I.B.M.

America’s behemoth corporation, I.B.M., should be the model for the changes needed for our country. Just as Big Blue recognized where value exists in the new world economy and moved from selling computer hardware to business and software services; so must Big Red, White, and Blue concentrate on economic activity that creates more wealth.

I.B.M. recognized that intelligence added products - not commodity products like the chips and encasing of computer hardware boxes - is where its competitive advantage and value proposition exits. Eighty percent of I.B.M.’s business, up from fifty percent in just 2000, comes from selling, not computers, but business services and software. Further indicative of that future is that much of I.B.M.’s sales growth, and the jobs it fills, are now overseas.

It seems clear that the U.S. will never again reach our pre-Great Recession employment highs in domestic construction, manufacturing and, perhaps, financial services. Instead, a prosperous future depends on developing and selling proprietary products worldwide in computer science/analytics, medical devices, software, electro-medical equipment, robotics, communications, lasers, semiconductors, business and insurance services, scientific research and pharmaceuticals, airplanes, satellites, automobiles, defense systems and, most especially, in green energy production and conservation technology.

It is understood already that for the U.S. to compete successfully more American students must be encouraged to study STEM subjects: Science, Technology, Math and Engineering. We must also make it easier for foreign students and workers who show a proclivity and expertise in these fields to stay and work in the U.S. This is how we will grow companies that create jobs, not reduce the number of available jobs for U.S. workers. Our economy’s competitiveness depends upon the technical and creative skills of our workers, irrespective of where they were born. Our own deficiency is demonstrated by two facts: First, roughly ten percent of college graduates in the U.S. have engineering degrees compared to more than one-third in China and India. Second, last year, China increased its patent filing by 30%; in the U.S. patent filing dropped by 11%.

What is more controversial, but equally required, is making our education and research systems much more efficient consumers of capital. So many people cannot be dropping out of college with huge loans, and without a degree to pay them back. In fact, the number of years required for a college bachelor degree needs to be reduced from three to four. Then, people will stop spending so much money on unnecessary educational time and, instead, start working. Four years of studying liberal arts (and the meaning of life) at a reasonable price made sense: but an undergraduate business degree at $50,000+ a year? One might as well go to work one year earlier. For those in technical fields, their graduate education or employers will need to build on core competencies developed be an undergraduates. For those who look to a college as their time to party, three years is also enough.

We also need our young college graduates to fan out across the world to teach English to a world hungry to learn it, teach in U.S. universities based abroad, learn, from the world, what others do to live well, and make business/cultural contacts and friendships for the future and work abroad to expose the rest of the world to the innovation and technical skills we possess.

Our educational instruction must move from business and scientific research, the two disciplines whose buildings and curriculums have overtaken college campuses, to engineering and technical mastery. Training more people in technical fields will simultaneously expand the supply of skilled labor and, through supply and demand, meet growth industries needs. We also need all technical high schools to be open at night for adult retraining – not just for a few limited adult training courses. This will also sufficiently contain the salaries of manufacturing technicians, medical and computer workers, electricians, mechanics, plumbers, and HVAC workers in order to keep jobs, factories and offices in the U.S. Making production more competitive will dissuade employers from sending work abroad. In return, we need to provide all workers with affordable health insurance, education and training programs as well as more than two weeks, annually, of vacation/personal time than. This emphasis on technical mastery, diligence, and occasional rest and relaxation is how Germany’s export driven economy dominates that of other European Union countries year after year.

Our new technical emphasis must be in engineering of all of types: especially clean energy technology (including nuclear), and the application of computer analysis to smart grids and transportation systems (as well as health care delivery). This will lead to more U.S. energy independence and world leadership in the next cyber-industrial revolution. This is also where the most value is to be gained in selling products to a rapidly industrializing world.

We need a complete reorientation of our investment dollars from biology-based to engineering-based research and production. Job growth and industry leadership are more probable and predictable in the fields of energy, transportation, smart-grid technology, computers, robotics and medical devices, as their products are much closer to coming to market than those based on biologics. Overemphasizing the pharmaceutical hunt, especially when the U.S. government stops overpaying so significantly for prescription drugs, is less advantageous than supporting engineering based solutions. Just as private equity investors have fled risky searches for the next miracle drug, so should federal and state government end such generous support with taxpayer money and tax credits. Sepracor in Marlboro, for example, which received $750,000 in government grant money and promised to create 25 jobs, laid off 940 people, or 20 percent of its workforce last year. Considerably more than 90 percent of researched biologic drugs never make it to the clinical trial stage and/or never obtain FDA approval. The amount of taxpayer money we’re spending on scientific research, without more guaranteed productivity or humanistic gain, is unsustainable. To lower the budget deficient cuts need to made somewhere in no federal budget and NIH funding is a reasonable target. Further, energy production conservation and weatherization programs will produce not only white collar jobs for people with higher degrees, but also manufacturing and construction jobs for those without.

Even the health care centers and research centers of universities that presently provide good paying jobs cannot forever continue using their current government supported model, as their success has depended upon taxpayer/government money to support scientific research, medical services and loans to students to pay for education. As our budget deficit grows and population ages, with a diminishing worker base to pay for the baby boomers’ retirements, severe cuts in government funding of health care inefficiencies and university-based research is inevitable. Worcester’s economy has been saved by UMASS Memorial Healthcare and UMASS Medical Schools. In the future these institutions, particularly the medical school’s research infrastructure and budget, will likely receive less direct and indirect government support.

Change means prosperity; the status quo means a decline in our nation’s wealth, as globalization exports less sophisticated work. If we do not do change our culture to master technical areas that do not come naturally to us, study analytical subjects we tend to think as boring, and give up part of our youthful, experimental, carefree, adolescent years; or welcome foreigners in large numbers to our shores; or go study and work abroad ourselves – we will inevitably decline as a country. As IBM knew the present model of growth is unsustainable. Someone will always be able to produce simple products less expensively than us. We cannot compete in basic manufacturing, nor settle for low paid domestic service work. We must develop our knowledge and innovation based platforms where competition from other countries is rarer. Only through significant transformation will the next century be about American prosperity; instead of a more evenly distributed wealth between us, China, Brazil, India and other Asian, Latin, European and Middle Eastern countries.

We will always have our American personality: bold, innovative, fearless, confident, creative, aggressive, open, brave, hard working, fun-loving, responsible enough, yet a little crazed and unglued. But to prosper in the world to come we must also be more analytical, educated, directed, technical and serious. Cultures can change. No one is as good at changing as us Americans: Let’s get started.