Arlington, Va. – The nation’s political leaders need to address warning symptoms in the U.S. high-tech industry.  The most visible of these symptoms – offshore outsourcing of high-skilled jobs from America to other nations – is only the tip of an iceberg signaling a much more complex challenge in the future: a potential U.S. “innovation shortage” influenced by a weak K-through-12 science-and-math education system, federal neglect for technology-oriented R&D funding, national security-driven immigration and visa policies that inhibit the U.S. from attracting and keeping talented foreign students, and an unfriendly business environment in comparison to other nations.  Those were the conclusions reached by leaders of the U.S. high-tech industry who participated in a strategic `war game’ known as the “Prosperity Game^TM on Offshore Outsourcing and Innovation” sponsored by the Electronic Industries Alliance (EIA) in West Palm Beach, Florida, last week.

 “The migration of high-tech jobs, including R&D, engineering and design, to other countries has become a serious economic issue for the U.S., but an even larger one is looming,” EIA President Dave McCurdy said.  “The knowledge-based infrastructure needed to spur innovation in the U.S. is being sorely tested.  If we do not look closely at our nation’s innovation future, we may suffer in an international economy driven by technology, education, competition and market access in other countries.”

To address these national issues, EIA is calling on political leaders from both parties to work in partnership with the U.S. high-tech industry and examine not only present-day issues such as offshore outsourcing, but also the very future of American high-tech innovation.

“Candidates for the White House from both parties are focusing on job losses instead of innovation gains and insourcing jobs into the U.S.,” McCurdy noted.  “We need to take an objective look at the factors driving the offshore outsourcing of knowledge-based jobs and rejuvenate the elements that foster growth and can determine the economic future of the U.S.”

To accomplish this rejuvenation, EIA is urging opinion leaders and policymakers to radically reform and bolster four pillars of the U.S. innovation infrastructure: education, basic R&D funding, student visa and immigration policies, and pro-growth business policies.

“We need to move beyond the binary argument of offshore outsourcing versus job protectionism and have a national discussion on the technological factors that are transforming our economy -- and the economies of other countries,” McCurdy said.  “This is not about replacing American tech jobs with cheap labor in other nations.  It is about a host of economic and political factors.” 

“In our industry, it is about the simple fact that to create shareholder value and grow, you either innovate or die,” he continued.  “It is about the ability of companies in the U.S. and elsewhere to manufacture, distribute and meet the growing market demand of businesses and consumers in countries all over the world.  It is about attracting the next generation of scientists, engineers, creators and innovators, and expanding the resources they need to learn.  It is about America’s ability to discover, build, and patent the `Next Big Thing’  whether it’s nanotechnology, biotechnology, or something more surprising -- and the potential of other nations to do it first.”

The 85 participants who formed strategies as part of the EIA Prosperity Game^TM teams included members of Congress, government agencies, the media, China and India experts, and leaders from the high-tech industry. 

To differentiate itself from other organizations, EIA plans to release and distribute a playbook of information for opinion leaders and policymakers in the coming weeks that includes legislative and regulatory recommendations made at the Prosperity Game^TM. Implementation of these recommendations will be necessary if the U.S. wishes to maintain its competitive edge in the global marketplace, according to EIA.

In the aftermath of 9/11, the U.S. is investing heavily in security and defense.  Despite these legitimate concerns, “we need to realize we are no longer in an arms race,” EIA 2004 Chairman and Ceridian Corporation CEO Ronald L. Turner pointed out.  “We are in a ‘minds race’ in which the U.S. could face an innovation shortage.”

“The technology industry in the U.S. is at an innovation crossroads,” EIA President McCurdy added. “We can protest and launch diatribes against the present-day actions of other countries, or we can create a real national strategy and plan for the future of U.S. high-tech.  The bottom line is this:  if we don’t determine what tomorrow will look like, others will determine it for us.”
 
About EIA:  The Electronic Industries Alliance (EIA) is a national trade organization that includes the full spectrum of U.S. manufacturers, representing more than 80% of the $430 billion electronics industry. The Alliance is a partnership of electronic and high-tech associations and companies whose mission is promoting the market development and competitiveness of the U.S. high-tech industry through domestic and international policy efforts. EIA, headquartered in Arlington, Va., comprises more than 2,500 member companies whose products and services range from the smallest electronic components to the most complex systems used by defense, space and industry, including the full range of consumer electronic products. The industry provides 1.8 million jobs for American workers.

About Prosperity Games^TM:  The Prosperity Games^TM were originally developed at Sandia National Laboratories.  Facilitated by communications consultants Domenici Littlejohn, Inc., and Sandia, the Prosperity Games^TM involve a combination of live, interactive formats in which stakeholder teams engage a problem, interact with one another, collaborate on long-range planning, and learn lessons about communication, conflict resolution and diversity. The Prosperity Games^TM simulate a large environment in which stakeholder groups have the opportunity to make strategic plans consistent with imagined futures. The Prosperity Game at EIA's 2004 Executive Leadership Forum was tailored to meet the unique challenges the high-tech industry faces as companies deploy resources around the globe.  Sandia National Laboratories provided financial support as well as game players and facilitators.