Out of a Bust, a Prescription
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Two key facts (Engardio, 23):
- The assumption that innovation and productivity alone will sustain the American standard of living may prove erroneous.
- Real incomes have declined over the last decade, even as productivity increased.
Two interesting solutions:
- Look for more state - and international support for - investment in production capacity in growth industries like autos (yes, there is growth coming), nanotech, and renewable energy.
- That support will likely flow to companies in GDP producing industries: you've got to make something to survive.
Two interesting opportunities:
- Position your company as a problem-solver in industries that will support high-paying, high technology jobs that create wealth.
- Use that positioning to team with the government in high capitalization industries. Look for more government regulation in financial industries and manufacturing industries. If the government is going to provide subsidies, they are going to require new efficiencies that increase productivity - and GDP.
Reference
Engardio, Pete. Forget Adam Smith. Whatever Works. BusinessWeek. 27 October 2008. 22. http://www.businessweek.com/magazine/content/08_43/b4105022816429.htm