It doesn't matter if China and India surpass us in producing what "The World Is Flat" author Thomas L. Friedman calls "low-cost labor and high-cost technology." What we are most adept at is building strong brands in greater numbers than anybody else. But we also have the capacity for citizens to buy those brands in greater numbers than anybody else.
As a nation, we're certainly not afraid of change, and that's an important reason why voters were not hesitant to make wholesale changes of elected officials this month.
Stagnant we aren't. We welcome, as no other nation, immigrants from all over the world, and that constant inflow of new blood and new thinking has kept us strong.
We outsource jobs to people and countries that do the work better and cheaper. And companies down on their luck in this country, such as Ford and General Motors, are gearing up to sell their vehicles in places like China (GM sells more Buicks in China than it does in the U.S.).
If there's any lesson we've learned over the past few years (come to think of it, since we've entered the 21st century), it's that the world is in constant upheaval, and we have no choice but to use it to our advantage.
Media industry turmoil
The media business has been in the thick of this turmoil. Old-line media companies get in trouble when they try to hold onto economic models. So what if internet advertising isn't as profitable as traditional ink-and-paper ads? The internet is a worldwide TV station that gives publishers opportunities they never dreamed of. It's creating a huge audience of prime prospects for subscribing to the print version of the media brand. What traditional publishers are discovering is that web audiences aren't just dropouts from print but an entirely new audience they never had access to before.
In Friedman's flat-earth scenario, "where all the knowledge centers are connected, the most important attribute you can have is creative imagination -- the ability to be the first on your block to figure out how all these enabling tools can be put together in new and exciting ways to create products, communities, opportunities and profits. That has always been America's strength, because America was, and for now still is, the world's greatest dream machine."
Importance of consumers
Other nations can and do dream up great products, but they can't rely on their own home market for success. They need our consumers, who are willing to give products from all over the world a try. Their only allegiance is to style, innovation, efficiency.
And that brings up a crucial point. In The Economist, Columbia University professor Amar Bhide contends that most of the value of innovation accrues to consumers, not to marketers of the products, "and stays in the country where the innovation is consumed." So if China and India do more invention, "so much the better for American consumers."
Bhide believes that the most important ingredient of innovation may be the eagerness of consumers to try new products or services. In his view, "it is America's venturesome consumers that drive the country's leadership in innovation."
Advertising, of course, plays a major role in communicating innovation and persuading consumers to try new things. But economists don't consider such intangibles as innovation, brand-building and ads important enough to measure as part of our gross national product.
If Bhide's thesis is right, according to The Economist, "America's policymakers should worry more about how to keep consumers consuming than about the number of science and engineering graduates, at home or in the East."