By Andrew Nusca
Posting in Education
At CES 2011, Cisco chairman John Chambers, GE chief executive Jeff Immelt and Xerox CEO Ursula Burns discussed the pain points of American innovation and global business.
LAS VEGAS -- If the United States wants to pursue innovation and compete on the global stage, it must lower its borders and allow talent to flood in, the executives of top American corporations said on Friday.
In a panel discussion at the 2011 Consumer Electronics Show, Cisco CEO John Chambers, GE CEO Jeff Immelt and Xerox CEO Ursula Burns agreed that topics like illegal immigration had become sub-points to a broader narrative, one in which U.S. companies are increasingly at a disadvantage against emerging powerhouses such as China.
"We've made it important to protect our borders," Burns said. "The last thing we need to do is that."
Immelt said that U.S. companies of all sizes must be more competitive by increasing their rate of innovation, because "the rest of the world is moving faster than we are."
"From the time you get up in the morning to when you go to bed at night, focus on exports," he said. "When Angela Merkel gets off a plane in Beijing, 20 German CEOs get off right behind her."
Exports was one of the three "functional pillars" that the U.S. must focus on, the executives agreed. The other two: an acute focus on partnerships between mid-size and large companies, and a focus on technology and innovation at the university and secondary school level.
ON EDUCATION AND PUBLIC-PRIVATE PARTNERSHIP
"We must fix this and we are working on fixing this," she said. "I don't think we can pretend to be better than we are. In educating the mass population, we are failing."
"Our K through 12 system is broken," he said. "We're not in the Top 10. We're not in the Top 20.
"Education is the most important long-term change that we have to do in this country."
But education is one glaring example of how the U.S. government and major corporations can work together. After all, Fortune 50 companies collectively invest billions in secondary education, Immelt said.
"This is a place where government and business should work together and can work together," he said. "There ought to be a call to arms on this."
He added: "We all have skin in the game. That for us is our lifeblood. I worry a little bit about losing our edge."
Burns said it was high time the U.S. government gauged the return on investment for its educational efforts.
"If you think about how much money all of our foundations -- just dollars -- it's hundreds and hundreds of millions of dollars," Burns said. "And I don't spend a lot of money without measuring outputs. If we look at the education system, we've failed. The outputs haven't changed dramatically."
It starts with clear goals, Chambers said.
"If you're two years behind in this industry, you're history," he said. ""We have not changed the way we teach our children."
ON IMMIGRATION AND PROTECTIONISM
"Today we are hanging up a sign that says, 'You're not welcome in this country.' " Chambers said. "We have got to change that."
Burns said the global financial crisis from 2007 to 2009 has politicized the issue further by prioritizing the protection of borders instead of building out infrastructure and improving education.
"The economic downturn made it easy to demonize people who are not here," she said. "It made it a competition when it shouldn't be a competition."
It's about helping engineers from China or India stay in the U.S. and start companies here, Chambers said.
"We've got to get back to one of our key advantages -- our immigration policy used to get the best and brightest to come here and stay here," he said. "Make them American citizens, not just a green card."
But the responsibility to spur action starts with the corporations who hire talent, Immelt said.
"Business can no longer sit on the sidelines. We've got to fight for our future," he said. "This is a good thing, not a bad thing."
Part of the problem is leverage. Burns admitted that as CEO, it was a neutral decision for her to build a factory in the U.S. or overseas.
"I have to build close to a reasonable market," she said. "I don't wake up in the morning and say, my preference is to employ Americans. My preference is to employ great people."
Unfortunately, current tax policy discourages U.S. corporations from hiring Americans, she said.
"The cost burden of having an employee in the United States is actually [comparatively] very high," she said.
"We're one of five countries in the world that has an arcane tax policy that taxes income twice," he said. "We pay taxes in India and China and Europe, and if we bring it back, we have to pay taxes again."
"You're in essence spending 70 cents on the dollar. Nobody in their right mind would do that."
Business only goes where the market is, Chambers said.
"I have 40 billion dollars here [in the U.S.]. I have 40 billion dollars allocation overseas. I'm going to spend that money," he said.
Immelt said he doesn't understand what good it's doing the U.S. to have a trillion dollars outside its borders.
"Jobs go where the markets are," he said. "I never apologize putting a factory in China if my growth is in China."
ON CULTURE AND INNOVATION
The good news? All three executives agreed that innovation is an American strength -- but so is time-wasting deliberation.
"The speed of innovation does not match our decision process in government or business," he said. "We're falling behind on speed. The U.S. has the carbs to be here, but we've got to start measuring it."
Immelt said a flatter management structure facilitates innovation at American companies.
"The way we interact with each other is a huge competitive advantage," he said. "As you get bigger, the battle with bureaucracy is profound."
Chambers said a dash of paranoia is just the kick U.S. companies need to compete globally.
"I think we have all the cards to win, the question is whether we have the courage, the fortitude," he said. "In confidence we can take on anyone in the world, but there's also a healthy paranoia of [being beat].
"The speed of innovation isn't going to create winners and losers, and that's what companies and countries think."
Immelt said his paranoia comes from global travel, some 60 to 70 percent of his time as GE's top executive.
"I've been going to China and India since 1984. I have the burden of knowing what's happening," he said. "I get back and sleep like a baby: sleep soundly, wake up every hour crying. That's what it's like to be a CEO."
The problem is that paranoia manifests itself about the wrong things, Burns said.
"This is not a fight about whether India should stay behind," she said. "It's about what are we going to do to make sure we participate as the world grows."
But it comes back to business. Allowing protectionism to grow is ultimately a failure of responsibility to investors, Immelt said.
"Technology innovation is what predicts wealth," he said. "How many engineers you graduate, how many patents you have...no one's asking us, 'Can you send some lawyers over here?' They want to know what's in your brain."
"The one mistake you can make is not learning from your mistakes."
Chambers said there's a "comeback opportunity" facing the U.S. as technology, innovation and business process combine to increase productivity some three to five percent in the next decade.
"It isn't just talking about it. We've got to follow it up with actions," Chambers said. "I still think innovation is what changes the world. But it's innovation with execution. I think we've fallen behind, but it's not hard to catch up."
He added: "In Silicon Valley, failure is a badge of courage. You've got to have a country that accepts that."
ON BUSINESS PROCESS
"It's about smaller, simpler, faster, more integrated," she said. "In the past, we were able to throw stuff at consumers and have them figure out a way to make it work. Consumers now want us to figure out a way to make it work. A lot of my R&D investment is making it simple."
Burns said Xerox spends $1.6 billion for research and development.
"It's interesting how much R&D dollars I spend," she said. "But that's not enough -- I need to figure out a way to make my technology work better with [other companies' products]."
Chambers listed three "axes" on which Cisco operates: internal innovation, external acquisitions and strategic partnerships."
"Have a quick time to market mentality and the ability to dream and set goals," he said. "Our [command-and-control model] allows us to take on 30 different fronts at the same time and have them working together."
ON ATTRACTING IDEAS
To end the discussion, the three executives discussed how they're working to spot the best small businesses and help them scale.
Immelt said GE's Ecomagination Challenge simply aims to "let the ideas flow." In return for access to GE's brand and distribution, small businesses help the company fill gaps in certain markets.
"GE distribution in the home could be [far bigger] than it is today," he said. "That's going to come from small business."
Chambers said it starts with open communication from the top of the organization.
"At Cisco, we have groups with touch points," he said. "We probably look at 100 companies before we pick one to acquire. Do you understand what is different about your organization? Are you checking the market? Do you have good people around you? Do you understand how to communicate your message?"
Burns said small businesses should seek a more relevant person within a large organization to pitch, rather than the CEO.
"Make it local. If you try to come to me with 100 ideas, I will lose 99 percent of them," she said. "I have 130,000 people in the world who should be able to listen better than me."
But companies must help both internal employees and external partners find that path to innovation, Chambers said.
"Do it for the next generation. It is the right thing to do in business," he said. "Do you build that into the DNA of your team? Companies like to do business with companies that they trust and like."
Photos: Andrew Nusca
Jan 10, 2011
American citizens must understand that no matter where they stand on the economic ladder there are foreign workers with equal or better skills who will be very happy to take your jobs either overseas or here at home, and do them as well or better for far less money and with zero benefits. This is a fact and is a direct result of our government?s ?Global Economy/Free Trade and massive immigration? policy combined with the law of supply and demand. The value of any individual (politically or economically) is inversely proportional to the number of people with whom they must compete. Therefore, if American citizens want to see their individual and collective value decreased all they need do is to sit by and allow their government to increase the number of people they must compete with for jobs and resources, or the number of people their political representatives must compete for votes. The total number of people in the US affects every aspect of our lives; we passed the point where more people was a good thing for the country over 100 million people ago. Now consider the immigration issue, legal and illegal. If we allow overpopulated countries to export their excess people into the United States then the value of our people (and their labor) will decrease. Economically, this is capitalism, plain and simple. It's the raw truth. It has nothing to do with racism, religion or any other prejudice. It's just a fact of life in our political economy. Now consider that we have over 308 million people in the US today, and that number will grow to 439 million by 2050 according to Census Bureau projections; that is 131 million people in only 40 years. Also according to the Census Bureau, 88% of that growth will be the direct result of immigration, legal and illegal, and the children of legal and illegal immigrants. If these numbers do not induce you to at least explore the consequences of our government?s policy of massive immigration, then nothing will short of a foreign worker taking your job or the job of a family member. I ask you, can you think of any problem, we face today, whose long term solution is in any demonstrable way, aided, assisted, or advanced by having larger populations at the local level, the state level, or the national level? Can you think of anything that can get better if we crowd more people into our cities, our towns, into our state, or our nation? Some of the articles and comments I read here cause me to fear H.L. Mencken accurately described the American public today when he said, ??it is in the nature of the human species to reject what is true but unpleasant and to embrace what is obviously false but comforting.? If we allow our political leaders from both political parties to accept the comfortable lie that continued massive immigration is a good thing, then the whole country will also reap the difficult and unpleasant consequences. There are a number of good internet sites that provide good, unbiased information to get you stated investigating what has, is, and will happen to your country while sit on your couch watching TV or listening to talk radio. Visit NumbersUSA.org as a starting point to become informed and active.
sboverie@...you are rite, however I am not born American, I came here when I was 18 so well after finishing school in my native land. my parents were both working yet they were very much involved in my education, and thanks to them I got a good education... and ensure a good future... so working parents are not an excuse..
This will sound weird, but innovation does not happen at the top but at the bottom. The reason is the people at the top have all their needs and wants fulfilled and do not need to innovate to make their lives better. Those at the bottom have to innovate and improvise to fulfil their needs. There are exceptions to this and it is not to say that the top can't innovate but don't need to innovate. The group of CEOs in the article want to open the borders to anyone who wants to come here as their way of innovating. They talk about the US universities as world class for foreign students more than for US students. Education is a sticky point, there is no doubt that our public schools are under perfoming; most of the public schools are crippled with unfunded mandates and swift policy changes. The main reason that US students do poorly is that the parents are not actively involved in making sure their children are learning. With both parents working to make ends meet, the kids have been left on their own. My experience of public schools was to have my curiosity and willingness to learn turned into boredom.
?We?ve got to get back to one of our key advantages ? our immigration policy used to get the best and brightest to come here and stay here,? he said. ?Make them American citizens, not just a green card.? John Chambers is correct: With 1 in 4 of the top universities in the world located in the U.S., our best shot at sustaining our economy is to remain the leader in innovation and talent, and for that we need to make it easier to stay in the U.S. Otherwise we'll continue to lose talent to emerging economies, and the death spiral will begin. Steven Moody Greenlight Immigration @citizinfo
I for one agree with virtually ALL the posts. Let me add this: How many PROFESSIONAL people (other than drug dealers and criminals) have our Mexican/American border protectors caught? Hmmm, maybe this is another "market" they expect to exploit! BIG BUSINESS - the crux of our economical problems would have us believe we are stupid enough to accept their "explanations"! PROOFs - Our border is essentially a SIEVE! GIVE US REAL STATISTICS - categorize PROFESSIONALS and blue collar workers WITH REAL numbers and statistics the immigration of legals and illegals. If immigration is the solution, why is the jobless rate hovering at 10%? Could it be that the cheap labor can come in and the corporations could save money by eliminating shipping costs. Why have the incomes of professionals "TUBED"? It must be we are not innovative and the REAL? innovators come from outside our country - given we believe those "on top" and are sure that we are idiots! Oh, by the way, what a wonderful way to provide unrestricted access to TERRORISTS - 4377 (unside down calculator humor) - what a wonderful way to further economically & physically cripple our country (remember the TWIN TOWERS)!!!!!! And, consider the riches (BONUS, PERKS... these executives collect by cutting costs and increasing profits. I am ashamed to thing, believe and know that these people have the gall and the lack of patriotism to be in position of power. Solutions? GOOD QUESTION! Respond to their insulting of our intelligent via blogs, anti-big business sites naming names (people and companies) and if you're fortunate enough to own stocks, vote against the establishment and for the good of all of us. If you've read to this point, thank you, Anony Moos
HOW TO SAVE AMERICA America itself needs a NEW BUSINESS PLAN and it should focus on why all the seed capital has left the US. The reason is large corporations such as these guys, who think they know what is best for America, have lead in the exodus of investment OFFSHORE, not here. They may know what is best for their international asset base, but they lack true knowledge of what is essential in the business trenches of America. If we wish to save the miracle of America, we must bring back: 1. Investment capital for young innovator firms and manufacturing of it here. 2. Mass Media programs not controlled by the international corporations, but aimed at pointing out that America is now 25 years behind EU and China, in key areas such as sustainable energy, and related technologies such as the smart grid. Purpose: to get these laggard representatives in DC to see the reality of America, and its true needs. 3. A realization that the war is no longer in Iraq or Afghanistan, but it?s very seriously ECONOMIC and TECHNOLOGY based. We spend all our seed capital on the war machine to protect the free world and guess what? All those countries come and take our technology invented here and jump a decade ahead of America, in use of the technology. Excellent example: Photovoltaic power from the sun. China is leaping years ahead of America at this very moment. Why? Because U.S. Government Policy is all wrong and based on a world view that is over 30 years old. ( I call it the hydrocarbon syndrome) Large so-called "American" corporations are now mostly internationally held (GM is an example as is GE), and thus are no longer truly American. At this very moment, the huge Chinese businesses are buying up new technology firms in California and elsewhere, and then will move production to the homeland. Is this fair to the American Citizen? Absolutely not! It is economic war against the U.S. people, modern style. Government policy must now upgrade to reality, and quite wasting precious seed capital on wars for oil, pride, etc. Government policy should be aimed at making America FIRST in leading technologies such as sustainable energy and efficiency of our lifestyle, economic, educational, and medical systems. Who is the dummy here? It seems we are being outsmarted 100% by former enemies and now China. 4. Finally, all students must pass key science, math, and foreign language courses, in order to graduate. Large corporations that care for Americans? HA! What BS! Our only hope is that we citizens band together and form a new American Party .. call it the "Citizens who care for future generations of Americans Party." James H. Smith, CEO www.h-energy.com email: firstname.lastname@example.org
I feel like these executives are talking out of both sides of their mouths. They say, "As a country we have to improve K-12 education so our companies can hire Americans." But then they admit that they have no intention of hiring Americans, because Americans are too expensive (for various reasons). Clearly what they are saying is that they want to use a flood of immigrant techies to drive down the wages of US techies. But they can't seriously believe that, longterm, such a policy will encourage US students to pursue STEM careers. So, really, they are saying that they want to flood the US with foreign techies, and keep that up indefinitely. None of this should surprise us, since these are CEOs talking here. They have no loyalty except to their company's (short-term) bottom line. We should hear what they have to say, but take it with a grain of salt. "It's easy to criticize," you say. Fair enough. Here are my suggestions to improve US competitiveness: 1) Stop all the politically-correct nonsense in our schools. If a child can't or won't keep up, fail him. If he is disruptive, put him in reform school. 2) Stop assuming every child wants and/or needs to attend college -- and a liberal arts college at that! Re-introduce trade schools at the high-school level. 3) We have millions of people (mostly able-bodied men) wasting away in prison, doing nothing. There's our cheap manual labor, right there! Plus: Give these men a purpose in life. Give them a chance to establish a work record. Give them a chance to build up some savings. What about the lazy ones? Answer: If a man will not work, let him not eat. 4) Along those lines, bring back debtors' prison and workhouses. A white collar criminal who embezzled a million dollars shouldn't get two years in a minimum-security prison. He should get put into a workhouse until he's paid back the entire debt (with interest) to those he's cheated. Friends and family (who have doubtless benefited) would be encouraged to help him pay it back. Bankruptcies would be evaluated by juries to determine if the persons acted irresponsibly. If they simply had terrible luck (e.g., expensive medical disaster) they could be forgiven, but profligates would be sent to the workhouse to learn the value of money. Lastly (for now), 5) Raise the Social Security retirement age. People are living longer; we must take that into account. It's a no-brainer. Why is there a big debate about it?
What we really need is innovation in CEO's and the government, cheaper labor for these positions, and maybe bring someone in from overseas that would use our own talent. It is our Harvard and Yale educated MBA's that are causing our problems, not our own people that are laboring. Fire the CEOs and all government policy makers and bring in real talent, not leeches that get money from leeching off of our workers. Idiot, we are 10% unemployed, and really about 20% when the real numbers are used and not the lying government workers.
GE has been shipping factories overseas for decades. They have no loyalty to this country. It may be true that we can benefit from immigration, but I want to see it done legally, in a controlled fashion. We should not be bringing in people while we have so many out of work. I've worked in tech companies that had many foreign workers in them. Those workers were afraid to stand up for themselves against management. They dragged down wages.
Sorry, I won't get into it - this isn't the place for such rhetoric, but many of these statements are lunacy at best. First - don't accept the premise of the story - it's bogus. The title is accurate, just don't buy it. ?We?ve made it important to protect our borders,? Burns said. ?The last thing we need to do is that.? Wrong. We must secure the borders first and foremost. No more handouts - the well is drying up faster that it's being replenished. Guess what - if that happens - no one will want to come here! The majority of our successful innovators immigrated here legally. They came here for a better life and the American dream - meaning if they worked hard and had good ideas - they would have a good life. Keep that alive and we'll have no shortage of innovators. Allow people to profit for their ideas and work - that's always been our motto, but recently - I have to wonder. The schools are an entirely different conversation and can't be brought into this argument. Lest you state you're comparing an apple to a banana.
Let's see... we have around 10% unemployement in the U. S., including a lot of high-tech workers, and we have to go to immigration to fill jobs? In my small, immediate circle of friends, I personally know two EEs who are out of work, in part due to out-sourcing. When our colleges and universities are having to lower admissions standards and introduce remedial math classes for incoming freshmen, (which they are) it's evident that the reason we may be "falling behind" is due to our education system, and the dumbing down of said system. We're having to import workers because the ones we're raising are too uneducated. Please realize that one of the stated goals of progressive education was to educate the masses just enough so that they can perform the menial tasks handed out to them by the educated elite in our service/manufacturing economy. We have succeeded all too well, so that now we have to "lower i[our] borders and allow talent to flood in". What a crock.
As usual, they are mixing what "we" need with what "they" want. Exec want CHEAP labor, period. The US has no shortage of people capable of doing grunt work. By importing people willing to work for less under terrible conditions they pull down the standard of living for those here legally. Add to this the fact they usually do not provide health care to this work force, shifting the costs to others, and its obvious why so many citizens are less than happy with these overpaid execs. Strange how we don't import someone from India to do THEIR job for a 10th (or less) of the compensation they have secured for themselves? Not. There is a legal method of importing/keeping people with legitimately hard to replace skills. No one is denying entry to Nobel prize winners or the like. Many citizens have stopped trying to get jobs as engineers for the simple fact they see execs like these shipping the jobs over seas or importing people willing to work for less, driving down the earning power that the engineers once would have had. Some one capable of being a good engineer is not going to be stupid and will have their eyes open about what the future is likely to bring. You will still have some who go because it is their calling, others will attempt to become a well paid parasitic exec moaning about the future as they collect millions from those they have conned into believing that, that is the standard wage. Perhaps if they did not so often lead their companies into losing millions, if not billions, all the while claiming how it would be worse without them ..... Of course the economy does not provide that many jobs of that kind. After all, eventually there does need to be someone who actually produces something rather than simply sell it or take credit for it.
President Carter created the current version of the Federal Department of Education in 1979. Did anyone notice that the quality of US education has gone into the toilet since then? Cliff Notes book on the US Constitution, a staple on collage campuses, says - Quote - The first page of the US Constitution is the Declaration of Independence. ? End Quote ? This is the garbage our schools are allowed to use as teaching tools.