Strategic CIO // Executive Insights & Innovation
Commentary
7/6/2010
10:53 AM
Chris Murphy
Chris Murphy
Commentary
Connect Directly
LinkedIn
Twitter
Google+
RSS
E-Mail
50%
50%

Andy Grove: Knowledge Work Isn't Enough

Intel co-founder Andy Grove doesn't have all the answers in his Bloomberg column on "How to Make an American Job Before It's Too Late." But he makes one opinion clear: The U.S. can't innovate if it doesn't also build stuff.

Intel co-founder Andy Grove doesn't have all the answers in his Bloomberg column on "How to Make an American Job Before It's Too Late." But he makes one opinion clear: The U.S. can't innovate if it doesn't also build stuff.Among many intriguing ideas in the full column, which you should read, Grove attacks the notion that the U.S. can focus on knowledge work, doing the design and engineering and feeling comfortable leaving the manufacturing to lower-cost countries.

He offers two main reasons. One, that approach just doesn't create enough jobs. Writes Grove:

Startups are a wonderful thing, but they cannot by themselves increase tech employment. Equally important is what comes after that mythical moment of creation in the garage, as technology goes from prototype to mass production. This is the phase where companies scale up. They work out design details, figure out how to make things affordably, build factories, and hire people by the thousands. Scaling is hard work but necessary to make innovation matter. The scaling process is no longer happening in the U.S. And as long as that's the case, plowing capital into young companies that build their factories elsewhere will continue to yield a bad return in terms of American jobs.

And two, the U.S. won't create enough great startups if it's not also manufacturing. He cites the advanced battery market, which is poised to boom with the growth of electric cars:

A new industry needs an effective ecosystem in which technology knowhow accumulates, experience builds on experience, and close relationships develop between supplier and customer. The U.S. lost its lead in batteries 30 years ago when it stopped making consumer-electronics devices. Whoever made batteries then gained the exposure and relationships needed to learn to supply batteries for the more demanding laptop PC market, and after that, for the even more demanding automobile market. U.S. companies didn't participate in the first phase and consequently weren't in the running for all that followed. I doubt they will ever catch up.

Grove offers some prescriptions that will rankle any free trader, including taxing foreign-built goods and banking that money to help companies that scale up U.S. production. But more broadly he argues for "job-centric political leadership" and "job-centric economic theory."

Comment  | 
Print  | 
More Insights
The Business of Going Digital
The Business of Going Digital
Digital business isn't about changing code; it's about changing what legacy sales, distribution, customer service, and product groups do in the new digital age. It's about bringing big data analytics, mobile, social, marketing automation, cloud computing, and the app economy together to launch new products and services. We're seeing new titles in this digital revolution, new responsibilities, new business models, and major shifts in technology spending.
Register for InformationWeek Newsletters
White Papers
Current Issue
InformationWeek Must Reads Oct. 21, 2014
InformationWeek's new Must Reads is a compendium of our best recent coverage of digital strategy. Learn why you should learn to embrace DevOps, how to avoid roadblocks for digital projects, what the five steps to API management are, and more.
Video
Slideshows
Twitter Feed
InformationWeek Radio
Archived InformationWeek Radio
A roundup of the top stories and trends on InformationWeek.com
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.