US Innovation: A High-Tech small sector led growth is the answer ?

Where can US Innovation lead to jobs is a question on everyone's  minds.  A clue is from today's stock rally,  spurred in part by the Fusion-io IPO,  after six days of stock market losses. Fusion-io makes flash memory storage and its largest customer is Facebook who use their infrastructure to manage all those millions of Facebook accounts. Sure there are jobs at Fusion-io today but with a larger operation you can be sure that many of the routine remote IT work will be done from overseas. But the core know-how and high skilled jobs at the knowledge end of the flash memory business would remain in the US.

The old industrial factory of Henry Ford that gave employment to thousands of  Americans,in one location,for a lifetime has disappeared with globalization. Because no sooner that you, as a business, put more than a few hundred people under one production roof    (whether it is manufacturing production or service production like managing computer servers remotely) you start wondering if you can do this cheaper overseas. 

On the other hand ,smaller organizations that are able to integrate  value whether in advanced engineering,biotechnology,finance,insurance,health-care etc. should be able to lead  US growth.

So what is this value that can be integrated? This value could be services like patient trials in medicine to code in software or  products like components for aerospace and automobile. A global sourcing orientation must be in the business model itself.

The problem with this kind of innovation is that the first market success can take time and profits may be illusive to start with. However, the Fusion-io IPO suggests that investors are willing to  take the risk  when they see the downstream success of customers like Facebook for Fusion-io.

The idea of a born global firm for marketing products or services globally to start with is not new. What this blog is suggesting is on the sourcing side hi-tech firms should start with a global sourcing model. It is great for competing globally and  for US communities who do not have to face job losses. Because both the market and a lot of the low cost inputs are abroad and are built so into the business model.

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