On mass manufacturing and what it means to humanity
Previous post pointed to this installment of The Genius of Design:
The Genius of Design, episode 1: http://vimeo.com/12112900
The second episode can be found here:
The Genius of Design, episode 2: http://vimeo.com/12490724
Some great quotes and perspective from episode 1 follow.
The division of labor and the Designer
Toward the middle of the video, they venture into the creation of the Designer, which happened as a byproduct of the Industrial Revolution … the maker and the designer became two separate entities, with potentially bad side-effects for the maker.
Dieter Rams (designer from Braun & others):
My grandfather, he was a specialist for surfaces … I learned from him to polish by hand, and his thumb was like his tool … he was thinking not in mass[-manufactured] products, and that is what what we have to think today, too; we have to change mass[-manufactured] products into quality products.
This clearly points to the goal of the modern designer, the desired end-product: the modern designer should create something that is compatible with today’s manufacturing techniques and capabilities, but which emulates the hand-crafted nature of the individually created product.
Narrator voiceover, talking about the future of manufacturing, given Rams’s observation:
But controlling a multi-faceted manufacturing process is more challenging than throwing a pot on a wheel. Designing for industry is based on a bold premise: that the craftsman’s skills can be replicated by a mechanical system in which machines act like humans, and humans [act like] machines.
This introduces the unpleasant side of the divide between the maker and the designer. The maker becomes a cog in a machine.
Bob Casey, Historian at the Henry Ford Museum:
What happens in a mass-production system is that the craftsmanship is transferred from the people who are physically assembling the product back up the chain away from the mass who are doing the assembly. The labor historians have a word for it: they call it ‘de-skilling.’ It says we are going to take the skill away from the majority of people, and were going to invest it in a smaller group of people who are designing [the product].
The obvious difficulty is how to avoid things like sweatshops and working conditions in which workers routinely throw themselves off buildings [insert sidelong glance at Apple & Foxconn]. The Henry Ford approach seems the most obvious … odd that so few seem to have emulated it. Ford turned his employees into his customers by paying them wages high enough that they could afford to buy a car of their own.
The problem was seen back when the industrial revolution began. Fiona MacCarthy, WIlliam Morris Biographer (after narrator voiceover “For William Morris, the most celebrated and influential designer of the 19th century, machines were at best a threat; at worst a menace.”):
He wasn’t against machines per se, because he could see that machines could, if properly regulated, make life better for people. But he couldn’t bear the thought of this beauty being achieved at the expense of the people who were producing in these inhumane conditions.
A beautiful object really must be made in beautiful surroundings by people who are living reasonable lives, lives with some pleasure in them … not the kind of lives that a lot of people in Victorian England were being forced to live and work in.
To address what he saw as the problem, Morris learned all of the crafts & skills that the machines were taking away from people … he believed that these were skills required by the designer — necessary for the designer to do his job properly. Evidently, he never managed to address the problem … because his works had significant hand-crafted aspects to them, they cost more and were thus relegated to the wealthy who could afford them.
The unadorned beauty of the everyday
There is a great section on the marriage of form and function, of beauty and purpose.
Sam Hecht, designer:
Design can never be a pure activity, because it’s always connected with how things are bought, how things are sold, how things are used, how things are thrown away or recycled. All of these different aspects of how consumption operates need to be acknowledged, understood, and sometimes manipulated so that you can create beautiful, resolute, astounding pieces of work.
The video goes on to point out that Japan, despite its rapid and whole-hearted acceptance of modernization and mass manufacturing, nonetheless as a culture appreciates and, as a consumer society, pays for hand-crafted high quality work on everyday objects. Things like teapots and teacups … quality hand-made items are sought after, and the objects carry price tags high enough to enable the artist/craftsman to continue crafting the object for the future. This is a culture that appreciates, recognizes, and rewards quality, all in the face of mass manufacturing.
Naoto Fukusawa, designer:
The Japanese see beauty in the functionality of an item, like tools and other everyday items. We place great emphasis on harmony and being at one with the world … We want products to melt into the environment and become one with it. The goal for us is creating harmony.
The interesting question is how to instill this attitude outside of the Japanese culture. Europe seems to have an appreciation for quality, though I do not know the extent to which it mirrors that of Japan. America, on average, has an appreciation only for price … and we use it to distinguish all goods from food to medicine to clothing to house construction. Scary.
On the frequent mental divide between function and appeal, specifically targeting the automobile industry:
For designers, the chassis is the platform, which exists to support their designs.
For engineers, design is styling, sometimes pronounced “packaging.”
Pretty humorous; it mirrors the divide between hardware and software engineers that I wrote about for a business article a while back:
“Reward: How to foster a technology-innovation culture within a large organization (What you can learn from startup companies).” Bruce Jacob. Chapter in The Handbook of Technology Management. H. Bidgoli, Editor. John Wiley & Sons: Hoboken NJ. 2010.
Last but not least, a great quote from Steven Bayley, writer:
There are three great and significant 20th-century art forms, I think: the one is the movies; the second is rock music; the third is industrial design, of which the automobile is the paradigm.
The piece spends a bit of time talking about Ford and the demise of the Model T, brought down by its own success (Ford became less an automobile manufacturer and instead a Model-T manufacturer), and there are some great quotes from designers at the company today.
A single, perfect sphere
It is clear that the challenges are two-fold: first, designers must make pieces that, despite their production numbers and the techniques used to produce them, retain the same essence of humanity inherent in a hand-crafted object. Second, the manufacturing processes (or, perhaps more appropriately, the manufacturing environments) must not dehumanize the workers. We as consumers must insist on these via the decisions we make with our wallets. It certainly seems possible to achieve both; Ford’s example shows that it is possible to leave profit (sometimes significant profit) on the table and yet grow or at least sustain one’s company. Happy, healthy, well-paid workers do not equal the impending downfall of a company … but perhaps I am naive.
The solution is typically innovation … when a company can compete on nothing other than price, then exploitation of workers seems an inevitable endgame. On the other hand, when a company competes on innovation, then interesting things can happen. Neat example in the video is the Coalbrookdale bridge:
[Though] mass production complicated ideas of beauty, the [cast] iron bridge in Coalbrookdale is an early testament to the beauty of the machine-made and the truth of the mass-produced.
This is the picture at the top of the post. I love that, with its reflection in the water, the bridge makes a perfect circle.
Jobs, homework, and shadow-boxing
The other day I ranted about today’s kids and their attitude toward employment.
:)
A number of students have stopped me in the hall asking for explanations, clarifications, mostly centering on what prompted the rant. I think I have a good answer, finally. Well … at least a better one than I’ve been giving over the past few days.
Ever I started doing the “start-up 101” classes at Maryland, I’ve been trying to figure out how to teach good design. Which, to me, amounts to instilling in someone the desire to do good design. What good design requires is the burning internal need to do something right, the burning dissatisfaction with anything but correctness, a demand for rightness. This is what causes people in startup companies to forego eating, sleeping, dressing well, taking care of their health, etc. … all in the name of putting a product out. These people do not willingly undergo burnout just because someone gave them a paycheck; they do it for the same reason that an author writes, a painter paints. They do it because they have to.
What I realized the other day is that students have the same attitude toward jobs that they have toward their homework—namely, they do it because they are told to by someone in charge and not for themselves.
Problem: this attitude guarantees substandard results. Nobody will ever do a good job at something unless they want to do that particular something and are doing it for their own benefit.
I’m not interested in figuring out how to make students want to do homework (humorous though, that); rather I am interested in figuring out how to break the link between the two, how to show students that the two things are, in fact, very different. A job is very unlike homework, largely because it matters. Homework is shadow-boxing; a job is fighting for your life. Take ownership.
Otherwise, find a Steve Jobs and become his loyal servant
Just read a great opinion piece by Stanislav on Apple, creativity, and Jobs’ monopolies [on taste and usability]. The bulk of the article is about how Apple competitors have squandered opportunities to do good work, but I think a central message is about how great design comes about (e.g., not by committees, which is common practice in nearly all non-Apple companies):
Non-Apple’s Mistake
If you are creative, create. Otherwise, strive to find a strong-willed [Steve] Jobs figure gifted with good taste, and become his loyal servant. This is how we get quality products, everywhere from architecture to operating systems. There is no other way. Creativity requires a mind, and a herd has none.
Stanislav is no fanboy, by the way … many people miss his disclaimer at the bottom:
A number of people linking here seem to think that I like Apple or forgive its sins (as if Apple needs my forgiveness.) This is a mistake. I loathe Apple products, and chafe under the straightjacket of their aesthetic whenever I use one. I simply happen to despise their competition that much more. At least Apple has an aesthetic. Its works, however flawed, are the works of a person, rather than an amorphous blob.
Good design requires personality — something that committees and focus groups lack. Given that most companies’ designs are driven by committees and focus groups, this creates a wonderful opportunity.
Bottom line: there is plenty of room for good design. Go to.
On employment [and selfishness]
I meet a lot of young kids in my job, so I see this a lot; it is the same attitude that I had years ago. People think of a job as a reward you get for being smart or doing well in school or acing the interview.
No: a job is not that.
A job is an opportunity, extended to you by someone, to help that someone make money.
That’s it. Someone out there is in the business of making money, and by offering you a job, they are inviting you to help them do it.
One of the problems in a highly specialized [capitalist] society is that there is so much abstract crap in the way we rarely see this picture. Instead, the notion is pervasive that a job (i.e., a salary) is a reward for a job well done. “Way to go on the entrance exams! Here’s $100,000 per year for the rest of your life! Woo!”
Yeah, no, it doesn’t work like that, and when you put it this way it’s kind of silly that anybody ever thinks of it differently, but I have to say that almost nobody I know thinks of a job as anything but a reward. And the problem with that is people tend to squander rewards, so the nationwide norm today is for people to maybe accomplish 2-3 hours of work in an 8-hour work day. And even that figure is maybe a bit high …
But this is one of the primary reasons the economy has tanked, people!
A job is an opportunity, extended to you by someone, to help that someone make money.
I know tons of people who work for the government, and because there is no bottom line, they think nothing of taking a day off for golf, leaving early to play with the kids, coming in late because they went out for a long breakfast with the spouse, taking extended lunches to go nap in the park. Really? Mind you, it is not restricted to the government sector; it’s just more widespread there. And today’s youth think that is what is expected of them — the salary is the lifetime reward.
People cry out that Obama is ushering in socialism. I’m sorry, but that is just too funny for words. People who spout this nonsense have obviously never talked to a 20-year-old in the last decade. 20-year-olds? Those people are socialists. Like I said, I was one when I was young and naive. Well, at least I’m no longer young.
A job is an opportunity, extended to you by someone, to help that someone make money.
If there’s one thing I want to get across to my students these days it is the following: guys, the future is in your hands. You can either work your ass off and make it great, or you can focus on yourself and waste it. The temptation towards selfishness is powerful, and “ME!” seems to be the banner I’ve seen flying overhead for the last few decades, but we have already recognized that selfishness is the cause of many of our present woes. It’s not about the individual anymore, and it is quite unfortunate that it ever was about the individual, because that notion has corrupted so many people that it continues to reverberate nearly everywhere. No, it’s not about you. Forget that. A job is about somebody else: the guy offering you the job. As Judge Judy used to say, “he’s the boss, applesauce!” I have no idea what that means, but it just works.
[12 April 2010: Added “and selfishness” to the title at the suggestion of one of my awesomer students.]
Innovation and why Apple is tight-lipped
Really funny how the press makes such a huge deal out of Apple’s secrecy around their product announcements, calling it “paranoid” and so forth.
Actually, it is extremely prudent practice.
Innovation is hard primarily because it is extremely difficult to ask the right questions. Bear with me on this. This is something that I preach to all the incoming grad students [people are always asking me to give this talk] — the point of the Ph.D. program is to train people how to ask questions. If a [research] question is asked appropriately, figuring out how to answer it is simple. If you frame a research question appropriately, you can hand that off to anyone, a grad student, an undergrad, and that person should be able to figure out what experiment to run, how to set it up, what data to collect, how to present it, how to analyze it, how to draw conclusions.
The hard part is framing the question.
Seriously, that is the entire point of the Ph.D. program: forcing students to learn how to ask questions well. Now let’s skip to innovation in an industrial setting. I claim that it is precisely the same deal: the hard part is framing the question.
Let’s say you have been tasked with the following: come up with the next-generation compute system. Though that sounds concrete, there is no well-framed question there, because it is not at all immediately obvious how to solve the problem. This kind of open-ended problem stumps people — even extremely smart and talented people, as we all can point at brilliant designers who have nonetheless put out computers or phones or devices that underperform, are hard to use, have numerous security flaws, or exhibit any combination of these problems.
The hard part is framing the question.
As soon as one designer solves a long-standing open problem, why is it that suddenly everyone rushes in with a me-too solution? Because that one designer managed to frame the question appropriately, and once the fact is made public “company X announced Y today” the question has been framed: aha — they solved the Y problem! Once you know the right question, solving it is trivial. If you tell a competent engineer what problem you have solved, he can figure out the solution in a heartbeat.
Really, this is no exaggeration. We solved several switching problems that had faced the electric guitar industry for decades — decades. People could have solved the problem decades ago, but had not. When we told people who had been in the business for 35 years what we had done, they didn’t believe it — said that we could not have solved the problem because it couldn’t be solved. However, as soon as we announced publicly what we had done (without saying how we did it), suddenly a small rash of me-too products appeared.
The hard part is framing the question. Once you have the right question in front of you, answering it is trivial.
That is why Apple doesn’t tell everyone all of the details up front. That is why they don’t want people leaking information. As soon as you know what Apple has done, figuring out how to do it takes a second. Any announcement they make gives their competitors an opportunity to do several years’ worth of technological catch-up in a single breath.
Innovation is fun that way.
Pursuing innovation and motivating engineers
A few years ago, I was asked to review a chapter for an upcoming business textbook on innovation management. I thought it odd that, in general, we don’t know much about innovation (where does it come from? how to do it well? how to do it regularly?), and yet here we are writing books on how to manage it. So in a fit of hubris I replied that I would rather write a chapter than review a chapter.
And then the editor called my bluff.
So I wrote the chapter, and the book just came out. The chapter, “Reward: How to foster a technology-innovation culture within a large organization (What you can learn from startup companies)” can be found in Bidgoli’s Handbook of Technology Management: Core Concepts, Financial Tools and Techniques, Operations and Innovation Management (vol. 1 of the set). The article’s storyline:
- Companies say that they desire top performance from their executives, and so they tend to pay their executives well.
- Companies say that they want to be innovative, and yet they tend to pay their innovators (engineers) less than just about everyone else in the company.
- Um, hello?
That’s pretty much the gist of it. You can argue about pay scales and so forth, but the truth is that engineers get the short end of the stick. Here’s why smart kids choose the medical profession over engineering:
Median Salary: Electrical Engineer
Median Salary: Anesthesiologist
Note: electrical engineers are among the highest-paid engineers out there (software engineers are a bit lower according to payscale.com). So this is a really depressing realization. I mentioned this in a post a while back, in opposition to Bill Gate’s assertions that money has nothing to do with why people opt out of STEM careers (science, technology, engineering, math). I mean, come on.
I came face-to-face with this again over the weekend, when my neighbor asked me what her high-school-aged son should do for a living (he seems to “get” computers). I mentioned software design and web design, but she described a conversation she had with her company’s computer analyst, who had laughed at her and said “programmers don’t make any money; the analysts do.” Which is, of course right … I remember during my stint in industry the admins were always paid better than the developers, though they had a much harder time of it (you have to pay someone a lot of money if they’re on call to keep a system up 24x7). So my neighbor is adamant against the idea of her son going into engineering if this analyst guy, who hadn’t gone to college, was making more money than her son would ever make if he became an engineer.
But wait, there’s more
Recently one of my grad students pointed me at the brilliant TED talk by Dan Pink. What he says is that, when your job depends upon creativity and thinking outside the box (i.e., engineering at its best), then attaching bonuses to performance is actually a hindrance—it makes you do your job worse by narrowing your focus (making you look more inside the box than out, I guess).
So the immediate conclusion is thank goodness we’re underpaying our engineers, because otherwise they would never be able to innovate.
Which, of course, I think is a gross misinterpretation of what Pink is saying. He says that financial incentives are a bad idea, not high salaries. In fact, I think that having a bunch of engineers running around worried that they aren’t making enough money (and maybe should have become anesthesiologists instead) probably has the same net effect as giving them financial incentives. So, no wonder we have such an innovation shortfall.
I think the right answer is the following: if you want innovation, overpay your engineers. Give them a stable environment, the right tools, and plenty of cash … and innovation will most assuredly come. Xerox PARC comes to mind, one of the last times anybody tried that recipe.
On business education and apprenticeship
America went into economic decline starting in the 1970s. Figuring out why may lead to a solution (one can hope …), so I sort of obsess over it.
I have suggested that a rising education level in the country likely led to a decline in the choice of manufacturing-based jobs, thus contributing to a decline in innovation (it is hard to innovate when you are not building anything, since the act of building exposes some of the best problems to solve). Without innovation, you lose the advantage you hold over your competition, and so you have to compete on price — an inherently lower-margin approach. I think a decline in innovation is what ultimately caused US economic growth to drop sharply, from three and a half percent to two percent in the early 1970s.
However, it is not immediately clear which cause begat which cause — innovation in America drying up, ultimately causing firms to lower their costs by outsourcing; or firms outsourcing their manufacturing, thus pushing away from themselves most of their opportunities for innovation. Both result in the decline in innovation, both potentially cause the drop in economic growth. But which is the initial catalyst?
I think the answer is both. The key is a long discussion I had with an economist the other day.
We were talking about innovation, tech, random stuff, and he gave me his perspective on formal education vs. business sense. His father had owned a factory a long time ago and was very selective about who he hired. He had found that one of the primary keys to manufacturing both efficiently and well was the experience level on the manufacturing floor: in particular, the old-timers knew what they were doing. Over the years, these guys had accumulated a significant amount of knowledge of how to do their job well, so that high quality output was ensured. The thing was that this knowledge took the form of “tricks of the trade” … more specifically, these were “tricks” that the old-timers were not particularly interested in sharing with strangers. Why? Because if you teach a new-hire stranger how to do your job as well as you do, who’s to say he doesn’t eat your lunch the next day? Come to think of it, that also describes the relationship between US engineering education and the rest of the world.
Anyway.
Conundrum: how do you hire new people and get them up to speed in the closely held tricks of the trade? How do you convince the old-timers to give up their secrets willingly?
Solution: you hire their kids.
This goes back to the age-old apprenticeship mechanism, whereby a master in a trade (or artform) teaches someone the knowledge he has accumulated over a lifetime of working in the medium. The apprentice is usually a child of the master or the child of a known and trusted friend. Why is this important? If you accept as an apprentice someone you know and trust, then
- you have a vested interest in seeing them succeed, and
- they are unlikely to stab you in the back and eat your lunch once they learn your secrets.
This guy’s dad, the factory owner, made a point to hire the children of his workers. The workers on the factory floor shared their manufacturing secrets with their kids, the factory hummed along, everybody was happy.
The monkey wrench, the economist said, appears when you get someone in charge who doesn’t understand this relationship (which, I’m going to hazard a guess, covers most executive officers on the planet). He described what happened when a typical MBA is put in charge: the new executive brings in strangers as employees; predictably, knowledge is not shared from the experienced employees to the new hires, and that knowledge is ultimately lost by not being transferred. In such a situation, a factory either becomes less efficient, or starts producing lower-quality output, or both.
So — here’s the theory. Two forms of education were on the rise in the mid- to late-1900s. One was the rush to college (discussed earlier); the other was the rush to business school. I think we have two complementary effects:
- The rush to get bachelor’s degrees produces a white-collar work force that is not “in the trenches,” is thus isolated from many of the realities of manufacturing the product, and so cannot innovate as effectively as before. Innovation declines, and, as a result, manufacturing declines … is ultimately outsourced.
- The rush to get MBAs produces an executive class that, for whatever reason, is somewhat detached and isolated from many of the realities and details (e.g. inter-personal dynamics) that can make the difference between a good company and a great company. Manufacturing suffers (potentially), is outsourced as an attempt to solve the problem, and, as a result, the potential for future innovation is all but eliminated.
Effect #1 directly reduces the degree to which the American work force innovates. Effect #2 increases the likelihood that an American executive could decide to outsource without realizing the potential deleterious effects. Together, both spell the end of American productivity.
I’m guessing that education, in both these forms, is the culprit behind our end of affluence.
Outsourcing: effect or cause?
Two people questioned me on something I said the other day about outsourcing … “cost-cutting is a last resort” … one asking for a clarification, the other a justification. Both were getting at the same issue: the fact that the chicken-and-egg problem does not have a self-evident answer.
To recap: I claimed outsourcing is an effect, not a cause … that it happens when your economics go sour, and you struggle to keep your head above water, but it is not the (initial) cause for the decline.
When your income is built on innovation, you inherently grow, provided your innovations are useful and well received. Innovation is like magic: it disobeys conservation laws, and thus blood, sweat, and tears can translate to wealth. The thing about “the American Spirit” that was pervasive throughout the 1700s, 1800s, and much of the 1900s, is that every American considered him/herself an innovator. The inventor was popularized, valued. The net effect was that, on the factory floor, any individual with insight on how to do things better could make a difference.
That is important. Innovation tends to happen where the action is: when you are building something, you think about how to make it better. When you use a tool, you think about how to redesign it so that it might do its job better. When you assemble a product, you think about how to do the same design with fewer parts. The person closest to the action often has the best insight into the problems, and so that person often is the most likely to innovate.
The flip side: if you’re not building anything, it’s really, really hard to innovate.
And so we come to our chicken-and-egg problem: which came first, the flight of manufacturing (outsourcing), or a widespread decline in innovation? Without manufacturing, you cannot innovate well because you are removed from the important problems; without innovation, you cannot manufacture well because you have to compete primarily on cost and not substance.
If we assume that things tend to take the path of least resistance, then the answer is that innovation declined first, leading to lower profits and attempts to cut costs, and ultimately outsourcing.
The easiest way to make money is to innovate, because innovation generates wealth, which is readily transformed into money. It is easier because it is free, like sunshine or rain; anyone is free to innovate and thus generate wealth, and this wealth-generation comes at nobody else’s expense. In fact, most innovations improve the lives of the people who purchase the innovative products, which really is the point.
In contrast, making money by way of cost-cutting is not free: you have to give up something to get it, such as quality or control or simplicity. Also, the amount of money that you can make via cost cutting is limited, whereas the upside of innovation is not. So, fundamentally, on two different axes (convenience and return on effort), making money by way of cost cutting is inferior to making money by innovating, and this specific form of cost cutting (outsourcing) essentially precludes you from ever innovating in that domain ever again by taking manufacturing out of your hands, thus ensuring that you’ll never make as much money as you did back when you were innovating. So I think that most decision makers would resort to cost cutting only if the innovation route was, for whatever reason, taken off the table.
However, the notion behind “the path of least resistance” assumes that all of this stuff was self-evident and that executives were conscious of it. That is not necessarily the case. I think we have two equally compelling arguments:
- Executives blindly chose to outsource their manufacturing, not realizing that the short-term gain would ultimately cut off their ability to innovate in that manufacturing arena, thereby reducing all future potential for growth in that arena.
- A wave of something spread across America and reduced our ability to innovate, or — just as effective — reduced the ability for innovative ideas to make it into a company’s product.
Or, of course, you could have a combination of the two.
And now that I’ve put it that way, I’m more certain than ever that the economic downturn (starting in the 1970s) was caused by education, because this brings back a conversation I had the other day with an economic-policy guy at AEI. Food for the next post.
Academia and the decline of wealth in America
For those of you under about 40 years of age, it wasn’t always like this.
In the US, it used to be that every year you could expect to be wealthier. Your purchasing power grew over time: you could afford things you couldn’t the year before. Your salary increase every year outpaced inflation. If there was something you wanted and couldn’t afford, all you had to do was wait. Give it a year, or two, or ten. You would be able to afford it, no problem.
No, really, go ask your parents. I’m not making this stuff up.
You can even see it in things like the government’s long-term programs, for example Social Security — who in the hell in their right mind would start a long-term program without an appropriate plan for funding it? Were our forefathers irresponsible? Short on brains? No, of course not — for centuries, yes centuries (it goes back to the 1700s, basically as far back as our government has tracked the data), the US economy had been on a three-point-something percent growth curve, while the world’s greatest economies were on a two-point percent curve.
Bottom line: every individual in the country became wealthier over time.
I’m not talking about companies, I’m talking about individuals. This is why, for centuries, every American child fully expected to do better than his/her parents. Every parent’s dream of seeing his/her children do well (financially) came true. It just happened; that’s the magical thing about growth curves. The infinitesimal 1% difference between us and the rest of the world, when compounded over several centuries, is what took us from being a pissant backwater in the 1600s and 1700s to a leading economic power by the early 1900s.
Then, in the mid 1970s, we fell to a two-percent growth curve. We’ve been on it ever since.
I’ve read a bunch of accounts, and I have yet to read a really compelling explanation for why it happened. All explanations I’ve read are overly complicated or artificial or specious, etc.
[if you have suggestions for reading, please send them to me, seriously]
At the time, our then-president Jimmy Carter remarked about it, said that it was perhaps the most important issue facing America at the time. He was right. However, his challenger, Ronald Reagan, dismissed Carter for criticizing America. Basically played the nationalism card, to national appeal, and the rest is history. That’s the last time any politician has mustered the courage even to mention the issue; it’s a sure-fire way to get yourself kicked right out of office.
The effect of the change wasn’t felt until the 1980s, at which point people realized that, for the first time in centuries, they couldn’t afford to purchase the house they grew up in. Since nobody had talked about the economic slowdown for over a decade, nobody put 2 and 2 together. People worried about their future, but nothing changed. And that’s where we are now. I can’t afford any of the houses I grew up in — and it’s not like my dad is a millionaire or anything; he’s a professor just like me. Identical social standing. The difference: I am poorer than he was. My children will be poorer than me.
This is what it means to fall off a growth curve.
We all see the net effects all around us, perhaps without realizing why: when you have more than enough money, people can afford to be generous, both monetarily and (more importantly) in spirit. When there’s not enough to go around, people can be less than charitable towards each other.
Anyway, that’s not what I want to talk about. I want to get us back on that three-point growth curve. The first thing is to understand what changed. Figuring out why will come some other day.
The ‘what’ part of the equation is innovation. America used to be a country defined by innovation. It was ‘the American spirit’ that people around the world talked about in the late 1800s and early 1900s.
Why do I finger innovation? Because innovation defies all laws of conservation: with innovation, you create wealth out of nothing. One day, you have nothing in your hand. The next day you have created, out of pure unadulterated thought, something that people want bad enough to give you money for it. You have created a thing of value. You have created wealth.
Out of nothing.
Innovation drives large-percent growth curves. Cost-cutting drives insignificant-percent growth curves, and cost-cutting is what underlies most of the American economy today. We figure out how to be more efficient, how to outsource, how to reduce costs, how to cut corners, and we have done so for the past few decades. That’s not really growth — for instance, it is bound by laws of conservation. It cannot scale forever. It’s basically a floating stasis.
In the 1970s we were starting the move from a manufacturing economy to a service-based economy … the first steps were the exporting of much of our manufacturing elsewhere. The problem is that if you don’t build anything you cannot possibly innovate — you cannot innovate if most of your economy is service … or anything other than manufacturing. What does it mean to innovate within a service economy? Make better sandwiches? Take more efficient delivery routes? Optimize the payroll? And if you’re not innovating, you’re not really growing your wealth.
Think of all the examples of American innovation since the 1970s. How many examples are not in the tech sector?
We don’t build anything here anymore, outside of tech. Kitchen appliances, power systems, washers/dryers, airplanes, raw materials, electronics, trucks, ships, even satellites these days — nothing is built here. We are no longer the only player in any of these markets; for nearly all we’re not even the predominant one; for most we don’t even play. We stopped manufacturing, and with that we stopped innovating. In industries where we still do manufacturing, we innovate like mad, but the number of industries is shrinking, and I fear that the economic footprint of those industries as a percentage of the global economy is also shrinking. The bottom line: even though we are an innovative people, our innovations are a drop in the global bucket. Meaning that our country’s growth will largely be static, and mostly in the downward slope compared to elsewhere.
Why did we export stuff elsewhere? I don’t think cost-cutting comes first — I don’t think people choose to outsource as a first resort; I think that comes later. So I don’t buy the argument of “the fat cats of corporate America decided to move operations elsewhere so that they could make more money” as the reason things went downhill. These guys were already making money hand over fist; why change course? They had a good thing going, and there was no external motivation to give it up (remember that there are non-trivial start-up costs to outsource something … nothing comes for free).
I think cost-cutting happens when you move to a lower-percentage growth curve; cost-cutting is a last resort that you pull out of your bag of tricks to try to get back onto the higher growth-rate curve of yesterday.
Another possibility: we got lazy. In the 60s and 70s, in both the automotive and electric guitar industries America was so far out ahead of the rest of the pack, we got lazy and stopped innovating by choice. We decided to make and sell crap. Why? Because we could get away with it. The quote re: autos — “Detroit decided that they would rather make money than cars.” It is quite possible that the same thing happened in many industries across the country.
I’m not fond of that explanation because it is fatalistic … basically it says that with success comes an inevitable downfall. I don’t want that to be true, because I want us to get back up on our feet. Anyway, I hope that it isn’t true, and so I keep looking for alternative explanations.
What else could explain the slow-down in manufacturing? Here’s another theory. Throughout the 1950s, in the post-war era, there was a common refrain of “son, get an education; I don’t want you to have the same hard life that I had.” The message from parent to child was “I want you to have a better life than I had, so go to college.” Basically, to put it in a nutshell, an entire generation credited college education for our country’s economic growth curve.
Let’s say that again, since I think it is important. Nearly every generation in the history of our country (well, at least beginning when the Europeans conquered the original owners of the place) has had a better future than their parents. Every parent lived to see their children do better than them. For some reason, in the mid-1900s, people started to think that the growth in American wealth was due to a college education. And so, starting in the mid-1900s to late 1900s, just about every American high-school graduate went to college.
One of the things they teach you in American college is that industry is to be looked down upon.
I have no idea where this came from, but it is there, it is palpable, and you cannot deny its presence. When in college, you are [indirectly] educated to believe that all of industry is equivalent to hard manual labor.
Now, don’t get me wrong — I have worked in industry, and I loved the immensely satisfying and challenging intellectual atmosphere that industry provides. It throws you into lapel-grabbing, brain-pounding problems that are nowhere to be found in academia. Industry demands from you a level of sophistication and attention to detail that is not approached in academia. It is a different mentality, a different focus, a different culture altogether. The two are apples and oranges.
But nonetheless, each looks at the other and sneers.
And so an entire generation of high-school graduates went to college and learned to loathe industry. They learned that working in the factories, in the design houses, in the drawing rooms — they learned that type of work was beneath them.
And so innovation died, and perhaps nine tenths of the brilliant minds that would have otherwise gone into industry and innovated the hell out of their field, that nine tenths went into the legal profession or the medical field or investment banking.
By the way, it’s still happening, and I was blown away by this. Bill Gates, bless his heart, told Congress that today America faces a critical shortage of engineering talent (basically the people who would have gone into industry a few decades ago), and that the problem is due to lack of education. However, other reports have shown that our education system produces more than enough STEM students (high-school and college students studying and graduating with degrees in Science, Technology, Engineering, and Math). What other reports have shown is that the top percentages of these students go not into STEM careers but rather into fields like law, medicine, and investment banking.
Why? One can only guess, but here’s some insight. None of the engineers that I know make more than about $200K, and even that is unusually high. None of the doctors I know make less than about $300K. None of the lawyers I know in private practice make less than about $400-500K (lawyers in the government, however, that’s a different story …). And let’s not get started on investment bankers.
The really smart students? Yeah, those guys know where to go to make a living, and I’ll give you a hint: they aren’t going into STEM careers. Mr. Gates, however, insists that solving the problem is “not an issue of raising wages. These jobs are very, very, very high-paying jobs.”
Yeah, okay, who invited that guy with the huge albatross-shaped conflict of interests hanging around his neck?
Anyway, back to the point. I finger education as the culprit for killing innovation. And, yeah, I’m part of the problem, not part of the solution. I know, I get it. But I only came to this conclusion recently, and for what it’s worth, I’ve tried to act as an evangelist to help fix the problem. See also here and here.
My agenda: let’s get innovation back on track in this country. For my part, I’m trying to teach good design principles, because a lot of what we call innovation is often just really good design. As for bringing industry back to the US, I have no idea. I suspect it’s a once-they’re-out-of-the-chicken-coop-they’re-gone sort of thing, so we’ll have to invent some new industries, or make the tech sector even bigger (quite possible with the iPad and the revolution it portends). Green energy is also a potential, but a ton of countries see the same potential and are vying for pole position. But either way, it is clear to me that we won’t get back to the good ol’ days unless we innovate as a country, as opposed to a bunch of scattered individuals.
I try to beat the same message into the head of every student who crosses my path: learn good design, obsess over correctness and elegance, and try to start up a company while in school or immediately after. The tools are there, the potential is there. The future is up to you guys.
Brilliantly done brief about quality of design, linking hardware, software, restaurant management, and, I would add, life in general:
[Q]uality offerings display self similarity. Any small part of it, is indicative of its whole. This lets you make a good judgement about an entire product by looking at a very small portion of it. This is as true in software as it is in restaurants.
If you ever expect to do a start-up at any time in your life, commit these words to memory. Commit the concept to your very frigging soul.
Though that comes off as hyperbole, it is not. Something I have been trying to get across in my “Startup 101” courses (on guitars and consumer electronics) as well as in our introductory design class is that to do good design you must obsess about it. That is the only way to get it right.
The easiest path to innovation is good design, and innovation is what gives you the type of economic growth that makes everyone in society wealthier. I’ve been ranting about that for a while (latest talk here, other talks here).
Come to think of it, I should rant about it here as well.
[Update: just write up a huge rant here]
