Is globalization making us richer? James Galbraith, the distinguished University of Texas economist, recently addressed this question before an audience at the University of Oregon.

Yes, Galbraith said, globalization is making some people richer — business elites in China and India, oligarchs in Russia, oil executives in Mexico and Nigeria. But, he added, "we have mainly seen rising inequality in the world economy over the last 20 years." Output and consumption are rising, but a narrow band of the world's population is enjoying the abundant fruits of globalization. For lower- and middle-class people, living standards are declining.

Through the late '90s, the United States bucked the inequality trend. Jobs were easy to find, overtime was plentiful and incomes went up. But, as we've seen vividly here in Oregon, the good times couldn't last. The tech bubble burst, business investment fell and high-paying jobs migrated overseas.

Is this job drain a done deal? Galbraith thinks so. "There's nothing that can stop China and India from the development strategies they've adopted," he said. "Computer code is going to fly around the world on fiber-optic cable, and we can't do anything about the fact that it originates in India."

Galbraith warns Oregon business and political leaders not to try to compete for jobs in the global economy by becoming the lowest-cost place to do business — for instance, by lowering personal and business taxes, loosening conservation regulations, curtailing the minimum wage or shortchanging health care and education.

"You can't compete with the Third World on wages and you probably wouldn't want to compete with certain parts of the United States," he said. "Oregon has a reputation for taking care of its environmental quality and its natural assets. If it loses that reputation it will lose more than it can possibly gain. Take inventory of what you have to offer the world, and accept investment from the industries that find your assets attractive."

Fortunately, Oregon has some unique globalization assets. Groups such as Mercy Corps and the Lemelson Foundation, which supports invention and innovation, can solidify Oregon's economic links to Asia and help deliver on globalization's so-far unmet promise of prosperity for all.

Mercy Corps is on the cutting edge of grassroots development partnerships, such as those involving Tazo Tea and impoverished villages in Darjeeling, India, that build infrastructure for sustainable economic growth.

The Lemelson Foundation is launching an ambitious program to fund homegrown inventors in the Third World. The Portland-based foundation, which collaborates closely with the Massachusetts Institute of Technology and the Smithsonian Institution, will devote $4 million in 2005 to the project in India, Indonesia and South America.

The goal, explains executive director Julia Novy-Hildesley, is to train and finance local inventors who are developing affordable, appropriate technology that's well adapted to indigenous conditions and resources.

Imagine, for instance, a bioengineered rice plant that turns blue when it is dehydrated or nutrient-starved. Farmers could use less water and fertilizer, protecting the environment and lowering production costs. And the foundation is promoting an "open-source" model of intellectual property, in which inventors will own the specific IP they develop, while the basic enabling technology is held in common, keeping multinational corporations from gaining control of patents and dominating the invention process.

The foundation takes its inspiration in part from the "significant innovation going on in Oregon around living sustainably," Novy-Hildesley says. That's a good start for getting ahead in the global economic race.

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Copyright 2005 Oregon Business magazine