The resurgence of America


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What were for centuries the Great Powers, and for nearly 50 years after the Second World War, the principal Western Allies and the Soviet Union, have been reconfigured. The Soviet Union has been sliced down to Russia with about 40 per cent of the former Soviet population, offering a pallid replication of Gaullist efforts to make France great again by being an annoying gadfly irritating the Americans around the world. Charles de Gaulle was a great statesman, who personified the historic cultural and political attainments of France in its most difficult and dishonoured times; Vladimir Putin is just another chief thug residing in the Kremlin.

China has replaced the U. It is trying to beat the United States at its own game of capitalism, but the Chinese version is a hodge-podge of state capitalism and a command economy, and the recoil of the Chinese from the pressure that has been applied by this U. Washington has seen it all, and seen it off, before. And there is Europe. Canadians were rightly offended, as Australians and New Zealanders were, when British prime minister Edward Heath tried to plunge headlong into Europe in , having failed to make it as the Common Market negotiator for Harold MacMillan in We were put over the side for Britain to take a total immersion bath in Europe.

Nine years later, Margaret Thatcher did a degree turn, brushed Europe back and plunged into a splendid renewal of the Special Relationship with the United States. Roosevelt, and they did as efficient a job of leading the West to victory in the Cold War as their revered antecedents did in leading the West to victory in the Second World War.

But before long, the special relationship gave way under British leaders more attracted by Europe and American leaders who had little interest in Britain. Then came a half-hearted British effort to go back head-first into Europe. It faltered and the Albion is faltering and befuddled. The problem with the European Union is both practical and theoretical. As a practical matter, it is governed by a bureaucracy of Dutch and Belgian scribes and functionaries that is answerable neither to the ludicrous European Parliament in Strasbourg, the ultimate irrelevant talking shop, nor to the principal member states, and is exacting its revenge for centuries of deference to France, Germany and Britain.

The British, however, do like to be law-abiding, and generally do pay some attention to the legislation and edicts of those who rule, and rightly judge Brussels to be insufferable and stifling.

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The whole idea was unutterable nonsense, and the structure is now crumbling. The splendid boulevards of Paris have seen it all before many times. Mighty Germany, its governing coalition almost worn threadbare by the imprudent admission of a million desperate Middle Eastern and African refugees, has delivered itself over to energy dependence on the feeble gangster-state of Russia while cutting its NATO contribution to half of what it had promised and complaining of American lack of enthusiasm to continue carrying Germany on its crowded and under-appreciated shoulders.

Diffusion of information technology, which has made possible the development and delivery of new or improved products and services in many of these industries, appears to be increasing the basic requirements of many jobs that formerly required minimal skills.

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These technologies place much greater demands on the problem-solving, numeracy, and literacy skills of employees in trucking, steel fabrication, banking, and food retailing, to name only a few. Trucking, for example, now relies heavily on portable computers operated by truck drivers and delivery personnel for monitoring the flow and content of shipments.


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Workers in these industries may have adequate job-specific training, but they face serious challenges in adapting to these new requirements because of weaknesses in the basic skills now required. But the adoption and effective implementation of new technologies also place severe demands on the skills of managers and white-collar workers. Not only do managers need new skills, including the ability to implement far-reaching organizational change, but in industries as diverse as computing or banking, they face uncertainty about the future course of technologies and their applications.

Nontechnological factors such as trade and regulatory policy, the environment for capital formation and corporate governance, and macroeconomic policy all play important roles in industrial performance too, especially over the long run. One of the most important is macroeconomic policy, which affects the entire U. Both monetary and fiscal policy have been less inflationary and less destabilizing during the s than during the s. They suggest that a stable noninflationary macroeconomic policy is indispensable for improved competitive performance.

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Another common element that has strengthened competitive performance, especially in the face of strong foreign competition, is rapid adaptation to change. In some cases, efforts by U. To a surprising degree, these prophecies of decline have not been borne out. Nor has the withdrawal of most U.

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In many U. In other cases, restructuring has been aided by the entry of specialized intermediaries systems integration companies, consultants, logistics companies, or specialized software producers. Restructuring is not always successful. In financial services, for example, many mergers and acquisitions ended by diminishing shareholder value. But in some industries notably steel, disk drives, and semiconductors European and Japanese companies were slow to respond to the new competition, often because their domestic financial markets were less demanding than those in the United States.

This financial environment also has facilitated the formation of new companies in such U. At least two issues remain unresolved. First, if U. Second, will restructuring be only occasional in the future, or will it be a continuing process? Moreover, rapid structural change has significant implications for worker skills and employment, an important policy issue that has received little attention in most discussions of industrial resurgence. Since , innovation by companies in all 11 of the industries examined in U. Industry in Studies in Competitive Performance has changed considerably.

Collaboration has become much more important for innovation in industries as diverse as semiconductors and food retailing. Most of these international alliances for which NSF has data link U. Alliances between U. Both kinds of alliances are most numerous in biotechnology and information technology.

In contrast to most domestic consortia, which focused on research, a large proportion of U. In addition to seeking cost sharing and technology access, U. During , total spending on basic research declined, on average, almost 1 percent per year in constant dollars. Industry-funded investments in applied research grew by 4. The increased importance of industry in funding university research is reflected in the formation during the s of more than research institutes at U. Nearly 45 percent of these institutes involve up to five companies as members, and more than 46 percent of them receive government support.

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The Bayh-Dole Act of permitted federally funded researchers to file for patents on their results and license those patents to other parties. The act triggered considerable growth in university patent licensing and technology transfer offices. During the s, U. Another shift in the structure of innovation was the increased presence of non-U.

Laurence Whitehead

Investment by U. Despite this growth, as of foreign sources financed a smaller share of U. Increased foreign financing of U. Foreign companies also formed joint research ventures with U. The restructured innovation process that has contributed to the resurgence of many U. This shift has produced high private returns, but its long-term consequences are uncertain.

The changing structure of innovation also highlights the difficulty of collecting and analyzing data that enable managers and policymakers to assess innovative performance or structural change. They include investments in human resources and training, the hiring of consultants or specialized providers of technology-intensive services, and the reorganization of business processes. All of these activities have contributed to the innovative performance of the industries examined in the STEP study. The STEP study focused primarily on industry-level changes in competitive performance, rather than public policy issues.

But the study raises a number of issues for public policy. Data currently published by NSF provide little information on changes in industrial innovation. Indeed, all public economic data do a poor job of tracking technology adoption throughout the U. Without substantial change in the content and coverage of data collection, our portrait of innovative activity in the U.

This raises complex issues for policy.

The resurgence of America The resurgence of America
The resurgence of America The resurgence of America
The resurgence of America The resurgence of America
The resurgence of America The resurgence of America
The resurgence of America The resurgence of America
The resurgence of America The resurgence of America
The resurgence of America The resurgence of America
The resurgence of America The resurgence of America
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