THE BLOG
08/25/2014 05:34 pm ET | Updated Oct 25, 2014

Engineers Don't Make Jobs, Jobs Make Engineers: Politicians Got it Wrong Again

Hero Images via Getty Images

Our politicians have been saying if we just get better grades in math, America will always be a leader in innovation even though all the things we invent are made in factories in China.

But now we're told that the inventors who got straight As want to be in China where all the factories that make the nifty gadgets are.

This shouldn't be a surprise. Anyone with first hand knowledge of what it takes to make things knows that innovation is tied to the factory floor, and when factories go overseas so go the workshops of innovation.

Read the history of Apple and you'll see how the personal computer industry sprang from defense industry assembly lines. Steve Jobs worked those lines in what is now called Silicon Valley and so did Steve Wozniak. Every capacitor, resistor and computer chip in the radar, missile guidance and avionic systems built in the South Bay was made in America. These components wound up in the electronic surplus stores where Woz scrounged parts for the Apple prototypes he built in the garage. Simple: No assembly lines, no spare parts, no garage inventors.

The Wall Street Journal tells us now that China has all those factories, it's in line to become a global leader in innovation (emphasis added).

"China will be one of the most advanced research-and-development centers for the new convergence between hardware and software, given it's the world's factory," said Annabelle Long, a director of venture capital for Bertelsmann Group.

A new generation of Chinese inventors is taking advantage of the multitude of companies supplying China's electronics industry.

Proximity to that supply chain lets inventors tweak their pet projects at the factory itself, giving them greater control over the finished product.

Bertelsmann has invested in Zepp Labs, a start-up founded by a Chinese engineer trained by Microsoft (in China). Zepp has offices and "teams" in Silicon Valley and China, but one can guess where the action is.

"In China, the company has 'a team on the ground to develop and manufacture its products,' said Jason Fass, Zepp's chief executive and a former Apple Inc. product manager. "Having that coverage has been enormously helpful."

And Bertelsmann isn't the only Western venture capital outfit bankrolling China's great leap forward into innovation. James Krikorian, an investor with venture capital firm DCM, told the Journal that China's expertise in tech manufacturing gives it an edge.

"Location is critical," he said. "That can absolutely serve as a benefit to the market and spur local innovation."

Even American inventors are moving to China. Zach Smith, a cofounder of a 3-D printer company -- the next big thing! -- moved to China to be close to manufacturers like Foxconn, the Apple assembler. He calls it "paradise for a maker/engineer-type geek."

Let's recap: American companies moved factories to China, then all the suppliers followed them, and Western companies moved R & D there as well. Now venture capital firms bankroll startups in China, and even the American inventors of "the next big thing" want to be there, too.

Meanwhile back at the ranch, our politicians would have us believe Americans are somehow naturally pre-disposed, genetically or otherwise, to be the world's innovators. If it's not outright racist, it displays an arrogance based on ignorance of history and facts.

The much-vaunted Yankee ingenuity that built our country sprang from a mixture of theft, thrift and a burning desire to overtake Britain. New England's textile industry took off in the 18th Century after American mill owners offered a bounty to anyone who would steal British trade secrets for mechanized textile production and deliver them to our shores. China's is running the same play, but it doesn't have to offer a bounty for our trade secrets - they steal what Western companies don't willingly surrender. And while the geniuses in Washington talk about strategic partnerships and "not falling into the trap of strategic rivalry", don't believe for a second that China isn't as hungry to overtake the West as we were to stick it to Great Britain three centuries ago.

Our politicians also still seem to believe production follows innovation, rather than the other way around, which is how it really works, as any engineer or even the Wall Street Journal will tell you. Nancy Pelosi and others talk about driving a renaissance of American manufacturing by training more engineers and developing "innovation clusters" around university research centers. Andrew Cuomo is big on innovation clusters as the cure for the decades-long decline of upstate New York following the offshoring of its heavy industry, and has proposed a $50 million state-run venture capital fund to help entrepreneurs commercialize university research. Besides the fact that 50 million is a mere pittance, the whole thing misses the point: entrepreneurial start-ups that commercialize basic research do not produce a lot of jobs. The greatest number of jobs - the source of wealth for most Americans - lies in the mass production phase of a commercialized technology, not in basic or even applied research. And, as we've seen, production does not follow innovation. In fact, investors nowadays essentially demand start-ups do production offshore. (It's not fair to single out Nancy Pelosi and Andrew Cuomo; their views are shared by plenty on both sides of the aisle. Sen. Mitch McConnell even said "it's not my job" to bring jobs to his home state.)

Since from a purely profit-driven perspective, it makes sense to move factories, research, development, innovation and investment to China, one might ask: why do we even care if America is the innovation leader of the world?

It only matters if we care about and believe in something called the United States of America. It matters if we care more about our own people, communities and country than another country, just as a parent cares more about her children than her neighbor's.

It's called patriotism.

But patriotism not very fashionable among the elites on both the left and right. They identify more with their Ivy League classmates from around the world than with the people in the town where they grew up. Some see patriotism as what bitter people cling to along with God and guns. Others, financial sophisticates and fundamentalist libertarians, can't find patriotism on a profit and loss statement, so it's irrelevant in the spreadsheets and theories they use to explain the world and everything in it.

To sum up: Innovation follows production, not the other way around. Most jobs are in production, not innovation. If politicians truly care about American jobs and innovation, they should craft policies to ensure production stays in America. The rest will take care of itself: Our people will have jobs -- and the know-how, tools and resources to invent "the next big thing."

But first, politicians have to forget about the "global economy" so beloved by their corporatist campaign contributors and just do what's right for America.