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US Losing R&D Dominance To Asia? 461

Posted by samzenpus
from the we're-some-number-other-than-one! dept.
bednarz writes "U.S. companies are locating more of their R&D operations overseas, and Asian countries are rapidly increasing investments in their own science and technology economies, the National Science Board said in a report released this week. The number of overseas researchers employed by U.S. multinationals nearly doubled from 138,000 in 2004 to 267,000 in 2009, for example. On the education front, the U.S. accounts for just 4% of undergraduate engineering degrees awarded globally, compared to China (34%), Japan (5%), and India, Indonesia, Malaysia, Philippines, Singapore, South Korea, Taiwan, Thailand (17% collectively). 'The low U.S. share of global engineering degrees in recent years is striking; well above half of all such degrees are awarded in Asia,' NSB said in its report."
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US Losing R&D Dominance To Asia?

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  • by schlachter (862210) on Thursday January 19, 2012 @06:05PM (#38753890)

    And most of that 4% in the US is Asian anyways. Just hope we can keep them here in the US after graduation instead of shipping them back to China because our fucked up immigration policy.

    • by flyingsquid (813711) on Thursday January 19, 2012 @06:07PM (#38753942)
      Oh, R&D dominance? Whew! When I first read that, I thought it said that the U.S. was losing D&D dominance to Asia.
    • Why don't we clear up a misconception here? That of "American companies". There aren't very many "American companies" traded on the stock exchanges. Go ahead, try to find some. IBM? Nope - they are a multinational conglomerate. Microsoft? Nope - ditto. I'd have to actually look, before I stick my foot in my mouth about one or another companies, but most of them are multinationals, with absolutely no loyalty to America, or to the American people.

      I happen to work for an American company. It is NOT tr

  • Duh. (Score:5, Insightful)

    by Anonymous Coward on Thursday January 19, 2012 @06:05PM (#38753896)
    This is simply the race to the bottom that corporate America is pursuing writ large. When we traded our democracy for a corporatocracy, this was the inevitable result.
    • by hedwards (940851)

      More or less, if we want this to change we need to do something about patent trolls and force corporations to demonstrate the need to import workers to fill those jobs if they want to get the necessary visas granted.

    • by khallow (566160)

      This is simply the race to the bottom that corporate America is pursuing writ large. When we traded our democracy for a corporatocracy, this was the inevitable result.

      "Race to the bottom"? So what do you recommend to encourage corporate America to stay in America?

    • by drnb (2434720) on Thursday January 19, 2012 @08:20PM (#38755994)

      This is simply the race to the bottom that corporate America is pursuing writ large. When we traded our democracy for a corporatocracy, this was the inevitable result.

      You are mistaken. It is Consumer America, not Corporate America, that is responsible for the race to the bottom. Corporations do not care where things are made or who makes them. All things being equal they would have things made locally by locals. There are coordination and transportation costs when you move manufacturing or development to some distant place. These additional costs would have to be offset somehow.

      Corporations primarily care about sales, costs are secondary to sales. Cost cutting is only desirable if it (1) generates new sales or (2) preserves existing sales but increases the profit margin. Now consider who controls the sales, it is the consumer.

      Consumers are responsible for the current situation because the consumer preference is for the lowest priced product or service, the consumer does not care where manufacturing or development takes place. **If** consumers did care where manufacturing or engineering took place and **if** this preference was reflected in buying decisions then corporations would not engage in off-shoring since it would hurt sales.

      In other words the U.S. experienced a lot of off-shoring because consumers rewarded those companies that off-shored with sales. **If** consumers had punished those companies but buying domestically manufactured/engineered products from competitors then off-shoring would have been a failed experiment and not have become a major trend. It was all in the hands of the consumer, it still is.

      While much manufacturing has moved off-shore the web has made it easier than ever to find domestically manufactured products. If consumers start showing a preference for such goods then off-shoring can be reversed. The power is in the hands of those making the buying decisions, the consumer, not the corporation.

  • Yes, but... (Score:2, Funny)

    by Anonymous Coward

    ...we're the leader in Human Studies diplomas. We're all set for the future.

  • by overshoot (39700) on Thursday January 19, 2012 @06:09PM (#38753978)
    I personally know people in industry who have been warning of this for the last 20 years. The "new economy" of that era promised to reduce costs by moving manufacturing overseas while keeping R&D in the USA. People who knew how R&D worked said that the manufacturing was, if nothing else, necessary to the local support (machinists, PWB fabs, etc.) that support R&D.
    • by Anonymous Coward on Thursday January 19, 2012 @06:43PM (#38754558)

      This has been happening since the 1970s.

      The problem is that US law as it has evolved in the past two decades is very hostile to a R&D culture:

      1: A nascent product can be sued out of existance. I remember an issue about a helmet company refusing to put out a new safety feature for fear of a bankruptcy producing class-action lawsuit because they didn't do it earlier.

      2: IP laws are so tangled that a company has a minefield of patents that are overly broad or vague. It only takes one violation to have a company shut down and liquidated.

      3: The media shows tech-savvy people as second class citizens. Joe Sixpack is viewed as cooler than Jane Chemist. Engineers are drawn in the press as mentally deranged, toadies, or people from Asia.

      4: Operation Sun Devil scared the [white|grey|black]hat types away from ever working for the US government. Contrast that to China and Russia where this sort of stuff is just as important as physical combat in their armies.

      5: There is such an income difference between being an engineer and other fields. A smart high school graduate can go into CS and might score a job of barely existing. The same guy who parties at a frat, gets his general business undergrad, goes to law school and graduates will be making $100,000 a year starting out, especially if he interns and gets well known at a decent law firm.

      6: Commotization: Why hire people for 40,000 a year in the US when $10,000 can get a contract with 10-20 of the best from Elbonia with guarenteed results?

      7: Tax structure. Payroll taxes are expensive, offshoring gives deductions. Hiring H-1Bs pays more for a company with tax incentives than their salaries cost.

      8: "We can't find any CISSPS to work for us for $15,000/year" translates to "We cannot find any useful talent in the US... we need more H-1Bs!"

      9: It is easy to wind up in jail for vague charges if one shows to be technologically competent. So, people tend to hide this. See #4.

      With the laws and regulations in place that make the US actively hostile to anything but sports heros, rock stars, and actors, it is absolutely no wonder why there is little to no technological progress here.

      • by mjwx (966435)

        1: A nascent product can be sued out of existance. I remember an issue about a helmet company refusing to put out a new safety feature for fear of a bankruptcy producing class-action lawsuit because they didn't do it earlier. 2: IP laws are so tangled that a company has a minefield of patents that are overly broad or vague. It only takes one violation to have a company shut down and liquidated.

        This.

        In Asia a company hires 10 engineers and 2 lawyers to make a new product. In the US a company hires 2 en

    • by Sentrion (964745)

      Exactly. You cannot separate the R&D lab from the plant floor. Both make common use of key personnel and resources.

    • by roman_mir (125474)

      Well, everybody on this site has read a comment or two of mine.

      lose [slashdot.org] your manufacturing [slashdot.org] and lose your economy [slashdot.org].

  • by vinayg18 (1641855) on Thursday January 19, 2012 @06:12PM (#38754022)

    "well above half of all such degrees are awarded in Asia"

    Gee, I wonder if that has anything to do with Asia having well above half of the world's population.

    • by Baloroth (2370816)
      Yeah, after scanning the article my impression is just that Asia is finally starting to develop to the point where they are able to compete. While it is true that the US "dominance" is decreasing, that doesn't mean the US is not doing R&D anymore, or even that it isn't doing more and more, just that China (in particular) is heavily increasing their investment into it. What that means long-term... IDK, it'll be interesting to see.
    • Asian do group work on solo projects and there high / college is all about the test and cramming for it.

  • by ackthpt (218170) on Thursday January 19, 2012 @06:12PM (#38754036) Homepage Journal

    China and India have had massive, massive pushes to educate engineers, medical workers, technology workers, etc. The shift is the pay off.

    A couple decades ago my brother, an engineer with Dow Chemical related the project he was managing - an project would be begun in North America, passed to a team in Japan or Oceana, then passed to India, before passing along to Europe and back to North America - each location meeting its objectives as part of the project. That was two decades back. So you can see there are people capable of engineering, research, medical discoveries and such in abundance by now. No doubt someone in Thailand is waking up about now and will correct any spelling errors I have made in this post.

    • by Menkhaf (627996)

      he was managing - an project would be

      a project

      You're welcome :) (although I'm not in Thailand, but in cold and dark Scandinavia)

      • by ackthpt (218170)

        he was managing - an project would be

        a project

        You're welcome :) (although I'm not in Thailand, but in cold and dark Scandinavia)

        Ah, yes. But you didn't catch all my punctuation errors, which will be detected and forward to the next time zone - all part of the 24 hour continuous global project that is now an industry for /. posting! (c:

    • by scamper_22 (1073470) on Thursday January 19, 2012 @06:49PM (#38754660)

      Indeed. I've made this point several times.
      Generally people who think of the 'innovation' economy are largely ignorant colonial thinkers. They lurk in academia or places like Silicon Valley and by in large live in a bubble.

      They tend to think like 'I'm working on high-tech and it's a great living' so if everyone was as educated as me, everyone could have a good educated job! Of course it eventually hits home that there's no demand for so many educated people.

      It's great to be educated... but that doesn't mean people are going to pay you lots of money for it.

      The progressives especially have pushed the idea that education leads to jobs. Which is true... so long as there aren't that many educated people.

      But as more and more of the world becomes educated, in reality you run into the same problem that manufacturing hit. Its a commodity. Just like how being the only literate person in a village hundreds of years ago probably entitled you to a reasonable living. But today, in a Western country where pretty much everyone is literate... it means nothing.

      And yes a portion of that means that with free trade and globalization, R&D work will get pushed to the country with a lower standard of living. This is not just in terms of pay, but also in terms of quality of people. For example, given the pay scale in North America, a decent software engineer might make 100k. That's not going to attract the best and brightest. They've learned and now go into finance, law, medicine...
      Compare imagine what quality engineer you could buy in India/China for 100K? You're talking the best and brightest... and they're motivated.

      And people who now worry about high-tech moving offshore face a huge moral dilemma. They've spent the past 50 years with the following mentality.
      - farm work? let migrant workers do it.. our people will find other jobs
      - textiles? we can do it cheaper overseas. who cares about the western textile worker's job.
      - manufacturing? we can do it cheaper overseas. who cares about the western manufacturing worker.

      Now suddenly, their 'educated labor' is a commodity and can be done overseas... now suddenly you see people worrying.

      Why should the manufacturing worker or service sector worker should have to pay higher prices for western made R&D or pay taxes to support Western R&D?

      Yes, I'm educated and work in high tech, but I do get pretty annoyed at educated people be they coworkers or those in the public sector who seem to think education entitles them to a high standard of living. It's going to hit home pretty fast.

      • Eh, literacy pays? (Score:4, Interesting)

        by SmallFurryCreature (593017) on Thursday January 19, 2012 @07:35PM (#38755440) Journal

        Then why was literacy so long the domain of Monks? Who were not known for their richness...

        Even back then an education was of limited wealth. A person needs a baker each and every day but how often do you need a letter written when you are a lumberjack or a small farmer?

        Star Trek never touched upon the problem of what all those billions of people making up the rest of humanity were doing. It had some episodes with miners in them but they made no sense if you wondered why people would mine for stuff in a world with replicator technology. Count the number of episodes where they still desperately need a part despite a working replicator sitting in every cabin.

        The simple fact is that the western economy post WW2 survived on the factory worker and the harvester (miners etc) when those jobs disappeared entire regions grew depressed and never really recovered. Meanwhile modern media kept showing "Friends" with people with jobs that never require them to simply be in from 9/5 doing just average not very interesting work. The entire economy (if you believe the media) runs on odd jobs paying enough to afford gigantic flats in the heart of New York and more time off then a Greek working for the state.

        Walmart is celebrated by these people as offering very cheap goods without anybody wondering that if nobody local gets payed to make these goods and if the people selling them don't get payed much either... then who can afford these goods in the long run?

        Go ahead, go to a store and try to buy western made goods... oh, they still exist, somewhat... e-reader. Name one made in the west. Tablets? MADE in the west? Where is the factory with the production line paying dozens if not of hundreds of people funding an entire large city producing iPads?

        It isn't just about engineers who make iPads, it is about engineers who make brake pads. Just as most scientist end up working in a production facility doing the same tests over and over, most engineers do not make ground breaking tecnology, but keeping that development on break pads going with all the production know how, that can keep an entire town in business. Jobs for the average person, a reason for the highly educated to come back to their home town.

        Remember a little game called SimCity? Fun game right? Do you remember how it was very easy to create slum areas by accident because there weren't enough jobs near by?

        Okay... now enlarge SimCity to SimWorld and remove all the factory from that little corner of the world called the west and put all the work and housing the "Asia"... what happens? Do the endless living areas with only shops become an affluent area or ,,, do they become Detroit? Manchester? De Bijlmer (pure living area now being torn down in Amsterdam Holland, do you think bad planning are a US problem only?)

        Douglas Adam spoke of three arks, what were the A and C arks again? And what ark are we keeping here? Think about it, we outsourced production (c ark) and now the research is following (a ark)... that makes us the B ark... better start collecting those leaves.

  • by sethstorm (512897) on Thursday January 19, 2012 @06:13PM (#38754040) Homepage

    If it is indeed so, get rid of any means to facilitate it - offshoring being the primary offender. No different than stopping blood from a wound versus allowing someone to bleed to death.

    This is one of the better cases for why we should train our own instead of everyone else. If there's any spare room after the least capable citizen has been trained, only then should the US consider friendly internationals - for which are not generally found in Asia.

    • And if the government wants to kill offshoring, they need to make it easier to hire & do business locally. Bust bad union control, bust badly constraining regulation, lower employment taxes, complete education system overhaul, etc.

      If all you do is ban offshoring, I'm not sure the current domestic climate is even capable of picking up the slack anymore.

      • by s73v3r (963317)

        Basically what you said is, "Make the US like China."

        No thanks.

        • Basically what you said is, "I'm fine with the USA stepping out of R&D, manufacturing, and innovation in general." These things do not happen in clean, isolated, academic-only think-tank utopias, they happen where there are boots on the ground doing productive things and seeing what comes of it.

          We do not need to become a China to pull this off, but we have way too many people with established interests preventing innovation for no other reason than their own entrenchment; ie, no environmental, human ri

    • by Rakishi (759894)

      You seriously think that'd achieve anything? All it'd do is that foreign companies would offshore production themselves and then import their products into the US at a fifth the price US companies charge.

      Or are you proposing going full out protectionist and banning all foreign imports and products and devices and technology?

    • by jbeaupre (752124) on Thursday January 19, 2012 @07:05PM (#38754980)

      In a weird twist, I'm working for a company in China as an engineer. They couldn't find the talent there. Chinese engineers are missing a critical talent: the ability to fail.

      It works like this: in China, you are taught there is a correct answer for each problem. If A then B. If C then D. If E then F. Always deterministic. You never fail because there is always a tried and true path.

      Works great for copying, but not in improving or creating products. That takes going down unexplored paths. And failing. And recovering. And failing. And recovering.

      When starting a new project with my team, I was asked "What is the method for creating a new product?" They fully expected me to give them a recipe. Something deterministic.

      I'm underwhelmed by their engineering skills too. They jump on the first method/equation/model they find and refuse to budge even when I present them with physical evidence that their model is flat out wrong.

      Sorry for venting. I shouldn't complain. I'm getting very well paid to do something an entire department of 50 other engineers can't do: go out on a limb.

  • How many DECADES have reporters been saying that losing the edge has been "right around the corner". This is just another example of a reporter who is too lazy to do a real story drumming up some sensationalism to get page views. Next.
  • by vell0cet (1055494) on Thursday January 19, 2012 @06:18PM (#38754140)
    Of course this has nothing to do with the anti science movement that took over when W was in office and is still a matter of fact for half the population.

    Half the american public are against "intellectuals", against evolution, deny climate change and think that investing in science is against God or is far to great a burden on the economy and you're surprised at this?
  • by Anonymous Coward on Thursday January 19, 2012 @06:18PM (#38754156)

    The low U.S. share of global engineering degrees in recent years is striking

    Americans don't want to learn science and engineering, because it's hard. It takes years of extremely hard work.

    I went through university with a business major. I saw the kind of work he did because he was asking me for tutoring help; the "hard" things he was learning were unbelievably trivial. I'd estimate his degree was a factor of 50 easier than mine; I could have taken all his classes, not studied for shit, and come out with straight A's, all with less effort than I was spending on a single difficult engineering class.

    Of course, he now makes more than I do. So why on earth would anyone want to go through what I did, when you could go through the far, far easier thing HE did, and be more financially rewarded for it?

    In the end American's lack of interest in science, technology, math, and engineering will sink the ship. You cannot compete in today's global world unless you (as a people) understand how that modern world works, and Americans don't wish to understand, because it's hard work. You reap what you sow. I've been saying this for the last 30 years, and now here we are, going down in flames to better educated countries. Surprise surprise. I used to give a shit, but then I learned there was nothing I could do to make people care, so I just gave up. No point in getting upset over it. I'm resigned to my country falling out of its former place as the world powerhouse of science and engineering. In the 50's, 60's, it was very much the USA, and everyone else a distant second. Now, that's reversing. So be it.

    • by jd (1658)

      Agreed, though there were a good few European nations in the 50s and 60s that weren't quite so distant -- at least, in very specialized fields. Britain's luxury goods and highly customized products were, at that time, still a force to be reckoned with. Germany had lost a lot of infrastructure, but was doing some very reasonable work in mechanical engineering, as were the Swedes. France had a wine industry that was a class (and glass) or three above anyone else.

      These specialized niches have been worn down fo

    • by scottbomb (1290580) on Thursday January 19, 2012 @07:03PM (#38754916) Journal

      For the most part, I don't think American students shy away from engineering degrees because it's hard. The students are just going to where the jobs are. When they hear about companies outsourcing engineering jobs to Asia and bringing in H1B visa holders by the boatload, it's no wonder they persue a different career path. Look at all the women going into nursing. There's a big demand for nurses and it pays very well. Nursing school isn't easy, either. But they're in demand, and that's the key.

    • by sdguero (1112795)
      Heh yeah. That's why I changed my major and got a History degree. I could go to school stoned every day, do almost no work outside of sitting through lecture, and I graduated with a 3.7 GPA. As a CS major I was barely squeaking by and it was no fun. My fellow classmates were total lame asses too...

      Lucky for me I have some tech skills and grew up around computers so I really didn't need the degree to get into engineering. I already had most of the skills before I graduated high school and have learned eve
  • No surprise (Score:5, Informative)

    by ironjaw33 (1645357) on Thursday January 19, 2012 @06:23PM (#38754206)

    I have a relative who works as a researcher for a major drug company. She had to move laterally in the company after they announced they were moving all new drug discovery work to China.

    As a senior Computer Science PhD student, this has me worried. I also know of a few recent American CS graduates that have gone to China to work as researchers for a particular American software company because that company's US research offices weren't hiring. I still know plenty of other graduates who had no difficulty finding research positions in the US, but it seems that a few major players are shifting their work to Asia. Hopefully the rest won't follow.

    • Re: (Score:3, Interesting)

      by entropy123 (660150)
      I graduated with a PhD in engineering in 2006. At graduation, the President of the University told us to get to know our politicians. In the US it is every man for himself and engineering skills cost less in China. Between my stint as a postdoc and as an Adjunct I think it no joke that PhDs need to get representation and organize.
  • U.S. Companies? (Score:5, Insightful)

    by Lije Baley (88936) on Thursday January 19, 2012 @06:24PM (#38754226)

    We need a new standard for what a company has to be like to call itself a U.S. company and be eligible for any the benefits of such title. Multinationals with little U.S. corporate responsibility need not apply. If corporations are people, then let them take a citizenship test.

  • by Joe_Dragon (2206452) on Thursday January 19, 2012 @06:38PM (#38754462)

    We have to many people in college and a lot of the tech fled needs apprentices systems AS CS IS NOT IT. So colleges are being dumped down to fit in people who are not college material but can do good a apprentices system. Also lot's of jobs don't need college and alot of people don't belong there.

    I say have more tech schools / apprentices systems and for IT you need to people at all levels but CS for all does not work CS is to long and to much high level for most IT jobs when a apprentices / tech school is a much better fit.

  • When I got my master's degree (EE) back in '85, there were about 130 advanced technical degrees given. Compare that to the 370 jurisprudence degrees handed out, and I think you can see where we were heading. Now lawyers are everywhere, and especially in politics where they can pass laws written to assure full employment for the members of their profession.
  • Look at China high speed rail systems it's a cheaper but unsafe ripoff of the japanese system that has no passenger fatalities due to derailments or collisions.

  • Of course the US is losing R&D ground to Asia. R&D takes money, but in the US huge salaries are paid out to executives and the rest tends to go out as dividends. R&D implies a company's management and owners have the ability to defer gratification. Something that is sorely lacking nowadays.

  • by Caerdwyn (829058) on Thursday January 19, 2012 @06:46PM (#38754610) Journal

    In my recent (and extensive) experience with interviewing people who are recent graduates, I am finding a very large percentage of people with bachelor's and master's degrees in computer science who can't write even the most simple scripts in any language... people with "expert in TCP/IP networking" in their qualifications, or who have three years testing routers and switches listed as experience who don't know what NAT means or what a MAC address is... people who don't know how to list running processes on any platform. These are people who are graduates. They have their degree. And those degrees are worthless. We've had half a dozen positions open where I work for a long while, the bar just isn't set that high, but we're not finding qualified applicants.

    It doesn't matter what nationality the school or the "graduate" is. Poorly-prepared graduates are a world-wide phenomenon. Sure, Asia is producing a large number of graduates, but the majority of them aren't going to be very useful. The U.S. is producing fewer engineering graduates, but they're just as useless.

    Yes, the universities are to blame. I don't know what they're teaching but it has little to do with reality and doesn't prepare the students to be employable. But the students are also to blame. Surveys show that between 75 and 98% of students admit to cheating, and don't feel particularly bad about it [glass-castle.com]; the universities also don't seem to think that cheating is anything to get worked up over either. No wonder nobody is learning anything.

    All of this is why I don't think that it's a big deal that the US produces only 4% of engineering degrees; 4% of "nothing useful" is no worse than "35% of nothing useful". If those degrees actually meant something, or correlated in any meaningful way to success (both for the individual and for the employer), I'd be more concerned. My real worry is that Westerners aren't even interested in engineering any more; they all want to be in sales and marketing and other nontechnical fields (or "soft" majors like political science or humanities, followed by whining about how nobody will pay six figure salaries for their chosen field). I'm not sure why this is,,, given how little tech work someone with a tech degree seems to actually be required to do, it can't be because of academic workload. Mind you, the profound anti-intellectualism that is still the rule in Western society may have something to do with it.

    -sigh- Kids these days.

    • by rsagris (831741) on Thursday January 19, 2012 @08:05PM (#38755832)
      Uh, how about you and your company try the novel idea of TRAINING people how to do their job, instead of expecting them to do your job for you by training themselves. If companies would quit expecting their employees to walk in already trained on their specific skill needs and actually get down to taking 1-2 months of training their employees, they might actually solve the problem of not having enough skilled candidates. Use their major and them having a degree as a screening criteria for work-ethic and overall ability to accomplish tasks put to them under a deadline, but don't expect them to be tailor made to suit your field. -rs
      • by evilviper (135110)

        Use their major and them having a degree as a screening criteria for work-ethic and overall ability to accomplish tasks put to them under a deadline

        Or better yet, don't. Getting a degree doesn't show you have a better work ethic or any other abilities than the general public... It just shows that you're bad at math... Get deep into debt by spending obscene amounts of money for years, rather than EARNING money full time for that same period.

        If you look at job listings, what do they always say? "BS in com

  • by Frightened_Turtle (592418) on Friday January 20, 2012 @01:50PM (#38764090)

    In over twenty years working in prototype development, I saved for being laid off instead of retirement. Anytime there was a hiccup in the economy, the first thing that management would cut from was R&D and product development. The mentality of a business focused management -- as opposed to a product focused management -- was since they were already manufacturing product, they could delay the release of new product for a while. As any idiot with half a brain can figure out, when you stop or delay developing new products or improvements to existing products, your company can quickly fall behind the competition and become irrelevant.

    As a testament to that, most of the companies I used to work for no longer exist. One was bought out by their primary competitor. Another still struggles to exist.

    Hand-in-hand with this was the fact that the moment they put someone with an MBA in the role of CEO, the company was doomed. Because these people had no concept of what it took to develop and manufacture product, they would start making cuts indiscriminately in order to increase the profit margin -- not profit -- of the company. They would cut a few thousand workers from the payroll in order to "save" $3 million and then pay the CEO a bonus of $5 million for saving the $3 million by putting a few thousand people out of work. Immediately after, the CEO would pull on his golden parachute and jump the company, leaving it to fail.

    Anyone in doubt of a business-focused CEO vs. a product-focused CEO need only look at the most perfect textbook example company: Apple Inc. After they ousted the product-focused Jobs from being CEO, they stuck business-focused men at the helm. Apple all but failed until product-focused Jobs retook command of the company. The first thing Jobs did when he returned was immediately put a stop to the financial dealings and focused the company on producing product again. The rest is history.

    Business people do not value their creative staff. I remember listening to a vice president complaining about the salary that a particular engineer was being paid, saying the guy brought in no business, didn't sell anything, didn't spend any time on the phone talking to customers and just sat quietly in a corner all day doing nothing. The VP felt that any engineer being paid more than $60K per year was being overpaid. The engineer in question was the very man who designed and developed the technology behind the product the company sold. The very reason the company existed! The VP made life very unpleasant for the engineer and eventually the engineer gave up and quit. Over a short period of time, most of the people who worked with him left as well. The VP reported to the Board of Directors that he had managed to save nearly $1 million in 'administrative costs' (the salaries of the people no longer there) and successfully campaigned this into a six-figure salary increase. What this VP actually did, without realizing it, was effectively scuttle the company. After I left the company, I learned from others it was well over a year before the CEO and board members of the company discovered what had happened. By then it was too late. Lack of improvements and enhancements to their product made them irrelevant in the market. Their competitors, on the other hand, suddenly exhibited a surge in improvements and enhancements to their products, as well as the introduction of new products.

    This was not an isolated case! One of the best examples of management not understanding or appreciating the true assets in the company was the case of Motorola vs. Intel. The Motorola PowerPC processor was the first mass produced CPU chip to break the 1 GHz barrier. The PPC was making inroads against Intel's Pentium line of processors and was rapidly moving ahead as the microprocessor of choice for new computers. Intel's line, on the other hand, had reached its theoretical maximum speed and was not moving ahead. Then, just as it seemed the PPC was about to truly gain momentum, things ca

If A = B and B = C, then A = C, except where void or prohibited by law. -- Roy Santoro

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