07 Oct 2011 “We’ve Never Seen Anything Like This Before”
How many times and in how many situations lately have we heard the familiar refrain we’ve never seen anything like this? Whether the subject is politics, housing, jobs, stocks, sovereign debt, corporate ethics, or American wars, experts find themselves unable to find comparison or remedy. Having no historical frame of reference makes us anxious. We naturally prefer familiarity over the unfamiliarity. We like trends and historical context on which to base our projections. We do not like unproven ideas.
Wednesday, America and the world lost a man who lived his life showing us what we had never seen before. He did not shrink from lack of historical context or supporting trends. Steve Jobs saw beyond uncertainty and the doubt of those around him countless times as he, in large measure singlehandedly, created the world’s second most valuable company. He created completely new product paradigms and he persuaded millions of people to try them, even though they had never seen anything like them before.
President Obama said “Steve was among the greatest of American innovators: brave enough to think differently, bold enough to believe he could change the world, and talented enough to do it. By building one of the planet’s most successful companies from his garage, he exemplified the spirit of American ingenuity. By making computers personal and putting the Internet in our pockets, he made the information revolution not only accessible, but intuitive and fun. And by turning his talents to storytelling, he has brought joy to millions of children and grownups alike. Steve was fond of saying that he lived every day like it was his last. Because he did, he transformed our lives, redefined entire industries, and achieved one of the rarest feats in human history: he changed the way each of us sees the world. The world has lost a visionary. And there may be no greater tribute to Steve’s success than the fact that much of the world learned of his passing on a device he invented.”
George Lucas said, “The magic of Steve was that while others simply accepted the status quo, he saw the true potential in everything he touched and never compromised on that vision.”
As we consider the pervasiveness of Steve Jobs’ legacy, we Americans would do well to adopt his spirit of innovative boldness as we tackle the significant challenges confronting this great nation. Years of economic malaise offer glaring proof that re-treaded ideas born of the status-quo simply aren’t working.
The “spirit of American ingenuity” of which Mr. Obama speaks so proudly, is nowhere more absent than in Washington DC. The century-old ideological war between bigger government and smaller government continues with few signs of innovative thinking. But just as Apple grew to brilliance (twice) under Steve Jobs, it is possible that our country’s leadership will turn toward innovative ideas to spring this economy out of its morass. As voters we should be particularly attuned to those politicians who offer bold new ideas which are uncommon, untested, and apolitical.
A very simple government innovation is this: Replace the 2,500-page US tax code with a one-page simple flat tax that a bright ten-year old can understand. It would remove the ability of Congress to do back room deals with supporters that unfairly re-distribute billions of dollars of tax breaks, it would improve collections and timeliness, it would increase tax revenues as loopholes would be eliminated, and it would free 5.4 BILLION hours of Americans’ time. That time slice equals an entire year of productivity and innovation in the US Information industry. Just one silly little vote guys and you can give us back close to 5.4 billion hours freeing time for life, innovation, productivity, and consumption.
While we continue to innovate incredible new technologies in this country, we build less and less of it here. We have allowed our industry to migrate to countries that offer better deals to our manufacturers. With some creative thinking, government could easily offer sufficient incentives to businesses to keep their manufacturing at home. They don’t’ leave just because labor is cheaper. For instance, the percentage of labor cost in a car is roughly 10%, according to the UAW. Still, that 10% takes a great deal of management time and expense compared to foreign competitors. When total benefits (including pensions and health care for workers, retirees and their spouses) is factored in, GM’s total hourly labor costs is about $69, while Toyota’s is about $48 according to a report by CBS News.
A service centered economy collapses faster and comes back more slowly than an industrial economy. Consider this; Americans eat 4.8 meals a week in restaurants. If they eliminated just one meal per week at full-service restaurants as many as 1 million restaurant workers could lose their jobs, or 7% of the 14 million people currently unemployed in the US.
Manufacturing jobs in a general sense are less fragile. Things like cars, refrigerators, cellphones, computers, and televisions eventually break or become outmoded and must be replaced. They may not be as easy to give up as a meal out a week. And businesses are not likely to walk away from expensive plants and equipment. Do we really want China to make our best and most innovative technology?
A number of things have to happen to bring manufacturing back to this country and they will require innovation and cooperation on the part of government, business, and labor. Government can consider new and less burdensome regulations as well as incentives that are fair to taxpayers and beneficial for the economy. Businesses can and should make commitments to the communities in which they open plants and form close relationships among workers, schools, and local governments. Unions likewise must commit and cooperate locally, basing negotiations on the local and state economy’s demographics, not irrelevant national data.
This week saw a refreshing change in direction, though modest. Job growth improved more than expected in September by 103,000 following a revised 57,000 rise in August. The ISM Manufacturing index showed that both employment and production picked up while orders in the manufacturing sector were flat. Construction came back in August, mostly from public sector spending, but private components also gained. And the ISM Non-Manufacturing index showed monthly growth in orders with employment contracting.
Steve Jobs leaves behind a rich legacy of creating “bicycles for the mind.” He showed us that humans could go further and faster than ever before if we used our imaginations to find whole new ways of solving problems. Steve Jobs’ life and accomplishments are getting the attention they truly deserve in this troubled time. His story reminds us how important thinking differently has been throughout our history and how vital it is to a better future.
Thank you, Steve.