Why is the U.S. sabotaging its own information technology superiority?
This question is deviling John H. Terpstra, IT consultant, author and Samba Team co-founder. He believes that the anti-Linux, anti-open source practices of U.S. computer manufacturers and retailers is a gift to Chinese IT entrepreneurs. He first stated this publicly in his October 18 column, Stopping Linux desktop adoption sabotage. Many of that article's readers agreed with him. In this interview, he discusses the present situation and its similarities with the history of other U.S. industries.
Are you surprised that so many readers agree with your prediction that IT entrepreneurs in China will move ahead of U.S. hardware manufacturers, largely because the Chinese will support Linux in all their products? What's happening today that leads to that assumption?
|John H. Terpstra|
John H. Terpstra: Go to any electronics retail store. Check the country of manufacture of the laptop and desktop computers that are on display. Let's face it, IBM sold their laptop computer business to China. Many peripherals on sale in these stores are manufactured in China also. Why? Because they produce a high-quality product at a lower cost than local manufacturers can match.
It is naive to think that this would happen without an incredible level of entrepreneurship and business acumen. China has become the world's leading manufacturing nation. And the world is rapidly becoming a debtor to its industrial muscle. Open source software is free, and that makes it possible for all of China to get on board the IT bandwagon. Linux is its mascot.
How are U.S. IT companies weakening their positions as technology leaders?
Terpstra: To answer this we need to look at the bigger economic picture.
The IT industry is still young and needs healthy competition to bring about maturity. It is also an industry that is developing rapidly. This causes a great deal of nervousness in companies that develop new products and new technologies and fear that their products will be obsolete before they have been able to gain sufficient financial return.
I can understand the fear that competitors may clone or copy technology on which they have bet the farm. Given the turbulent nature of the market, the concept of protection of the investment through intellectual property controls is appealing.
Litigation and legislation adds to the cost of producing software. A huge number of software patents are being granted by the PTO (U.S. Patent and Trademark Office) every year. Large companies are registering thousands of patents each year. They understand that this will lead to cross-licensing of patents as a means of long-term survival.
Smaller businesses can not afford the overhead of filing for patents. Patents effectively push smaller companies out of existence. Meanwhile, patents and litigation drive up costs of development in the USA. This leads to movement of software development to India and China, where labor costs are lower.
Small companies are a major source of innovation and entrepreneurship. In the past, they have been sought and bought by large companies as a cost effective alternative to in-house innovation and development. No matter which way you look at it, software patents and litigation drives away employment opportunity for U.S. citizens. This is destroying the industry. Protectionism has never worked.
Is history repeating itself? Can you see similarities in what is happening in the U.S. IT industry today to what's happened with other U.S. industries in the past?
Terpstra: There are similarities in development of the local IT market and earlier experiences in traditional product markets.
The Merchant Marine Act of 1970 was designed to protect the US shipping industry. It increased industry costs so much that, in a few short years, most vessels that sailed under the U.S. flag re-registered under (non-U.S.) flags of convenience. The Merchant Marine Act accelerated the decline of the industry. Many tens of thousands of shipping industry jobs were lost.
Pharmaceutical companies obtained patent protection to preserve American jobs. The result is that Americans pay more for medicine than most people overseas for the same medication. Many research jobs were moved overseas to capitalize on lower labor costs, (but savings have not been passed on to the U.S. consumer).
Protectionism destroys what it purports to protect. (Such) unethical market practices ultimately lead to consumer retribution. In the long run, it pays to be ethical.
In the bigger picture, competition accelerates the learning curve effect and drives down prices, and that increases the size of the total market.
Where does Linux and open source fit into this bigger picture?
Terpstra: Open source software exerts the ultimate effect of the learning curve and reduces the cost of software development to the minimum. It creates viable markets out of markets that would otherwise be out of reach of protected businesses.
We need to recognize also, that the U.S. is part of a global market. Domestic U.S. protective measures are not welcomed abroad. The U.S. market accounts for less than 10% of the global market potential. We need to decide which market we want the lion's share of.
Smart people catch the early wave and learn rapidly to ride it home. The challenge is to paint an accurate picture of what that home will look like when we finally arrive there. We are all smart with hindsight; however, the early bird catches the worm. Hopefully we are still early enough to change direction and thereby avoid later regrets in the U.S. (IT) market.
Go back to part one.
Go back to part two.
About John H. Terpstra: Terpstra is CTO, PrimaStasys, Inc., an IT consulting firm and a member of SearchOpenSource.com's Editorial Advisory Board. He is author of the new books, Samba-3 by Example: Practical Exercises to Successful Deployment, 2nd Edition and The Official Samba-3 HOWTO and Reference Guide, 2nd Edition.