Some information for this post is taken from the Concord Coalition

Business, corporate, government or individual fiscal year calendars and planners for the US fiscal year 2018 as defined by the US Federal Government, starting on October 1, 2017 and ending on September 30, 2018. The calendars cover a twelve-month period and are divided into four quarters. With that being the case, once again the clock begins ticking elevating our national debt.  As of 2 October 2018, at 0900 hours our national debt was about $21.5 trillion dollars.

As you can see, a trillion is a one with twelve (12) zeros behind it.  We have twenty-one of these to deal with.  The chart below was “shot” at sixteen (16) hundred hours (4:00 for you civilians) on 2 October 2018.  If that debt is allocated for each citizen and each taxpayer, the debt becomes $65,447 or $176,475 respectively. We all had better have a really really good year.

Right now, our debt is approximately ninety-four percent (%) of our gross domestic product (GDP).  In 2050 that debt is estimated to be one hundred and fifty percent (150%) our GDP, which is considered to be unsustainable.   The chart below will give you some idea as to how quickly our debt has risen.

Well, if misery loves company, we are not alone with issues of national debt.  The following chart give debt of the top twenty (20) countries with significant debt.  Not a pretty picture.

WHAT IS THE CURE FOR US NATIONAL DEBT?

Entitlement Programs – When social security was first enacted the life expectancy in the country was sixty-three (63) years old.  Today that life expectancy is in the late seventies (70’s).  If we’re to get our entitlement programs back into line, we should think about changing the eligibility age for social security and Medicare to at least the early seventies (70’s).

We should also change social security disability and loosen the eligibility for those who are over sixty-two (62) years old.  Those who can’t continue to do hard labor (construction) type of jobs would be eligible to collect earlier.  We would also have to make sure that medical insurance companies use community rating so those older Americans could get medical insurance at a “reasonable” price until they reached the age of eligibility for Medicare.

The Military – It makes no sense that the United States should spend more than the next ten countries combined for national defense.  We have significantly more firepower than we need and as a result we tend to trot this ability out to other parts of the world and work towards “nation building”.  It’s time that we go back to the levels of military spending we had under previous administrations and even make larger cuts.  We just can’t afford the size military we have and the interventionists policies that we’ve developed.  We really cannot protect the entire world endlessly.

Tax policy – It’s not only the rich.  We do need to change tax policy on the richest Americans.  They do need to pay more, but so does everyone else.  Right now, we have close to fifty percent (50%) of Americans not paying any income taxes.  This just isn’t fair.  If we’re all to participate in the good things that our country has to offer, then we all need to participate in paying a “fair” level of taxes to support those activities.  Everyone should have “skin in the game”.

Public workers compensation packages – Thirty years ago people went to work for the government knowing they were going to make less money, but their job security was going to be very strong.  Today according to John Mauldin, we have a situation where government workers are paid on average forth percent (40%) more than their private sector counterparts.  This is more than unsustainable.  There is no reason government workers should have this sort of bonus and it needs to be brought under control if we’re to reign in our government debt issues

CONCLUSIONS:

The above suggestions and possible solutions are only the tip of the ice burg.  The problem is: WE NEED TO DO SOMETHING and do it quickly—like this year, right now.

 

 

 

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Portions of this post were taken from Design News Daily publication written by Chris Witz, August 2017.

I generally don’t “do” politics but recent activity relative to the Federal Jobs Initiative program have fallen upon hard times.  President Donald Trump has decided to disband the council of his Manufacturing Jobs Initiative. The announcement came Wednesday morning, after a significant exodus of council membership.  This exodus was in response to the President’s comments regarding a recent white supremacist protest in Charlottesville, VA.  By Tweet, the president said:

Rather than putting pressure on the businesspeople of the Manufacturing Council & Strategy & Policy Forum, I am ending both. Thank you all!

— Donald J. Trump (@realDonaldTrump) August 16, 2017

I personally was very surprised by his reaction to several members pulling out of his committee and wonder if there was not more to ending the activities than meets the eye.

The members counseling President Trump were:

Brian Krzanich—CEO Intel

Ken Frazier—CEO Merk & Company

Kevin Plank—CEO UnderArmour

Elon Musk—CEO of SpaceX and Tesla

Bob Iger—CEO of Disney

Travis Kalanick—Former CEO of Uber

Scott Paul—President, Alliance for American Manufacturing

Richard Trumka—President, AFL-CIO

Inge Thulin—CEO 3M

Jamie Dimon—CEO of JPMorganChase

Steven Schwarzman—CEO of Blackstone

Rich Lesser—CEO of Boston Consulting Group

Doug McMillon—CEO of Walmart

Indra Nooyi—CEO and Chairperson of PepsiCo

Ginni Rometty—President and CEO of IBM

Jack Welch—Former CEO of General Electric Company

Toby Cosgrove—CEO of the Cleveland Clinic

Mary Barra—President and CEO of General Motors

Kevin Warsh—Fellow at the Hoover Institute

Paul Atkins– CEO of Patomak Global Partners LLC

Mark Weinberger– Global chairman and CEO, EY

Jim McNerney– Former chairman, president and CEO, Boeing

Adebayo Ogunlesi– Chairman, managing partner, Global Infrastructure Partners

Phillip Howard– Lawyer, Covington; founder of Common Good

Larry Fink—CEO of BlackRock

Matt Rose– Executive chairman, BNSF Railway

Andrew Liveris– Chairman, CEO, The Dow Chemical Company

Bill Brown—CEO, Harris Corporation

Michael Dell—CEO, Dell Technologies

John Ferriola– Chairman, president, CEO, Nucor Corporation

Jeff Fettig– Chairman, former CEO, Whirlpool Corporation

Alex Gorsky– Chairman, CEO, Johnson & Johnson

Greg Hayes– Chairman, CEO, United Technologies Corp

Marillyn Hewson– Chairman, president, CEO, Lockheed Martin Corporation

Jim Kamsickas– President, CEO, Dana Inc

Rich Kyle– President, CEO, The Timken Company

Jeff Immelt– Chairman, former CEO, General Electric

Denise Morrison– President, CEO, Campbell Soup Company

Dennis Muilenburg– Chairman, president, CEO, Boeing

Michael Polk– CEO, Newell Brands

Mark Sutton– Chairman, CEO, International Paper

Wendell Weeks—CEO, Corning

Mark Fields– Former CEO, Ford Motor Company

Mario Longhi– Former CEO, U.S. Steel

Doug Oberhelman– Former CEO, Caterpillar

Klaus Kleinfeld– Former Chairman, CEO, Arconic

I think we can all agree; this group of individuals are “BIG HITTERS”.  People on top of their game.  In looking at the list, I was very surprised at the diversity of products they represent.

As of Wednesday, members departing the committee are as follows:   Kenneth Frazier, CEO of pharmaceutical company Merck; Under Armour CEO Kevin Plank; Scott Paul, the president of the Alliance for American Manufacturing; Richard Trumka, of the AFL-CIO, along with Thea Lee, the AFL-CIO’s deputy chief of staff; 3M CEO Inge Thulin; and Intel CEO Brian Krzanich.

In a blog post , Intel’s Krzanich explained his departure, saying:

“I resigned to call attention to the serious harm our divided political climate is causing to critical issues, including the serious need to address the decline of American manufacturing. Politics and political agendas have sidelined the important mission of rebuilding America’s manufacturing base. … I am not a politician. I am an engineer who has spent most of his career working in factories that manufacture the world’s most advanced devices. Yet, it is clear even to me that nearly every issue is now politicized to the point where significant progress is impossible. Promoting American manufacturing should not be a political issue.”

Under Armour’s Plank, echoed Krzanich’s sentiment, expressing a desire to focus on technological innovation over political entanglements. In a statement released by Under Amour, Plank said,

“We remain resolute in our potential and ability to improve American manufacturing. However, Under Armour engages in innovation and sports, not politics …” In the past year Under Armour has gained attention for applying 3D printing techniques to shoe design and manufacturing.

Paul, of the Alliance of American Manufacturing, tweeted about his departure, saying, “… it’s the right thing to do.”

I’m resigning from the Manufacturing Jobs Initiative because it’s the right thing for me to do.

— Scott Paul (@ScottPaulAAM) August 15, 2017

President Trump’s Manufacturing Jobs Initiative, first announced back in January, was supposed to be a think tank, bringing together the most prominent business leaders in American manufacturing to tackle the problem of creating job growth in the manufacturing sector. At its inception the council boasted CEOs from companies including Tesla, Ford, Dow Chemical, Dell, Lockheed-Martin, and General Electric among its 28 members. However, over the course of the year the council had been steadily dwindling, with the largest exodus coming this week.

The first major blow to the council’s membership came in June when Tesla CEO Elon Musk resigned from the council in response to President Trump pulling out of the Paris climate accord. Musk, a known environmentalist , tweeted:

Am departing presidential councils. Climate change is real. Leaving Paris is not good for America or the world.

— Elon Musk (@elonmusk) June 1, 2017

At that same conference, when asked why he believed CEOs were leaving the manufacturing council, the President accused members of the council of being at odds with his plans to re-shore more jobs back to the US:

“Because [these CEOs] are not taking their job seriously as it pertains to this country. We want jobs, manufacturing in this country. If you look at some of those people that you’re talking about, they’re outside of the country. … We want products made in the country. Now, I have to tell you, some of the folks that will leave, they are leaving out of embarrassment because they make their products outside and I’ve been lecturing them … about you have to bring it back to this country. You can’t do it necessarily in Ireland and all of these other places. You have to bring this work back to this country. That’s what I want. I want manufacturing to be back into the United States so that American workers can benefit.”

Symbolic or Impactful?

It is unclear whether the dissolution of the manufacturing council will have an impact on Trump’s efforts to grow jobs in the US manufacturing sector. Some analysts have called the council little more than a symbolic gesture that was unlikely to have had any long-term impact on American manufacturing to begin with. Other analysts have credit Trump as a driving factor behind a spike in re-shoring in 2017. However other factors including labor costs and lack of skilled workers overseas are also playing a significant role as more advanced technologies in industries such as automotive and electronics hit the market.

CONCLUSIONS:

I personally regret the dissolution of the committee.  I think, given the proper leadership, they could have been very helpful regarding suggestions as to how to create and/or bring back jobs to our country.  In my opinion, President Trump simply did not have the leadership ability to hold the group together.  His actions over the past few months, beginning with leaving the Paris Climate Accord, simply gave them the excuse to leave the committee.  They simply flaked out.

As always, I welcome your comments.

EXPORT-IMPORT BANK

December 10, 2015


In recent weeks the Export-Import Bank has been in the news—some positive and some negative.  I have never interfaced with the bank or had cause to contact the bank so I was very interested in doing cursory research to see just what services they give.  Here is what I found.

The Export-Import Bank of the United States (EXIM Bank) is an independent, self-sustaining agency with an eighty-one (81) year record of supporting U.S. jobs by financing the export of American goods and services. Established in the wake of World War II, when crippled foreign markets were strong enough to purchase American products, the Export-Import Act of 1945 has been renewed by Congress sixteen (16) times without a political fight.  This year (2015) that fight has been intense due to some feeling the bank is unnecessary and caters to the largest of corporations.  According to some, the bank is unsustainable, and, according to the Congressional Budget Office, is set to cost taxpayers $2 billion over the next ten years.  This figure doesn’t take into account the opportunity cost of diverting these taxpayer dollars, money which could be utilized elsewhere in the economy.  Tax dollars should go toward fixing roads and infrastructure, funding troops and national security, not toward funding private transactions for America’s largest Fortune 100 corporations.  After a five-month hiatus–one that cost businesses billions of dollars worth of credit guarantees and insurance for overseas business opportunities–the 81-year-old agency regained authorization to once again begin supporting the export operations of thousands of its business customers. The bank had been forced to suspend operations following a long campaign by Republican lawmakers, who want to close the financing agency because they see it as an example of “crony capitalism” that assists only the nation’s biggest businesses.

With that being the case, on December 4, 2015 President Obama signed legislation reauthorizing the charter of the Export-Import Bank of the United States (“US Ex-Im Bank”) through 2019. The reauthorization is part of a 5 year, US $305 billion transportation funding approved by both houses of the US Congress. As a result, US Ex-Im Bank will begin doing new business again, ending for now a long and well-publicized debate about the future of the US’s official export credit agency.  There still is controversy.

On the plus side, by financing the export of American goods and services, EXIM Bank has supported 1.3 million private-sector, American jobs since 2009, supporting 164,000 jobs in FY 2014 alone.

With nearly sixty (60) other export credit agencies around the world trying to win jobs for their own countries, EXIM Bank helps level the playing field for American businesses. “Made in America” is still the best brand in the world, and EXIM Bank ensures that U.S. companies never lose out on a sale because of attractive financing from foreign governments.

In FY 2014, Export-Import Bank financing supported $27.5 billion worth of U.S. exports. $10.7 billion of that total represents exports from U.S. small businesses, making small business exports the top category for EXIM Bank supported exports last year.

While the Ex-Im Bank projects to save the US government $14 billion over ten ( 10 ) years, an alternative analysis from the Congressional Budget Office found that the program would lose about $2 billion over the same period, partly due to discrepancies how credit risk is accounted for. Both conservative and liberal groups have been critical of the bank, and some continue to call for its closure.  President Barack Obama was critical of the bank during his presidential candidacy, but has since become a supporter of the program. Let’s take a look at where the money goes by  category.

Bank Segments

The three largest beneficiaries of Ex-Im financing are Boeing, General Electric and Caterpillar, not small businesses by any definition of the word.  In fact, those three are multinational conglomerates that can most certainly find private financing elsewhere.  That goes directly against the bank’s own charter, which states that the bank should provide export financing only for “export transactions that are unlikely to proceed without Ex-Im support.”  In 2012, Boeing alone received 83 percent of all loan guarantees, and in 2013, just five corporations received 93 percent of all Ex-Im loan guarantees.

Private lenders, like JP Morgan Chase, and Citibank, benefit as well.  When Ex-Im finances transactions, a private lending institution holds the debt for the transaction and is able to charge an interest rate to the borrower.  Because the transaction is backed by the full faith and credit of the United States, they hold this debt practically risk-free.  These giant lending institutions churn a profit, without housing any of the risk.

Nearly 99 percent of all U.S. exports are financed without the bank’s help. In fact, the bank penalizes those other 99 percent of U.S. exports by distorting the market and putting them in an anti-competitive position, forcing them to compete with companies who do receive federal loan subsidies at more favorable rates.

I’m not a finance “guy” so I can’t pass judgment on the bank and its operations.  I do know much greater “advertising” needs to be accomplished to alert small businesses that financing is available through the bank.  You would think the U.S. Chamber of Commerce would lead this effort and spread the work.   If we consider our trade deficit, we find a huge imbalance. The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that the goods and services deficit was $43.9 billion in October, up $1.4 billion from $42.5 billion in September, revised. October exports were $184.1 billion, $2.7 billion less than September exports. October imports were $228.0 billion, $1.3 billion less than September imports. The October increase in the goods and services deficit reflected an increase in the goods deficit of $2.1 billion to $63.1 billion and an increase in the services surplus of $0.6 billion to $19.2 billion. Year-to-date, the goods and services deficit increased $22.2 billion, or 5.3 percent, from the same period in 2014. Exports decreased $84.7 billion or 4.3 percent. Imports decreased $62.5 billion or 2.6 percent.

Exports of goods decreased $3.1 billion to $123.8 billion in October. Exports of goods on a Census basis decreased $3.0 billion.  Industrial supplies and materials decreased $1.6 billion.

  • Fuel oil decreased $0.4 billion.
  • Other petroleum products decreased $0.4 billion.
  • Capital goods decreased $0.9 billion.
  • Industrial engines decreased $0.5 billion.

As you can see, we are losing the trade balance battle.  As I mentioned, maybe greater emphasis should be placed on alerting small businesses that the “bank” is ready and willing to work to enhance exports from small and mid-cap companies.  Just a thought.

THE 1%

August 15, 2015


The data for this post is taken from the following sources: 1.) The Atlantic.com, 2.) Bankrate.com, 3.) IRS, 4.) Economic Policy Institute, 5.) Forbes Magazine, and 6.) Global Finance Magazine. The spreadsheets have been developed by this author.

I think we all agree the word “wealthy” is somewhat relative if we use money and assets as our baseline of comparison.  There are those who rely solely on the “almighty dollar” to keep score.  I would hope we all realize there is much more to life than money although covering our expenses and having a little “walking around” money; i.e. disposal income, is not all bad.  I would like to address wealth from a global perspective.

If we look at the world’s poorest countries measured by per capita GDP (Gross Domestic Product) we see the following:

INCOME PER DAY

Let’s do the same by region:

INCOME BY REGION

Now, compare this with the average annual U.S. income, stated by Forbes Magazine to be approximately $51,000.00, and you come away with the thought that “working Americans”are truly wealthy compared to the rest of the world.  PLEASE NOTE: I SAID “WORKING AMERICANS”.   We have a huge population unable, for whatever reason, to find gainful employment.  That’s another story for another day.

If we look at the statistics, we find the following:

  • According to the U.S. Census, the median income from 2000 to 2010 has declined by seven percent (7%).
  • The Economic Policy Institute indicates that between 2007 and 2009 the average household wealth for the wealthiest one-fifth of the population has declined by sixteen percent (16%). For the rest of us, the decline is right at twenty-five percent (25%). Granted, this period in our country was one of significant economic decline from which we have never really recovered.
  • According to the IRS, an adjusted gross income of $343,927.00 would put you in the top one percent (1%) of the working population, $159,619.00 in the top five percent (5%), and $113,799.00 in the top ten percent (10%). As we all know, adjusted gross income backs out taxes and allowable expenses.
  • The Tax Policy Center publishes the following for the top one percent (1%): 2009-$503,086.00, 2010-$516,633.00, and 2011-$532,613.00. This does NOT present adjusted gross income.
  • GET READY FOR THIS ONE:  Fifty-seven (57) members of Congress or approximately eleven percent (11%) of the 535 members are considered to be the “financial elite” of this country.  Two hundred and fifty (250) are millionaires in Congress.   In looking at all members there is an average net worth of $891,000.00.  This is nine times that of average Americans.

Now, let’s go “big-time”.  Can you name the top twenty richest people on the planet?  I can as follows:

BILLIONAIRS

Can you imagine a billion dollars? $1,000,000,000.00 How about eighty-six of those billion dollars? To really demonstrate just how far a billion dollars would go relative to the poorest countries, look at the chart below.  What I have calculated, based upon thirty-five billion dollars ($35 billion), is how long that amount would support an individual with a current daily income as given in a chart presented earlier.  The results are absolutely amazing.

NO OF  YEARS

Please don’t misunderstand, I am in no way condemning the wealthy, after all, in comparison with the world’s poorest, we the average American, are tremendously wealthy. Doing the calculation: $51,000/$394.25 = 129.36 years.  This is how long an annual American income would support an individual in the Congo-Kinshasa region. The wealthiest in the world have earned their money by tremendously hard work, focus, intensity, planning the work and working the plan, staying with their dreams and quite frankly sheer old determination. Never giving up, BUT they have developed skill sets and resources to realize their dreams.  This does not include:

  • Watching mindless TV each day.  According to the A.C. Nielsen Co., the average American watches more than 4 hours of TV each day (or 28 hours/week, or 2 months of non-stop TVwatching per year). In a 65-year life, that person will have spent 9 years glued to the tube.
  • Hours of video games. A nationally representative study found that the average American 8-to-18 years old play video games for 13.2 hours per week. According to a survey of parents, 36% of children ages 0 to 6 years old have played video games. By age 6, the brain grows to 75-90% of its adult size.
  • Never reading a book. In the US,  seventy-five percent (75%) of people sixteen (16)  years and older read at least one book last year; of those people the average number of books read was fifteen (15), but the median, which is more representative of the average American, was six  (6).  This is a little better than I expected.  Hooray for our side.
  • Dropping out of high school.   By the way, the dropout rate is described as follows: Every year, over 1.2 million students drop out of high school in the United States alone. That’s a student every 26 seconds – or 7,000 a day. About 25% of high school freshmen fail to graduate from high school on time. THIS IS A DIASTER FOR OUR COUNTRY.
  • Involved with drugs and drug addiction.  More than twenty-two  million (22 million) Americans age twelve (12) and older – nearly nine percent ( 9%) of the U.S. population – use illegal drugs, according to the government’s 2010 National Survey on Drug Use and Health.
  • Drinking to access-– National Institute on Alcohol Abuse and Alcoholism.  Prevalence of Drinking:  In 2013, 86.8 of people ages eighteen ( 18) or older reported that they engaged in binge drinking in the past month.   Deaths among individuals aged twelve (12) and older, 46.4 percent involved alcohol. … Expanding our understanding of the relationship between moderate alcohol.

Last but not least, one quote from “silent Cal” basically says it all:  “Nothing in this world can take the place of persistence. Talent will not: nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not: the world is full of educated derelicts. Persistence and determination alone are omnipotent.”

PERSISTENCE is one skill set all of the “greats” have.  As always, I welcome your comments. HANG IN THERE—YOU DAN DO IT.

 


I really don’t know who said it first but—“sometimes the only way you know where you are going is to take a look at where you are right now”.   There is a great deal of truth in this statement so I thought we might take a look at where we are relative to S & E (science and engineering).  Since this is not a subject that can be covered quickly, I am writing the first in a series of documents that will cover the following:

  • Overview of science and engineering—where we are now with conclusions as to where we need to go.
  • Current labor force relative to S & E professions.  This is a fairly broad look, but an important indicator as to where we are falling behind.
  • R & D trends (Global)
  • Public Attitude towards S & E professions.
  • State indicators.  What states within our Unites States provide the majority of trained S & E professionals and offer the greatest number of jobs.

This first effort is a brief overview of where we are now.  The next publications will follow during the month of May.   All of the information for each segment comes from the following publication:

 National Science Board—National Science Foundation, “Science and Engineering Indicators–2012”, required by 42 USC, Paragraph 1863(j) (1)

It is very important to note that—“Science and Engineering Indicators (SEI)” is first and foremost a volume of record comprising the major high-quality quantitative data on the U.S. and international science and engineering enterprise. SEI is factual and policy neutral. It does not offer policy options, and it does not make policy recommendations.  The data are “indicators.” Indicators are quantitative representations that might reasonably be thought to provide summary information bearing on the scope, quality, and vitality of the science and engineering enterprise. The indicators reported in SEI are intended to contribute to an understanding of the current environment and to inform the development of future policies.  All we are after here is to present the basic facts as they exist, without embellishment or fanfare.  Just the facts!   The overview focuses on the trend in the United States and many other parts of the world toward the development of more knowledge-intensive economies in which research, its commercial exploitation, and other intellectual work are of growing importance. Industry and government play key roles in these changes.  We primarily will be looking at knowledge-based economies and other intellectual work of growing importance on a global basis.  There is absolutely no doubt; those economies that have and continue to develop technologies benefiting their populations will progress faster, maybe much faster, than those countries otherwise dormant relative to science and technology.  Even though manufacturing is critical to continued national sovereignty, science, technology and engineering in general drive manufacturing.   We will be looking at trends relative to the United States, China, the European Union, Japan and those eight countries; i.e. India, Indonesia, Malaysia, Philippines, Singapore, South Korea, Taiwan and Thailand, etc. within the east Pacific theatre.  There are several generalities we can state relative to the global progression in question.  These are as follows:

  • We definitely live in an interconnected world with intertwining economies.  Those countries continuing to prosper economically offer open markets and willingness to participate in the transfer of technology.   No doubt about it.
  • Open markets exist in just about every country on our globe.  One exception is North Korea and even that potential trading partner is beginning to recognize the benefits of world-wide trade.
  • Most countries recognize the significant importance of education and dedicated R & D effort relative to global commerce.  It is imperative that a knowledge-based workforce exist to promote technology on a wide scale.
  • With Asia’s rapid ascent, China is a major player on a global scale.  A rising superstar on the world stage that must not be taken lightly.  China has made a commitment toward being a world force, thereby promoting science and engineering education.
  • The European Union is “holding it’s own” but much of the trade is between members of the “union”.
  • Brazil and South Africa show very high rates of growth relative to science, engineering and technology and recognize the great importance of an educated population.
  • Israel, Switzerland and Canada are examples of countries with mature growth relative to science and engineering- technology in general.  Continued progress is dependent upon a well-trained work force, and they recognize that fact.
  • Global R & D expenditures have grown faster than global GDP with significant efforts to make economies more knowledge and technology based.  An example of this—global R&D efforts in 1996 were $522 billion USD whereas in 2009, that number was $1.3 trillion USD.  This fact is demonstrated by the following graph.  There is a 69.23 percent increase in R & D expenditures in just thirteen (13) years.  A 5.325percent in R & D spending per year for thirteen years.  

 

  • The United States is the largest contributor to the R & D effort with $400 billion (2009) USD but with Asian countries, mostly China, a very close second.  Please note, the EU figure represents all expenditures for R & D by the seventeen (17) countries within the “Union”. This is a conglomerate number.

For many countries, there is an R & D target of 3% of GDP.  They recognize the great importance of technology and engineering relative to continued economic improvement.    It is also a recognized fact that industry is the mechanism that fuels this technology growth.  In the USA, industry funds 62% of the R & D effort.  70% for Germany, 45% for the United Kingdom and 60% for China, Singapore and Taiwan respectively.  The chart that follows gives the percentages of GDP for each region.   That percentage being on the ordinate (vertical) axis of the chart. The percentage in the USA is roughly flat over the last thirteen years.   China has grown consistenly.

 

If we look at the annual growth rates for selected countries, we see the following:    China has made significant efforts to invest in R & D whereas the EU, USA and Japan have reduced  R & D funding.   2008 and 2009 exhibit percentages that, in my opinion, are truly alarming.

 

 

There is no doubt that China and the Asia/Pacific countries are giving the US a real “run for the money”.  The chart below will demonstrate that fact quite well.

North America; i.e. USA, Canada and Mexico, etc. traditionally spend more than the rest of the world but Asia/Pacific is catching up.  Figure 0-6 is a fascinating look at how R & D expenditures “travel” across our globe.  This graphic represents the global transfer of technology and further demonstrates how intertwined global commerce is.

The relative importance of global technology is driven home by the following chart, showing graduation rates by region.  This chart represents the importance associated by each country as to what is expected of education.   It also is a very definite indicator as to where the jobs will continue to be in the twenty-first century.

Next, we will look at the current labor force and those professions participating in that labor force.  You may be surprised as to where scientists and engineers work.

 

 

 

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