IT Addict, "High Tech made Simple" / This blog has moved to www.jeremyfain.net

Monday, August 07, 2006

Beyond "techno-fetichism & -nationalism": God Bless America´s Venturesome Consumers

I came across a refreshing article in the Economics Focus column of this Friday´s issue of the opinion-shaping, free-market, weekly, British magazine The Economist.

Amar Bidhé, a Professor of entrepreneurship at Columbia University´s business school, explained in a recent paper why mushrooming alarming reports stating that the US economy will suffer from a shortcoming of engineering graduates are mistaken.

Bidhé distinguishes upstream (R&D offsprings, inventions) and downstream (a service or product) innovations, and demonstrates that good managers, able for instance to bring a patent to the market, matter as much if not more than good engineers. Bidhé also advocates the Wal Mart case, striking a positive opinion about a company that has optimized its operational processes (downstream innovation) to lower prices and attract more consumers.

I recommend you to read Bidhé´s paper as well as The Economist´s column, which ends with Amar Bidhé´s main idea: there is no added value without a transaction, and since American consumers often lead the use of innovation products & services, the more innovation in China & India, the better for the United States. Consumers, not technologists, reap off the benefits of innovation. Hence the whole point of the demonstration: "America´s policymakers should worry more about how to keep consumers consuming than about the number of science and engineering graduates, at home or in the East" (source: The Economist).

1 Comments:

  • Hey Vincent,

    On your two points:

    - I´m glad you don´t see the connection between less engineers and a better (not "more") Consumers Society, since there is no such connection.

    - About the high-margin thing. You´re totally right. For instance, the French luxury industry has a positive impact on the French economy, although its n.1 market is Japan.
    However, if you have consumers, it means they can afford purchasing. And if people can afford purchasing, it implies they have a job. And if they have a job, it means companies pay them, and if they pay them, it means such companies are profitable or they wouldn´t exist. Since these organizations are profitable, they pay taxes, enriching the Nation they live in. Such a Nation may invest in better infrastructure to connect the country to others, easing business in general.
    Furthermore, being Indian working in India doesn´t mean you´re working for the Indian government or an Indian company. Such phenomena as outsourcing or foreign direct investments, and clever taxation-shield strategies, lowers the impact of not "producing locally" many technologists anymore.

    By Blogger Jeremy Fain, at 8/08/2006 11:42:00 AM  

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