The first is from the airline industry. Boeing aircraft company is nearing the introduction of its newest long-haul airplane, the 787 Dreamliner. Though Boeing has long been associated with Seattle, Washington, and the 787 is assembled there, that doesn’t begin to tell the story of this plane. Its components are made in manufacturing facilities in Kansas, South Carolina, Japan, and Italy, and then brought by sea, air, and land to that assembly facility in Seattle.

On the surface, this seems ludicrous. Why would a company like Boeing trust such a widespread supply chain for something as large as a plane? You can’t simply park a bunch of airplanes somewhere waiting for parts to arrive from across the country or halfway around the world.

It is that Boeing has the utmost confidence that free trade agreements ensure the reliable entry of goods across borders and through customs, and that they have developed an extremely advanced logistics program that allows for just-in-time delivery of parts. They have perfected the process to where assembly of the plane takes only 3 days--remarkable for something with 8 zeros on its price tag.

Now, in the language of the day, some would argue that we have “outsourced” or “off-shored” those jobs to Japan and Italy. It is technically true that those jobs used to be done in the U.S., but because Boeing has invested money in R&D, perfected its supply chain, and held down costs, it is now trying to figure out how many more people it needs to hire to fill all the orders it is receiving for the 787.

Contrast this with the state of Airbus, the European competitor to Boeing, who, in its quest to protect jobs in Germany and France, is now trying to decide how many workers to lay-off as it attempts to catch up with Boeing in terms of engineering, performance, and cost.

Sticking with the airline industry, we can see the flip-side of the free trade and outsourcing coin, commonly referred to as in-sourcing. Just down the road in Indianapolis sits a Rolls-Royce plant. This is not the luxury car maker that we are familiar with, but an aircraft engine manufacturer.

They are a British company, employing over 4,000 Hoosiers, making engines for the Brazilian airline company Embraer. These engines are then shipped to Brazil using the same advanced logistics technology that Boeing employs for its worldwide supply-chain. It is the combination of American advanced manufacturing prowess, along with free trade agreements between the U.S., Britain, and Brazil, that make this relationship profitable for Embraer, its Rolls-Royce supplier, and ultimately, American workers.

This is actually a rather minor example of in-sourcing. The biggest boy on this block is probably Toyota Motor Corporation. Over the last twenty years, Toyota has built manufacturing plants all across the U.S., fusing the Japanese manufacturing principle of Keizan, or continuous improvement, with the quality of American engineering and manufacturing to build what is about to be the largest carmaker on the planet.

I had the pleasure of visiting the plant in Princeton, just south of here, a couple weeks ago. It is an impressive example of the integration of manufacturing and design, and a real model of how American manufacturing still produces some of the highest value goods in the world.

Many in this room won’t remember, but there was a time in the not so distant past when we were worried that Japan was going to eat our lunch. Instead, it was the U.S. that ultimately saved Japanese industry.

So, this is all very interesting and makes for a fun economic discussion, but why does it matter to you as students, or you as faculty, at the Purdue College of Technology? It matters because the process of globalization and its effects on the United States and the rest of the world have changed our comparative advantage.

Our advantage used to be our bulk. We could make more cars or more steel or bigger computers or taller buildings. Today, it’s tough to compete on size when there are two countries across the Pacific with four times as many people as we have. Instead, our comparative advantage now rests with our minds. Quite simply, we can out-think the rest of the world.

There are a couple structural reasons for this. The first one is easy. We have a Constitution and Bill of Rights. This is a free and open society that doesn’t throw you in jail or worse when you challenge the status quo.

The second is the transparency of our banking and investment system. Entrepreneurs and risk-takers won’t invest in new products and new ideas if they aren’t confident of a fair shake. Couple that transparency with the taming of the macro-economic risk that I mentioned earlier, and the U.S. has the most highly liquid markets where entrepreneurs and investors can do what they do best -- put capital to use in areas that spur economic growth.

Those structural issues would be meaningless though without the most important ingredient – Americans themselves. We are the hardest working, most talented workforce in the world. That is not a birthright though; it comes from world-class education and training in our nation’s schools, colleges, and universities.

The programs and classes at the College of Technology are exactly the kind of education that I am referring to. It took no more than a quick glance at your brochure to see that these areas of study are exactly aligned with the U.S. comparative advantage.

Why are companies locating in the U.S.? They do so because of our Industrial Distribution prowess, our computer and engineering mastery, and our organizational leadership. I hope those sound familiar…As students in those fields, you are gaining the education and skills you need to be on the cutting edge of what we are now calling the innovation economy.

Don’t think you can rest on your laurels though. We are in the middle of the information and communication revolution, not the end, and that means that monumental transformations still lay ahead of us. To stay on top of these changes is going to require continuous education. Not necessarily in the way you have traditionally thought though. Maybe it will be a live classroom delivered over the internet to learn the next generation of GPS or RFID. Or maybe it will be curriculum downloaded to your IPOD from an electronic learning marketplace.

However it is delivered, education and then application are going to be the key to maintaining global economic competitiveness and leadership.

If I could turn now to the faculty and leadership here today…You too are going to play an important role in the global economy, and it is much more than just providing degrees to the next generation.

As I described earlier, there are tremendous benefits to globalization and free trade. But that does not present the whole picture. There are also costs, particularly to individuals, that come with free trade. Millions of Americans were trained and have worked in industries that could now be considered at-risk in the global economy.

We have already seen substantial downsizing in the auto industry as Detroit tries to cope with the new economic reality. This affects not only the big three, but also all the suppliers that depend on them for business. Indiana, like many of the so-called Rust Belt states, has been particularly hard hit. A little further to the south and east, the Carolinas have seen the near disappearance of the once dominant textile mills.

What both of these examples, and probably countless others, have in common is that they were industries that provided thousands, and possibly millions, of jobs requiring little education. As those jobs disappeared, we have many individuals who do not possess skills that make them employable in today’s economy.

As premier education providers, colleges and universities must be a part of the solution. I’m sure your enrollment figures are reflecting a dramatic increase in what can be called “non-traditional” students. These are the over-25-year-old adults looking to develop the skills to improve their careers or find new jobs.