Do we think about the future? Are we prepared for the future? These are questions I have been pondering after an article over the weekend that discussed required retirement funds to maintain your current lifestyle. I think I am pretty close, but have no desire to retire yet. But it has motivated me to think about the future.
The state of Washington better start thinking about what they will do if Boeing pulls out and moves to South Carolina. Currently three 787’s per month are being built in North Charleston, but now there is discussion that the new 777X will also be partially built in South Carolina, a non-union state. What would happen to the economy in Washington if Boeing pulls out completely? Although the state is more diversified, Boeing still has a huge impact on our state economy. So Washington you better start thinking about this. I know Governor Jay Inslee is looking at this, and hopefully it is not too late. I think the Union’s that are working with Boeing had better think about this too.
However, the bigger impact of not thinking about the future will be the lack of foresight when it comes to scientific research. Large companies will always expend a certain percentage of it’s budget on Research and Development. Product lines mature and decline, and these companies know that if they don’t pay attention then they will cease to exist. However, a good portion of research that has impacted business has been accomplished by government-supported research. And as Gerald Seib states, “business needs to pay attention to this.”
What are the examples of government funded research that has impacted business? “Dr. Ruth Benerito developed the easy-care cotton process that led to permanent press clothing, as well as flame-resistant furniture.” This one event provided the initiative needed by US textile manufacturers, and a much need “boost” to the cotton industry in its fight against synthetics. Dr. Benerito was a research chemist working for the Department of Agriculture.
Other research accomplished by government agencies that have impacted our lives are bar-codes, GPS systems, the computer touch screen, and government research involvement in the development of the Internet (which is well documented). The impact of government-funded research on our lives is immeasurable. Therefore, we should really think through cutting spending in this area.
“A study by the American Association for the Advancement of Science found that overall federal research-and-development funding could be reduced by $57.5 billion, or 8.4%, if the sequester stays in place.” I don’t know how much that will specifically impact our future, but I do know that R&D is something that is critical to any entity’s future, and I think it is strategically critical to our country’s continued hegemony.
Additional data gives an indication that less research is being funded. Research says that fewer research grants are being requested and fewer are actually being funded. Which came first, the chicken or the egg? “The effects ripple out directly to research universities, which are the engines for the most ambitious and innovative government funded research.” Seib adds to this, “At the University of Notre Dame, the sequester has caused a drop in government-funded research of between 6% and 10% this year.”
There is no question that our country needs to cut spending. Our debt cannot continue to grow every year. We are leveraging our future to maintain a current lifestyle, which is dangerous. Any company will tell you how important it is to have a rational debt to asset ratio.
However, we need to think these cuts through clearly and strategically, which is what a skilled manager will do. Oh wait, we are talking about politicians, they are neither rational nor strategic.
And that is my thought for the day!