Learning to Compete

Executives involved in outsourcing U.S. jobs should also become involved in sponsoring CA schools

In the mood to see a fight last week, I headed to Moscone Center to experience the offshorers' bash, otherwise known as the electronicaUSA/Embedded Systems Conference, a gathering of manufacturers of the microchip technology found in modern dashboards and toasters. These businesses profit from sending jobs overseas, and politicians are pummeling them with pro-American rhetoric. So several offshoring executives used the occasion of the conference to strike back.

"I guess I take pride in being one of those Benedict Arnold CEOs," said T.J. Rodgers, CEO of Cypress Semiconductor Corp., during an offshoring panel at the conference last Wednesday. "We are going to make this country more productive and therefore create more jobs."

Spoiling to learn more, I headed out onto the Moscone exhibition floor, past booths with made-up techno names such as Xilinx, Zilog, Cirronet, Imecnology, and Virtutech, until I arrived at one representing the microprocessor-maker Tensilica, which was luring visitors with a battle-bot competition.

It appeared I'd found what I was looking for. In this miniature smash-up derby I encountered elements of the offshoring debate that showed both critics and proponents to be delivering specious sucker punches.

Anti-offshorers -- national Democratic leaders the loudest among them -- suggest that the recent exodus of high-speed-modem-enabled jobs to Beijing and Bangalore is somehow different from earlier employment migrations, which left America's overall economy sound. They're exaggerating.

President Bush and his fellow-traveler business executives, meanwhile, say outsourcing is an ordinary part of the international trade game, in which America has always prevailed. They're ignoring real deterioration in the country's competitive position.

Since World War II, America has dominated global trade because it has paid attention to its competitive advantages, among them an educational system unmatched in the world in terms of breadth, depth, and diversity. In California, however, where the stakes in the offshoring debate may be the highest, education is now literally crumbling before our eyes; dozens of public secondary school systems already can't pay their bills, and the situation seems likely to get worse. The state's public universities and community colleges are decaying, too.

California is front-and-center in the globalization debate, but the debate is, at least in this state, largely an exercise in hypocrisy.

Democrats, well aware of how America benefits from global trade, should quit their anti-offshoring grandstanding. Executives of companies who send work overseas, meanwhile, should prove they actually care about American competitiveness and do something to help fix our deteriorating education system. At the least, these executives should lean on their state Republican allies to back off the no-new-taxes blood oath. They should have their firms become directly involved in sponsoring individual schools.

Yet, strangely, I didn't hear a peep from executives at the offshorers' ball about California's educational crisis.

So I watched battle bots instead.


In a queen-bed-sized arena, a metal, beaked, brick-sized cart nudged and snipped at a vehicle mounted on large triangular treads. With each tinny crash, the brick pushed the treadmobile closer to the edge until it fell, pro-wrestler-style, to the floor below.

"I spent yesterday at the Laney College machine shop, making parts," said conference-goer Micah Liebowitz, the owner of the victorious brick, aptly named Terra Cotta Warrior. "Then I went home and stayed up until 4 a.m., making sure it was perfect."

Liebowitz is a full-time machining and welding student who dreams of someday fabricating highly-refined battle-bot components that might be sold at hobby or toy stores. He's the sort of obsessed, smart, creative Californian whom offshorers have in mind when they say America will always win the global competition game. Other countries may usurp the manufacture of radios, automobiles, and software, this logic goes, but America will perennially innovate the Next Big Thing.

I buy this argument, for the most part. America -- with its dominant financial markets, enviable legal system, massive consumer market, vibrant entrepreneurial culture, and, most important, superior and universal education system -- is a country uniquely situated to benefit from unfettered global trade, even when that trade is in human capital.

But there's a rub, and it is one Micah Liebowitz happens to personify.

Liebowitz is working to educate himself at Oakland's Laney College, a place that's run-down, short of equipment, lacking in teachers and class offerings -- just like other California public schools. The chancellor of the Peralta Community College District, of which Laney is a part, tells me his schools may be forced to continue eliminating smaller-sized classes from the schedule and delaying equipment purchases if it is to handle a growing student body. Even without new funding restrictions, students will be turned away.

This statewide situation is only going to get worse as state government ponders how to resolve a $7 billion budget deficit amid Republican vows to keep taxes low, and Democratic vows to keep Republicans from cutting non-educational government services.

Higher education is hurting too; Gov. Schwarzenegger proposes reining in the Cal Grant student aid program while recommending that state colleges raise their tuition for the third year in a row. His budget proposal recommends freezing enrollment at universities and shunting some freshmen who were eligible to attend the four-year institutions to community colleges, where schooling is cheaper. Schwarzenegger also recommends eliminating money for college-prep programs as well as for those that help disadvantaged elementary students. He has proposed cutting state funds to the University of California system by 7.9 percent, or $228 million, and to the California State University System by 9 percent, or $240 million.

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