[rayiner]

A lot of our “value chain” is bullshit. If and when China becomes twice as big an economy as the US, much of our “edge” in marketing, finance, and services isn’t going to mean squat. E.g. how much “GDP” will evaporate overnight when American universities no longer have the cachet that comes along with being the best universities in America?

[seanmcdirmid]

> A lot of our “value chain” is bullshit.

No it isn't, productivity has to increase, that's why we constantly get rid of jobs that do not provide much value. People want more money, and the only way we get there is with more productivity (doing jobs that make more money).

> If and when China becomes twice as big an economy as the US, much of our “edge” in marketing, finance, and services isn’t going to mean squat.

China gets to 2X our GDP by doing what we basically did in the 90s, so you are definitely right! They will have their own marketing, financing and services. The only difference is that they won't need to outsource manufacturing to China (well, they are outsourcing it a bit now, but also investing tons in automation).

> E.g. how much “GDP” will evaporate overnight when American universities no longer have the cachet that comes along with being the best universities in America?

I don't know what you are ranting about, but I get the feeling that if I did know what you were saying here I would probably agree with you.

[rayiner]

> No it isn't, productivity has to increase, that's why we constantly get rid of jobs that do not provide much value.

Our measures of “value” are wrong.

> I don't know what you are ranting about

My point is that a lot of what we think of as “higher value” activities are actually derivative of and downstream of our industrial supremacy. As China takes up that mantle, the higher value activities will go along with it. E.g., how long do we expect the US to do the cutting edge nuclear power and weapons research when China is the one building all the nuclear power plants?

I mean look at the path dependency that led to Silicon Valley. Why did the software revolution happen in the same place we were building the microchips?

[seanmcdirmid]

We basically agree then: as China takes up higher value activities, they won't need those activities from the US anymore. Also, France is the cutting edge designer of nuclear power plants these days.

> Why did the software revolution happen in the same place we were building the microchips?

Hardware people becoming software people was extremely common back then, and still is today (EEs can make more coding than using their degree directly). Now we have the opposite problem (we don't have enough hardware people because software sucked all the oxygen out of the room) and China has less of it (although increasingly...they are repeating history as well). If anything, this just backs up my point in how higher value activities de-emphasize manufacturing (even super high end manufacturing as in semiconductors).

You can replace perceived value with actual value if you don't agree with the value judgement calls that were made, which is entirely reasonable.

[WillPostForFood]

"we don't have enough hardware people because software sucked all the oxygen out of the room"

How much is this exacerbated by the lack of domestic hardware manufacturing in the US for the hardware people? Seems like software boom starting in the late 1990's happened as China came online for hardware outsourcing. Not suggesting a causal relationship there, just complementary effects.

[seanmcdirmid]

The same thing happens in China. If you want a good job, software will pay way more than hardware. Heck, you even see people from Taiwan doing software jobs in China because they at more than the hardware jobs in Taiwan that they could get.

[varjag]

Productivity since 2000 had only increased by some 30%, which can not account for structural changes in job market.