Basically, the curve named for the life cycle of the product where the beginning and ending points are of the highest value: the initial product R&D and finally the marketing/sales; the curve bottoms out mid-cycle with manufacturing. Check it out.
His point is that although currently it's mostly manufacturing in the U.S. has been offshored to China, India, etc, it is pure arrogance to think the U.S. has a monopoly on thinking skills. Thus your high-level R&D jobs are at risk to cheap foreign labor.
Some have proposed that education is the answer. That presumes China and India and other countries are standing still. Like it or not, they aren't. China and India are churning out engineers faster than the U.S. I am not trying to dismiss the importance of education, but logic dictates that if everyone had a Ph.D., then Ph.D.s would be greeting at Wal-Mart and serving pizzas at Pizza Hut.
So one possible negative outcome of this market reality will be to force more U.S. Ph.D.s into "secure" government jobs, and in particular the Military Industrial Complex. You can't offshore work that requires a security clearance. This feedback cycle will make the regular economy increasingly distorted.
It is easy to empathise with the knowledge workers who choose to join or stay within the MIC. It's a nice steady paycheck to pay their mortgage and car debts. Don't worry about what we're actually doing with our time and effort. Hopefully it's mostly just wasting taxpayer dollars, and not building bombs.
But ultimately job security in the MIC depends on the U.S. being respected and/or feared by other countries. And with the current state of the quagmire, this power projection is looking less credible. Beware of the wounded leviathan, power concedes nothing without a demand.
But since they just marched in, we should demand that they march right back out.
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