The cover article of the Oct. 5, 2009 issue of Time is entitled, “The Tragedy of Detroit: How a great city fell—and how it can rise again.” In simple terms, protectionism engineered by a pact between the American auto makers and the United Auto Workers reduced incentives for the Big Three to innovate while foreign competitors “siphoned away their market share.”
I got the sense that foreign auto makers have out-innovated us when I drove, of all brands, a Citroen rental car while on vacation in France with my family this past June. To me, Citroens were embedded in my memory from the 1980s as those quirky-looking French cars. On this trip, we rented a Citroen Picasso, a diesel-powered four-door sedan that kind of looks like an oversized Toyota Prius. The Picasso was roomy, easy to drive and certainly more refined than any GM car I have rented in the past few years.
On a recent flight from Chicago to San Francisco, I sat next to an architect from China who lives in Hong Kong. A graduate of the University of California at Berkeley, she is very familiar with American culture and visits the U.S. often. She said that each time she comes back to the U.S., it seems like there is less energy, less willingness to work hard and innovate.
We certainly don’t have as many people as China, and I would also say that we don’t have as many really smart people, so in order for us to compete against countries such as China, we need to be clever and creatively bring together various synergistic parts of our society to spur innovation. In Silicon Valley, the confluence of entrepreneurs, technologists and financiers (venture capitalists, investment bankers and investors) continues as a fairly unique business alchemy. While few would accuse this triad of altruism, their combined efforts do benefit American society by providing solutions to problems, enhancing American competitiveness, and creating jobs.