You could find no better metaphor for the way the rest of the world can now compete head-to-head more effectively than ever with America than the struggles of the U.S. Olympic basketball team in 2004. The American team, made up of NBA stars, limped home to a bronze medal after losing to Puerto Rico, Lithuania, and Argentina. Previously, the United States Olympic basketball team had lost only one game in the history of the modern Olympics. Remember when America sent only NCAA stars to the Olympic basketball events? For a long time these teams totally dominated all comers. Then they started getting challenged. So we sent our pros. And they started getting challenged. Because the world keeps learning, the diffusion of knowledge happens faster; coaches in other countries now download American coaching methods off the Internet and watch NBA games in their own living rooms on satellite TV. Many of them can even get ESPN and watch the highlight reels. And thanks to the triple convergence, there is a lot of new raw talent walking onto the NBA courts from all over the world-including many new stars from China, Latin America, and Eastern Europe. They go back and play for their national teams in the Olympics, using the skills they honed in America. So the automatic American superiority of twenty years ago is now gone in Olympic basketball. The NBA standard is increasingly becoming a global commodity-pure vanilla. If the United States wants to continue to dominate in Olympic basketball, we must, in that great sports cliche, step it up a notch. The old standard won't do anymore. As Joel Cawley of IBM remarked to me, “Star for star, the basketball teams from places like Lithuania or Puerto Rico still don't rank well versus the Americans, but when they play as a team-when they collaborate better than we do-they are extremely competitive.”
Sports writer John Feinstein could have been referring to either American engineering skills or American basketball skills when he wrote in an August 26, 2004, AOL essay on Olympic basketball that the performance of the U.S. basketball team is a result of “the rise of the international player” and “the decline and fall of the U.S. game.” And the decline and fall of the U.S. game, argued Feinstein, is a result of two long-term trends. The first is a steady decline “in basketball skills,” with American kids just wanting to shoot either three-point shots or dunk– the sort of stuff that gets you on ESPN's SportsCenter highlight reel—instead of learning how to make precise passes, or go into the lane and shoot a pull-up jumper, or snake through big men to get to the basket. Those skills take a lot of hard work and coaching to learn. Today, said Feinstein, you have an American generation that relies almost completely on athleticism and almost not at all on basketball skills. And there is also that ugly little problem of ambition. While the rest of the world was getting better in basketball, “more and more NBA players were yawning at the notion of playing in the Olympics,” noted Feinstein. “We have come a long way from 1984, when Bob Knight told Charles Barkley to show up to the second Olympic training camp at 265 pounds or else. Barkley showed up weighing 280. Knight cut him that day. In today's world, the Olympic coach wouldn't even have checked Barkley's weight in the first place. He would have sent a limousine to the airport to get him and stopped at Dunkin' Donuts on the way to the hotel if the player requested it... The world changes. In the case of American basketball, it hasn't changed for the better.”
There is something about post-World War II America that reminds me of the classic wealthy family that by the third generation starts to squander its wealth. The members of the first generation are nose-to-the-grindstone innovators; the second generation holds it all together; then their kids come along and get fat, dumb, and lazy and slowly squander it all. I know that is both overly harsh and a gross generalization, but there is, nevertheless, some truth in it. American society started to coast in the 1990s, when our third postwar generation came of age. The dot-com boom left too many people with the impression that they could get rich without investing in hard work. All it took was an MBA and a quick IPO, or one NBA contract, and you were set for life. But while we were admiring the flat world we had created, a lot of people in India, China, and Eastern Europe were busy figuring out how to take advantage of it. Lucky for us, we were the only economy standing after World War II, and we had no serious competition for forty years. That gave us a huge head of steam but also a huge sense of entitlement and complacency-not to mention a certain tendency in recent years to extol consumption over hard work, investment, and long-term thinking. When we got hit with 9/11, it was a once-in-a-generation opportunity to summon the nation to sacrifice, to address some of its pressing fiscal, energy, science, and education shortfalls-all the things that we had let slide. But our president did not summon us to sacrifice. He summoned us to go shopping.
In the previous chapters, I showed why both classic economic theory and the inherent strengths of the American economy have convinced me that American individuals have nothing to worry about from a flat world- provided we roll up our sleeves, be ready to compete, get every individual to think about how he or she upgrades his or her educational skills, and keep investing in the secrets of the American sauce. Those chapters were all about what we must do and can do.
This chapter is about how we Americans, individually and collectively, have not been doing all these things that we should be doing and what will happen down the road if we don't change course.
The truth is, we are in a crisis now, but it is a crisis that is unfolding very slowly and very quietly. It is “a quiet crisis,” explained Shirley Ann Jackson, the 2004 president of the American Association for the Advancement of Science and president of Rensselaer Polytechnic Institute since 1999. (Rensselaer is America's oldest technological college, founded in 1824.) And this quiet crisis involves the steady erosion of America's scientific and engineering base, which has always been the source of American innovation and our rising standard of living.
“The sky is not falling, nothing horrible is going to happen today,” said Jackson, a physicist by training who chooses her words carefully. “The U.S. is still the leading engine for innovation in the world. It has the best graduate programs, the best scientific infrastructure, and the capital markets to exploit it. But there is a quiet crisis in U.S. science and technology that we have to wake up to. The U.S. today is in a truly global environment, and those competitor countries are not only wide awake, they are running a marathon while we are running sprints. If left unchecked, this could challenge our preeminence and capacity to innovate.”
And it is our ability to constantly innovate new products, services, and companies that has been the source of America's horn of plenty and steadily widening middle class for the last two centuries. It was American innovators who started Google, Intel, HP, Dell, Microsoft, and Cisco, and it matters where innovation happens. The fact that all these companies are headquartered in America means that most of the high-paying jobs are here, even if these companies outsource or offshore some functions. The executives, the department heads, the sales force, and the senior researchers are all located in the cities where the innovation happened. And their jobs create more jobs. The shrinking of the pool of young people with the knowledge skills to innovate won't shrink our standard of living overnight. It will be felt only in fifteen or twenty years, when we discover we have a critical shortage of scientists and engineers capable of doing innovation or even just high-value-added technology work. Then this won't be a quiet crisis anymore, said Jackson, “it will be the real McCoy.”
Shirley Ann Jackson knows of what she speaks, because her career exemplifies as well as anyone's both why America thrived so much in the past fifty years and why it won't automatically do the same in the next fifty. An African-American woman, Jackson was born in Washington, D.C., in 1946. She started kindergarten in a segregated public school but was one of the first public school students to benefit from desegregation, as a result of the Supreme Court ruling in Brown v. Board of Education. Just when she was getting a chance to go to a better school, the Russians launched Sputnik in 1957, and the U.S. government became obsessed with educating young people to become scientists and engineers, a trend that was intensified by John F. Kennedy's commitment to a manned space program. When Kennedy spoke about putting a man on the moon, Shirley Ann Jackson was one of the millions of American young people who were listening. His words, she recalled, “inspired, assisted, and launched many of my generation into science, engineering and mathematics,” and the breakthroughs and inventions they spawned went well beyond the space program. “The space race was really a science race,” she said.
Thanks in part to desegregation, both Jackson's inspiration and intellect were recognized early, and she
