When The Music Stops

I can remember playing musical chairs as a child. The stylus would drop on the 45 and we would walk around and around a set of chairs placed in a circle with one less chair than the numbers of players. Nobody knew who was winning or losing as long as the music was playing. But when the music stopped, one of us didn’t have a seat. I can remember how much I hated losing.

Not to sound too alarmist, but lately the more studying and thinking I do about the global strength of Brand America, I have been getting the same feeling I recall as a kid playing musical chairs. The world is spinning while the music plays and I am not certain we will like the seat we’re left with when the music stops.

Why worry? The Anholt-GfK Roper Nation Brands Index ranks Brand America #1 in both their 2009 and 2010 global survey. The world thinks Brand America is doing just fine. Is the world perception wrong?

Maybe they are, maybe they’re not. By nature, I tend have a “glass half-full” perspective on the future. Here are two questions I am struggling with. But here are two questions I am struggling with:

1. Is Brand America prepared to effectively compete with Brand China?

One of the columnists I find thought provoking is Tom Friedman who writes for the NY Times. Here are two articles I found particularly concerning.

We’re No. 1(1)! makes me wonder if both China and India have juked Brand America with a head fake and we’ve fallen for it, as the Nationwide Insurance advertisement claims, “hook, line and sinker”.

China’s approach to winning a global leadership position in the expanding energy industry. makes me concerned China’s continued focus on and advancement in developing a capability for innovation is quickly becoming a meaningful long-term competitive challenge for Brand America.

Can’t Keep a Bad Idea Down provides some data points that should make everybody concerned that Brand America is no where near as competitive as it needs to be. Friedman references the book Rise Above the Gathering Storm, Revisited: Rapidly Approaching Category 5. He cites some statistics provided by Charles Vest (former M.I.T. President): Brand America is sixth in global innovation-based competitiveness, but 40th in rate of change over the last decade; 11th among industrialized nations in the fraction of 25- to 34-year-olds who have graduated from high school; 16th in college completion rate; 22nd in broadband Internet access; 24th in life expectancy at birth; 27th among developed nations in the proportion of college students receiving degrees in science or engineering; 48th in quality of K-12 math and science education; and 29th in the number of mobile phones per 100 people.

2. Is Brand America’s strategic pursuit of transitioning to a knowledge economy fundamentally flawed?

Outsourcing manufacturing so Brand America could become a high technology, knowledge-based economy has been the vogue for over a decade. Manufacturing was seen as something emerging markets with low cost labor would be better suited to deal with. Sean Silverthorne points out that we are paying a price for that strategy.

Dan Slane, Chairman of the U.S. – China Economic and Security Review Commission, recently gave a fascinating talk about the challenges outsourcing manufacturing presents to America’s long-term competitiveness. I found it powerful, alarming and thought provoking. Here is a link to an audio file of that talk – http://omi.osu.edu/policy/dan-slane-on-the-us-china-relationship-manufacturing/. Dan’s talk is well worth grabbing a cup of coffee and listening to.

The more I learn, the more I believe the choice before Brand America is not whether to create a manufacturing economy OR a knowledge economy. I believe we need both and that manufacturing is actually an enabler of innovation.

It has always been my experience that you learn best by doing. It is equally true that necessity is truly the mother of invention, and the best way to identify what’s necessary is to be involved in the making process. It also helps technical ideas and expertise to a specific geography. My concern is that by outsourcing manufacturing we are inadvertently enabling other countries to develop the capability and capacity to actually out-innovate our nation.

Where will Brand America be when the music stops? Will we like the seat we end up with? Is my concern unfounded? Is manufacturing an enabler of innovation? Should Brand America be pursuing a strategy of creating a Manufacturing AND Knowledge economy?

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