I'm not sure I personally see the link to outsourcing. But I do agree with the quote in the OP that (in my own words) once innovation is no longer the main differentiator you typically see the “power and money people” take over. So I guess you could say that Americans should count themselves lucky that they still have large sections of the economy where innovation is the differentiator.

> once innovation is no longer the main differentiator you typically see the “power and money people” take over.

Someone contrasting engineering culture at Tesla and current "old auto", described part of the latter as being fine with someone else making the actual vehicle, and then just slapping a brand on it. Suggesting causality can go the other way too - innovation is still a differentiator, but is deemphasized by a management culture focused elsewhere.

Re: the link to outsourcing - is it not clear? Without scapegoating the cheaper external workers - as the business gets commodified, management sees less and less of the value in the internal expertise and institutional memory.

You start to see a 50-year-old engineer not as a battle-hardened mentor who can be a leader for your teams and instead as a highly-paid shambling pile with less "productivity" than a fresh grad.