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Originally Posted by aceventura3
I wish I could fully put into words how wrong you are.
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Well, if you can't, it leaves you in a position of being rather unconvincing. Sorry.
Here is one position that strikes at what I'm talking about. You're welcome to disbelieve it, refute it, or ignore it if you want. I myself think it's an important realization for the American economy.
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The underlying problem isn't simply lower Asian costs. It's our own misplaced faith in the power of startups to create U.S. jobs. Americans love the idea of the guys in the garage inventing something that changes the world. New York Times columnist Thomas L. Friedman recently encapsulated this view in a piece called "Start-Ups, Not Bailouts." His argument: Let tired old companies that do commodity manufacturing die if they have to. If Washington really wants to create jobs, he wrote, it should back startups.
Friedman is wrong. Startups are a wonderful thing, but they cannot by themselves increase tech employment. Equally important is what comes after that mythical moment of creation in the garage, as technology goes from prototype to mass production. This is the phase where companies scale up. They work out design details, figure out how to make things affordably, build factories, and hire people by the thousands. Scaling is hard work but necessary to make innovation matter.
The scaling process is no longer happening in the U.S. And as long as that's the case, plowing capital into young companies that build their factories elsewhere will continue to yield a bad return in terms of American jobs.
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Andy Grove: How America Can Create Jobs - BusinessWeek
I'm not saying startups aren't important. I'm saying that it will be up to existing companies and the recovery/expansion of their markets that will lead to a recovery.
The problem isn't a lack of startups; it's a lack of scaling. It's a difference between "some guy with an idea" who's looking for angel investors vs. a company who has already moved beyond that and has something ready to go on a large scale. This is both for young companies and older companies alike. Apple has been around for decades, yet look at the heavy scaling they've done in recent years. Now they're bigger than Microsoft, being the biggest tech company in the world. The challenge, of course, is for companies to scale in a way that helps the domestic job market, which isn't often the case with tech companies who manufacture elsewhere.