Brains, not brawn, the future of the economy

Where I live in Detroit, there's a lot of grumbling about NAFTA, the free trade agreement that some see as the great evil that has made it increasingly difficult for working people to find good-paying jobs. But in this increasingly global world, it seems unlikely to me that we're ever going to return to a time when working on the line pays top dollar.

Bill George, author of best-selling leadership book, Finding Your True North: A Personal Guide, and a professor of management practice of Harvard Business School, spoke last week at his alma Mater Georgia Tech's winter commencement. In a column for Business Week, George expands on what he told the students. He says a manufacturing economy isn't returning to the U.S. -- too many people elsewhere in the world are willing to work for much less money than working people here need and want. So he says if we are to compete, we must do it with our brains, not our hands.

He offered the new graduates a plan for improving the economy by encouraging innovation. The concepts aren't radical, but they are do-able and worthy of consideration -- particularly at a time when government -- and people, in general -- seem short on innovative ideas.

George advised President-Elect Barack Obama's administration to:

  • Encourage scientific discovery by increasing grants for the National Institutes of Health and by creating a new organization, the National Institutes of Energy & Environment.
  • Add federal scholarships for undergraduate and graduate students in math, engineering and the sciences.
  • Negotiate free trade agreements throughout North and South America as well as Asia, Africa and the Middle East.
  • Change tax policies to favor long-term capital gains over short-term gains to encourage longer-term investments.
  • Put in place Obama's campaign proposal to give founders and original investors in new companies zero capital gains tax when the companies are sold.
  • Increase the H-1B visas in the technology sector and offer more visas and accelerated citizenship for foreign graduates who earn advanced technical degrees at U.S. universities.
  • Create retraining grants to encourage mid-career workers to enter technical fields.
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