Tuesday, March 30, 2010

What's a "Salient" Industry Today?

The business section of the NYT carried a report yesterday: Volvo was about to become a Chinese-owned company! Big shock or not a big shock? On a scale of 1-10, I'd say it barely rated a shrug.

After all, Jaguar is now part of the Indian Tata empire.

And the sale of IBM's computer business to China happened so long ago, nobody even remembers.

Not long ago autos and computers were considered "salient" industries. Salient because they represented so much more than just cars and computers. Cars were the touchstone of a nation's productive economy. If you had a thriving auto industry you also had rubber, steel, aluminum, glass. You had all of the components that made up a car--engines, batteries, even upholstered seats. A healthy auto industry was part and parcel of a healthy industrial economy. Which is why every nation that wanted to be globally competitive treated its "national champion" auto brand (or brands) as a salient industry.

When Japanese imports threatened Renault and Peugeot national champion brands in France, the French government stepped in. All of a sudden Japanese imports were stacked up on the docks at French ports. The explanation? More inspections were needed. All of a sudden the streets in front of dealership selling Japanese imports were being dug up, repaved, dug up and repaved again. The explanation? The streets needed repaving! It was only coincidence that they happened to be the streets where Japanese car dealerships were located.

Computers held the same elite status as the industry of the future. Computers were weapons in another form. It was imperative that the US dominate the race to the future; the US had to have the fastest super-computer, had to safeguard critical computer technology, had to guard against exporting computer technology that could fall into the wrong hands.

Computers and cars were salient industries because they were about more than computers and cars. They were about national security--national economic security (a term that seems to have disappeared from the national conversation lately--perhaps due for a serious comeback).

But today nobody cares who owns Volvo or Jaguar (or Hummer which was briefly set to be sold to the Chinese as well). Nobody cares if Lenovo makes IBM laptops.

So what is a salient industry today?

You could make a case for global finance--especially in light of the weapons of mass financial destruction unleashed on the world by Wall Street warriors. In this scenario the titans of Wall Street were playing the role of Brig. Gen Jack Ripper in "Dr. Strangelove." Financial bombs away!

But if finance is a salient industry, all the more reason for new and tight oversight of how it works, how it operates, what the rules are, what the regulations are.

You could also make a case for education--if we live in a knowledge economy, what is more salient than the educational performance of the people who live and work in this country? Here again we seem to be stuck in a bad movie--"Blackboard Jungle", perhaps.

Again if education is a salient industry, we need to muster a new national effort to fix the public schools, rethink "no child left behind," and take a systems approach to our failing national public education platform.

Money and schools. What else belongs on the list of salient industries? Renewable energy? I'd vote yes.

Other nominations? Let me know what you'd propose!

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