by John Slater
The U. S. economy drives the world and the dollar is the global currency. Its free market economic system has been adopted globally as has its democratic system of government. Our institutions of higher education are magnets drawing the best and brightest to our shores, many of whom have remained to help lead our dominance in new technologies. Each of those pillars of strength is being challenged and, in response, we are fighting the last war.
While we focus on fighting old battles over globalization and world trade, we are at risk of losing a far more important battle, one in which the means of production and distribution will depend on new technologies currently under development to automate and digitize the global supply chain. The critical conflict of the coming decade will be the battle for dominance in the global economy. The winners will be those nations that understand the importance of these new technologies and act to lead in their adoption.
This is not the first time American technological superiority has been challenged. In the 1980s the U.S. memory chip industry was decimated by low cost Asian competition and many observers decried the loss of the U.S. tech industry. American ingenuity won the day, as commodity memory chips were eclipsed by the explosion of the microprocessor industry. The application of Moore's Law enabled increasingly more complex systems to be incorporated into microchips, leading to the explosion of PC based computing power and ultimately to the Internet and its progeny. It was no accident that, during this period of explosive growth, the U.S. tech community attracted many of the world's brightest engineers and scientists, many of whom stayed to become leaders of the Silicon Valley success story.
This time the stakes are even higher as the digital revolution sweeps over every aspect of human activity. The technologies upon which the future of goods production and distribution will be based, including robotics, additive manufacturing, lasers, satellite communications and artificial intelligence, were first developed in the U. S. Yet today Japan and Germany control the robotics industry and build some of the world most advanced production equipment. Germany is at the forefront of introducing Industry 4.0, through which factories will be controlled by digital networks, making production more efficient, potentially by orders of magnitude. China has committed as a matter of national priority to take the lead in all these fields and is investing tens of billions to both acquire and develop the world's most advanced technologies. Notwithstanding the strength of our technology base, no law of nature assures that the U.S. will again be successful in fending off these challenges.
My college major was Economics. Friends in the humanities would engage me in vigorous debate over the source of a nation's military strength. They fervently believed that economic strength derived from military power. In ROTC we studied military history. There was naturally much focus on the great military tacticians, men like Julius Caesar, Napoleon Bonaparte and in our own country Grant and Lee. Each of these men excelled as warfighters, but history taught us that military power ultimately depends on a nation's sustained ability to supply its warriors with food, weapons, ammunition, et. al.
One of the major reasons the United States won the Civil War was that the northern states had embraced new technologies vital to their success. Advanced communications (telegraph) transportation (railroads) and means of production (steam) enabled the northern states to build and sustain a supply chain that inexorably ground down the South, notwithstanding the brilliance of its military leaders and the valor of its troops. If we are to assure American military dominance in the 21st Century, we must preserve our nation's role as the world's technology powerhouse and economic engine.
As Team Leader of our investment banking firm's Advanced Manufacturing & Automation Team, I am privileged daily to witness wonderful things. Throughout our nation, the world's most brilliant scientists, engineers and entrepreneurs are busy developing technologies that promise to make manufacturing and distribution vastly more productive and that will enable introduction of advanced technologies, including lifesaving medical devices, that would be impossible without the tools of automation.
Automation promises to bring manufacturing back to our shores and billions of dollars are being invested to make that happen. Success in this enterprise requires our continuing role as the global technology leader. That depends in great part on our ability to continue attracting and keeping the world's most talented scientists and engineers. Some of brightest (and most fervently American) individuals I know have come here from places like India, China, Eastern Europe and many others, drawn to our shores as the land of opportunity.
Our ability to continue attracting the world's best and brightest is critical to our success in the battle for global technology and economic dominance. Unfortunately, our national policy seems focused on the last wars, attempting to turn back the tide on globalization, immigration and trade. We live in an increasingly globalized world of free trade and competition for the best talent regardless of national origin. If we turn our back to the world, other powers will take our place, using many of the ideas and technologies originally developed here.
This is our battle to lose. Embracing the new technologies promises a future in which the American Heartland can again be a global leader in manufacturing, while the country as a whole benefits from prowess in fields such as biotech, digital intelligence, materials science and others currently unimaginable but sure to come. Winning this battle depends upon our openness to world trade, upon attracting the best and brightest scientists and engineers to our shores and upon America continuing to demonstrate its leadership as the world's beacon of democracy and freedom.
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