I  had a conversation with my Father the other day who was lamenting to  me the current economic situation: high unemployment, the plethora of inexpensive goods from China, and the hollowing out of our manufacturing base. To a certain extent, the American psyche appears to be in a collective malaise of self doubt and unclear about the path forward.

That does not need to be the case. I thought to myself:

• what is it that we need to do?
• what do we need to focus on?
• how do we rebuild the economy?

I assume that there are people at a higher paygrade than I who are mulling this over and doing something about it, but humor me for a moment as I elaborate on some options that might be considered from my lowly perch.

The Answer is in the Question

In the problem question they say, if the question is written properly, you will find the answer. Jim Collins wrote a great book on the best companies called “Good to Great” (well worth reading) which covers common elements to those companies, i.e. what they do well. In the book he talks about the hedgehog principle (read the book for the short story behind it and other examples); the short of the message is around three questions as indicated below: what are we deeply passionate about? what can we be best in the world at? what drives our economic engine (or what is there a market for)?

What are We Best in the World At?

The US is currently best at desiging and, at times, maufacturing and providing some of the most sophisticated products and services in the world that are cutting edge.

• Just look at our aerospace industry. Witness Boeing’s leading edge commercial aircraft designs that still dominate the world’s airways despite all of the State funding from European Governments into Airbus (EAD).
• Look at the satellite and space flight industry. We have sent more people and products into space than any other nation and consistently do so.
• Look at computer software and web services; we have the biggest titans on the planet in this industry such as Microsoft, Google, IBM, Oracle, Facebook, Amazon, Ebay, and many others. Much of software is outsourced to other coutries such as India, but name a major software company that is consistently developing new products and services at an exponential rate elsewhere in the world? SAP based in Germany? Old product, not too cutting edge anymore, slow growth. TCS (Tata Consulting Services), Wipro, and Infosys in India, the top three in sales there? Combined sales for the these three are no more than $5 Billion (US) which is the equivalent of Symantec (Yes, antivirus/firewall software), no. 7 on the list in the USA’s top software developers. They make up less than 1.5% of total global software development. Potential competitors, yes, titans, no.
• Medical procedures, devices, and pharmaceuticals; US is the tops in this area alongside the French, Swiss, and British. Of course we are also some of the biggest consumers with the largest healthcare spending per user worldwide (more on that later).
• Motion picture and entertainment. Here is where I need to slow down now. I have seen far too many BBC productions, think Millionaire (Who Wants to Be a….”), American Idol, and The Office (thanks Ricky Gervais, sorry about your Golden Globes performance), just to name a few, to say that we have the outright majority of creativity. We have also imported show ideas from the Netherlands, France and other countries. However, we are still by and large the world’s marketplace for major motion pictures and TV show rights. Ever visit a foreign country and turn on a prime time channel? I don’t know how many times a have viewed Don Johnson or David Hasselhoff speaking German or Spanish (and they speak rather fluently!). This of course pales in comparison to the gaming industry…
• The USA has 6.5 of the top 10 video game publishers worldwide, Japan 3, France 1.5 (Activision Blizzard is French owned by merger between Vivendi of France; HQ is in the US). This industry is expected to grow to $12.5 billion this year, expected to overtake the music industry soon (when was the last time you replayed that Fleetwood Mac album or Taylor Swift’s Speak Now; now, how about Angry Birds, Jewel, Halo Reach, Super Mario Brothers?!).
• Cutting edge new products: Apple’s Ipod, Iphone, Ipad, Microsoft’s Kinect (OK, they bought the original company), the Segway (perhaps not burning up the roads, but they are out there), Boeing 777, 787, and Amazon’s Kindle. There are many more, but on to my next point…
• How about Green technology? We rank second to China. No major surpise there. We currently invest abour half of what China does which means we have a lot of catching up to do. China just surpassed the US in carbon emissions and derives much of its electricity from Coal powered plants, but it will take a short period of time for them to change that with a control minded Government (and banks) that are will to put their money down on that bet. We need to refocus our efforts on green technologies and investments, which leads me to my next point….

The Hedgehog’s Path Forward

Instead of shooting in a number of different directions, we need to see where our future lies and what that looks like. Here are a handful of areas where we need to invest:

• Heavily in high speed rail and local transport; divert funds from highway contruction and repairs (didn’t all those suburbanites buy SUVs and four wheelers over the past 10 years; let them use those vehicles on the potholes). This will free up people from driving the miles we do, reduce air pollution (LA will thank us), and reduce the incidence of lung disease and ailments (asthma rates are huge in NYC).
• Heating and AC savings in homes and buildings; by investing money now we can save on fuel costs which reduces our dependency on foriegn oil and coal burning fuel electric plants.
• Broadband (mega) wired and wireless technologies; the FCC should, as a part of this, regulate the market and make the major cell companies standardize to a global cell technology that works on different devices and liberate us from this two year indentured servitude to their services. If we don’t  like the service, then we should be able to take our phone with us.
• Reform our educational system from top to bottom, from pre-K through end of life. Our educational system needs to be JEJIT(for)ME: just enough, just-in-time, and just for me. If we can do TIVO with TV, then we should be able to do this with education and professional development. See my post on the Khan Academy and others below.
• Public health and wellness, not just healthcare; this means looking at diet and exercise. Examining the roots of chronic and communicable diseases and addressing them. This also means a diet that relies on healthy organic foods, not the indstrustrial food chain. Walking , running, dancing, and movement play at work or school and greater recreation.

So in short we need to eat better, move more (exercise), reduce our carbon footprint by using energy more wisely through investing in our homes and in our transit systems, and teach ourselves, our children, and our friends better. No one guarantees a healthy economy and future. We need to guarantee that by our hard work in that direction. We can do it; we have done this before, and we need to do it now.