Mr. Groves comments are quite sobering. I don't know if I accept the setup to his conclusion as being relevant though.
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Gloomy stuff though.
-ERD50
Having been privileged to spend almost 10 years sitting 30' from his cubicle, I can say that having an Andy Grove talk, described with adjectives sobering, scary, or if you were the subject of his talking, downright terrifying is very common.
Grove was revered among Intel folks, even among those he fired, the question was "is Andy Grove one of the smartest people you've met or THE smartest person?" . I am in THE smartest category.
I found that even when you disagree with him, as I do in this case, only a fool won't carefully reexamine their position. Not to say that he is infallible, on many occasions I have seen people (even myself) with more data, and more knowledge successfully argue with him. However, when he has carefully studied a subject as appeared to have here, I assume he is right and I am wrong. Now I accept subject matter expertise easily, a doctor, an auto mechanic etc. But for policy matters like this, why I figured I am smarter than the average bear and I'm right and you are wrong. Grove is literally the only person who I assume the opposite.
Last year I attended an Intel Alumni talk on CleanTech and Andy made a similar point about the problems of scaling alternative energy. Essentially he said that America is good at doing R&D for alternative energy and getting early adopters. But for the multi-trillion energy business there just isn't enough capital (or incentive for energy companies) to move to the stage where approximately 20-25% is alternative energy. Once a energy technology reaches critical mass Grove assumes the forces of capitalism will do a good job driving widespread deployment.
I am personally quite interested in the CleanTech and I have seriously looked at making many investments, since Hawaii is obviously a good location. However, what I have discovered is that while there a fair amount of dollar available from VC, Angel investors, state and local government for alternative energy inventions (better grid management software, better genetic engineered Algae etc.) there is almost no capital available to actually construct large wind farms, large solar energy facilities, biomass plants etc. Without DOE, State grants and utility mandates I don't think we'd see any alternative energy projects being made. Heck even T Boone Pickens has failed to raise capital.
Now a good free market capitalist (and believe me I love John Stossel's reports, Milton Freidman etc.) would say that reason we don't have alternative energy is because it isn't cost competitive with oil, or gas. They'd be right I doubt that any of these will ever be competitive without subsidies until oil hits $250/barrel.
However there is a huge chicken and the egg problem, without economies of scale these techs won't even be competitive at $250/barrel. But because economics are so bad, and amount of capital required so large, no individual company can afford to make the investment knowing they will be losing money for years if not decades. So I very reluctantly conclude that alternative energy requires collective subsidy by all of us. AKA the incompetent government.
Frankly, I wish it was a simple as cutting taxes. Cutting tax rates is almost useless to break even or money losing companies, and lets face it profitable US manufacturing companies are pretty rare. ~75% of Intel chips are manufactured in US and 75% are sold outside of the countries and I believe Caterpillar does most of it manufacturing in the US and is also quite profitable same thing with Boeing. But I'd be surprised to find more than a dozen companies which have more than 20,000 manufacturing employees in the US and have been constantly profitable over the last twenty years, who would greatly benefit from lower taxes. I bet none are on the scale of FoxConn.
My disagreement with Andy is the in relative importance of manufacturing job. Left unsaid in his article is this simple fact, manufacturer jobs like agricultural jobs at the turn of the 20th century are simply vanishing. The largest loser of manufacturing jobs in the last decade by far was China. Now some of these jobs moved to even cheaper countries like Vietnam, but most of the rest were lost to more efficient machinery and industrial robots. So I question given the inability of the government to get any industrial policy right is this the most important one for them to focus on.