India, China: Sweat shops with Attitude

Monday, November 24, 2008

China, India set to be leading powers by 2025:  US Intelligence    and if you believe that I have some land on the tip of Tamil Nadu available for you...oops its now underwater.  Literally and financially.

The United States has differentiated itself from the rest of the world due to one fundamental, driving belief....invest in Research, without prejudice.   While Europe has been busy providing social nets of ever increasing size, the United States has increased investments in R&D.  I do not mean research on how to improve productivity or build a better mouse trap.  Fundamental research, blue sky research, the kind that leads to creative destruction in the marketplace over time.

If the global spend on fundamental research is $100 per year then the United States is spending over 60% of this amount.  Is it any wonder that every gadget has been invented in the US...they may be manufactured world-wide...but first they have to be invented.  When I look around, every home convenience and product is due to research in the US.  From TV's (thank you Mr Einstein for the photo-electric effect), fridge's, phones, ac's, cd's, dvd's computers.....need I go on to cars, airplanes...

Looking forward I see no change; as the world's belt is tightened even more due to this financial crisis, the gap between the US and the rest of the world in R&D will only grow.  I cannot think of a single field of study that the US is not out-spending and out-thinking the World.  And as a result they attract the best from the world over.

Europe has a place at the table of powers...but the competition is for second...there is no competition for first place.  Europe is in enormous trouble due to this financial crisis...they have conditioned their societies to support from government programs.  Touching these programs is going to be very difficult...R&D spending will be cut back even more...they will lose even more of their brains to the only game in town...the US.

China is a homogeneous society...they can spend like crazy and reproduce to their hearts content...but they will attract no one from outside....restricting yourself to only your  population for brains is obviously a losing constraint.  And insisting on the supremacy of your language is an even bigger handicap. I do not see India in a better position on any measure.

To become a power will mean contributing to the World in significant ways...making clothes, writing programs and answering phones is not sufficient.  Until China and India are able to spend on R&D in a significant way, attract global intellectual resources and organize to produce results for the world I do not see what all the fuss is about.

India and China will be the complainers in the World Order;  the intellectual firepower at work on break-through solutions will be attracted by resources...

What do China and India offer the world besides labor?  Sweat shops have to be taken seriously...but not in long term decision making.  A transformation is required...

I will bet against either China or India having the capacity for this transformation in the next twenty five years.

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1 Post Comments:

Anonymous said...

And where do you see Central and Eastern Europe in 2025 - a unified Europe - a leading power? The Euro? New energy plan seeks to reduce EU’s reliance on foreign gas and oil. A comprehensive plan to help the EU economy recover from the crisis is also being prepared.

I agree with your bet against either China or India having the capacity for this transformation.

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