The Stars Are Brightly Shining

20 Dec 2010 – Mark Lee

A Star in the West

In an August post to this blog entitled Go West?, I mused on my recent move from London to the San Francisco Bay Area, suggesting that the opportunity for US sustainability leadership remains great thanks to unique American attributes that foster innovation, and asking at the same time if there is adequate will and vision to use those strengths to engender the scale of change necessary.

Having promised to return to this topic, I was inspired to do so by the near turning of the year and a James Fallows piece in The Atlantic on the ways America underestimates and misunderstands its own economic strengths. Fallows cited many of the things I pointed to in Go West? – outstanding universities, immigration policies that bring to the US “…a disproportionate share of the nation’s creative talent” and effective intellectual property protection (itself one reason immigrants choose to set up businesses in America instead of elsewhere).

But more interesting to me than the reaffirmation of the strengths was Fallows’ point about the thing most often overlooked. Fallows says the X factor is widespread misunderstanding of how critical public-private partnership has been to new industries, growth and innovation, particularly the federal research funding underpinning industries like IT, healthcare, biotech and aerospace. At a time when government is often presented as the problem, Fallows asks that we see it as a – maybe even the – critical enabler of business success. Is it possible he’s right? While that’s debated here (witness the wrangling over whether any further government stimulus – read investment – is needed to help the US out of the recession let alone build new platforms for commerce), other nations’ actions suggest he’s onto something.

A Star in the East

The 1979 movie China Syndrome terrified with the premise of a nuclear meltdown – one so horrific that the reactor would sink into the earth in the US, burn through to the other side of the planet, and re-emerge in China.

Aside from geographic inaccuracy (the reactor in question would end up in the Indian Ocean, and that only by defying gravity), the China Syndrome that might sink US competitiveness today is unwillingness here to let government support economic recovery and growth via both tax cuts and investment. While ongoing partisan bickering leads to potentially unsatisfactory compromises on taxes and stimulus in DC, it is willingness and courage to invest (not a spent reactor) that appears to have left the US and popped out of the ground in the Middle Kingdom.

Fareed Zakaria discussed China’s investments in industries of the future on his December 12, 2010 CNN Global Public Square (GPS) program, citing seven key areas where China plans to quadruple output in five years. The targeted sectors – which will receive $1.5 trillion in government investment – are alternative energy, biotechnology, new generation information technology, high-end equipment manufacturing, advanced materials, alternative fuel, and energy saving and environmentally-friendly technologies. As if he was Zakaria’s comic (or tragic) foil, Thomas Friedman had already brilliantly parodied this situation (US non-investment versus Chinese drive) in his November 30, 2010 WikiChina piece. Most damning? That a leaked cable from China’s US Ambassador would be likely to report that Chinese “…efforts to dominate the wind, solar, nuclear and electric car industries will not be challenged by America”, because the view inside US borders has become too parochial, with American Exceptionalism degraded from “…working to be exceptional [to] talking about how exceptional they still are”.

Sad Tidings

This hurts to hear; it hurts to write. So will things be brighter in 2011? Possibly.

Denounced by extremes on the right and left of the political spectrum, the compromise the Obama Administration has agreed with Republicans to extend the Bush tax cuts through 2012 and cut payroll taxes while extending unemployment benefits will provide some stimulus (making Democrats happy) along with tax relief (pleasing the GOP). Most of the money will go to the wealthy and the middle class, who are more likely to save than spend it, and there is no way of predicting (or concentrating) where the amount that flows through will land. So while it is good to see some further stimulus, it is without vision and focus – where the money ends up will depend on consumer whim rather than a plan.

Still, the tax compromise represented forward motion by a federal government that has been paralyzed by partisan battles, and may indicate the potential of divided leadership to get something done. When the parties share accountability, neither can be wholly obstructionist. (See another of my blog posts, Bit by Bit, for views on incremental versus transformational change; a divided Congress and incremental progress on US policy – domestic and international – may prove something to celebrate.)

Given that leadership requires vision and courage also, consider that when we compare the US to China only on the grounds of current investment and economic growth, we gloss over the insecurity of a nation that can’t celebrate (or at least accept) the receipt of a Nobel Peace Prize by one of its citizens, and we ignore the reality that some seven hundred million Chinese don’t yet take part in their nation’s much vaunted economic miracle. The US is not yet ‘behind’ China or other nations in any insurmountable way. Rather, it continues to enjoy tremendous advantages, but must think differently about the world around it, and then plan and act differently to ensure those advantages don’t erode.

Wish List

While my children approach Christmas with visions of (modern variations of) sugar plums dancing in their heads, if I can choose something to go under the tree, it’s the energy, optimism and courage necessary for this country to commit to a better future by investing in it now. When the original US stimulus bill was passed, the talk was of projects that were ‘shovel ready’. But, as China’s example suggests, future prosperity is likely to depend on a shift from investing (only) in conventional infrastructure to higher value plays that are broadband ready, genome ready, solar ready and global. Is that kind of exceptionalism too much to ask?