February 3, 2015 at 14:45How Star Companies Like Apple Kill U.S. High Tech
Large IT companies such as Apple have traditionally been considered the locomotive of the industry, a major center of innovation. But not everyone shares a similar point of view. Professor of Economics William Lazonik (William Lazonick) from the University of Massachusetts at Lowell has a radically opposite opinion.
In the scientific works that were included in the project " Political Economy of Distribution”(“ Political Economy of Distribution ”), Lazonic explains his point of view on the example of Apple. Say, if you take a high-tech product like the iPhone, then you can’t say that it was created specifically by Apple. Such products are created as a result of the efforts of many people, many of whom do not work in the company. Some of these people worked under government contracts, receiving grants from the federal budget. The process takes several decades, so the current developments are created thanks to the work of past generations of engineers and researchers. The same iPhone uses a touchscreen, GPS and other technologies created long before the release of this smartphone.
Professor Lazonic considers it abnormal that Apple and other companies use the results of state scientific research, but do not think at all to compensate for the costs. Private corporations spend all of their profit exclusively on their own needs, not disdaining the use of fraudulent tax evasion schemes .
The economist says that the situation on the labor market changed dramatically in the 80s, around the time that Intel processors and computers using the IBM PC architecture gained popularity. Along with the change of technology, the replacement of personnel in companies took place. In place of old experienced workers familiar with old technologies, young people familiar with technological innovations began to recruit. There is a galaxy of newfangled startups that attract talented young people with millions of options. Company management has also evolved: they realized that they need to manage companies not for the sake of employees or product quality, but to appease shareholders.
In the new system, the size of wages began to depend on the stock price, which also influenced the worldview of managers.
William Lazonic thinks that because of these problems, the “crisis of innovation” has begun in the USA, and other countries are starting to overtake America. According to him, one of the reasons for this is that with the end of the Cold War, investment in the research industry has declined significantly. But this is not the only and not the main reason. The global problem is the behavior of private corporations that are not interested in long-term projects. Unfortunately, current legislation encourages such a strategy.
In the scientific works that were included in the project " Political Economy of Distribution”(“ Political Economy of Distribution ”), Lazonic explains his point of view on the example of Apple. Say, if you take a high-tech product like the iPhone, then you can’t say that it was created specifically by Apple. Such products are created as a result of the efforts of many people, many of whom do not work in the company. Some of these people worked under government contracts, receiving grants from the federal budget. The process takes several decades, so the current developments are created thanks to the work of past generations of engineers and researchers. The same iPhone uses a touchscreen, GPS and other technologies created long before the release of this smartphone.
Professor Lazonic considers it abnormal that Apple and other companies use the results of state scientific research, but do not think at all to compensate for the costs. Private corporations spend all of their profit exclusively on their own needs, not disdaining the use of fraudulent tax evasion schemes .
The economist says that the situation on the labor market changed dramatically in the 80s, around the time that Intel processors and computers using the IBM PC architecture gained popularity. Along with the change of technology, the replacement of personnel in companies took place. In place of old experienced workers familiar with old technologies, young people familiar with technological innovations began to recruit. There is a galaxy of newfangled startups that attract talented young people with millions of options. Company management has also evolved: they realized that they need to manage companies not for the sake of employees or product quality, but to appease shareholders.
In the new system, the size of wages began to depend on the stock price, which also influenced the worldview of managers.
William Lazonic thinks that because of these problems, the “crisis of innovation” has begun in the USA, and other countries are starting to overtake America. According to him, one of the reasons for this is that with the end of the Cold War, investment in the research industry has declined significantly. But this is not the only and not the main reason. The global problem is the behavior of private corporations that are not interested in long-term projects. Unfortunately, current legislation encourages such a strategy.