Thomas Friedman is back from a 5+ month book writing sabbatical, and damn if he isn't a man on fire:
We are not as powerful as we used to be because over the past three decades, the Asian values of our parents' generation -- work hard, study, save, invest, live within your means -- have given way to subprime values: "You can have the American dream -- a house -- with no money down and no payments for two years."
That's why Donald Rumsfeld's infamous defense of why he did not originally send more troops to Iraq is the mantra of our times: "You go to war with the army you have." Hey, you march into the future with the country you have -- not the one that you need, not the one you want, not the best you could have.A few weeks ago, my wife and I flew from New York's Kennedy Airport to Singapore. In J.F.K.'s waiting lounge we could barely find a place to sit. Eighteen hours later, we landed at Singapore's ultramodern airport, with free Internet portals and children's play zones throughout. We felt, as we have before, like we had just flown from the Flintstones to the Jetsons. If all Americans could compare Berlin's luxurious central train station today with the grimy, decrepit Penn Station in New York City, they would swear we were the ones who lost World War II.
How could this be? We are a great power. How could we be borrowing money from Singapore? Maybe it's because Singapore is investing billions of dollars, from its own savings, into infrastructure and scientific research to attract the world's best talent -- including Americans.
And us? Harvard's president, Drew Faust, just told a Senate hearing that cutbacks in government research funds were resulting in "downsized labs, layoffs of post docs, slipping morale and more conservative science that shies away from the big research questions." Today, she added, "China, India, Singapore ... have adopted biomedical research and the building of biotechnology clusters as national goals. Suddenly, those who train in America have significant options elsewhere."
Much nonsense has been written about how Hillary Clinton is "toughening up" Barack Obama so he'll be tough enough to withstand Republican attacks. Sorry, we don't need a president who is tough enough to withstand the lies of his opponents. We need a president who is tough enough to tell the truth to the American people. Any one of the candidates can answer the Red Phone at 3 a.m. in the White House bedroom. I'm voting for the one who can talk straight to the American people on national TV -- at 8 p.m. -- from the White House East Room.
Who will tell the people? We are not who we think we are. We are living on borrowed time and borrowed dimes. We still have all the potential for greatness, but only if we get back to work on our country.
I don't know if Barack Obama can lead that, but the notion that the idealism he has inspired in so many young people doesn't matter is dead wrong. "Of course, hope alone is not enough," says Tim Shriver, chairman of Special Olympics, "but it's not trivial. It's not trivial to inspire people to want to get up and do something with someone else."
It is especially not trivial now, because millions of Americans are dying to be enlisted -- enlisted to fix education, enlisted to research renewable energy, enlisted to repair our infrastructure, enlisted to help others. Look at the kids lining up to join Teach for America. They want our country to matter again. They want it to be about building wealth and dignity -- big profits and big purposes. When we just do one, we are less than the sum of our parts. When we do both, said Shriver, "no one can touch us."
I'm closing in on the end of my 4th year at Boston University, and it really is striking to me just how much a shift there has been in the attitudes of the kids coming into school now versus when I first arrived. Friedman is absolutely right: they desperately want to get to work on our country, and they cannot even begin to understand why the "adults" are so obsessed with so many irrelevant issues. The political will is there. What's been missing is the leadership. These kids want the truth about our problems, not poll tested spin and focus group crafted policies.
UPDATE: As if on cue, the next item in my RSS reader was James Surowiecki's latest effort for the New Yorker. An excerpt:
n the current atmosphere of economic tumult, the announcement that Toyota sold a hundred and sixty thousand more cars than General Motors in the first three months of this year might seem like a minor news item. But it may very well signal the end of one of the most remarkable runs in business history. For seventy-seven years, in good times and bad, G.M. has sold more cars annually than any other company in the world. But Toyota has long been the auto industry's most profitable and innovative firm. And this year it appears likely to become, finally, the industry's sales leader, too.
Calling Toyota an innovative company may, at first glance, seem a bit odd. Its vehicles are more liked than loved, and it is often attacked for being better at imitation than at invention. Fortune, which typically praises the company effusively, has labelled it "stodgy and bureaucratic." But if Toyota doesn't look like an innovative company it's only because our definition of innovation--cool new products and technological breakthroughs, by Steve Jobs-like visionaries--is far too narrow. Toyota's innovations, by contrast, have focussed on process rather than on product, on the factory floor rather than on the showroom. That has made those innovations hard to see. But it hasn't made them any less powerful.At the core of the company's success is the Toyota Production System, which took shape in the years after the Second World War, when Japan was literally rebuilding itself, and capital and equipment were hard to come by. A Toyota engineer named Taiichi Ohno turned necessity into virtue, coming up with a system to get as much as possible out of every part, every machine, and every worker. The principles were simple, even obvious--do away with waste, have parts arrive precisely when workers need them, fix problems as soon as they arise. And they weren't even entirely new--Ohno himself cited Henry Ford and American supermarkets as inspirations. But what Toyota has done, better than any other manufacturing company, is turn principle into practice. In some cases, it has done so with inventions, like the andon cord, which any worker can pull to stop the assembly line if he notices a problem, or kanban, a card system that allows workers to signal when new parts are needed. In other cases, it has done so by reorganizing factory floors and workspaces in order to allow for a freer and easier flow of parts and products. Most innovation focusses on what gets made. Toyota reinvented how things got made, which enabled it to build cars faster and with less labor than American companies.
But there's an enigma to the Toyota Production System: although the system has been widely copied, Toyota has kept its edge over its competitors. Toyota opens its facilities to tours, and even embarked on a joint venture with G.M. designed, in part, to help G.M. improve its own production system. Over the years, more than three thousand books and articles have analyzed how the company works, and things like andon systems are now common sights on factory floors. The diffusion of Toyota's concepts has had a real effect; the auto industry as a whole is far more productive than it used to be. So how has Toyota stayed ahead of the pack?
The answer has a lot to do with another distinctive element of Toyota's approach: defining innovation as an incremental process, in which the goal is not to make huge, sudden leaps but, rather, to make things better on a daily basis. (The principle is often known by its Japanese name, kaizen--continuous improvement.) Instead of trying to throw long touchdown passes, as it were, Toyota moves down the field by means of short and steady gains. And so it rejects the idea that innovation is the province of an elect few; instead, it's taken to be an everyday task for which everyone is responsible. According to Matthew E. May, the author of a book about the company called "The Elegant Solution," Toyota implements a million new ideas a year, and most of them come from ordinary workers. (Japanese companies get a hundred times as many suggestions from their workers as U.S. companies do.) Most of these ideas are small--making parts on a shelf easier to reach, say--and not all of them work. But cumulatively, every day, Toyota knows a little more, and does things a little better, than it did the day before.
The system doesn't necessarily preclude missteps--in 2006, Toyota ran into a series of quality problems--and it's possible that the focus on incremental innovation would be less well suited to businesses driven by large technological leaps. But, on the whole, the results are hard to argue with. They're also phenomenally difficult to duplicate. In part, this is because most companies are still organized in a very top-down manner, and have a hard time handing responsibility to front-line workers. But it's also because the fundamental ethos of kaizen--slow and steady improvement--runs counter to the way that most companies think about change. Corporations hope that the right concept will turn things around overnight. This is what you might call the crash-diet approach: starve yourself for a few days and you'll be thin for life. The Toyota approach is more like a regular, sustained diet--less immediately dramatic but, as everyone knows, much harder to sustain. In the nineteen-nineties, a McKinsey study of companies that had put quality-improvement programs in place found that two-thirds abandoned them as failures. Toyota's innovative methods may seem mundane, but their sheer relentlessness defeats many companies. That's why Toyota can afford to hide in plain sight: it knows the system is easy to understand but hard to follow.
A topic this complex really deserves a much longer post, but I'm pressed for time today so this will have to do.
Basic political economy says that there are a few different types of capitalist systems in the world today. Our model is the liberal markets model, an uncoordinated free for all that uses creative destruction to foster radical product innovation. In much of Europe and Asia the corporatist model prevails, a system that structures the rules of the game such that cooperation and coordination are much more prevalent throughout the economy. In corporatist systems, process innovation is the process by which most companies change and grow, a basic fact that Surowiecki's article does a fantastic job of highlighting.
Back in the late 1980s and early 1990s, most political economists had concluded that the liberal market model was superior, and the academic literature was filled with predictions that the Asian and European systems would gradually adapt to look more like us. By the early 2000s, however, many were beginning to doubt those predictions, all the radical innovation of the dot.com bubble notwithstanding. The cooperation produced by corporatist systems has some very real long-term advantages, many of which the liberal model cannot emulate, no matter how hard it tries.
What are the long term implications of all this? To be honest, no on really knows. One thing is clear, however: the superiority of the US model cannot and should not be assumed. It may be real, or it may have been an artifact of the unique historical circumstances of post-WWII twentieth century geopolitics. I guess we'll just have to wait and see...
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