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What nonsense. 'Germany innovates in order to empower workers and improve their productivity; the U.S. focuses on technologies that reduce or eliminate the nee

by netcan 12y ago

What nonsense. 'Germany innovates in order to empower workers and improve their productivity; the U.S. focuses on technologies that reduce or eliminate the need to hire those pesky wage-seeking human beings.' First, hogwash. Second this whole article is an attempt to pick a bit of this and that and get to a conclusion, like some high school debate club. Germany's manufacturing sector is more innovative than the US' at the moment. This has all sorts of reasons. They’re good at industrial engineering. The US’ software industry is by far the most innovative in the world, especially consumer facing software. Israel has a strong generic drugs industry and South Korea are great at consumer electronics. Different countries are different and if you want to draw a narrative explaining why, you’ll need to set a higher bar than this. These things are not some inevitable outcome of a policy. They are organic developments that happened. They have a history. They’re caused by culture, and luck and magic as much as and more than they are caused by the “three factors” that he lays out.

tinkerdol 12y ago
> They’re caused by culture, and luck and magic as much as and more than they are caused by the “three factors” Germans don't believe in luck and magic, maybe that's why they make great industrial engineers :) Although you're right that it's surely a complex process. We'll have to wait and see how much and which investments really pay off, but in the meantime it is nice to live in an environment where billions are invested (check out http://ec.europa.eu/programmes/horizon2020/ http://ec.europa.eu/programmes/horizon2020/ to read details about a new European wide program).
- fennecfoxen 12y ago
  It bothers me a bit when people (politicians, supporters, big business guys) throw around big numbers about how much has been Invested in something. Investing billions is easy. Getting billions in return from your investment, now, that's quite a bit harder. Investing less money for the same return, also hard. Anyway, these billions should be counted on the negative side of things, is the point. Tell me instead of the return on your investment!
  - tinkerdol 12y ago
    Good point, I have no idea what the return will be. However it is still pleasant to be employed as a researcher in this type of environment, and is something I think the US should do more of too, including increasing the funding of NASA. Which leads us to an interesting question of how you even measure the benefit of such things... what was the financial gain returned from landing on the moon, for example? Lots of types of research have no direct financial gain yet still add to the overall progress of society. (Although this point might be straying far from the original intention of the article.)
    - netcan 12y ago
      I think it boils down to honesty. I think it's fine to put money into fundamental R&D, NASA and the like. But, that's an expense. Treating it as such, lets us ask the right questions. I didn't invest €3,000 last year in lunch, I ate €3,000 worth of lunch. The right question is "was it tasty?" In the kind of discourse that gets put around policy, I would be asking "what productivity gains did I make be eating lunch?"
      - darkmighty 12y ago
        That would be contrary to investment. Investing means putting off short term objectives for a chance of maximizing better long term ones. A nice lunch is a goal in itself, i.e. it makes you happy or w/e. As far as I know, R&D is not a fundamental entertainment or the like (although NASA is), so it is an investment.
- jboy55 12y ago
  Horizon 2020 is giving out 80 billion Euros between 2014 and 2020. That's a big amount roughly $15 billion per year. In the US, private venture capital being invested is around $4 billion, per month, or $48 billion per year. Plus, there's the baggage of accepting public money. In private money, your failures are fairly private. Its not front page news when Kleiner Perkins put $30 million into a failure. But Solyndra failing was a huge deal in the US. In Canada, where I grew up, public money going into failures is always newsworthy. When 50 million Euros of that 80 billion goes to some fraudster, it'll put the whole program at risk. That's why its difficult for countries to legislate innovation. There's a large party of people who are rewarded when those investments fail.
pessimizer 12y ago
>They’re caused by culture, and luck and magic Is this an example of the non-'hogwash' way of reasoning about reality?
- netcan 12y ago
  What I mean is that the industries which prevail in a country are there because of a combination of many reasons. Most of them are historical and many/most of them unknown or at least poorly understood. Industries are ecosystems and they are culture. Policies play a role, but its a complicated role, interacting with all these things. I'm objecting to this article on two levels. One, that it is at all possible to pick a result (even if it was defined) like innovation in manufacturing and relate it back to policies which can be then implemented somewhere else to achieve the same result. Policy isn't the only thing at play and IE, if the US would understand like Germany understands that "innovation must result in productivity gains that are widespread, rather than concentrated in the high-tech sector of the moment." then GM would have good software like BMW does. Second, I don't think the author even tries. WTF is he even saying. Who is Germany? What exactly does she understand? Does "understand" mean implement a policy? What policy? Are we talking about changing high school curriculum or tax codes? He's basically isn't saying anything while trying to give his audience the impression that some very obvious mistakes are being made needlessly. The conclusions are populist and political, nearly implying a belligerent conspiracy. "Germany’s innovations create and sustain good jobs across the spectrum of workers’ educational attainment; American innovation, at best, creates jobs at Amazon’s fulfillment centers and in Apple stores." And it's mostly untrue, to the extent that weasely implications and unspecific statements can be true or untrue. The bones of his non-argument seems to be that German innovation creates good middle class manufacturing jobs while US innovation eliminates them. That's not true. Amazon & Apple do not employ only low wage staff. They have nothing to do with displacing auto workers. They employ mostly people in "middle class" jobs. The German manufacturing sector isn't increasing employment in good old 1950s style manufacturing jobs either. They sector is employing engineers, accountants and such, just like Apple and Amazon. I don't literally mean magic.
  - pessimizer 12y ago
deleted 12y ago
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deleted 12y ago
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vasilipupkin 12y ago
the strength and certainty with which you dismiss the article are not supporting by your arguments. Germany has certain institutions in place to support certain types of innovation. Whether or not US can reach the exact same level in those areas is besides the point - the point is to try to replicate those institutions that are working to improve things here
mattlutze 12y ago
The author's position as a chair of innovation studies at the University of Toronto surprises me, given the very Op-Ed'dness of this blog post. I'd expect a professor talking about his field to be able to easily cite the studies and statistics informing his opinion.
danielweber 12y ago
And it repeats this trope about the US manufacturing industry being "decimated." The US is manufacturing more stuff than ever before. His evidence is that US manufacturing is only 13% of GDP, where it is 21% of GDP in Germany. Well, percent-of-GDP is, by definition, a zero-sum game. There are only 100 percentage points to go around. What other industry has been "decimated" in Germany by those 8 percentage points going into manufacturing? This is HBR's "blog network." Can any Harvard Business student make an equivalent entry, or is there some kind of editorial control here?
- netcan 12y ago
  Dan Breznitz holds the Munk Chair of Innovation Studies and is a codirector of the Innovation Policy Lab at the Munk School of Global Affairs at the University of Toronto. That's why this soft headedness is infuriating.
- darkmighty 12y ago
  You're picking a strange point. Relative decline, in %GDP, does mean a decline in importance in manufacturing. It's well known that US manufacturing is down for the last few decades and Germany is indeed an outlier among western countries in that manufacturing has retained relative economical importance.
  - michael_h 12y ago
    It's well known that US manufacturing is down manufacturing employment is down.
  - danielweber 12y ago
    I don't know about "importance," since it seems like a value judgement, or an equivocation to use the word in two different senses at the same time. Agriculture is less than 2% of American GDP but no one starves for lack of food. The US doesn't need to pour more resources into making food more "important." The US really is manufacturing more stuff than ever. http://2.bp.blogspot.com/-OyF5jxwDPa4/T7b90wKmj5I/AAAAAAAARnI/mJhmTS_Ckw0/s1600/mfg2.jpg http://2.bp.blogspot.com/-OyF5jxwDPa4/T7b90wKmj5I/AAAAAAAARn... Manufacturing is high-beta relative to GDP, so trying to increase its percentage of GDP would increase overall volatility.
bayesianhorse 12y ago
"Culture" is also a very common way to explain random effects with something you can be proud of.
dba7dba 12y ago
> South Korea are great at consumer electronics South Korea is also strong in shipbuilding. I think about nearly half of the ships being built these days are from South Korea. And these are not just simple container carriers. Lots of LNG carriers and also a few billion dollar LNG floating plants that are being built by Samsung Shipyard. And Hyundai is also 4th largest car manufacturer as of 2012, ahead of Ford, Nissan, Honda. Oh btw, I don't see any German corporation in top 30 US Patent Assignees. Top 20 are dominated by US, Japan, Korea, and Taiwan. Highest ranked German firm is Siemens at #33. I agree the article is standing on weak reasonings.
- bane 12y ago
  It's probably still true, but the #1 and #2 largest shipyards in the world are right down the road from each other on the Koje-Do island - Samsung and Daewoo within just a few ships from each other in terms of overall size. There are 3 very large shipbuilders in South Korea as it turns out. I got a chance to get a tour of the Daewoo Shipyard back about 6 years ago now. And they had all manner of ships under construction, including ships as advanced as submarines -- all for external countries. The submarines were all for Germany IIR. It was very impressive.
- levosmetalo 12y ago
  It's funny how patents are now used as an indicator of innovation here, while seemingly vocal majority here on HN would happily dismiss complete patent system as meaningless and and because it suppress innovation. That being said, why would German companies rush to register their patents in US patent office? What is the ranking of US companies registering patents in Germany?
  - dba7dba 12y ago
    Sorry if I somehow indicated # of patents is the absolute measure of how innovative a company/nation is. It's not. I'm just saying it is ONE of the tools to show the article is flawed. Not ALL patents are useless, only some. And it's preposterous that Apple wants $50 per Samsung mobile device for allegedly infringing 2 or 3 patents when each mobile device touches upon about 250,000 patents (patent on manufacturing tool, patent on the manufacturing tech that was used to build the manufacturing tool, material, etc etc). But I digress. And # of patents assigned WAS one of the best tool for measuring innovativeness before some started abusing it (filing bogus patents, patent trolling). Global corporations file patents in US because US has largest market (or used to) and rule of law is strong.

by netcan 12y ago

tinkerdol 12y ago

> They’re caused by culture, and luck and magic as much as and more than they are caused by the “three factors” Germans don't believe in luck and magic, maybe that's why they make great industrial engineers :) Although you're right that it's surely a complex process. We'll have to wait and see how much and which investments really pay off, but in the meantime it is nice to live in an environment where billions are invested (check out http://ec.europa.eu/programmes/horizon2020/ http://ec.europa.eu/programmes/horizon2020/ to read details about a new European wide program).

fennecfoxen 12y ago
It bothers me a bit when people (politicians, supporters, big business guys) throw around big numbers about how much has been Invested in something. Investing billions is easy. Getting billions in return from your investment, now, that's quite a bit harder. Investing less money for the same return, also hard. Anyway, these billions should be counted on the negative side of things, is the point. Tell me instead of the return on your investment!
- tinkerdol 12y ago
  Good point, I have no idea what the return will be. However it is still pleasant to be employed as a researcher in this type of environment, and is something I think the US should do more of too, including increasing the funding of NASA. Which leads us to an interesting question of how you even measure the benefit of such things... what was the financial gain returned from landing on the moon, for example? Lots of types of research have no direct financial gain yet still add to the overall progress of society. (Although this point might be straying far from the original intention of the article.)
  - netcan 12y ago
    I think it boils down to honesty. I think it's fine to put money into fundamental R&D, NASA and the like. But, that's an expense. Treating it as such, lets us ask the right questions. I didn't invest €3,000 last year in lunch, I ate €3,000 worth of lunch. The right question is "was it tasty?" In the kind of discourse that gets put around policy, I would be asking "what productivity gains did I make be eating lunch?"
    - darkmighty 12y ago
      That would be contrary to investment. Investing means putting off short term objectives for a chance of maximizing better long term ones. A nice lunch is a goal in itself, i.e. it makes you happy or w/e. As far as I know, R&D is not a fundamental entertainment or the like (although NASA is), so it is an investment.
jboy55 12y ago
Horizon 2020 is giving out 80 billion Euros between 2014 and 2020. That's a big amount roughly $15 billion per year. In the US, private venture capital being invested is around $4 billion, per month, or $48 billion per year. Plus, there's the baggage of accepting public money. In private money, your failures are fairly private. Its not front page news when Kleiner Perkins put $30 million into a failure. But Solyndra failing was a huge deal in the US. In Canada, where I grew up, public money going into failures is always newsworthy. When 50 million Euros of that 80 billion goes to some fraudster, it'll put the whole program at risk. That's why its difficult for countries to legislate innovation. There's a large party of people who are rewarded when those investments fail.

pessimizer 12y ago

>They’re caused by culture, and luck and magic Is this an example of the non-'hogwash' way of reasoning about reality?

netcan 12y ago
What I mean is that the industries which prevail in a country are there because of a combination of many reasons. Most of them are historical and many/most of them unknown or at least poorly understood. Industries are ecosystems and they are culture. Policies play a role, but its a complicated role, interacting with all these things. I'm objecting to this article on two levels. One, that it is at all possible to pick a result (even if it was defined) like innovation in manufacturing and relate it back to policies which can be then implemented somewhere else to achieve the same result. Policy isn't the only thing at play and IE, if the US would understand like Germany understands that "innovation must result in productivity gains that are widespread, rather than concentrated in the high-tech sector of the moment." then GM would have good software like BMW does. Second, I don't think the author even tries. WTF is he even saying. Who is Germany? What exactly does she understand? Does "understand" mean implement a policy? What policy? Are we talking about changing high school curriculum or tax codes? He's basically isn't saying anything while trying to give his audience the impression that some very obvious mistakes are being made needlessly. The conclusions are populist and political, nearly implying a belligerent conspiracy. "Germany’s innovations create and sustain good jobs across the spectrum of workers’ educational attainment; American innovation, at best, creates jobs at Amazon’s fulfillment centers and in Apple stores." And it's mostly untrue, to the extent that weasely implications and unspecific statements can be true or untrue. The bones of his non-argument seems to be that German innovation creates good middle class manufacturing jobs while US innovation eliminates them. That's not true. Amazon & Apple do not employ only low wage staff. They have nothing to do with displacing auto workers. They employ mostly people in "middle class" jobs. The German manufacturing sector isn't increasing employment in good old 1950s style manufacturing jobs either. They sector is employing engineers, accountants and such, just like Apple and Amazon. I don't literally mean magic.
- pessimizer 12y ago

deleted 12y ago

[deleted]

deleted 12y ago

[deleted]

vasilipupkin 12y ago

the strength and certainty with which you dismiss the article are not supporting by your arguments. Germany has certain institutions in place to support certain types of innovation. Whether or not US can reach the exact same level in those areas is besides the point - the point is to try to replicate those institutions that are working to improve things here

mattlutze 12y ago

The author's position as a chair of innovation studies at the University of Toronto surprises me, given the very Op-Ed'dness of this blog post. I'd expect a professor talking about his field to be able to easily cite the studies and statistics informing his opinion.

danielweber 12y ago

And it repeats this trope about the US manufacturing industry being "decimated." The US is manufacturing more stuff than ever before. His evidence is that US manufacturing is only 13% of GDP, where it is 21% of GDP in Germany. Well, percent-of-GDP is, by definition, a zero-sum game. There are only 100 percentage points to go around. What other industry has been "decimated" in Germany by those 8 percentage points going into manufacturing? This is HBR's "blog network." Can any Harvard Business student make an equivalent entry, or is there some kind of editorial control here?

netcan 12y ago
Dan Breznitz holds the Munk Chair of Innovation Studies and is a codirector of the Innovation Policy Lab at the Munk School of Global Affairs at the University of Toronto. That's why this soft headedness is infuriating.
darkmighty 12y ago
You're picking a strange point. Relative decline, in %GDP, does mean a decline in importance in manufacturing. It's well known that US manufacturing is down for the last few decades and Germany is indeed an outlier among western countries in that manufacturing has retained relative economical importance.
- michael_h 12y ago
  It's well known that US manufacturing is down manufacturing employment is down.
- danielweber 12y ago
  I don't know about "importance," since it seems like a value judgement, or an equivocation to use the word in two different senses at the same time. Agriculture is less than 2% of American GDP but no one starves for lack of food. The US doesn't need to pour more resources into making food more "important." The US really is manufacturing more stuff than ever. http://2.bp.blogspot.com/-OyF5jxwDPa4/T7b90wKmj5I/AAAAAAAARnI/mJhmTS_Ckw0/s1600/mfg2.jpg http://2.bp.blogspot.com/-OyF5jxwDPa4/T7b90wKmj5I/AAAAAAAARn... Manufacturing is high-beta relative to GDP, so trying to increase its percentage of GDP would increase overall volatility.

bayesianhorse 12y ago

"Culture" is also a very common way to explain random effects with something you can be proud of.

dba7dba 12y ago

> South Korea are great at consumer electronics South Korea is also strong in shipbuilding. I think about nearly half of the ships being built these days are from South Korea. And these are not just simple container carriers. Lots of LNG carriers and also a few billion dollar LNG floating plants that are being built by Samsung Shipyard. And Hyundai is also 4th largest car manufacturer as of 2012, ahead of Ford, Nissan, Honda. Oh btw, I don't see any German corporation in top 30 US Patent Assignees. Top 20 are dominated by US, Japan, Korea, and Taiwan. Highest ranked German firm is Siemens at #33. I agree the article is standing on weak reasonings.

bane 12y ago
It's probably still true, but the #1 and #2 largest shipyards in the world are right down the road from each other on the Koje-Do island - Samsung and Daewoo within just a few ships from each other in terms of overall size. There are 3 very large shipbuilders in South Korea as it turns out. I got a chance to get a tour of the Daewoo Shipyard back about 6 years ago now. And they had all manner of ships under construction, including ships as advanced as submarines -- all for external countries. The submarines were all for Germany IIR. It was very impressive.
levosmetalo 12y ago
It's funny how patents are now used as an indicator of innovation here, while seemingly vocal majority here on HN would happily dismiss complete patent system as meaningless and and because it suppress innovation. That being said, why would German companies rush to register their patents in US patent office? What is the ranking of US companies registering patents in Germany?
- dba7dba 12y ago
  Sorry if I somehow indicated # of patents is the absolute measure of how innovative a company/nation is. It's not. I'm just saying it is ONE of the tools to show the article is flawed. Not ALL patents are useless, only some. And it's preposterous that Apple wants $50 per Samsung mobile device for allegedly infringing 2 or 3 patents when each mobile device touches upon about 250,000 patents (patent on manufacturing tool, patent on the manufacturing tech that was used to build the manufacturing tool, material, etc etc). But I digress. And # of patents assigned WAS one of the best tool for measuring innovativeness before some started abusing it (filing bogus patents, patent trolling). Global corporations file patents in US because US has largest market (or used to) and rule of law is strong.