<<< 1.) I would argue that in the last 10 years Japanese R&D and education are on a pace to be of the same caliber of the US(although a smaller market) within 5 years. In the area of chemistry and pharmaceutical the competition is already fierce. Some of the brightest minds in chemistry are in Japan right now.>>>
Some things look like they are going to happen but somehow doesn't or that it takes a lot longer than one would think. Look at ISDN and HDTV. Anyhow, if Japan were to catch up in 5 years, they would really have to get going. What do they have now that comes close to Stanford, MIT, Harvard, Berkeley, University of Michigan and so on.
<<< 2.) The smaller market and ceiling you refer to has part to do with scarcity of resources and labor pool IMO. Eg it's hard to brain drain english speakers. With that said, one of the things that is important to take into account from both sides of this discussion is the simple fact that once you are in the lead, it's WAY harder to stay in the lead. The closer you get to leading the way, the easier it is to fall off the mountain a little too.>>>
It's like in golf, the closer you get to the hole the harder it gets. (I like to use sports analogies because the rules are simple and clear cut and games are not nearly as complex as in real life). Another way to look at it is that if you are the heavy weight champion, you get to stay the heavyweight champion until you get clearly knocked out.
<<<3.) I think one of the points that Jay makes that is important to consider is the dichotomy between manufacturing and innovation. A round of innovation in the US would afford us another growth spurt that would again put us in the lead. But, the juggernaut that is Asian economic development has all the tools and resources at their disposal to overtake, should the proper selection pressure evolve. I happen to think it will. Chinese are much more about keeping up with the Jone's than America has been in the last 20 years.>>>
Using another sports analogy, clearly China was the heavyweight champion at around the 15th /16th Century. But, somehow they became xenophobic and let it all get away. It is very difficult to regain the title. To regain the innovative skills especially when others have much better tools/equipment (language/education) to hone their skills. As far as civilizations go, as far as I can tell, it has never been done.
<<< 4.) On the subject of outsourcing innovation: I don't have references that are free off the top of my head. I can PM you the whole articles if you want them. I don't consider this work to be the most innovative, but I do feel as though it is innovative in that it is developmental in providing the capital for future innovative growth. Bear in mind that these folks have none of the EPA and labor considerations we have here to slow them down. Labor costs are about 1/10th, that means I could hire 10 guys and sit around and point all day. I tend to think I could be more productive in this environment than with one guy who really knew what he was doing. Especially when part of discovery research is a simple numbers game.>>>
I don't think R&D is purely a numbers game. I don't think you can just throw money at the problem. Look at how the last round of innovation got started. IBM spent tons of money on R&D. They had Nobel Prize winning scientists on their payroll. They had beautiful facilities (I visited a number of them). But it was Steve Jobs and Bill Gates that took them to school and made the Internet possible.
WRT GE and outsourcing. GE is like the ad that says. We don't make anything we make everything better. That should be GE's ad. They shouldn't make anything they should just hold the paper. That is what GE should be about anyway. You can't really discount Jack Welch. If he thinks now is the time to invest in India, that should be seriously looked at. Jack, however, is not infallible. His judgement, at least in his personal life may be flawed.
WRT to Mercks efforts in outsourcing, it shows to me, if anything, the infancy of outsourcing complex tasks, and how little that is going on there.
Steven M. Hutchins, director of outsourcing at Merck & Co., is most likely a very innovative type of person and is probably way ahead of the curve. I don't think Merck is gambling a lot (percentage of company revenues) on this project. |
