Tuesday, February 7, 2012

A Roadmap for America

In his State of the Union Address, President Obama made reference to getting manufacturing back in America.  In fact, he explicitly said that "this blueprint begins with American manufacturing."

That made me squirm.  This post is to describe why I think all of America should squirm, and what we should do instead.

The Problem

I squirmed because it strikes me as a wistful desire to return to a bygone era, one that has passed us on and we need to embrace the new change.  We've been through this before, with housing prices:

In the 2009-2010 era, I distinctly remember politicians saying "we have got to restore housing prices! Get them back up to where they used to be!"  (Sadly, a Google News search couldn't bring up any direct quotes.)  But the ugly truth was that housing prices were a bubble, and prices were not going to go back up.  For the housing market, it was a great ride up from 2003 to 2007, and we've been "taking our medicine" ever since.

I feel similarly, although not identically, towards manufacturing.  There has been a fervor recently over how iPhones and solar cells are manufactured in China and not in the US.  Why is that?

First of all, the Chinese are willing to work in conditions that would not be tolerated in the US today.  This is described eloquently in the famous piece done a few weeks ago by This American Life.

Secondly, they're willing to do it for far less than minimum wage.  Shenzhen has the highest minimum wage of any city, at about $207 per month.

Third, the Chinese government is backing production in a big, big way:

Admittedly, the electronics industry has the worst labor practices of any industry, but it's telling of how far the "other guys" are willing to go.  When President Obama asked Steve Jobs about why Apple can't make iPhones in the US, Steve replied, "Those jobs aren't coming back."

He's absolutely right.  Manufacturing in China is a step or three below what manufacturing was like in Pittsburgh in the early 20th century:

I openly admit -- and heartily welcome -- the fact that Chinese wages are rising (21% last year alone).  I hope that someday in the near future the Chinese worker will have parity with a laborer in the western world.  But that does not mean that the manufacture of iPhones, or most other commodities, will move back to the US.  Instead, they will move to southeast Asia ... or possibly Africa ... wherever the cheapest labor in the world can be found.

The Solution
So, what do we do instead?  America should strive to be an innovator, and stick to the high technology, high capital investment stuff, where the employee has to be smart, skilled, and resourceful.

Here's one example: a government sponsored, nationwide wireless network.  I have no idea how legal this would be, and here's where I need help.

In the 1950's, then-President Eisenhower embarked upon the Eisenhower Interstate System: a network of high-speed roads that would connect the US and allow commerce to flow freely and quickly.  It immodestly touts itself as "The Greatest Public Works Project in History."  The cost in 1991 was estimated to be $128.9 billion (starting in 1956), but wow has it enabled growth in this country.

Why not do something similar for the wireless / networked world?  Roll out a "wireless highway" that anyone can get on to, with bandwidth limits (the 21st century equivalent of speed limits) so that all may partake?

I see two hard parts:

  1. Making it forward compatible.  Unlike today's LTE / WiMax / 4G battles, the US network would ideally be upgradeable as technology advances.  The US government has tons of frequencies available for its, so more headroom exists for it to grow than exists in private industry.  I'm not an actual network engineer, but I'm willing to bet this isn't easy.
  2. Making Verizon, AT&T, Sprint, and T-Mobile happy.  There are laws prohibiting the government from competing with private industry.  And those 4 mobile carriers (and many other, non-national carriers) have spent billions of their own nickels in developing and deploying their own super-fast wireless networks.  But maybe if the government makes the frequencies available to all, then it wouldn't really be competing?  After all, the US Postal Service, FedEx, and UPS all seem to get along okay, right?

This would be innovative.  It would require a large cadre of network engineers to design, deploy, and maintain.  It would train the next generation of electrical engineers, electricians, construction crews, phone developers, and computer makers to take advantage of our "wireless highway system."  And it might unleash a whole new division of commerce (well, actually, just continue to boost the industry we already have) to take advantage of this new highway system.

That, and examples like it, are my idea of a blueprint for America.

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