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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: Mary Cluney who wrote (45601)	2/4/2004 11:07:49 AM
From: Dr. Voodoo	Read Replies (1) \| Respond to of 74559

WRT to Japan, outsourcing, and things that happen and don't. This whole discussion is more about trends. The trend is your friend until it bends. What Jay, myself and others are saying is, a) we were here for the first part of the trend when we didn't think it was a trend. b) we leveraged our collective ASSets when we were convinced it wasn't a trend. c.) we soon watched the 2:30 buying program kick in and convince us that we were wrong. It's hard for us believe that with as much capital that has been evolving that the trend hasn't changed. Yes there will be some bumps along the way. Is it more than a collective headfake by the governments of the third world? Who knows for sure? From my snippets of the brain drain, I tend to think China(breadth) is for real and India and Mexico(bright spots, but all bluster) aren't. We're just going with the flow. I don't think R&D is purely a numbers game. I don't think you can just throw money at the problem. Absolutely and whole heartedly true. However, discovery is. It's simply a matter of figuring out where to look (Research--the truly innovative work) and turning over the rocks(discovery--the not so innovative). How you turn over the rocks counts too(Development), and just as Japan has learned to improve process development(innovative), so can China. Much of research is discovery. Once you teach people to discover, you've taught them that by looking in the right places, you can get rich. You've taught them one of the peices of innovation with a pavlovian response, and you've taught them about risk. The average Japanese isn't about risk. That's why they don't borrow etc etc. I agree culturally they are different. Maybe it will require a few more busts and booms in the Chinese economy, but if you believe our economy is being tugged along by research, can you not then believe that China's is being pushed along by manufacturing growth? See the history here? Point people are making is resource wise the trend ain't in our favor and OBV doesn't look too good either. This is why I'm not so sure I like outsourcing even modestly innovative work. After having said that, taking the IBM model of funding Open Source seems to suggest that one can do this. However, this will require nimble companies to be able to go with the flow. Because all companies(and in your case lazy programmers), cannot be so nimble, as Jay would say 'much dynamism will be released'. I tend to think that the economies of the world are not so nimble. So much economic dynamism, etc etc. down the food chain till you get to the most nimble unit. 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. OK, replace the words, IBM with US economy and academics, and Steve Jobs and Bill Gates with China, India etc. See a picture here? Again, I apply the appropriate brain drain caveats and you can apply the language ones. Unfortunately, I tend to think we inflate the real costs of our R & D at home(ala IBM) a lot more than the developing world(BG and Steve). When we supply them with the capital and the base technology, I'm not so sure we're prepared to take their work, be nimble and develop, support, exploit any faster than they will. What do they have now that comes close to Stanford, MIT, Harvard, Berkeley, University of Michigan and so on. I wonder whether or not the real question is. What is the capital barrier to creating a MIT, Harv, etc.? I just tend to think that the bright minds will go where the opportunity exists because the intellectual barriers may not be so high. My boss speaks Japanese, French and English. I think if I wanna be nimble I better learn a little less Spanish and a lot more Chinese. Now if we're getting our collective teeth kicked in, the old national pride beast might awaken and things could change on a dime. Voodoo

To: Mary Cluney who wrote (45601)	2/4/2004 5:30:36 PM
From: elmatador	Read Replies (2) \| Respond to of 74559

<<Steve Jobs and Bill Gates (both dropouts) that took them to school>> You need the vision, for that you need guys who are out of academia. “..the idea that fundamental science generates technology is “grossly erroneous”, says Rustum Roy, director of Science, Technology & Society Program at Pennsylvania State University. Usually, technology pushes science. Finding new subatomic particles with the SSC may never be technologically beneficial. Just building the SSC could be—but that’s a very inefficient way to invest in competitiveness. So, asserts Fusfeld of RPI, spending millions in Big Science projects will do little to improve U.S. technology. “People are not looking at this rationale’, he declares. “The existence of a large science-technology base is useless unless employed to strength the economy. The vision that R&D is crucial for innovation, and consequently strengths the economy is a myth. Studies of successful innovation both the military and civilian sectors reveal that research results initiated innovations in only 5% of the cases studied.” E.A. Haeffner, The Innovation Process, Technology Review, Mar,/Apr. 1973. R&D activity for technical problem solving during the course of an innovation also appears to play a minor role. A Department of Defence study on the role of research in weapons systems developments during the 1945-1962 period found that only 9% of over 700 significant scientific and technological events associated with the development of 20 major weapon systems could be identified as resulting from basic or applied research.C.W. Sherwin and R.S. Isenson, Project Hindsight, Science, Jun. 23, 1967. The part played by Stanford, MIT, Harvard, Berkeley, University of Michigan or Carnegie Mellon is not that big. Those guys are interest in funding and they are very good at persuading the general opublic that they deserve.

To: Mary Cluney who wrote (45601)	2/4/2004 7:38:18 PM
From: EL KABONG!!!	Read Replies (1) \| Respond to of 74559

Hi Mary, 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. Let's not so easily give away the accomplishments of others... <g> It was the (collectively speaking) universities of the United States that developed the Internet, almost totally funded by DARPA. IBM, Steve Jobs and Bill Gates had nothing to do with the development of the Internet. Even the nation's leading community colleges were on the Internet long before Mr. Gates and Mr. Jobs saw any commercial potential for the Internet. Where Mr. Gates (and Mr. Jobs) did excel though, was in realizing the potential for small, home computers. To this end, Mr. Gates was able to acquire DOS from IBM. The latter saw no potential in this "toy" computer language, while Mr. Gates envisioned a vast market of home computer users, deploying their computers for such tasks as financial record keeping and entertainment (much like Alien Invaders or Pong, not the relatively sophisticated games we see today). The networking of home computers via the Internet was a vision of the colleges. Very few viable commercial leaders saw any real potential usage for the Internet, and viewed it as a university-based "distraction". It was the United States military that envisioned the usage of the Internet to share information (initially communications) between distant locations, and it was the universities that made those communications possible. The commercialization of the Internet didn't occur until the early '90s, long after the initial groundwork was completed. What Jobs and Gates brought to the table was money, which enabled large-scale deployment of applications across a large body of home-based users. It wasn't until after Microsoft (and to a lesser extent) Apple Computers made their hardware Internet-friendly that other commercial enterprises saw any value to the Internet. Long after colleges and universities had "home pages", and long after languages like HTML (and GUIs) were developed did the rest of commerce jump into the Internet fray, more so from an irrational fear of being left behind rather than any innovative effort on their part. Even though some universities in Europe and Asia were involved in the initial stages of the development of the Internet, most of them regarded their participation as a curiosity rather than as an innovative development. They simply failed to recognize any potential. Remember that back in the early design and development stages, small home computers were a novelty, definitely not the norm, and most definitely not popular with anyone other than computer "geeks". Remember bulletin boards? They were the dial-in precursor to the networked Internet. So, while we can heap reams of accolades upon Bill Gates and Steve Jobs (and Mr. Wozniak sp???) for the development of home-based computer systems, collectively they are an afterthought in the development of the Internet. KJC