The challenge America faces in the wake of global competition is daunting.
We have lost our dominance in manufacturing, as well as in the provision of services like banking, accounting and insurance. Computers and Internet access can be found almost everywhere in the world, and most countries can provide such services anywhere, anytime and usually at a fraction of what it costs in the U.S.
IBM, the world's largest computer maker, acknowledged that a number of software and chip development and engineering jobs were being moved to India and China. Industry stalwarts like Microsoft, Hewlett-Packard and Dell Computer announced that they, too, were either outsourcing their software development or expanding their foreign subsidiaries in China, India, the Eastern Bloc, or Russia to do the same.
Now these same companies and many others, as a matter of economic survival, have not only continued to outsource jobs but have off-shored entire divisions of their companies. Writing in Newsweek Zachary Karabell makes the case: "The truth is that the decline in jobs is a result of megatrends including the growth of technology and the rise of globalization. Neither of these is going away.... along with the hyper efficiencies produced by technology, (this) has allowed businesses to generate record revenues and profits while shedding record numbers of workers".
Globalization 3.0, as author and New York Times columnist, Thomas Friedman calls it, is here. Outsourcing jobs and offshoring companies are commonplace. We are currently suffering what economists are euphemistically calling a "jobless recovery," and our communities and schools are facing challenges not well understood by politicians, policy makers or parents.
Twenty years ago it was fashionable to blame foreign competition and cheap labor markets abroad for the loss of manufacturing jobs in the U.S., but the pain of the loss was softened by the emergence of a new services industry. Now, it is the service sector jobs that are being lost, and research and development, which is the life-blood of an Innovation Economy.
We don't know how many jobs are lost from outsourcing or offshoring. But this shift of high tech service jobs will be a permanent feature of economic life in the 21st century. And it is clear that the pervasive worldwide spread of the Internet, digitization and the availability of white-collar skills abroad -- where the labor cost alone may justify the move -- mean huge cost savings for the global corporations.
Making matters worse, we are nowhere near ready to capture the high ground in the new competitive environment, given the lackluster performance of our systems of education today.
A whole new economy based upon creativity and innovation is emerging. This is why , as I have said before ( http://www.huffingtonpost.com/john-m-eger/steam-not-just-stem_b_751847.html ) , we urgently need to redesign our K-12 (and college curricula too) to focus on preparing students for this new competition if we are to survive, let alone succeed, in this new global economy.
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