THE TIMES THEY ARE 'A CHANGIN (VIA INNOCENTS ABROAD)

IMD World Competitiveness Yearbook, 2004

A new breed of local competitors emerges, mainly from Asia, and soon from Russia and Central Europe. They don’t only provide manufacturing or services to western companies; they compete in their own right with their own brands. They will assail western markets, just as Japan efore (sic), but on a much wider scale. Such nations are quickly absorbing world standards in management and technology, which are spread by offshoring activities. Contrary to many industrialized nations, especially in Eruope (sic), they are eager to succeed. They often rank very high in accepting the need for economic and social reform or in having values that sustain competitiveness. They reshape world competitiveness. Others will dearly suffer.

Just a few charts and paragraphs from a press release on the annual competitiveness report of this prestigious Swiss business school give a good snapshot of what the economic near-future may bring. That Old Europe is sclerotic is not news, but how many truly understand the implications of the huge strides being made in countries we used to collect pennies for? That countries like France, Germany and Italy cannot make even the most minor adjustments to insolvent pension schemes or pampered working conditions without political upheavals is completely suicidal.

Presumably the main “economic and social reforms” the authors refer to are democracy and the rule of law. For the U.S. and others now leading the pack, surely the question is whether they will continue to roll up their sleeves and compete or join the suicide pact by succumbing to populist protectionist appeals based upon, for conservatives, the preservation of traditional ways of life, and for progressives, spurious appeals to human rights.