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Cisco, GE and Xerox CEOs: 4 challenges facing U.S. industry, and how to fix them

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CES, Xerox, Cisco, GELAS VEGAS—Chief executives from some of the world’s largest companies laid out the keys to developing the next generation of innovative technology during Friday’s opening panel discussion here at the 2011 Consumer Electronics Show. Education, immigration, taxes and export policy all need to be fixed to allow the U.S. to continue to flourish in the face of global competition, agreed Xerox CEO Ursula Burns, Cisco CEO John Chambers and GE CEO Jeffrey Immelt.*

Although the U.S.’s universities are still the strongest in the world, the country gets a "D minus" for grades K through 12, Burns said during Friday’s panel. "I don’t think we can pretend to be better than we are," she said. Chambers pointed out that American K through 12 education is not even ranked in the top 20 worldwide in terms of performance in math and science, something that will impact U.S. businesses down the road. Immelt remarked that this country turns out far more sports therapists than engineers.

Tied closely to education is immigration, as all three CEOs lamented the difficulty in hiring foreign students after graduation. "We are telling people today that they are not welcome here," Chambers said. Instead, the U.S. should offer citizenship or at the very least green cards to visiting students trained at the country’s universities. Burns noted that the economic downturn of the past few years has made it easier to ostracize workers seeking jobs in the U.S. "The last thing we need is to do that," she said. "We have 300 million people here (out of the world’s population of 6 billion); we can’t block out the rest of the world."

In the same sense, the U.S. government needs to be more open to doing business with the rest of the world, the CEOs said, particularly because that’s where most American companies are finding revenue growth. Immelt said that 60 percent of GE’s revenue comes from customers outside the U.S. Cisco and Xerox get 55 percent and 50 percent of their revenues, respectively, outside the U.S. Burns said, "My preference is to hire good people wherever they are. We want to be close to our customers."

The CEOs pointed to taxes as another barrier to growing business in the U.S. Chambers expressed a preference to hire in the U.S., but said that "everything is working against it." Cisco has more money invested overseas than it does in the U.S. If the company tries to pull that money back into the U.S. to invest here, however, it gets double taxed, he explained. "We already pay taxes on that money in Europe, China, India and elsewhere," he said. "If we bring the money back to the U.S., we likewise have to pay U.S. taxes on it." Immelt added, "What good is it doing the U.S. today for GE to have a trillion dollars outside the U.S.?"

With regard to exports, Burns pointed out that other countries are busy signing trade agreements with one another while the U.S. drags its feet. If the U.S. doesn’t trade with other countries, then businesses here can’t create new markets for their products or new jobs for workers. The CEOs cited the difficulty with which the U.S. government has nailed down a trade agreement with South Korea, already the U.S.’s seventh-largest trading partner. That agreement, reached about a month ago, still needs legislative approval in both countries.

This all ties in to CES in the sense that big U.S. companies like Cisco, GE and Xerox invest in the research and development needed to make the products that show up on the show floor here. Burns noted that Xerox invests 5 percent of its revenues into R&D, for example.

Of course, there are many sides to the debate over how businesses in the U.S. should be treated by the government, particularly in light of a less-than-stellar past decade of corporate behavior—Enron, Worldcom/MCI and Tyco come to mind.

Image (left to right) of Consumer Electronics Association (CEA) CEO Gary Shapiro, Xerox CEO Ursula Burns, Cisco CEO John Chambers and GE CEO Jeffrey Immelt, courtesy of Larry Greenemeier/Scientific American

*Editor’s Note (1/24/11): This was edited after posting. It originally referred to Ursula Burns as Ursula Barnes.

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  1. 1. Mr. Peabody II 9:06 pm 01/7/2011

    These CEO’s are nothing more than "carpetbaggers". They built their wealth in the most innovative and advanced country in the world. Now they want to reap all benefits of what our country used to be because they don’t want to pay the taxes to support it.

    You can always rely on U.S. Big Business to kill any goose that lays golden eggs….

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  2. 2. Mr. Peabody II 9:28 pm 01/7/2011

    "Chambers pointed out that American K through 12 education is not even ranked in the top 20 worldwide in terms of performance in math and science, something that will impact U.S. businesses down the road. "

    Most kids get K thru 12 education at public schools, which have been relentlessly stripped of public funding until teachers now have to pay for most of the supplies they need to teach their students.

    Meanwhile, these carpetbagging companies and their cronies — like Microsoft, Google, etc. — funnel tens of trillions of dollars of their profits into off-shore accounts and investments, rather than pay the taxes that are desperately needed to improve our public education.

    Small wonder the Europeans and Asians have such better education — that’s where most of the American Corporate profits are invested! Hypocrites!

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  3. 3. BAWinn 6:35 am 01/8/2011

    I would like to suggest another challenge facing us all – cleaning up after GE. Those of us who live in the Berkshires have been trying for decades to get GE to remove its PCBs from the Housatonic River. It’s amazing to me that Jeff Immelt has the nerve to preach to the rest of us.

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  4. 4. dbtinc 7:39 am 01/8/2011

    you’re kidding, right?

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  5. 5. JamesDavis 12:19 pm 01/8/2011

    I own the largest and most recognized digital publishing company in the world, – doing business in every corner of the world and I took my publishing company world wide in less than a year, but no one seems interested in knowing how I did it.

    I also presented a paper to the Secretary of Education, during the Bush administration, explaining how to restructure and rebuild the educational system to where it would be the best in the world…by the way, the U.S. is 23rd in the world in math and science and 28th in the world in engineering, and how grades K through 12, with just a very simple move, can compete with the Scandinavian same grades. Their elementary school teachers all have to have masters degrees and by the time the child reaches 12th grade, they can speak as many as six languages. The Secretary of Education told me that we have the best educational system in the world, and I believe my paper ended up in the trash can.

    I can rearrange the educational system to where the children in this country can get the best, safest, and most affordable education anywhere, but no one seems interested in wanting to change the system so it will work the way it was intended to work and America can once again lead the world in science, math, and engineering.

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  6. 6. John_Toradze 2:58 pm 01/8/2011

    Well, as a former congressional advocate and political consultant, you should do five things then.
    A. Set up a web site that lays out the program with a 501c3 for your education reform program.
    B. Put a digital publication set together that lays out the program.
    C. Build a membership base in your reform movement. This allows you to become part of the political kingmaker system in American politics today. The way that works is that the small highly active pressure groups determine mostly, who wins the first round elections to determine the candidate from democrats or republicans.
    D. You need to become a significant contributor to senators and representatives. It’s a simple fact that the going rate for access is either $10,000 per hour, or else control of a significant block of voters who really get out there and vote. And don’t turn up your nose at congressional staffers either. They make most decisions for their congresspeople.
    E. Make very sure that you are both correct and compelling. With every objection, see it as an opportunity to make your case. If you need to think about it more after an objection, then go do that.

    That’s how to play the game Mr. Davis.

    I wish you well. That advice would cost you a lot if you had sought it out. But people usually don’t value advice unless they pay for it. I hope that you are smarter than that. My best to you.

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  7. 7. John_Toradze 3:06 pm 01/8/2011

    I agree with the fundamental point made here in the comments.

    What schools need most is money. These corporation CEOs are part of the system that backs politicians who are cutting taxes and shutting off money. Nobody sees them lobbying hard for more taxes to fund education. Nobody sees these cynical fakes demanding lower levels of funding to prisons or doing away with stupid laws that cost us way too much in incarceration costs.

    So that panel, the lot of them, are fundamentally, liars. This little panel of theirs is complete BS and they know it. It’s nothing but a cynical PR stunt and they should be ashamed of themselves for it. Of all the people in the USA, these guys have the greatest ability to put their money where their mouth is. And they don’t do it. Period, end, stop.

    Until they really, fully do so, they are cynical liars.

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  8. 8. jshuey 4:04 pm 01/8/2011

    Mr. Peabody –

    Apparently you never took an economics course. Here is a very basic fact: Corporations/businesses NEVER pay taxes. Taxes are merely another expense item in the cost determination of a good or service, and becomes part of the price you and I pay for those goods and services. (Plus a markup for profit.)

    Distilled – ONLY consumers pay taxes, businesses never do.

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  9. 9. kmkatt 4:56 pm 01/8/2011

    Mr. Peabody II, I do not want to sound disrespectful but, you do not have a clue about what you say. Educating children is not a money issue, educating children is is a process of saturation. The learning experience starts in the womb but, at birth its environment plays the most important role. In an unstructured and pampered society, why learn, it is suppose to come to us. Mom and dad will make it good, out of guilt. We should invest as much time into our children as GE, XEROX, CISCO, etc do into there business’. Nobody watches over our children in the way a successful corporation watches over their child. Television and peers have more influence on our students than parents and the institution of education. How can we expect an educational institution to do better, they want to through money at them, just like the parents. No accountability. Remember, they are parents also, what kind of example to they set. Don’t tell me they leave the bad parenting at home.

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  10. 10. kmkatt 4:59 pm 01/8/2011
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  11. 11. jtdwyer 11:21 pm 01/8/2011

    I agree that the cry for more money for education is a little shrill. IMO, the qualification of teachers is also severely lacking. While money wouldn’t hurt that profession in the long run, it would likely simply increase the pay scales of competent and incompetent teachers alike.

    What’s the cost/student in countries that a are highly ranked, perhaps Japan and Germany, for example, and how do they approach the operation of schools and teaching of children? I suggest it’s be more beneficial to understand how others achieve better results before throwing money at the problem.

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  12. 12. letxequalx 5:26 am 01/9/2011

    Self Preservation. We need to buy our goods from companies that manufacture in the United States. Companies who market goods in the United States have to manufacture and hire labor here in the United States. Right now, to get the class of car I want that’s built in the United States, I have to buy a Toyota.

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  13. 13. wanders11 9:18 am 01/9/2011

    Why does everyone jump to the conclusion that K-12 education is a NATIONAL issue? It has always been a state and local responsibility. What fraction of a typical high school’s budget is provided by the federal government?…the state govt? …the local govt? That is where the responsibility lies. We are not a "centrally planned educational authority" like most other countries. It is one place where the locality cannot just rely on the federal govt to "do something for me."

    Other countries’ national governments have a central planning role in K-12 education. Ours has general oversight to provide adherence to constitutional principles, but don’t look to DC to determine how many credits of calculus will be required. (he he)

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  14. 14. Radiated 10:34 am 01/9/2011

    It never ceases to amaze me how big corporations talk about paying to much tax,. We all pay to much tax , I would like to employ more people and pay less taxes. Except the people i would employ would be people in this country and they would be paying taxes in this country. Let’s stop giving the corporations all the breaks and start giving the small businesses in this country a break

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  15. 15. jtdwyer 11:29 am 01/9/2011

    It does seem that the low performance of students, compared to those in other countries, is a nationwide phenomenon, doesn’t it? In that case the problem won’t likely be solved by any local corrective action.

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  16. 16. kmkatt 3:02 pm 01/9/2011

    I agree but, we also have to look at our cultural differences. Our children lack parental guidance and control. Our society lacks control and accountability, our teachers are part of that condition. Children that have their parents involved in their lives tend to be more successful. Daycare and after-school programs have not made any changes in the ‘latch-key’ problem. Children need to be home with an adult family member doing homework. Parental accountability, guidance and love make for a successfully educated child. Which would make for a more successful society.

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  17. 17. michaelyork777 4:03 pm 01/9/2011

    I say segregate all the children into their own
    individual spaces, (which negates the possibility of
    classroom misbehaviour and wasted time),supply them
    with a computer, and a comfortable, climate controlled
    space, utilizing teachers as ready advisors. Make it
    like the business day with two 15 minute breaks, and
    an hour for lunch. Let computers do what they do best,
    provide a compelling repeatable media learning experience for K-12, and accelerate the process of
    learning. Not to mention, saving our kids from having
    to carry 40lb backpacks

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  18. 18. basdel 4:07 pm 01/9/2011

    If you are really serious about education reform, try the charter school movement. We’ve had one here in California now for quite awhile with no real, substantive results. Show us the results of your change. Show us the date driven research on educating 35 7th graders with attention spans of gnats and no inclination to think and/or be creative, no matter what you put in front of them. If you give them something to learn that’s rote… memorizing facts like the periodic table of the elements, they have no interest. If you give them a game to play to help them memorize those facts, they have no interest. Or give them a creative project that incorporates the skill sets that is your ‘educational objective’, they won’t turn it in, and show no interest. If you buy $100k in computers, run software to reinforce the table of elements in a way that emulates their favorite online games, they will be bored as soon as the novelty of the technology wears off.
    My suggestion James, before you take your hard earned capital and sink it into your ‘school of dreams’ is to go out and get your credential, and teach for at least three years in an ‘at risk’ district. Find out what’s really troubling our school system, and then apply your knowledge to a set of charters that actually advances the cause of education.
    I for one would actually like to see a charter school that does what charter schools were supposed to do, advance the cause of education. All of the charters I am acquainted with are excellent cash cows for their founders, because they are run on a business model, but they have done nothing to reform education in a substantial, data driven way. I have not seen better test scores, better results, better mathematicians, better engineers, more motivated students, or anything of substance come out of any kind of education reform in the last 25 years.
    I’m quite serious about this James. I understand your frustration with the secretary of education. He seems to be drinking from the same well as those that say we have the best health care system in the world. I would love to see solid, substantial, research based, field tested reform make it’s way through our educational system.
    Lastly, I want to make it clear that I love my job as a middle school teacher. My kids are the best! But they are not: future engineers, scientists, or mathematicians, not because they can’t be, but because they don’t want to be. And while I genuinely support real reform, no amount of it will change their minds.

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  19. 19. Mr. Peabody II 9:42 pm 01/9/2011

    Then why do corporations keep trillions of dollars in off-shore accounts and cardboard foreign companies so they don’t have to pay U.S. taxes on them?

    Do you really think they are doing it *only* to keep their expenses/prices down for American citizens?

    Dream on!

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  20. 20. Mr. Peabody II 9:47 pm 01/9/2011

    So by your logic, we don’t need schools at all.

    All of what you say is true, but you oversimplify. If we continue to destroy our public education system, all of your concerns won’t matter.

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  21. 21. Mr. Peabody II 9:54 pm 01/9/2011

    If what you say is true, why should Big Business be moving/investing trillions of dollars outside the U.S.?

    Do you think they’re doing it to keep their prices low for you?

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  22. 22. Mr. Peabody II 9:56 pm 01/9/2011

    Wow! Even Scientific American won’t hire an IT staff smart enough to keep spammers out of their comment areas.

    Talk about low tech!

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  23. 23. ruprecht 10:28 am 01/10/2011

    Issues with education today have nothing to do with money and everything to do with motivation. A motivated student does well, poorly motivated student does not.

    Our best students are bored with our current system. We dumb things down to bring up our weakest students, in the process we bore our brightest. My son (6 in 1st grade) loves to learn and is interested in experiments we do at home, along with learning to read and write better. Yet he hates school because it’s boring. He continually finishes his work quickly and quietly waits for his teacher to assign a new task. The teacher cannot move him forward too fast though because she has to keep the pace set for the weakest students – and we’re talking about a private school where the students are much better on average than public schools.

    Kids are bored with school and pumping money into the budget isn’t going to change that fact. Our education system needs to do a better job of engaging students and giving them opportunities to be excited about learning.

    Get the kids engaged and motivated and they will love the experience and love learning. Stay the course with dumbing things down to the weakest students and we will continue to bore all our students into hating it.

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  24. 24. kmkatt 10:42 am 01/10/2011

    This is not oversimplification, Mr. Peabody II, i never referred even by logic my logic, that we do not need school. I said more money isn’t the answer. We change our philosophical learning style about every two -five years. They have dumbed down our students. So, when a student reaches high school they have gone through about three and a half changes. That means instead a flow in their education, they have to readjust their learning protocol, slows the flow and gives frustration to teachers and students. And, there is no state by state continuity, students cannot move and flow. A problem in this economy. Oh by the way, every philosophical change cost are astronomical, training and materials. Do you know what a book costs? Sometimes the squeaky wheel needs to be greased not replaced. Especially, with something not proven. Their changes make money for the academics that publish, they do not teach, the grades they write for. Who gets the next greatest amount of money? Administration.

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  25. 25. zarkon55 12:32 pm 01/10/2011

    Please correct your article:

    The C.E.O of Xerox Corp. is Ursula Burns, NOT Barnes.


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  26. 26. Mr. Peabody II 7:37 pm 01/10/2011

    @ kmkatt

    Let me make sure I understand your premise:

    You are certain that the decreases in funding for public schools is irrelevent to the decline in their performance, and that continuing to starve public schools of funding will have no impact on the problem.


    For the record, I agree with almost all of your points. Parents, the media, educational textbook publishers, and deterioration in the priorities of our culture are at the root of our education problem. If you have suggestions for how to stop these, I’m open to hearing them.

    In the meantime, the only factor I have even a remote possibility of impacting is funding for public schools, so that at the very least, those few of us with the right priorities — who cannot afford private schools — have a chance of providing our children with the education they need.

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  27. 27. bahodir 10:00 pm 01/10/2011

    Dear debaters,
    All this people want is profit from every step they take, every effort they make, every second they spend.
    Open your eyes, is it so difficult to understand that we live in 21st century known as capitalism, not humanism?! Is it so hard to understand that the world contains more people than ever needed which resulted in having no value of a human being(by this I don’t mean to tackle this problem with any other means). There is just a vast amount of us that those people think they can manage by only replacing us with some others, allegedly with foreighners who could cost them much cheaper.
    They just mean it when they say the country needs more softer approach to immigration, in fact, it is the most friendliest in the world. There are just countable amount of countries that has this type immigration policies. Do you have any idea how easy or hard it is to get even legal status of residenship in japan, china, russia, iran or israel? No?! Then my advice is look for the answer.
    Education?! Let me just not reveal all those intriguing details about educational system, because it would look shameful to all debaters here.
    Taxes?! Well who would want to pay a whopping amount of money which is a significant part of payroll earned pretty hard nowadays. Especially millions if not billions of dollars from wealthy pockets. Whereas they think about catching up on other competing wealthy people. Here is an example:
    Eike(as the minerals magnate is known in Brazil. Forbes magazine ranks him the eighth richest man in the world, with a fortune of $27bn (£17bn)) is confident the boom will continue and that Chinese demand will help power him yet further up the world wealth rankings.

    "I told Carlos Slim," he(Eike) recalled with a grin – referring to the world’s richest man, the Mexican telecommunications tycoon – "clean your rear-view mirror on the right hand side and clean your rear-view mirror on your left hand side because I don’t know which side I will be overtaking you."

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  28. 28. Squish 6:29 pm 01/11/2011

    I think what we need is a better return on our investment. By itself, it is not a travesty that America does not rank within the top ten. The travesty is that America pays dearly for such a poor return. America often relies now on industrious foreigners to do hard work like becoming an engineer.

    I have taught in Asia for years and in Western countries. I have not taught in America yet but I think I can safely make inferences. One of the big differences is how students percieve educational success: in Asia students are encultured to believe that More Effort = More Success. The Western take leans towards More Talent = More Success (see Carol Dweck).

    The second point of view has a few upsides. Everyone is a gem in the rough somehow and search for their uniqueness. The massive downside is that students, facing initial failure, often give up. They do not realize that expertise/mastery of anything is now commonly most largely attributed to hours of hard work (10 solid years worth). By over-esteeming talent, effort is dismissed. I bet American students lie more often on how much they studied – its all talent! Only losers work.

    In Japan however, if a student fails, his classmates tell him "gambatte" or to work harder. The effective mentor/protoge system requires lots of time and effort for small but steady incremental gains. Again, effort is paramount. They do not do nearly as well at free-wheeling creative type stuff, so I guess that is the price for their overall higher numeracy and literacy.

    Strangely, compared with Asia, some Western countries support negative stereotypes of math and science achievers ("geeks" & "dorks"). Troublingly, some underachieving Western minorities exhibit tall poppy syndrome and try to limit their ingroup members’ success by labelling academic success as sellout and undesirable while only promoting sports and music.

    In the West we are too pampered. No one wants to do the hard work – parents blame teachers, teachers parents, and everyone the media. The intrinsic motivation of learning to enrich one’s life seems wanting. But Asian students don’t always have this drive either. Western students demand "fun" which is not always possible. As a gross endictment, they obsess on their rights without fronting their responsibility. What motivates Confucian-raised students? They acknowledge the societal worth of education, and view shirking their duty of working to reveal their potential as being selfish and shame-worthy.

    Let’s share the shame and eliminate it by placing higher expactations on effort.

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