The co-chairman of the National Innovation Initiative, Clough is charged with finding ways to help the United States generate and hold on to high-skill, high-paying jobs. The project is part of the Council on Competitiveness, a group of business, academic and labor leaders focused on spurring economic growth and raising the nation's standard of living.
The findings and recommendations submitted by Clough and co-chairman Sam Palmisano, CEO of IBM, will provide the basis of a national summit still in the planning stages.
Fear of falling living standards has emerged as an issue for computer programmers and other skilled U.S. workers. Despite a resurgence of the information technology industry, the job market for IT professional has not kept pace. Critics have pinned a lot of the blame on the movement of U.S. jobs offshore. They also fault the practice of extending visas to foreign-born IT professionals, contending that this further hurts job prospects for American workers.
Clough, who is also the president of the Georgia Institute of Technology, spoke with CNET News.com about what he thinks will be key to developing good jobs as well as the future of government research money, regional planning and new forms of public-private investments.
Q: A lot of what we are hearing in the tech industry is that high-skill work can easily go offshore. What do you see as the initial responses to that problem?
A: Well, several. I think that we are on the verge of a real wave of the introduction of new technologies in the world. Part of that is going to be driven by developments in biotech; some driven by developments in areas like logistics; some driven by work in nanotechnology. Some of that is around the corner, some of it is longer-term, some of it is 50 years from now. The United States has got to be poised to take advantage of that.
Basically, since the Cold War ended, the federal government has not had a clear motivation for investment in research and development, and it has been guided, to some extent, by issues clearly on persons' minds, such as health care. The National Institute of Health budget went up at the expense of the budgets in areas like electrical engineering, mechanical engineering, chemical engineering, math, physics and chemistry.
Are you calling for actually more overall federal monies for research--or redistributing them?
I think that there is not enough money being invested overall.
Remember that federal R&D is just a piece of the national investment in R&D. Thirty or 40 years ago, federal R&D was 60 percent to 70 percent of total R&D. Today, it is just the reverse. Industry puts up more like 67 percent of the total R&D; the federal government's now down to 30 percent.
Companies that are based here are increasingly identified as "global." How do you deal with this question of "we," when you are dealing with companies that are less and less national?
The other side of this coin is Siemens, a German company that has operations all over the world--and big ones in the United States. We at Georgia Tech are very proud of our relationship with Siemens. We have a platform in Europe that enables us to work with Siemens and the Technical University of Munich. That's the way the world works today. We are going to be dealing with mostly globalized companies.
They still will have home bases. IBM, for example, clearly has a moral sensibility, if you will, and a rationale that it will always have a huge presence in the United States. It would never simply pull up stakes and say, "Okay, we are going to India, because there are a lot of people over there who can work cheap."
There are only so many smart people in the world, and they are not all in India; they are not all in China. They are in this country, and so there are going to be great inventions and developments that will take place in this country, and nobody is going to walk away from that. In addition, in this country, we have, I think, the other parts of the innovation pie. We have strong venture capital. We have a very benign regulatory laws. We also have a collective entrepreneurial mind-set. Not every country has that.
As far as India and China doing well as nations and in this economy...that's not a bad thing. It helps create a more stable world for all of us, and having a stable world is good for our economy. There may be these temporary shifts of jobs overseas. I do not think it will go on forever, because eventually, these things balance out. In part, right now, some of the imbalance with China has to do with monetary policy--not technology capabilities.
One argument I heard recently is that if we start letting the lower-end software development jobs or other tech jobs go abroad, then you cannot expect to have the high-end jobs here in the long run--because what we are doing is exporting experience, as this person put it.
As far as India and China doing well as nations and in this economy...that's not a bad thing.
One argument has been made that it is a pure economic decision. These students are realizing that all the IT guys are getting laid off, and it is MBAs or the lawyers or health care people that are still having jobs.
We all have family members or friends who are struggling with some of these things. But some of this is temporary, some of this is a shift in the economy, some of this is the shift in the global economy. We are not saying to anyone, nor should we say to anyone, "There is a job out there, when you get out, guys. It has got your name on it, and you will have it for life." It just does not work like that anymore. What you need to do in educating young people for the future is to educate them so that they can be flexible and adaptable, because the life span of jobs in the future is going to be relatively short, compared to the old days.
If you've got a very, very smart person who is an IT professional, I can guarantee you that that person--if smart enough--will figure out where the job market is going or figure out that he or she wants to change life directions and become very successful.
Should companies like IBM, Intel and others make firm commitments to having jobs or factories here?
If you tried to pin that on a company, it could run itself out of business. It would be forced to operate a plant or a division inherently uncompetitive in the global economy. That is not going to be good for the workers in the long run, either, because instead of gradually losing their jobs, they would lose them all at once. The policies we look to set in place have to be policies that understand the new realities of the global economy.
States have to get more active in this picture. They need to understand their economies better. For example, a study showed that Georgia has--or Atlanta has--4 percent of the logistics industry in the country. We did not focus on and understand that before.
Georgia also has a fairly strong concentration in telecommunications, which has been going down for the last four or five years, as a result overcapacity. On the other hand, logistics is going up. And also, software is going up, because people are investing in software--not necessarily hardware. You've got to constantly re-evaluate yourself; see what you need to invest in. And states have to do that, because it is the regional innovation that drives the country--not necessarily some global strategy.
Is there a role for more direct government intervention, in the sense of actually starting up industries or playing a more aggressive role than we think of in the capitalistic economy?
I think that there can be. I will just relate the story here in Georgia, but there are a lot of other stories you could cite. I think that a very far-sighted decision was made in Georgia under Zell Miller, when he was governor, to create the Georgia Research Alliance. That is not a big investment on the part of the state. It is about $25 million to $30 million a year--but one in which you work closely with the industry and targeted segments of the economy to do R&D, to help the industry stay competitive and gain a competitive edge.
That is a place where the state is investing. And in a couple of areas, the state has even set up a seed capital fund, where our high-tech business incubator administers it, but we look for a three-to-one match with industry--one public dollar to three private dollars. It is an incentive for tech companies to invest in research and help start-up companies in their local areas.
And then, the public actually can retain a stake of the company?
Absolutely. Now, as the companies get successful, different things can happen. What you have to be a little bit concerned about is that big companies will come and gobble them up and move them out of town.
I would imagine that a public stake in it could actually prevent that from happening.
It can. And you can actually write a contract and say, "We expect this company or a division to stay here for X period of time." So there are ways to do that. I think that this is an enlightened policy we need to adopt in order to be successful in this economy.