On Friday, August 11, 2006, Northrop Grumman Chairman and CEO Ronald D. Sugar addressed the West Coast Competitiveness Summit at the San Diego Air & Space Museum. Dr. Sugar was introduced by Tom Vice, sector vice president of business development, Northrop Grumman Integrated Systems. Below are Dr. Sugar's delivered remarks.

Global Competitiveness: The Need to Lead

Thank you, Tom, for that introduction and good morning. It is a special honor for me to join you today, to talk about American innovation and our place in a high-tech world – a world that is growing more competitive every year. I cannot imagine a better place to meet than here at the San Diego Air & Space Museum – surrounded by objects that testify to America’s long leadership in science and technology. They also confirm the power of the human imagination to change the world for the better.

The technologies that have been developed here in southern California – and in our nation’s other technology centers – have helped mankind cure disease, mitigate environmental damage, and propagate knowledge as never before through satellites and the internet. These technologies have also helped our nation win wars both hot and cold and advance the cause of peace. American technology and innovation have made our nation the measure of global competitiveness for decades. For the next few minutes, I would like to tell you why I believe it is critical that our nation maintain that leadership.

Every age in man’s history has had its governing commodity and the fortunes of nations wax and wane in correlation to their mastery of it. I believe that global competitiveness today simply refers to a nation’s mastery – or lack of mastery – of the governing commodity of the era. In past millennia it was the mastery of tools and weapons – first of stone then bronze, and finally iron. Centuries ago the governing commodity became the discovery of gold and other precious metals. More recently it has been trade and finance, heavy industry and oil. But the ultimate governing commodity of our age is intellectual capital. As a nation, we are preeminent in the world today because we dominate that commodity.

We may have won the Second World War with industrial capacity, but the Cold War was won with intellectual capital. Our adversary, the Soviet Union, was an authoritarian state. One which had the advantage of a command economy that could devote itself almost indefinitely to war-time levels of military industrial output. The only way we could compete with such a foe – without bankrupting our nation – was to combine our two greatest strengths – intellectual capital and a vibrant free market economy – into the awesome force that eventually won the struggle. The products of that combination included the nuclear navy, reconnaissance and communication satellites, air superiority, and intercontinental ballistic missiles – all enabled by advances in micro-processing, metallurgy, composite materials, information technology, and aeronautical science. And all this was accomplished while reducing our defense expenditures from 50% of our GDP by the end of World War II, to less than 4% as of today.

Many of those advances were made possible by the steady growth of computing power. Craig Barnett was a pioneer in this area. In fact, the progress of our modern world is largely gauged to that measure. The computing power aboard an Apollo capsule was roughly that of a modern pocket calculator. Today, computing power has enabled some of our most important advances and emerging technologies. The human genome project, nanotechnology, space-based systems and many other advances are the result of it.

Because that computing power is widely prevalent, advanced technology is now available to far more users and would-be users than ever before. Moore’s Law tells us that affordable computing power will continue to double every eighteen months. The implications of that are at once inspiring and harrowing.

Inspiring, because the advance of the human condition is linked to the propagation of knowledge. Think of the explosion of knowledge throughout renaissance Europe that followed the invention of Gutenberg’s printing press. The recent explosion of the internet has done the same thing – only a million-fold. And in the bargain, it has democratized access to knowledge as never before.

But this trend also has implications that are harrowing. Combine commercially available computing power with internet-based technical information, and with renegade nations eager to spread these capabilities to those seeking to do us harm. Suddenly, even nations and terrorist groups we have long dismissed as too backward to be threats are now very threatening.

This dawning age of technology is a double edged sword. And it remains for the civilized world to cultivate its benefits while managing its risks. Can we do it? Only if we continue to dominate the commodity of our age – intellectual capital. And there’s the rub, because for some time now America’s leading indicators have not been promising.

Last year a National Academies report, commissioned by Congress, pointed out that in 2004 U.S. universities graduated only 70,000 engineers. Meanwhile, India graduated about 200,000 and China graduated over 500,000. And the quality of those engineers is becoming every bit as good as our own.

Study after study reveals that American students are avoiding math and science in high school and college. And those that seek out such courses often have trouble finding teachers. U.S. school districts will need to hire 240,000 middle school and high school math and science teachers by 2010 to arrest this spiral. Where will these teachers come from?

In his State of the Union speech earlier this year, the President called for a major national effort to increase America’s competitiveness through increased research funding, tax credits for research and development, and the training of more science and math teachers. These are all important. But we must also not discount the role of inspiration. I and many other scientists and engineers of my generation were inspired to our life’s work by our nation’s early space program. I remember as a nine year old the launching of Sputnik and the ensuing space race. I for one was captivated by space. Because space exploration has such strong connection to the creation of intellectual capital, let me devote a few minutes to that topic.

The future benefits of exploration – like those of basic scientific research – are not knowable. What we do know for certain is that investments in exploration have historically returned enormous benefits to those nations that made them. The benefits that came from our first great age of space exploration defy calculation, though few were anticipated in 1960. I’m referring to such things as improved weather forecasting, precision global navigation, ubiquitous global communications, and a greatly expanded understanding of our world and our universe. This is consistent with the historical rule of exploration – that far from slowing a nation’s progress, exploration often accelerates it.

President Jefferson understood this. He required that the tasks of Lewis and Clark include scientific research, analysis of trade and economic potential, and the discovery of land and water routes for commerce and immigration. Theirs was an age of discovery. They knew that, though exploration makes no promises, it usually returns results. In 1803 no one foresaw the astonishing productivity of western farmlands, or the economic boon of plentiful oil. No one imagined the great cities, industries, and universities those lands would spawn. No one expected that California would become the nation’s most populous State and largest economy. No one anticipated the grandeur of Yellowstone or the national parks system that would be born there. President Jefferson simply understood that the nation’s destiny lay west, and to abstain from its exploration would be to deny his countrymen their future.

We face too many challenges to remain withdrawn from the exploration of space. As Americans prioritize the needs of our times, we must remember that the ultimate goal of space exploration is the welfare of all those who live right here on planet earth.

The most significant human failures are often failures of imagination. The notion of perpetual American technology dominance is so entrenched in our national psyche that we no longer perceive it for what it is – an assumption – and a perilous one at that.

Perilous because of the complacency it inspires. Very few of history’s great nations suddenly plummeted from their positions of prominence. More frequently, they simply wound down. They got tired. They stopped innovating, creating, and exploring. They lost their optimism and their confidence. They turned inward, focusing more on preserving their past than on boldly embracing the future. They abandoned the hard, risky struggle for progress until, inch by inch, they created their own irrelevance. As the historian Arnold Toynbee asserted, the autopsy of history shows that great nations die not by murder, but by slow suicide. I believe that national complacency about our dominant place in the world could be the first step toward that fate.

But it is a fate we can avoid if we choose. Not only must Americans invest more in applied research, but we must invest more in basic research. Our national laboratories are neglected jewels and they we must re-energized. Yes, we must hire more high school science and math teachers, but we must also inspire our kids into their classrooms. Yes, we need to generate more graduate-level engineering and science students, but we must also make it easier for talented foreign students to work in this country after they graduate, and to become Americans. Above all we must fight the lie that holds advanced technology to be the source of our problems instead of a means of deliverance.

There is much the private sector can contribute and my company, Northrop Grumman, is striving to do its part. We are sponsors of the Weightless Flights of Discovery program that many of you may have heard about. We are doing a flight in San Diego right now and we will be doing another later today. Its purpose is to help teachers inspire students to pursue technical and scientific careers related to space exploration. Earlier this year, we co-sponsored the National Engineers Week along with the Society of Women Engineers. Together we hosted a congressional briefing on the importance of the STEM workforce. STEM stands for science, technology, engineering, and mathematics. Northrop Grumman sponsors a number of STEM programs. We also are proud sponsors of the Sally Ride Science festivals, which are designed to encourage more girls into science and math. Sally is a one woman army in this worthwhile cause.

We may think that our new high-tech age has pretty much had its run, but it has not. It is just starting. Last year the British historian Paul Johnson put the issue in perspective. He said, “The species Homo Sapiens is less than 1 million years old. Civilization has existed for only about 8,000 years. The Industrial Revolution occurred less than 250 years ago. We’ve harnessed electricity for only 150 years, and atomic power for half a century. The rate of advance is accelerating very fast indeed, yet the pace is going to quicken at a speed we cannot now imagine. We are only at Chapter One in the story of humanity and its glories."

Our current technological age is barely off the starting blocks. If we are proactive, if we choose to struggle, invest, and risk, we can improve our standard of living, our economic power, and our national security. On the other hand, if we choose complacency, others will exploit this new age at our expense. America did not achieve its place in the world by accident and we do not hold it by tenure. The twenty-first century is now very much up for grabs. With focus, conviction, and action, we can renew America’s leadership in the world to come.