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2007-2008 SEASON News Articles
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Detroit should embrace free trade, innovation
date: February 22, 2008
SOURCE: Detroit Free Press
By: Gary Shapiro, President & CEO, Consumer Electronics Association (CEA)
Most in the Detroit area will say that international trade and competition have hurt local businesses and workers. It is simple: Blame global trade for a tough economy and then seek to remedy tough times by erecting walls of protectionism, all in an effort to try to bring back the glory days of Detroit’s auto supremacy.
But I suggest another perspective: The same economic forces that have hurt Detroit also hold the key to its resurgence. Automakers and other industry leaders can harness global innovation to re-engineer their businesses through technology.
Detroit has all the ingredients for a successful turnaround: a highly skilled workforce, a modern international hub airport, and a surplus of reasonably priced housing, commercial and industrial space. Yet America is constantly getting the wrong message about Detroit. Michigan political and union leaders are vocally leading the charge to protect Detroit from overseas competition.
What the rest of America hears is that Detroit can’t compete.
Recently, UAW President Ron Gettelfinger railed against the Korea free trade agreement, saying South Korea is one of the most closed markets and a free trade agreement with that country would be the “theft of American jobs.”
But the agreement actually opens the Korean market to U.S. goods –— including our automobiles. We are already open to Korean goods, but Korea imposes unreasonable tariffs on U.S. products, an imbalance that would be remedied by the very free trade agreement perversely opposed by those who would benefit most from it. Indeed, this same free trade agreement is also opposed by many Korean industries that don’t want the tariff imbalance corrected in our favor.
Imagine if Detroit boldly came out in favor of free trade. The world’s perception of Detroit would change. Neutral research shows that American cars are increasingly of higher quality than imports. But marketing matters and the defensive posture of Detroit have hurt the city’s image.
Free trade may be an easy target for the region’s woes, but American employers know that surviving and thriving in the 21st Century economy requires embracing innovation and new markets, not trying to turn back the quantifiable progress they have wrought.
The innovation boom we’ve witnessed over the past 15 years has helped create 25 ?million new jobs, a period during which unemployment has hovered at historic lows. Thanks to free trade, technology and new services that technology inspired, for the past two decades we have had the lowest unemployment rate of any developed country.
A recent study conducted by PricewaterhouseCoopers found that the consumer electronics sector alone directly generated 4.4 million U.S. jobs and indirectly generated another 10.7 million. Employment gains because of our industry have helped to offset declines in manufacturing jobs. Sectors like content production, for example, have experienced job growth approaching 30% over the last 16 years.
The engine driving these developments has been the remarkable technological innovation made possible by a free, open international trading environment. Free trade ensures that American innovators, whether in Detroit or Silicon Valley, have access to a vast global market. It ensures that American consumers have access to the most cutting-edge technologies at the lowest prices. And perhaps most important, it ensures that innovative American companies can provide American workers with good, high-paying jobs.
Navigating the emerging economic environment has not been easy, particularly in manufacturing cities such as Detroit, but we are beginning to see how companies can use these incredible innovations to adapt and advance.
At the 2008 International Consumer Electronics Show in Las Vegas, advanced in-vehicle electronics took center stage, with Detroit automakers leading the way.
General Motors’ Rick Wagoner, the first-ever automotive chief executive to keynote CES, introduced the exciting new Provoq, with its advanced green technology and cutting edge enhancements to OnStar.
Microsoft Chairman Bill Gates, meanwhile, showcased the enhanced features of Ford’s popular Sync system. And Visteon, a Van Buren Township-based company that produces automotive components and systems, teamed with 3M to introduce a demonstration vehicle containing more than 50 technologies designed to enhance connectivity, convenience, health, flexibility and sensory input.
These new technologies are exciting not only in how they transform the driving experience, but in what they represent: 20th Century industry powerhouses adapting and responding to the needs of their 21st Century customers by aggressively embracing innovation and change.
Free trade is disruptive to the status quo, but it is the key to both innovation and Detroit’s economic resurgence. Detroit must compete in the new economy, not retreat with the old one.
Gary Shapiro,51, is the president and chief executive officer of the Consumer Electronics Association, a trade organization representing more than 2,200 companies. Shapiro, who lives in Detroit and Washington, speaks Monday to the Detroit Economic Club meeting at the Troy Marriott, 200 W. Big Beaver Road. For information or tickets, call 313-963-8547 or visit www.econclub.org. Write to him in care of the Free Press Editorial Page, 615 W. Lafayette, Detroit, MI 48226, or at oped@freepress.com.
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