Intelligent Enterprise

We outsource manufacturing. We outsource services. Farming and mining already follow a natural global-sourcing model. Now, research says that we should outsource science too; it's good for American innovation. I guess the outsourcing genie is well and truly out of the bottle…

A recent article in the New York Times mentions research and researchers in American universities that have reached the conclusion that we have nothing to fear from the rise of science in low-cost countries like China and India. In fact, we should view this as an opportunity to "reduce the cost of producing new scientific discovery," which should help American innovation. In turn, this approach also decimates the theory that a shortage of US scientists will hamper American competitiveness.

Of course, this theory is predicated on various factors, such as: Would the outsourced process of scientific discovery produce "quality goods?" Do we have the standards, processes and experience to manage outsourced scientific discovery?

It would appear that America is caught in a sort of trap of its own making: After decades of arm-twisting countries around the world to bring down trade barriers and open up their economies, the US can hardly run for protectionist cover in its own tough times. Yet, if we outsource manufacturing, services and now scientific research, what remains? A country of accountants, lawyers, venture capitalists, weapon-makers, bureaucrats and politicians? Can a country of some 275 million people survive without large-scale and sustainable domestic capabilities in manufacturing, services and research?

(Incidentally, I thought that the NYT article made a curious logical gaffe. It states that the researcher's insight "runs counter to the notion that the United States fails to educate enough of its own scientists and that shortages of them hamper American competitiveness. The opposite may actually be true. By tapping relatively low-cost scientists around the world, American innovators may actually strengthen their market positions." How can tapping low-cost scientists around the world be opposite to or invalidate the theory that the US fails to educate enough of its own scientists? That we can access talent around the world does not imply that we do not need to produce scientists of our own or are producing enough. Do you see this faux pas too, or am I misreading it? This, and a couple of other typos plain-and-simple I've seen in the NYT lately leaves me very concerned that somebody is asleep at the switch at NYT!)

Don't get me wrong; I'm not panicking — yet. Last I saw, this was still the world's largest economy (in overwhelming proportions). And, outsourcing is still only a small fraction of the overall economy. Still, I think I'm heading out to look for some macro-economists to help me decipher the future. Do you qualify?