Wednesday, December 9, 2015

The Road to Innovation Starts with Regulation

“I can’t work any more fifteen-hour days,” sighed Jack, a seasoned electrical engineer working for Chrome Semiconductor. Chrome was a fairly young startup company, and their CEO, Stan Shwartz, had specifically hired Jack to lead their research and development division. When Jack accepted the offer, he was promised a large lab, a generous budget and freedom to choose his hours in order to be with his family more. Instead, Jack became overly familiar with “budget cuts”. He spent more time in the lab each day while his fellow engineers were constantly being replaced with "marketing consultants".

Jack heard his phone buzz. He looked down and read an urgent memo from Stan: “Great news! Apple has offered to buy out Chrome! Isn’t that great! No more long hours for anyone”!

He was right. None of the engineers would have to worry about overworking. By next week, they’d be looking for new jobs, hoping their “compensation package” would support their family. In the meantime, Stan and everyone else in management would be buying new houses. Jack stared at the wall. He began to wonder how his wife would take this, again.

In today’s technologically ubiquitous world, engineers form the backbone of society. Their innovations influence every major business and even personal decisions. As the industry grows, however, engineers are finding it harder and harder to do their job. For the tech industry to continue to grow, government involvement must take place. Although regulation in today’s global economy can seem unpractical, government regulation should be implemented within the tech industry to promote innovation and protect job security.

Regulating the Past

Engineers have always depended upon some form of government involvement. In times of war, for example, governments raise defense budgets and pressure tech firms to innovate more, putting emphasis on novelty over commerciality.

In WWII, Britain reallocated government resources to better develop the radar and strategically place it throughout the country. The result not only changed the course of the war, but forced other countries, including the US, to spend more time and energy developing new espionage technologies (Strickland). In the process, commercial products, such as the microwave, were produced, showing that when innovation is the primary objective of tech firms, they produce more.

Even outside of war, government involvement has proven to be more beneficial for tech firms. In the 1960s, the US government approached several tech firms with the need to “network” several computers together (Strickland). Companies responded and with time the internet was born; a worldwide consequence of the government’s request. Many other products and even trends, such as digital and social media, have evolved from the internet, once again indicating that novelty motivates firms to innovate more than appealing to consumer needs.

Engineers vs Investors

When governments choose not to become involved, however, tech companies have to focus more on the consumer. As they commercialize, they allocate more money towards marketing and shift their area of interest from the engineers to the investors.

While firms always strive to maximize profits, furthering society technologically is no longer a primary goal for the firm. Instead, tech companies are more concerned with controlling the market. In short, an absence of government involvement leads to a decline in innovation. Why develop a new product when firms can buy out the competition?

Beating the Competition

It is common for larger, more commercial firms to absorb several smaller firms, which in turn eliminate engineering jobs. Startup companies tend to be more engineering oriented, focusing more on bringing new ideas and inventions to the world. They find a niche and capitalize, becoming trade experts in what they produce. In a healthy, governmentally regulated industry, other startups would produce competing products, more jobs would be created, and all companies are forced to constantly improve their products.

However, in today’s unregulated market, large companies can absorb smaller companies without anti-trust laws holding them back. When tech companies merge, several engineers are laid off and expected to find jobs elsewhere. But when jobs are lost due to mergers, and cannot be recreated through startups that won’t survive, the industry shrinks. What’s worse, is that those who stay are forced to appease business leadership, sometimes unethically.

Playing the Game

Without government pressure, firms who are struggling are more likely to participate in illegal activity to stay afloat. Volkswagen, for instance, struggled in producing energy efficient, economic diesel cars comparable to their competitors’. Upper level management instructed engineers to rig efficiency tests in order to get better ratings. While only Volkswagen was caught, many other engineers in other firms are probably forced with the same dilemma.

An unregulated market also produces an oligopoly, where large firms coerce to eliminate competitors and manipulate prices. Corruption within in the industry is bound to grow as the government continues to follow a laissez fair philosophy.

The Global Economy: A Regulation Nightmare

Getting involved, however, would indeed be hard for any national government. For one, the tech industry is a globally dependent market. Engineers work with other engineers from around the world buying, selling, and developing new products. Just because the US decided to regulate would not imply jurisdiction in other countries.

Furthermore, large firms who felt pressured by regulation might relocate outside the US. It would be practical for them, but devastating for the US. The government could lose an indispensable amount in corporate taxes, jobs would be destroyed, and the economy itself would suffer. Without the ability to regulate worldwide, regulating itself would not be a practical option.

Engineering a New Standard

Despite disbelief, engineers could work together to promote worldwide regulation. Engineers not only need to work internationally, but communicate internationally as well, being conscientious of differing customs, cultures, beliefs, and viewpoints. Engineers can strategically use these differing elements within each other to find mutual purpose and work together.

Whether it be through superficial means such as phone calls, Skype, and eMail, or in a more intimate setting like conferences and meetings, engineers communicate to persuade, and can do the same with worldwide regulation.

For years, businessmen have handled the diplomatic affairs of tech firms. But perhaps the engineers themselves are better qualified and less compromised when it comes to establishing a healthy solution for their industry.

There are thousands of engineers like Jack who want to make a difference in the world. They spent years at school learning about ways to improve society through technology. However, in today's laissez fair economy, a firm with that mindset cannot survive. If the government were to be more involved, creating international anti-trust measures with other nations, then society would continue to see the dramatic technological advances it has seen in times of war. Only this time, society can truly benefit.

Works Cited:

     Strickland, Jonathan. "Do Wars Drive Technological Advancement?" HowStuffWorks. Web. 10 Dec. 2015.
     Tired at Work. Digital image. SFGate. Jeffrey M. Johnson, n.d. Web. 9 Dec. 2015. <>.

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