Spring 2005

What a wonderful day this is!  The graduating class ready to conquer the world, meet the challenges of the new century, solve the problems of the world!

Well, let me add a little bit of reality from my own experience.

Almost forty years ago (long before any of you were born!), I was sitting down there, where you are, ready to take on the world!

Of course it was easier to pick out the engineers in those days, we were the ones carrying the slide rules, and the pocket protectors. [Anyone who doesn’t know what I am talking about, see me afterwards.] But this isn’t going to be about how tough things were for my generation. You know the stuff – walking miles to school every day.
…In the snow.
…Uphill.
…Both ways.

But the fact is, it was a very different world, and not just because of the slide rules, etc.  On the one hand, of course, it was the height of both the Cold War with the Soviet Union and the hot war in Viet Nam, a time of  political and cultural turmoil. That’s the down side.

But from the point of view of a graduating engineer, there was a lot that was positive.

Beyond any question, the U.S. was the largest and most robust economy in the world!

Beyond any question, we had the best science and technology infrastructure in the world. Federal R&D spending as a percentage of the gross domestic product was at its peak of nearly two percent.

Our higher education system was the envy of the world, generating the largest number of S&T degrees. The earliest year for which I have comparative figures is 1975, when the trends were down, but even then we handed out about 75,000 more first degrees in natural science and engineering then the closest competitor, which was Japan. Doctoral degrees weren’t even close – we awarded three times as many as the closest competitor, which was Germany.

This system attracted the best and the brightest from all corners of the world.  And, many of these people stayed on in the U.S. which offered many opportunities and contributed to the technology advances in the U.S.

As a result, U.S. products and services were sought out in every corner of the globe.

We had the largest and most profitable auto companies of the world (The Big Three!).
American cars were seen in every corner of the world.

We had no competition in the air transport business; Boeing, McDonnell Douglass, Lockheed were unequaled.  Pratt and Whitney and GE produced all the commercial jet engines in the world.
 
The electronics industry was created in the U.S. after the development of the transistor. These high tech marvels could only be made in the U.S., by companies like Texas Instruments, Intel, and IBM. The first integrated circuit had been demonstrated seven years before – at Texas Instruments, although the practical applications were still quite limited by our standards.

Large computers were finding their way into all kinds of applications,  although I’m not sure that anyone other than Isaac Asimov would have suggested that in forty years I would be writing this speech on my laptop computer, on board an airplane carrying 400 people.

DuPont and Dow were the world’s leading chemical companies with very little competition.

The U.S. had many high powered private sector R&D labs, like Bell Labs, IBM and Xerox Labs, DuPont Experimental Station.

And, after a little kick in the pants from Sputnik, we had taken a “large step for mankind” on the moon!

We were literally on top of the world!

In that kind of technology environment, engineering meant designing new systems, based on “established principles” – you looked up information in Kent’s Handbook, or other well-worn books. Our product cycles were much longer, the pace of knowledge creation was a lot more leisurely. At Pratt, where I worked, we were very proud of the fact that we could develop a new engine in ten years!

Well, a lot has changed since then.

Take the branding of “apple” for example. In 1965, it was a fruit. A couple of years later it was a music recording company. Then it was a manufacturer of a strange new appliance that came to be called a “personal computer.” Now it’s still a computer maker, but it’s probably best known in connection with a little pocket gadget that you can use to hold the entire catalog of a music recording company. Symmetry.

More importantly, their little pocket gadgets that sell like hotcakes are assembled by companies headquartered in Taiwan.

Frankly, the landscape that you face today as graduates is not nearly as comfortable as the one I faced. Today, the rest of the world is catching up with us. And to be fair, it’s not so much because we as a nation have been slacking off, as that they’ve finally gotten their feet under them.

Yes, we still have the leading GDP, but do the math. The four largest emerging economies – Brazil, Russia, India and China – collectively account for about 25 percent of the world’s population, compare to four percent for the United States. According to an estimate by Goldman Sachs, in about 30 years the combined GDP of  those four counties will exceed that of the hallowed G-6 – the United Kingdom, France, Germany, Italy, Japan, and the United States.

Moreover, such a projection may not fully take into account the second major problem facing industrialized nations, namely the rapidly growing ability of those four and other Asian and European economies to compete in technology-based markets. Japan set the model in the 1970s and 80s for how to force feed a domestic industrial structure with the tools to develop and use technology. Others, such as Taiwan, Korea and now China, learned the lesson.

The educational systems offered in China, Japan, Korea, and elsewhere are becoming quite competitive with the U.S. In 2000, according to National Science Foundation figures, Asian universities accounted for almost 1.2 million of the world’s natural science and engineering degrees, European universities for another 850,000, and North American universities only about 500,000. Something similar is happening with doctoral degrees.

And it’s not just a question of relative sizes. The ratio of first university degrees in science and engineering to the college-age population in the U.S. is about 5.7 per 100. The number of our EE graduates is going down, while degrees in park service and leisure are going up! Meanwhile across the various ponds the ratio in the major European nations is between 8 and 13 out of 100, in Japan it’s 8 out of  100, in Taiwan and South Korea it’s about 11 out of 100.

And the jobs and the opportunities are there to keep many of the best and the brightest at home. Most of the high tech products are being manufactured in the Asia Pacific. As a result, U.S. companies (if there is such a thing left!) are spending more time on outsourcing and off shoring. …And they are setting up R&D labs in all corners of the world.

Boeing is the only commercial airline manufacturer left in the U.S., and Airbus is giving them a run for their money!

Two of the U.S. car companies are loosing money, and the third is bought out by Daimler Benz.

Dow and DuPont have many powerful competitors.

It will be very challenging – and it will be your challenge – for the United States with its small fraction of the world’s population and its relatively tiny high-tech sector (7-10 percent of GDP, depending on how you define "hi-tech") to slow the descent from its current dominant technology leadership position.

How do we compete in this global market?  How do we maintain our standard of living?
The only way we know how, the “old fashioned way”.  We “innovate”!

That’s how we became the technology leader of the world, and that’s how we’ll do it again!  And everyone agrees on that!

President Bush said last year, “… we live in a competitive world ... We shouldn't take our preeminence as the world's greatest economy for granted. We've constantly got to make sure the economic environment here is strong. We've got to make sure that we're innovative.”

The Council of Competitiveness, in their recent report “Innovate America”, said flatly, “Innovation will be the single most important factor in determining America’s success through the 21st century.”

The less upbeat Task Force on the Future of American Innovation put it, “We conclude that although the United States still leads the world in research and discovery, our advantage is eroding rapidly as other countries commit significant resources to enhance their own innovative capabilities.”

And the even less bouncy Craig R. Barrett, CEO of Intel, wrote “The balance of innovation has begun to tilt eastward, as China and India start taking their own products to market. For the first time, other nations are about to produce more U.S. patents per year than the United States.”

As an official of one of the government’s oldest science and technology research laboratories, this is not the sort of thing that helps me sleep well at night. And yet, coming here today makes me feel a lot better.

The Yankee ingenuity has always been there, and still is here.  I see it right in front of me. We need to focus the country back on science and technology!

And we need to get our youngsters interested in science and technology in an early age! Thomas Friedman, the professionally quotable foreign affairs columnist for the New York Times had a great line recently in an interview for Wired magazine: “When I was growing up, my parents told me, ‘Finish your dinner. People in China and India are starving.’ I tell my daughters ‘Finish your homework. People in India and China are starving for your job.’" Here at least I have an audience of people that got the message.

We need to value our teachers at all levels who teach science and technology.

And we need to value our scientists and engineers, and appreciate what they mean for our economy!  And, I am sure, everyone who is here appreciates them.

And we need to appreciate the fact that today technology is much more interdisciplinary, and we need to work as a team.  And we need to be able to manage and exploit all the knowledge that is being created at an astronomical pace.

Today, you are graduating with all the tools to be creative, innovative, and entrepreneurial to drive the U.S. economy.

We are counting on you to go out there and conquer the world -- the world of science and technology that is --  and restore American prowess in technology and world leadership.

Stan Williams, a Senior Fellow at HP, and director of their Quantum Science Research, said recently, “The wealth of the United States was created through engineering. All of the benefits that flow from that wealth, our security, health and freedom, depend on our ability to lead the world in engineering.”

He is certainly not going to get any argument from me!

Good luck to you all!

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