Recharging America: think globally, think kindly, think outside the schoolroom / Newsweek

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15 Ideas to Recharge America
How to keep pace in changing times.
Newsweek
June 12, 2006 issue - Can the United States remain competitive in the changing global environment? NEWSWEEK asked 15 leaders in the fields of science, technology, education and business to assess the challenges we face and to offer some solutions.

Entrepreneurs and venture capitalists from Silicon Valley addressed the issue of how immigration policies help—and hurt—our competitiveness; educators from the East spoke of the need to beef up basic skills like math and science in our schools, and to re-create the scope of investment in university research that triggered the technology boom after World War II.

Should the Internet remain "free"? Has the erosion of core values—like the rewards of hard work and the postponement of short-term gratification in favor of long-term gains—weakened our future? Should we be frightened by the explosive growth of countries such as China and India, or see it as an opportunity to expand our own horizons?

Some voiced frustration at the federal government, while others pointed fingers at big business. But all agreed there is a lot of work to be done. Excerpts:



REED HASTINGS
CEO, NETFLIX

We Need to Fix Our Schools
The key to long-term success is to cut down government regulation.

We have declared three big crises in education over the last 60 years. One was after the Russians launched Sputnik in 1957. We thought that we might lose the cold war, and we blamed our public schools for not producing enough scientists. The second declared crisis was in 1983, with the publishing of "A Nation at Risk," when we were worried about losing the economic battle against Germany and Japan. And now in the last five years, with the rise of job outsourcing and globalization, education is again perceived as being in crisis. In other words, we project our current fear on the public-school system.

Sure, there are major problems in education. But they are not new. K-12 education is the last big government monopoly in America. School boards struggle with growing state and federal regulation. When a government monopoly is underperforming, politicians just add more state and federal rules, which only makes the monopoly less performance-focused.

The solution is to free our school districts, and to make it easier for educators to form more charter public schools to provide healthy competition and increased innovation. When we have monopolies, we need plentiful regulation. But if we embrace charter schools as competition, we can eliminate most of the government regulations that are strangling school districts today.


SUSAN HOCKFIELD
PRESIDENT, MIT

Spend More on Research
Half of our growth since World War II is thanks to technology.

The 21st-century economy is fueled by competition that is innovation-based rather than resource-based. Keeping our innovation system strong will be key to the United States' remaining competitive. To do that, we must invest in talent and research. First, that means investing in education—especially core science, math and engineering. Second, we must invest in university research. After World War II the U.S. government pioneered such investments in order to capture, in peacetime, the technological gains that had been made while the nation was at war. This led to astonishingly productive growth in research and industry. By the mid-1960s the United States was investing, in terms of federal dollars, about 2 percent of GDP in research. This year, it's about 0.8 percent. Today other countries are ramping up their investments in research. Robert Solow, an MIT faculty member and Nobel laureate in economics, did a study that estimated that 50 percent of this nation's economic growth since World War II can be attributed directly to technology. That's a big fraction. We shouldn't back off investments that fuel that kind of economic growth.



ESTHER DYSON
EDITOR OF RELEASE 1.0

Change the Culture
It's time to emphasize creativity in technology and science.

We don't revere scientists and engineers anymore. We revere movie stars. We're at the point of too much tolerance of laziness and bad behavior. It's not that we should all be uptight, but let's acknowledge that it's a good thing to be studious, to be hardworking. We need to celebrate and encourage creativity that's not just artistic but also functional.

Politicians and the media pander. They rarely inspire or challenge, and we need people to start feeling the satisfaction of rising to a challenge, rather than being given self-esteem because they tried. Yes, it's good to try, and failure is not dishonorable. But actually achieving something is worth celebrating.

One model to accomplish this is organizing competitions, like the X Prize for private spaceflight, or the FIRST competition, sponsored by inventor Dean Kamen, where high schoolers compete to make the best robots. The goal is to help change our culture by celebrating people who are creative technically. When I say creative, you think about artists and dancers and musicians, but you can be very creative in designing things that work. There is an art to technology that I think is under-revered, in part because of the image of the wonky scientist. It's an unfortunate caricature, because as our economy develops, it's the ability to innovate and be creative and build new things that will help us compete.



TIM DRAPER
FOUNDER, DRAPER FISHER JURVETSON

View Rivals as Partners
Competitors can present opportunities rather than threats.

It's pretty clear to me that in somewhere between 10 and 20 years, the Chinese economy will eclipse that of the United States, and it will go even faster if our currencies come into balance. Historically, when one country passed another, the result was war. Now we are so interconnected with China and Europe and India and all different parts of the world that the idea of attacking someone is like attacking yourself. I think we have a fabulous opportunity to recognize that we are, in fact, helping each other. We should view the Chinese as business partners. Every country benefits from the strength of the others. If Mexico were a much, much stronger country both economically and politically, crossing the border would go both ways and no one would think about putting up a bunch of walls. We need to recognize that geographic barriers are crumbling and people are going to be more mobile, so geographic boundaries are less important. Businesses are going to be global. That will force governments to compete. They will have to adopt policies that attract capital and great minds to their countries. That will force them all to become better and more efficient. If people like the Chinese government more, they'll move to China. If they like the U.S. government more, they'll come here.



MARK WARNER
FORMER GOVERNOR OF VIRGINIA

Look Beyond Political Labels
We have to draw on ideas all across the spectrum.

We live in a world moving at Internet speed, where India and China aren't playing for second place. Confronting this challenge will require a national competitiveness strategy that connects the dots between education, our human capital, our intellectual capital, our inadequate infrastructure, the world's most expensive health-care system, fair-trade policies, the fiscal meltdown in Washington and an energy strategy that decreases our reliance on foreign oil, addresses global warming and increases American jobs.

A comprehensive approach requires the real engagement of government, the business world and educators. And a recognition that the change needed in many areas will be transformational—not incremental.

Fundamental to this challenge will be the requirement that America produces the most educated, innovative and entrepreneurial work force in the world.

This strategy must also allow America (which has fallen to 16th in the world in broadband deployment) to have a 21st-century infrastructure, so we don't leave behind wide swaths of our country, particularly our rural communities.

To get this right, we're going to have to draw on ideas all across the spectrum—and not worry about whether they come with party labels or D's and R's attached. These challenges demand that we move beyond left versus right and liberal versus conservative. It's got to be future versus past.



PAUL SAFFO
DIRECTOR, INSTITUTE FOR THE FUTURE

Focus on the New Age of Creators
Web sites like Flickr and Second Life depend on their users for content.

We are entering an age in which the most important economic actors are neither producers nor consumers, but creators. Blogs are the most obvious indicator of this creator trend, but other examples proliferate. Selling on eBay is creation, loading photos on Flickr or videos on YouTube is creation, as is adding an entry to Wikipedia. Or consider the massively popular online environment Second Life, where members can hang out, socialize, buy and sell things, and also create their own virtual spaces.

Just as the time clock symbolized the worker-centric economy and the credit card represented consumers, the computer mouse is the symbol of the new creators. Personal media are very different from television, with its one-way message: shut up, watch and then go buy what you see. On the Web one must always be clicking, selecting and browsing. Personal media don't just allow two-way interaction—they demand it, and this is the cornerstone of the new age of the creator. This is truly a revolution without bystanders.


RODNEY BROOKS
DIRECTOR, MIT COMPUTER SCIENCE AND ARTIFICIAL INTELLIGENCE LABORATORY

Bring Back Those Offshore Jobs
We need to increase our factory workers' productivity.

It's impossible these days to not think globally. If you're a high-tech company, your market is the world, and you have to think about it as soon as you start writing a business plan. Even companies with one or two people on staff are now turning to China for quick, small-scale, custom manufacturing. In the next decade, our outsourcing is going to bolster these countries' economies—and eventually the cost of sending work there will rise. That will give us an opportunity to bring more craft-based, specialized manufacturing back to our shores. But we can't do it unless we use technology—robotics in particular—to increase our factory workers' productivity. Not just the giant robotic arms of big factories but also easy-to-program smaller robots that could help with more delicate tasks. If we stop funding the basic science that underlies this kind of innovation, it's a recipe for long-term disaster.



ROB GLASER
CEO, REAL NETWORKS

Cut Out the Bullying
Customer good will is a key aspect to building global success.

One underappreciated aspect of American competitiveness is how we are perceived in the world. Depending on the perception, it can have a real impact on Americans who are trying to do business globally. On the positive side, I still see a pretty deep reservoir of good will toward American entrepreneurship. When you meet business people in China or in Europe or in Latin America, you find that their conceptual model is the American entrepreneur. On the other hand, after the second beer they inevitably raise the question: "If America is such a great country, why is it such a polarizing force in the world?" It's a sign that geopolitical antipathy might have an impact on our economic competitiveness.

It doesn't affect us at Real Networks too much, because we're not a giant and we make popular software. But the bigger companies, the Wal-Marts, the Microsofts, have a problem when they try to do business internationally, because there's a natural fear of their size. That fear can wind up connected to the burgeoning feeling that America is politically and militarily unilateralist or a bully. I'm guessing that the greatest damage in this regard is probably in the Middle East and in the Arab world.

Smart companies can deal with this. Starbucks, which was a big target several years ago, has done a brilliant job of humanizing the actual values and ethics of the company. They partner with people like Conservation International to help the environment, they help indigenous suppliers—and they let people know about that. Customer good will is a key aspect of what causes consumers to habituate to one product or service versus another and to feel good about one brand versus another.

And, of course, it would also help if our foreign policies change and we go back to more multilateral policies.


DAVID SAMPSON
DEPUTY SECRETARY OF COMMERCE

Let's Extend the R&D Tax Cut More
Spending on R&D increases our competitiveness.

If properly nurtured, research and technology will respond to the biomedical, energy and environmental imperatives that we face in the 21st century. Not only will this solve problems and improve quality of life, but it will also bring about economic opportunities that we can barely imagine today. The goal of the president's American Competitiveness Initiative, announced in January, is to create the right conditions, the right nurturing environment, in which a new golden era of U.S. innovation can flourish.

First of all, that means making the research-and-development tax credit permanent. This credit allows businesses to deduct part of their R&D spending from their taxes—and it has expired in the past. Two thirds of R&D spending in America today takes place in the private sector—that's $200 billion each year. Private-sector companies need to have a high degree of reassurance about what the tax treatment of R&D spending is going to be.

The second component is increasing federal support for vital basic research in the core physical sciences. President George W. Bush is proposing doubling the government's commitment over the course of the next 10 years. With this increase, the federal lab that we run, the National Institute of Standards and Technology, will be focusing on three areas: nanotechnology, quantum computing and the hydrogen economy.

The third component is improving math and science education for America's students to make sure that we've got a full pipeline of kids today who are going to be the scientists, mathematicians and engineers of the future.



CRAIG NEWMARK
FOUNDER OF CRAIGSLIST

Don't Let the Big Guys Take Over
Why letting the telecoms control the Internet is a bad idea.

We need to preserve Internet neutrality, which is key to American innovation. The Net is a two-way medium of mass communication with essentially no cost of entry, making it the perfect tool for re-distributing power from a relatively small group of very powerful people to much larger groups of people with small amounts of power. Hence, more opportunity for innovation. The American people are fully capable of competing and making things happen—I've seen it at Craigslist. But now the telecoms are threatening to throttle innovation for their own profit. The folks in charge are saying, "If you want fair treatment, you have to pay to play." And the new innovators—like us, like YouTube, like Flickr—simply don't start out with that kind of cash. Meanwhile, the big guys, who may not be innovating anymore, can say, "Hey, big telecom, here's some extra money." In exchange, they get the extra privileges—and ensure that we don't get a fair shake. You can bet that a system like that will, among other things, force a lot of development offshore. It will mean that the next innovation in, say, video will happen in Bollywood instead of Hollywood. Net neutrality is the embodiment of American values: play fair, work hard and get ahead. We need to protect that vision.


FRANCINE BERMAN
DIRECTOR, SAN DIEGO SUPERCOMPUTER CENTER

Get a Handle on All That Data
We need information before we can expect innovation.

Imagine that all the records of your life—photos, diaries, tax documents—were shoved haphazardly into a pile. Now imagine that on a national scale. From presidential libraries to protein databanks, this country is being deluged with data, and it's so disorganized that we can't even access all of it, much less search it easily. It may sound geeky, but we need a national data-management plan. We have to decide what information to keep, and how. Scientists, business leaders and governments rely on this wealth of data to innovate—and students need it to learn. With better data management, we could teach our kids to think creatively about real-world problems, with real numbers, rather than teaching them how to take standardized tests by rote. That will make them better innovators in the future. We've always had top-tier brains in this country; let's give them a data-rich environment where they can flourish.



ARATI PRABHAKAR
U.S. VENTURE PARTNERS

See Immigration as a Strength
Having workers from all over the world gives us an advantage.

We don't really think in terms of geographic boundaries. At the end of the day, what's exciting for people like me is how you turn technology and ideas into value. I think it's modern alchemy. You start with smart people, an idea, some basic technology, and out of that grow companies, jobs and value for shareholders. You don't want to be in a protective crouch—you want to be out there in the world and thinking, "What are the things that are good for America?" That means being completely engaged in the flow of people, capital and goods around the world. At virtually every one of my companies, if you look around at a management or board meeting, you'll find people born in India, China, South Korea, Turkey, the United States—all over the world. The founder of one of my companies is a Korean who got his Ph.D. in electrical engineering at Stanford, went to work in Japan, then home to Korea to work at Samsung, and then he started his own company. His next key executive is a Korean who got his Ph.D. at Berkeley and stayed in the United States. This is a company that is headquartered in the States, designs its chips in Korea, outsources manufacturing to Taiwan and has a sales office in Hong Kong. These people can go back to India, China and Korea and create those links to American suppliers and customers. It is such an important part of how the global economy is growing. The immigrant-rich society has a definite advantage.

PETE PETERSON
THE BLACKSTONE GROUP

Face Up to Fiscal Realities
Our current short-sighted spending habits threaten our future.

Increasing globalization of the economy brings with it ever more cries for improving U.S. competitiveness. Given the increasingly technological state of things, it is only natural that high on the competitiveness agenda is more investment in research and development, particularly at the federal level. After all, federal researchers helped make possible such breakthroughs as the Internet, microwave ovens, lasers and atomic clocks, and advances that led to Global Positioning Satellites, which guide so many cars on the road today.

But the awkward and unasked question is: where do we get the money to pay for this? Before we get too distracted by the "richest nation on earth" rhetoric, let's look at some sobering fiscal realities: federal investment in nondefense R&D is getting crowded out by the ballooning cost of health care and retirement programs. Four decades ago these R&D expenditures were nearly 6 percent of the federal budget. Today they are less than 2 percent. During that period, spending on health-care programs like Medicare and Medicaid increased by more than 12 times as a percentage of GDP, whereas non-defense R&D spending fell by 60 percent. These benefits for seniors—largely Social Security and Medicare—threaten to devour the entire federal budget. And these programs, focusing on us older fogeys, are, alas, about the past and not the future.

So let's face reality. We must get rid of our aggravated case of short-termitis, the mentality of "I want it all," "I want it now" and "I don't want to give up anything." If we don't fundamentally reform our gargantuan entitlement programs and at the same time our gluttonous energy and consumption habits and meager savings levels, we simply won't have the resources for these desperately needed R&D investments.



WENDY KOPP
PRESIDENT AND FOUNDER OF TEACH FOR AMERICA

Give All Children a Good Education
Turning out kids who can't read at a basic level holds us back.

We will maximize our contributions to the global economy if we as a nation realize our ideals. Today we are far from actually being the place of equal opportunity we aspire so admirably to be.

Half of the 13 million kids growing up in poverty in our country will not finish high school, and those who do graduate will be where eighth graders are in privileged communities. We are turning out so many kids who can't even read at a basic level, and that holds us back as much as a deficit in math and science education.

Yet in urban and rural communities across the country, we at Teach for America have seen firsthand that kids growing up in poverty excel when given the educational opportunities they deserve. This should fuel our sense of responsibility and our sense of urgency as a nation to do more to ensure that all of our nation's kids, regardless of where they are born, fulfill their true potential and have a chance at the American Dream. To me, this is a matter of fairness. But it is also the most promising strategy for unleashing the full potential of our country. Not only will we discover new human resources, but we will develop some of our most promising leaders and innovators—because kids who overcome the challenges of poverty and attain an excellent education are likely to have the grit and the leadership skills to take our society to a whole new place.