In a brave new world, failure brings success

ON EXCELLENCE

August 23, 1993|By TOM PETERS

"Madonna runs a positive trade balance," I began an informal briefing for congresswomen and congressmen. "Two-thirds of her revenue comes from outside the United States. Welcome to the new, soft economy -- every bit as potent as the old, hard one." Twenty-nine more points followed:

All nations are pursuing the same economic strategy. The global battle cry is "value-added, knowledge-based, export-led economy." It's going to be one heck of a scrap.

We deal from strength. Ninety-four percent of Americans work in industries that are more productive than Japan's.

The much-maligned service sector is a national treasure. Our global lead in services productivity is stunning. Our positive services trade balance is enormous and growing.

It's Asia, stupid. Sometimes I think we've ceded Asia's markets to the Japanese. Go (farther) West, young women!

This is an epochal change. If you're not confused, you're not in touch.

Churn is success. Economist Joseph Schumpeter called it "creative destruction." Progress is achieved through elimination (mostly inferior jobs) and creation (mostly valuable jobs).

Failure is our secret weapon. "Failure is Silicon Valley's greatest strength," wrote journalist Mike Malone. No failure, no progress.

Big-company job losses are just beginning. Corporate crash diets are painful but healthy.

Midsize growth companies are our salvation. They are creating jobs (mostly good) and have become export stars.

Immigration is a boon. Immigrant energy is spurring Silicon Valley, Miami and Los Angeles as it spurred the East and Midwest a century ago.

The "virtual corporation" is real. Disembodied companies, constantly changing shape and employing many contract and temporary workers, are a must in a volatile marketplace.

Brains are in. Heavy lifting is out. That's as true in manufacturing as in banking.

Education R Us. It had better be: The wage gap between the college grad and the high-school dropout is enormous and growing. Learning is a lifelong affair. Close the books when you finish formal schooling, and your future is dim.

Community colleges are an unsung asset. A German-model apprentice system is not the answer to U.S. skills training. Beef up our potent community colleges instead.

Education needs overhauling. Forget the Japanese approach. We need to foster imagination, not rote-learning. Our widest lead over global competitors lies on research-university campuses. Nourish them.

Jobs and careers are changing. Lifetime jobs are dead. British management expert Charles Handy says 10 or 12 jobs and two or three different careers will be the norm.

Kiss the nanny state goodbye. The world does not owe us a living. What happened to the American spirit of self-reliance?

Benefit packages must mimic new job realities. We should encourage worker mobility. Part of the answer: pensions, training credits and health-care benefits retained by individuals, not controlled by corporations.

Research and development is key. If knowledge is economic power, then R&D is the engine of progress -- for Nike and Time Warner, as well as Intel and Apple Computer.

High-tech can take care of itself. Heed pioneer venture capitalist Don Valentine: "To Washington I say, please do not help us. The world of technology is complex, fast-changing, unstructured, and thrives best when individuals are left alone to be different, creative and disobedient."

Tomorrow's information-highway system is more important than yesterday's interstate-highway system. (That doesn't mean the government should build it.)

Biotechnology, which may become bigger than computers, needs friends. Right now, we're in the catbird's seat: Don't let health care reform throw out the baby with the bathwater.

There's no place to hide. Want a brighter future for your children? Embrace free trade. NAFTA will cause dislocation, but stimulate a net increase in better-paying jobs. Besides, free trade is essential to global political stability.

Investing offshore means more jobs at home. A solid base overseas is the surest route to market (and export) development. The world is more stable and prosperous because of the special Japanese-American partnership. Don't forget that.

If fear leads to loathing, we lose. Beware name calling (immigrants, trading partners) that makes us turn inward and mean-spirited.

We must reinvent government. The world economy demands worker and corporate flexibility. To help rather than hinder, government must also become agile.

That ought to keep 'em all busy for a while!

(Tom Peters' column is distributed by the Tribune Media Services Inc., 720 N. Orange Ave., Orlando, Fla. 32801; (407) 420-8200).

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