9
Concluding Observations

In the final session of the conference, participants sought to identify some of the most important themes that had been identified over the previous day and a half. Moderator Denis Simon of the Levin Institute began the session by suggesting five key points:

  • We are entering an era with multiple scenarios, much fluidity and turbulence, and potential for international economic and political conflict.

  • China is producing a huge number of science and engineering graduates for what may be different paths of talent -- a “just in case” strategic innovation on the “just in time” business philosophy. Understanding the demand for talent will be important.

  • For the United States, China poses a paradigm change far greater than Japan’s growth in the 1980s. All the systems that we have taken for granted—manufacturing, education, competition—are unraveling, so Americans need to put on new glasses for viewing the world. One reality is that multinational companies have moved much further into globalization than most people perceive or understand.

  • In education, the issue is not quantity of academic degrees but quality of talent. Talent must be prepared to adapt to new environments, understand how to manage risk and uncertainty, and know how to make decisions.

  • Does the U.S. government understand what these trends mean? What are the public policy implications? Clearly, there is a need to adapt policy more quickly.

Pete Engardio of BusinessWeek observed that the conference had not turned up examples of important next-generation products coming out of China or India. Was that a function of the sectors examined or of looking in the rearview mirror?

According to Marco di Capua of the Beijing office of the U.S. Department of Energy, the fact that the world is entering an energy-constrained era is not sufficiently appreciated in the United States. Important energy issues will be production, structure, diversification and competition, and new sources. A key challenge will be how to extract oil from new or marginal sources without creating huge carbon emissions. Another will be dealing with unpleasant historical legacies. A third is how we innovate in the consumption of energy. The United States can be a leader, not by “beating others” in competition but by showing the way.

Several speakers referred to the importance of labor mobility as a source of cross-pollination in the emerging global economy. In the near term the United States is likely to experience a movement of highly trained people back to their countries of origin, including India and China. But the United States should endeavor to remain a magnet for foreign talent, for example by lowering barriers to entry, including delays in visa processing.

Near the 50th anniversary of the Soviet launch of Sputnik, conference participants were reminded that the prospect of Chinese and Indian competition may spur efforts to renew U.S. education and innovation. But conference chair David Morgenthaler observed that this will depend on recognizing that opportunities and needs change. Strikingly, the United States lacks a business plan for its future. The economy is riding Moore’s Law regarding the



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9 Concluding Observations In the final session of the conference, Pete Engardio of BusinessWeek observed participants sought to identify some of the most that the conference had not turned up examples important themes that had been identified over of important next-generation products coming the previous day and a half. Moderator Denis out of China or India. Was that a function of the Simon of the Levin Institute began the session sectors examined or of looking in the rearview by suggesting five key points: mirror? According to Marco di Capua of the Beijing office of the U.S. Department of Energy, the fact We are entering an era with multiple • that the world is entering an energy-constrained scenarios, much fluidity and turbulence, era is not sufficiently appreciated in the United and potential for international economic States. Important energy issues will be and political conflict. production, structure, diversification and China is producing a huge number of • competition, and new sources. A key challenge science and engineering graduates for will be how to extract oil from new or marginal what may be different paths of talent -- a sources without creating huge carbon emissions. “just in case” strategic innovation on the Another will be dealing with unpleasant “just in time” business philosophy. historical legacies. A third is how we innovate Understanding the demand for talent will in the consumption of energy. The United States be important. can be a leader, not by “beating others” in For the United States, China poses a • competition but by showing the way. paradigm change far greater than Japan’s Several speakers referred to the importance growth in the 1980s. All the systems of labor mobility as a source of cross-pollination that we have taken for granted— in the emerging global economy. In the near manufacturing, education, competition— term the United States is likely to experience a are unraveling, so Americans need to put movement of highly trained people back to their on new glasses for viewing the world. countries of origin, including India and China. One reality is that multinational But the United States should endeavor to remain companies have moved much further a magnet for foreign talent, for example by into globalization than most people lowering barriers to entry, including delays in perceive or understand. visa processing. In education, the issue is not quantity of • Near the 50th anniversary of the Soviet academic degrees but quality of talent. Talent must be prepared to adapt to new launch of Sputnik, conference participants were environments, understand how to reminded that the prospect of Chinese and manage risk and uncertainty, and know Indian competition may spur efforts to renew how to make decisions. U.S. education and innovation. But conference Does the U.S. government understand chair David Morgenthaler observed that this will • what these trends mean? What are the depend on recognizing that opportunities and public policy implications? Clearly, needs change. Strikingly, the United States there is a need to adapt policy more lacks a business plan for its future. The quickly. economy is riding Moore’s Law regarding the 43

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44 THE DRAGON AND THE ELEPHANT Institute of Management—noted that there will increase in computer processing power for a few continue to be points of tension between their more years; but beyond that, future drivers of countries and the United States, particularly over growth are unclear. What is clear, he said, is trade and the U.S. current account deficit; but that the United States needs to do a better job of they expressed confidence in the flexibility of strategic planning as the economies of China and the U.S. economy and its ability to adapt and in India will surpass ours in size. the ability of all three countries to learn from Chinese and Indian participants—in each other how to sustain innovation and particular Mu Rongping of the Chinese growth. Academy and Rishikesha Krishnan of the Indian