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.

Legislators say state funding may even be cut at kindergarten-through-junior-college levels, despite Schwarzenegger's pledge to uphold a ballot proposition aimed at protecting these schools from cuts.

As the government reduces school funding, the number of students who are desperate to gain new skills in a down economy is growing.

"We have the largest graduating (high school) class in the history of the state, and we don't have room for them. We don't have the money," says Elihu Harris, chancellor of the Oakland-area Peralta Community College District. "We're concentrating on making sure lights are on, that utilities, garbage, and recycling are taken care of."

Even at the University of California, the favored child of the state's school system, student bodies are feeling the effects of fee hikes and program cuts enacted in the previous two years.

"The assumption is, if you're needy enough, you can get aid; if you're wealthy, you can go as well. But it doesn't even pan out like that anymore," says Liz Geyer, executive director of the University of California Student Association. Even qualified UC doctoral candidates, the presumed elite of the elite, are having a difficult time finding a place, Geyer says. Rather than take on graduate students, professors are taking on post-doctoral students -- who don't require the same level of instruction, and are therefore cheaper to train, as research assistants. The result is fewer opportunities for graduate students.

"In some labs, you'll see six post-docs and one graduate student," Geyer says.

At the 409,000-student California State University system, the picture is even worse. S.F. State students recently voted themselves a fee increase to preserve hundreds of classes scheduled for cancellation, and to head off a proposed elimination of the school's career center.

Students in kindergarten through junior college are presumably protected under Schwarzenegger's plan to comply with Proposition 98, a 1988 initiative that is meant to shield budgets for primary and secondary education from the effects of economic down cycles. But it's clear that some Democrats are now willing to look at cuts in K-through-JC to preserve some vital social services funded by the state.

"We're putting our chips in with the governor in hopes that he can hold the line from deeper cuts that could come from the right and left," said Bob Blattner, a lobbyist for School Services of California, whose clients include school districts around the state. "You've got a lot of people on the right who love education, but would sacrifice us rather than raise taxes. You've got a lot of people on the left who love education, but would rather sacrifice us than make the draconian cuts in social programs. And the governor is the one who loves education above all else."

Perhaps. But state Assemblywoman Jackie Goldberg (D-Los Angeles), who leads that body's Education Committee, said schools shouldn't find solace in the idea that the governor might cut life-or-death medical services in the name of protecting schools. "The governor says there will be no new taxes. The Republicans say there will be no new taxes. Do I think education is a life-and-death issue? Yes," Goldberg says. "But it's slow death. Health cuts are fast death. If you don't get HIV medications, you're going to die."

I asked Carole Migden, chairwoman of the California Board of Equalization, a tax agency, whether offshoring executives have been ringing her up, volunteering to help fund ways to raise California corporate taxes to fund education.

They're not, Migden says, but she's been thinking about ways to get around this contradiction.

"Jobs are being outsourced. However, our colleges aren't educating community college students in the most efficacious and results-driven way," Migden says. "I'd like to target a couple of schools in the community college system and get San Francisco-based corporate sponsorship. I don't know how to get the public funding system to budge. Not when you have a low-tax pledge, when Democrats are reticent about promoting taxes."

Junior colleges aren't the type of schools people seem to have in mind when they talk about America's global competitiveness. Instead, articles about offshoring often include statistics about the vast number of engineering graduates turned out by universities in India.

But even if South Asia does usurp thousands of software jobs, India's not going to become a dominant economic power by turning all its best and brightest into engineers. America's greatest strength has always been its economic diversity and flexibility, and the resulting ability to anticipate and develop the next big thing. This is a country where a liberal-arts college dropout can hire a bunch of fallen architects and illustrators -- and create Pixar. California is where the seemingly hapless Ask.com of Emeryville can stumble from failure to failure -- and then somehow molt, and turn into an incipient leader in the world of search engines, one of many industries-in-progress made in the USA.

California is a land of second chances. Up to now, public schools, including community colleges, have been a cornerstone of this strength. Unlike more socially rigid places, California has been able to draw upon the talents of reformed burnouts, monolingual immigrant peasants, widowed housewives, 24-year-olds just getting over their listlessness, and millions of others whose most promising years didn't happen to come immediately after high school graduation.

Micah Liebowitz, for instance, is 25. He doesn't have a job beyond selling gadgets on eBay. And he's taking classes in a department, and at a school, that nobody seems to have much respect for. I myself took welding classes at Laney College a couple of years ago. I can tell you, from personal experience, that the magnificent, Gov. Pat Brown-era facilities have been subjected to such neglect in recent years that they produce a sensation of working in Pompeii.

Liebowitz says some things have gotten better recently at Laney. The machine shop has two part-time instructors who have a lot of energy; "the old instructor was all doom and gloom," he says. But the shop is still always running out of things such as "bits, blades, any sort of consumables," he says.

Liebowitz got interested in battle robots in high school, and he's been perfecting his machines ever since. A couple of weeks ago, he attended an event where he met builders from Japan, Spain, and China. The contest at Moscone offered even more exciting potential for idea-sharing, Liebowitz says.

"These chip-heads have a lot in common with what we do," Liebowitz says, motioning toward a mini-grandstand packed with rapt, pocket-protector types. "The next step is to integrate the chips into the robots and take the remote control away, and they can run themselves."

"First I'd like to sell components at events. Then target the hobby market. Perhaps we could go after the market for experimental commercial robots, too," he says.

Heading back across the Moscone exhibition floor, through the forest of nonsense-name tech banners, I imagine Liebowitz doing quite well for himself. It's the rest of California I worry about.

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