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Sunday, April 30, 2006

It's a Fish Eat Fish World

I'm not afraid of a more competitive global economy - we'll get our share on a level playing field:

Lessons in Darwinism for the western world, by Geoffrey Moore, Commentary, Financial Times: Successful companies have long acknowledged the parallels between natural selection in ecosystems and competitive successes in free markets – in no small part because their stakeholders have enjoyed such happy outcomes. In the west, however, that may be about to change.

Like European enterprises in the 19th century, US companies have enjoyed “home field advantage” throughout the 20th century. They dwelt in the most vibrant economy, drew upon the most mobile and best-educated workforce, enjoyed the most plentiful sources of capital and sold in the most attractive market for goods and services. If a company wanted to be significant, it had to win in the US market...

Now we are into the 21st century and it is already clear that home field advantage is crossing the Pacific. In this century, China and India look to be the great canvases upon which economic successes will be painted. ...

If Americans and Europeans want to win in the 21st century, we must learn to play better in away games. As this new world dawns, we are beginning to experience the dark side of natural selection, the perspective of those selected against, rather than for. This is Darwin ... wielding the sharp, pointed stick of failure. Interestingly, it is failure – most dramatically the threat of extinction – that drives evolution, not success. Successful species do not mutate: they ... breed until such time as they consume all the free resources in the ecosystem and only then do they begin to mutate... That time is now.

To accept this challenge is to deal with Darwin. And in spite of US culture’s somewhat problematic relationship with evolutionary thinking, ... I am relatively optimistic about America’s ability to step up. I am not so optimistic, however, about Europe’s prospects. One great obstacle to dealing with Darwin is the sense of entitlement, and this seems ... to make adaptive change impossible. France’s youth are convinced they are entitled to well-paying jobs. Italy’s citizens take it as a matter of national pride that Alitalia exists, irrespective of its ability to compete. Germany’s unions believe they are entitled to more, not less, compensation and benefits. The Swedes believe Darwinism is a scandal that socialist institutions are meant to redeem.

The problem with all the above is simple: Darwin does not care. ... it rewards what works and penalises what does not. ... We must ... establish sustainable competitive advantage from within our own ranks. This is still a work in progress but at least it is a work under way. Denying the need for such change, or waiting for political institutions to resolve the issue, are all losing gambits...

    Posted by on Sunday, April 30, 2006 at 06:06 PM in Economics, International Trade | Permalink  TrackBack (0)  Comments (20)


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