled by the end of its first day as a public company, spiking close to triple the $45 offering price before sliding back. On Friday the stock closed over $93, but on Monday the stock opened at $86.45, and at mid-day it was bouncing around slightly north of $85 per share, and by mid-afternoon it started to climb once again toward $92. See NYSE: LNKD.
It is still early to know whether this is irrational exuberance or whether this is a meaningful event for the companies that follow LinkedIn to IPO. In all likelihood it is a little of both, namely a meaningful event that demonstrates at least some irrational exuberance. With the economy and the IPO market having been in the tank for so long a little zeal never hurt anyone, right? In any event, regardless of what LinkedIn does from here on out the fury of trading and interest suggests that good things are on the horizon for the economy and perhaps for job creation as well.
Gene Quinn, at University of New Mexico, April 21, 2011
Patents are indeed the lifeblood of innovation. Of course, without innovation nothing else happens, or matters, but there is definitely a symbiotic relationship between innovation and patents. The innovation that we say we most want is that innovation that is cutting edge, not just an improvement upon what already exists; paradigm shifting innovation or technologies that could be characterized as disruptive in nature. It is with paradigm shifting, disruptive innovation that we see leaps forward. Those leaps forward lead to the formation of new start-up companies and frequently to the birth of entire new industries. It is with this type of highly desirable innovation that we see enormous job growth, which the U.S. economy could use right about now. Unfortunately, this type of innovation does not come cheap.
President Obama delivers his weekly address on Feb. 5, 2011
In his February 5th radio address, President Obama noted that “If we make America the best place to do business, businesses should … set up shop here, and hire our workers, and pay decent wages, and invest in the future of this nation. That’s their obligation.”
I agree. But government has an obligation, too. Is it doing all it can to truly make America the best place to do business?
Consider Evergreen Solar, which until last month was one of America’s largest solar panel makers. On January 14th, it shut down its Massachusetts factory and sent 800 jobs to China. This leaves only Silicon Valley’s Solyndra making solar panels in the U.S., and it just shut down one of its two production facilities.
What appears below is the speech Henry Nothhaft (Tessera President & CEO) gave at the Innovation Alliance conference on January 21, 2010, which is published with his permission. Readers may also find interesting Nothhaft’s recent article Looking for Jobs in All the Wrong Places: Memo to the President, relating to President Obama’s State of the Union Address and published by Harvard Business Review.
Hank Nothhaft addresses the Innovation Alliance Conference, 1-21-2011.
All told, I’ve helped create more than 6000 jobs and return 8 billion dollars to investors. And this work experience has given me first hand insight into a subject that economists are only now beginning to study closely. Namely the surprisingly powerful role that start ups play in job creation and economic growth. Of course, economists have been studying the sources of economic growth for a long time. 50 years ago, Robert Solo discovered to every one’s great shock that virtually all economic growth, or at least 80% of it comes from technological innovation. Not capital inputs or productivity increases or anything else, just technological innovation, the kind of break-through innovation that crates whole new industries and millions of jobs. Like the development of semiconductors, personal computers, software, and the Internet.