Category Archives: budget

Of Obama and Operating Excellently

//Time capsule post… it was sitting in my drafts for sometime. Finally managed to publish it.

The other day I was engaged in a conversation with a friend who believes that Obama’s decision to evolve towards a leaner military is a wrong one. He, much like the Republican Presidential candidates, spoke in vague and abstract terms of why the decision is bad – it will weaken America… we need to support our military… military spending is a sign of strength…

In all fairness, the only specific point that was mentioned: China is rising. Okay, I will concede that point. But there are other types of spending like infrastructure, research and education that China seems to be managing better than us. Why not talk about that as well…?

I am no military expert… the closest I have gotten to being in a military is being in a school bus that used to drop a colonel’s daughter at her home in a military cantonment (yeah!). Having said that, using context and relativity as my guide -here’s why I think the idea is a brilliant and a necessary one:

I work for a large public university that is current undergoing a system-wide exercise called: operational excellence… (I have also heard it being called “about time”). The impetus and the goal is similar to what the reduced military spending debate is about: less money, hence more efficiency. There is well placed criticism from those who are opposed it, skepticism from those who say they’ve seen this in the past, and premature exuberance from those who think this is the greatest thing since the Stanford band celebrated a little too early… =)

It is too early to call OE a success, and then there are days the process comes across as counter-intuitive… but, I’m supportive of the goal: making college education affordable for all. And this can only happen if the university is able to reduce its operating costs.

Similarly, (I was going to bring it back) security at home requires us to divert more capital towards domestic needs and for this we will need to reduce our military expenditure. It is simply a matter of priorities… if we had unlimited resources, then by all means spend on everything and anything that will give us the perception of being safe and prosperous. But the hard truth is, just like my employer, America will need to prioritize.

And investing towards a future that we will all share has to be that priority.

Fareed Zakaria mentioned the White House Innovation White Paper on his show today… and I was surprised: the white house has a white paper on innovation?! Maybe, that is the Republican/libertarian in me. I expect such white papers to come out of the “Jobs, Gates and Alliances Inc.” industry. I do not expect the government to play a significant role in innovation…

Zakaria went on to elaborate areas of innovation that the government has spurned:

– without the Department of Defense there would be no semi-conductor industry

– NASA was a key buyer of the nascent computer industry

– DARPA invented the internet (sorry Al Gore fans, but that is one of those inconvenient truths)

– it was the military that spawned the use of GPS, way before there was an “app for that”

and that got me thinking, the government does have a role, and a specific role to play in the innovation economy – it is supposed to and should provide a climate for innovation. Not innovation itself, but the climate for innovation:

-a tax structure that facilitates business spending

-investment/spending (depending on if you are a democrat/republican) on research and education (and yes making sure that research is happening on an “operationally excellent” basis)

Singapore spends 6.9% of its budget on innovation – matching that would mean we will have to spend close to $700 billion on innovation climate. We can borrow that from the Chinese, right?! They love giving us money..! Well borrowing $700 billion for innovation climate spending is better than borrowing money from China to fund tax rebates that give $600 to most people (sorry Warren Buffet – you missed out) to spend on Walmart items made in China!

So I guess, by now, I have ideologically left the Republican camp and am on the other side… but practical solutions calls for pragmatism, that does not believe in ideology whose time has come and gone, but in solutions that work. Treating political parties as sports teams is silly… The times are changing and we are still having debates that are based in ideology and are conducted by mostly loud fundamentalist leaders, who are able to get away with euphemisms and political commentators, that take refuge in esoteric concepts…

So, just like Zakaria and other don’t-have-a-team people,  I am hoping that President will outline an agenda, that focusses on long term sustainable growth and how we can keep continue to file the most number of patents than any other country out there.

(btw – “China accounted for more than two-thirds of all cleantech IPOs in 2010 – 63 out of 93 launches globally, including 8 of the 10 biggest IPOs.”)