American ingenuity and innovation, the twin engine of the country’s economy since World War II, is in danger of losing steam and job growth potential if federal legislators allow “automatic” spending cuts to kick in next year rather than earmarking federal funds to advance education, research and manufacturing, according Massachusetts Institute of Technology President Susan Hockfield.
Hockfield sounded the economic alarm bell at a recent event at the Commonwealth Club of California in Silicon Valley.
“The big question is: Where will our much needed jobs come from?” she asked. “Will we let other nations lead or will we seize the lead?”
Spending cuts may help solve America’s immediate budget deficit woes, but Hockfield warned of dire consequences to not making critical, long-term investments that will drive the innovation economy that has generated more than half the new jobs in the last 50 years.
Hockfield’s scolding wasn’t limited to Beltway legislators. She also had stern words for Silicon Valley’s startup culture.
“Don’t just create ideas, also make products here,” she said. “Buying back technologies that we invented changed our surplus into deficit. We need to have a substantial fraction of technologies that are made in America.”
Despite the stinging criticism, Hockfield praised Silicon Valley for being one of the industrial wonders of the world and integral to maintaining America’s innovation lead.
“It’s where big, new ideas get transformed into products that create new markets and put people to work,” she said.
She highlighted Silicon Valley’s role in making the country a global leader in semiconductors after serious threats from a fast rising memory chip industry in Japan during the 1980s. Hockfield extolled how industry and government leaders worked together during that time to createSEMATECH, a consortium that helped America recapture the tech lead with semiconductors.
“The entire computer industry came out of basic investments in research,” she said. “We have to engage with government leaders and help them understand what we do. There are very intelligent people in Washington, but political forces trump all.”
She claims there has been a “lackadaisical approach to education” and many government leaders “don’t understand the pipeline, the engine of economic growth.”
The 1990s were the most successful decade for the innovation economy, according to Hockfield, who noted that between 1995 and 2000 America sustained 4.2 percent GDP growth and 22 million jobs were created each year.
The United States remains a leading producer of advanced technology products, but its dominance has eroded in the past 10 years ago. Hockfield wrote in a New York Times Op-Ed, “We enjoyed a trade surplus in advanced technology manufactured goods; today, that category accounts for an $81 billion annual trade deficit.”
Hockfield, the first woman to lead MIT, sees a future shaped by engineers collaborating with physical and life scientists to bring new discoveries that benefit industries and lasting economic growth.
Recently, she was appointed to the Advanced Manufacturing Partnership, a group of industry, academic and government leaders looking for ways to speed research in advanced materials and processes.
Photo: Susan Hockfield, President of MIT, speaks about the innovation economy at the Commonwealth Club. (Flickr image.) By Intel Free Press.
Tom Foremski is the Editor and Founder of the popular and top-ranked news site Silicon Valley Watcher, reporting on business and culture of innovation. He is a former journalist at the Financial Times and in 2004, became the first journalist from a leading newspaper to resign and become a full-time journalist blogger.
Tom has been reporting on Silicon Valley and the US tech industry since 1984 and has been named as one of the top 50 (#28) most influential bloggers in Silicon Valley. His current focus is on the convergence of media and technology — the making of a new era for Silicon Valley. He also writes a column at ZDNET.
