Three Billion New Capitalists: The Great Shift of Wealth and Power to the East by Clyde Prestowitz is a good companion to Tom Friedman’s The World Is Flat regarding globalization. At times I felt the chapters could have been written by both authors. Ultimately they complement the globalization story.
Prestowitz was counselor to the Secretary of Commerce during the Reagan Administration and is Founder and President of the Economic Strategy Institute, a thinktank in Washington DC.
Globalization is certainly not new and some issues addressed by Prestowitz may be hard to wrap around completely, but he provides an overview of what has been accelerating … offshoring. To no surprise the destination is China and India. Released in 2005 Prestowitz could not have considered the Mattel lead paint product recalls fiasco just two months old as consequences of globalization. Or was that just bad management on Mattel’s part?
The shift in wealth and power also focuses on banking and oil. Two chapters focus on this impact for China and India … and America along with the EU. What is an example of the impact on America: 100,000+ new cars are registered every month in Bejing? I would like to see the numbers for Bangalore. Think of a billion new drivers wanting to see their country, visit family and travel to see friends.
Prestowitz writes how Mexico and countries in South America have lost jobs to China and India even with NAFTA due to cheaper labor and more importantly less expensive (foundry) manufacturing in Asia. When a company in China can produce a part for a tenth of the cost in America … business decisions seem to be easier when ordering tens of thousands of parts. But haven’t we learned the negative lessons of globalization yet?
I found points throughout the book regarding a short attention span to math and science education in our country a bit of a concern. What will the competitive landscape look like in ten years when more children around the globe have years of access to the internet, cheap yet powerful computers and have been writing programs on Web2.0 for most of their young adult lives?
Intel will be okay no matter what. We can adjust.
But in addition to being Chairman of Intel,
I am also a grandfather, and I wonder what
my grandchildren are going to do.
Craig Barrett, Chairman, Intel
Prestowitz has echoed the calls by many leading technologists to change the educational system in our country. We Americans continue to struggle with the impact of globalization on our educational systems because, as many have suggested we are happy, fat and comfortable. Combined with the uncomfortable understanding that students in a wealthy Boston suburb are not learning the same subjects as those in the innercity schools of LA or Chicago is more of a concern today.
Clearly China and India have been successful to establish their countries as strong keys to global economic futures and the relocation of technological innovation. Three billion new, educated workers accustomed to working for lower wages compared to America will contribute to some shifts of future economic power. Spiking gasoline prices over the three years have made most Americans feel “uncomfortable” for the first time since the oil crisis in the early ’70s. But it may well be just the beginning of uncomfortable news Americans will need to address in the short term future.
An audio presentation to the Carnegie Council is located here regarding this book. The NYTimes book review is here.