AND ONE ECONOMY TO RULE THEM ALL:

Don't write off the US economy: China and India may be growing faster but in technical innovation there's no contest (Hamish McRae, 3/10/10, Independent)

[T]he flip side of that is that American corporations have vastly increased their productivity. As demand returns they are increasing their output using the existing staff. What is bad for the labour market, for the millions of people seeking employment, is good for the corporate sector.

The country is beginning too to glimpse the possibility that it might no longer be so dependent on imported energy. American optimism has been fuelled, if that is the right word, by the technical advances that may make it possible to exploit the massive oil and gas reserves trapped in shale and tar sands at a commercial cost. It is hard to see the US once again becoming self-sufficient in oil but, add in Canadian reserves, and you could see North America as a whole regaining that position.

There is also an appreciation, always there but maybe pushed to the back of people's minds, that the US is still the main source of commercial and intellectual innovation in the world.

It has the best universities – the only other country with world-class universities is the UK and we are in danger of losing our edge as finances tighten. There have been suggestions that within another decade China may have developed institutions of similar merit. But for the time being there is clear water between the US and China on that front, at least. Besides, the best Chinese (and Indian) students still want to study in the US, with the UK as the principal alternative.

I think too that the row between Google and the Chinese authorities has led to a new appreciation of American innovative excellence. Google needs to be in China because that has more internet connections that anywhere else. But China needs Google in the sense that if it is to push forward intellectually it needs the access and direction that search engines bring. Besides, the innovative vigour of US entrepreneurs is undimmed. Look at the global impact of the iPhone, a technology where the US had been lagging. Look at Twitter.

The big point here is that the rest of the world looks to the US for innovation. The Chinese and Indian economies may be growing faster, actually much faster, but in terms of technical leadership there is no contest. The US is unquestionably the leader, now more than ever.

Anybody can assemble the stuff we design.

Posted by Orrin Judd at March 10, 2010 7:00 AM