Will More Innovation Create a Booming Economy?  

January 6, 2012

In an effort to get our economy moving again, our politicians have been touting innovation as a way to create jobs and stop our economic decline.

President Obama:  “…get ideas from the drawing board to the manufacturing floor to the marketplace as swiftly as possible, which will help create quality jobs…”

Mitt Romney:  “…the United States has to depend on productivity and innovation to remain at the forefront of the world economy…”

Rick Santorum:  “…creating jobs in America again by unleashing innovation…”

I agree that new products created by inventors, tech innovators, and intellectual capital occupations, such as research scientists, are important. But, someone has to produce the items that the research creates. Even now, American patents, technology, and know-how are being used to produce goods in Chinese factories, providing millions of jobs for Chinese workers.

With our present free trade system, additional research and design done by American engineers and scientists will be transferred to China and used to create even more jobs for Chinese workers.

And, eventually, because of lower wages paid to Chinese researchers and scientists, the American researchers and scientists will lose their jobs. Also, it is often more convenient for the research facilities to be located near the production facilities. And our big corporations are intent upon moving our production facilities to China and other low-wage countries.

With our present free trade system remaining intact, there are not many economic reasons for massive research and training facilities to remain in the US, if they can be located in low-wage countries like China, India, etc. for much less cost. And with our tax-base being shipped to China along with our factories and jobs, we will be unable to build new infrastructure, such as the new high-speed trains in China.

It was not long ago that we were being told that it was good for our low-wage labor-intensive jobs to move to China and elsewhere, because we could concentrate on the high-tech factory jobs. Now, not only are labor intensive jobs being done in China, but also computer chip factories and other high-tech jobs are moving to China.

But, this time, it seems to me, that we are being told that it is okay for even our high-tech factory jobs to move to China.  If our high tech jobs are moving to China to manufacture the latest cell phones and other electronic products for us, why are our politicians telling us that innovation will create jobs for us?

Maybe they are saying that we can all become inventors, innovators, research scientists, etc.  Seems like I have heard something like this before.  Maybe the politicians are unaware of the fact that most of the products being made in China were invented in America.

Are our leaders unaware of what is happening, or are they just saying things to get our votes?


3 Responses to Will More Innovation Create a Booming Economy?

  1. Jim on January 20, 2012 at 5:23 pm

    Jobs are created as a need of American businesses. Jobs cannot be “created” by a government. The real problem is that this nation became the economic powerhouse that it was by the might of it’s manufacturing industries…not by flipping hamburgers. As the country has lost more and more of it’s manufacturing, it also means all the millions of manufacturing specialists are dying off, or losing their hard-one skills. These may be impossible to replace…maybe never…as it was a result of centuries of work and innovation. Innovation on that scale can not be had overnight or even in a decade or two. The current seated president has followed through with the threats from the prvious administration and eliminated our manned space program completely. In addition, education in this country teaches nothing anymore that would allow a citizen to become self-sufficient, or skilled in a useful trade. As an example, I live in Orlando, Florida, and just recently the University of Central Florida dropped all engineering courses, and our local Barnes and Nobles totally eliminated the engineering book section of the store. I was an engineer before lung cancer took me out of the work force, but even then, we were having a difficult time finding people with the skills to understand basic design mechanics and principles. This is while China is increasingly funding education, and are well on thier way to a manned lunar landing AND occupation of the moon. I grow weary.

  2. TaxiDriver on February 19, 2012 at 8:08 pm

    Jobs are created where rights are protected. Otherwise, anyone who needed labor would just enslave it. Cheap labor comes from places where rights are less protected; Mexico, China, India, the Antebellum South. Same goes for innovation. Innovation happens where the rights of innovators are protected. By engaging in free trade and globalization, we allow the abdication of that protection. America wasn’t innovative because Americans were inherently superior. America was innovative because America jealously protected individual rights. Now, by getting in bed with China, some of the worst oppressors of human rights in the civilized world, we destroy ourselves.

  3. TaxiDriver on February 19, 2012 at 8:11 pm

    The answer is that both Kaynes AND F.A. Hayek were wrong. Alexander Hamilton was right.

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