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Cloud Computing: Will the World Pass the United States By?

Everybody's So Different, The US Hasn't Changed

Life's been good so far to so many in the United States, but it's hard to find optimists about the country's future. Cloud Computing offers an escape route, but it may be trumped by bigger cards. I'll explain...

A Half Century of Warning
The US did not arrive in its current predicament suddenly, or by accident. A certain cultural deficit as well as a misplaced economic emphasis were first mentioned almost 50 years ago.

The Vast Wasteland of American TV, for example, was first noted in 1961 (by FCC Chairman Newt Minow), as was the emergence of the Military-Industrial Complex (by President Dwight Eisenhower in his farewell address), two things that many people have believed since that time signify a nation in peril.

Minow inveighed not only against vacuous entertainment but against, "endlessly, commercials--many screaming, cajoling, and offending." More seriously, Eisenhower warned, "the potential for the disastrous rise of misplaced power exists and will persist."

Neither of these views have been refuted in the subsequent half-century, and small armies of critics have joined the respective battle cries in a series of cultural wars siince that time.

Eisenhower now also looks positively prophetic in a larger sense, noting in his speech, "America knows that this world of ours, ever growing smaller, must avoid becoming a community of dreadful fear and hate, and be, instead, a proud confederation of mutual trust and respect."

Are the Good Times Really Over?
Those of us of a certain age have been reading stories for four decades that fret about whether our children and grandchildren will be able to sustain, let alone improve, the lifestyle we've enjoyed.

A great and steadily improving quality of life was bequeathed to us Baby Boomers from great-grandparents who grew up in an age without electricity or running water, grandparents who endured the Great Depression, and parents who secured the nation's freedom in World War II and subsequent post-war economic dominance.

That lifestyle did continue to improve for our children and young grandchildren, as microwave ovens, ever-smaller cellphones, cable TV (and flat-screen TVs), broadband internet access, and shopping malls and more shopping malls proliferated throughout the land.

But now? Today? Who is optimistic that the next 30 years will come close to matching the past 30?

When Merle Haggard first asked, "Are the Good Times Really Over for Good" in 1981, he ended his song by optimistically stating that they were not. Merle's still performing these days, and one wonders if he would now like to change that final lyric.

The anger over the present state of the nation and its economy is set to be channeled into millions of votes in the general election on November 2. Whether this anger manifests itself in a dramatic change of the US Congress or not, the reality of an angry nation of fingerpointers will not change soon.

Volcker Weighs In
A recent article in The Toronto Globe and Mail gets to the point, for the US and the world, noting, "(Global economic) recovery is strained because growth in advanced economies is weak, while growth in emerging markets is strong."

The article featured quotes from former US Fed Chairman Paul Volcker, now an advisor to President Barack Obama and a sharp critic of  US financial institutions and their role in the economic meltdown of 2008.

Volcker is quoted in the article as saying that international cooperation requriing "extraordinary feats of leadership" is needed now to resolve the current state of global economic affairs.

The article notes that the US has been "the dominant force on the world stage" since the end of World War II, making international economic cooperation a matter in which "the US ultimately dictated the rules."

But "this time it is different," the article points out. "The US remains the dominant economy, but it is no longer predominant."

These words should carry shock value similar to news of the Berlin Wall coming down or of China emerging as the world's second-largest economy, because all of these things were unimaginable as recently as the early 1980s.

Unimaginable, as in "if pigs had wings" or "when Gallagher is funny."

IT to the Rescue Again?
Information technology has come to the rescue of the US economy before.

In the 1980s, as the US mired itself in a deep recession following years of "stagflation," the humble personal computer emerged, transforming the way white-collar work was done and ultimately creating a much more productive economy.

As an inevitable slump followed in the early 90s, the Worldwide Web came to the rescue, pumping up the dot-com bubble and pulling the entire economy along in its vacuum trail.

Since the dot-com bubbleburst of a decade ago, the overall economy recovered, even if the tech-heavy Nasdaq has only restored about one-third of the $7 trillion it lost in theoretical wealth.

Yet the Web has continued to be a predominant aspect of modern society, worldwide. It has certainly put traditional media companies under great strain, but has steadily been providing new generations of productivity improvement through improved communications, software delivery, and the creation of Web-centric global supply chains.

It has also spawned this creature known as Social Networking. But all the Facebook games and Twitter extensions in the world will not ride to the rescue the way that PCs and the Web did in the past. For that, we turn to Cloud Computing.

I, and hundreds of others, have waxed prolix over the past 18 months or so about the benefits of Cloud Computing. Consolidation and efficiency! Re-allocation of capital expenditure! Measured services! A fundamental transformation! It's not a new technology, it's the fruition of many technologies! All that.

Just today, I was speaking to a highly placed business executive in the Philippines about Cloud. He brought up the subject, and was very enthusiastic for its potential in areas of the world that simply could not afford the latest and greatest IT; now, in theory, they can. His enthusiasm is shared by many executives and government officials with whom I've spoken throughout Southeast Asia over the past six months.

Cloud Computing does have the potential to transform the world, in a good way. And most of the thinking about it and technologies that drive it are coming from the US, to be sure. But will the US be a global leader in its adoption?

It's Not a Pretty Picture
How the US got into a situation about which this question can even be asked can be debated now and forever.

But it seems that the idea of the US regaining a truly dominant position in the global economy is now unimaginable.

Let's turn to the World Economic Forum's rcently released Global Competitiveness Report, in which the US finished fourth. The top three finishers were Switzerland, Sweden, and Singapore, all small nations. So on the surface, it seems as if the US still reigns supreme among the large, influential nations of the world.

But dig a bit deeper into this report, and you'll uncover some alarming details.

This report is a serious deal, with no fewer than 12 "pillars" upon which the findings rest, backed by the participation of hundreds of economists from throughout the world and sophisticated statistical analysis. The pillars are grouped together into the categories of "basic requirements," "efficiency enhancers" and "business sophistication and innovation."

The report finds the US wanting in several areas:

* In the area of basic requirements, the US finishes 32nd, just below Cyprus (!), China (!!), and Tunisia (!!!). Specifically, the US is rated 40th in its institutions, 15th in infrastructure, 42nd in health and primary education (just behind Greece and Portugal), and 87th in its current macroeconomic environment. The latter ranking stems from its economic meltdown in 2008 and its aftereffects, which have led to a tremendous public debt, something the WEF and the contributors to this report dislike immensely.

* The country is saved by its performance in the efficiency enhancers area, finishing 3rd overall. But again, let's take a close look.

Its higher education and training is rated 9th; still strong, but no longer the envy of the world. It finishes out of the top tier in some other pillars in this area; most notably, the fiasco in the financial services industry places it 31st in the area of financial market development--nipped at the tape by stalwarts such as Kenya, Montenegro, Mauritius, and Oman.

Well, something is clearly ridiculous here, whether it's with the US or with the report.

The US is saved in this area of the report only by its #1 finish in "market size," a no-brainer that speaks much more to the nation's past than its future.

  • The US is also saved by the final area of the report, which comprises "business sophistication" and "innovation." It finished 8th in business sophistication, and remains the world heavyweight champ in innovation.

But how long will the innovative leadership continue in a nation that is on the downslide in so many other areas? As other countries rush to develop their societies and put a stopper on their collective brain drain, how will things change in the decades to come?

More Bad News
The WEF, admittedly not everyone's favorite organization, is hardly the only organization to deliver an unflattering report about Uncle Sam.

Reporters Without Borders ranks it in a tie for 20th place in its latest Press Freedom Index. It ranks 13th in the United Nations' Human Development Index, trailing many Western European nations, Australia, Canada, and Japan.

The US also has an income disparity these days that is higher than that not only of Western Europe and the other usual suspects but also of Russia, Guinea, and Malawi. It is rated the same as Turkmenistan and Ghana in this area.

To those who consider all of the above to be leftist conspiracies, the US does also fall behind both Ireland and Australia in the Index of Economic Freedom put together by The Heritage Foundation and The Wall Street Journal.

Current Currency Trouble
The current global economic crisis--and I think crisis is the proper word--is to a large degree a currency crisis. The US dollar is woefully weak, as investors scurry to harbors they consider to be safer.

Many of these unwilling beneficiaries are resource-rich countries. To wit, Canada and Australia have seen their respective dollars reach near-parity with the US dollar and with each other. Leaders in South Africa fret over a rapid rise in their rand.

Meanwhile, many fingers are being pointed at China, which is routinely accused of undervaluing its currency, so as to keep its products cheaply priced. Leaders in the US routinely lambaste China over this issue, and threaten to start a trade war.

The Japanese yen has also been pushed to historic highs, and this country has seemingly (and terrifyingly) reached the brink of a real war with China over this.

You Can See a Lot by Observing
If you can judge the mindset of a society from things you observe, and I think you can, then the US does not present a pretty picture today. I'm not talking about all the big statistics (such as unemployment and job creation), which we all know are grim.

Rather, I mean certain things that Americans do that seem to be way out of step with the world. In the past, Americans were (and could be) disdainful of marching to a different drummer.

The metric system? Screw that (even though everything is manufactured with the metric system in the US today).

A parliament and prime minister? Ha, I don't think so! We'll keep our separation of powers, if you don't mind.

National health care? A socialist plot.

Gun laws? They're for sissies, and don't mess with the Second Amendment.

High gasoline taxes? No thanks, we love our cars so very much.

Football means you stick somebody in the numbers, the Monroe Doctrine is now a global doctrine, and nobody else seems to be volunteering to be the world's policeman, so allright, we'll do it then.

Everybody's so different, I haven't changed, as Joe Walsh has been singing for years.

The US has been a truly exceptional place in innumerable respects for so long, it's hard (at least for an American) to imagine anything different. Never before have the country's citizens or its leaders really needed to listen to what others in the world are saying, whether about us or about things in general.

The Coin of the Realm
But now, it seems that time has ended. It may be time for change. I doubt that the US will march to anybody else's tune in the areas I list above anytime soon. But maybe it could in a much smaller way, something that may seem a bit silly when you first hear it.

Canada and Australia eliminated $1 bills a long time ago. Their coins work fine, so much so in Canada that its $1 coin (the "loonie") has become the nickname for its currency.

The US has made two unsuccessful attempts to create a workable dollar coin. Both attempts have been half-hearted, and did not require that the dollar bill be eliminated.

This is still an unthinkable idea in the US, efficiency be damned. The image of George Washington on the greenback still shines too brightly for the country to take the issue seriously.

But in the final analysis, this tiny little fun fact-that Canada and Australia eliminated their dollar bills long ago--represents the crux of the problem. The US just seems incapable of overcoming many legacies of its past, which is something it could afford as the world's dominant economy but which it cannot afford as the world's merely predominant economy.

I doubt the US will shoot back up to #1 in most world rankings simply by creating a workable dollar coin to replace the dollar bill. But I'm sure it won't if it never does.

While American politicians and many of the country's citizens argue about whether humans existed with dinosaurs and which entertainers are "dangerous" and "truly dangerous," you can bet your bottom dollar that there is a world out there that is striving every day to lift itself out of poverty, with no small reliance on information technology.

It's as if the world is passing the US by, another unthinkable thought. As long as it clings to the mindset that it is somehow uniquely exceptional, it will continue to eat dust as the world continues to pass it by, unthinkable but true.

I don't expect the extraordinary leaders of Volcker's imagination to appear, and I've inferred from his interview that he doesn't either. So let's let Cloud Computing be the way, the future, the next great thing that will save our butts from falling into the economic fires we start.

I do expect all of the creative minds of the IT industry to keep developing the things that will override political mediocrity, as they've done in the past. I have no idea if the United States can take full advantage of the technology it creates. To my American way of thinking, I hope that it will. But I question whether a nation ranked #32 in basic requirements by many of the world's most informed people is up to the task.

More Stories By Roger Strukhoff

Roger Strukhoff (@IoT2040) is Executive Director of the Tau Institute for Global ICT Research, with offices in Illinois and Manila. He is Conference Chair of @CloudExpo & @ThingsExpo, and Editor of SYS-CON Media's CloudComputing BigData & IoT Journals. He holds a BA from Knox College & conducted MBA studies at CSU-East Bay.

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