The Conceptual Economy

Competitiveness

December 2006 / January 2007 By: Deborah Wince-Smith Volume 4 Number 6

Print this Article

E-mail this Article

The Council on Competitiveness just celebrated its 20th anniversary with the publication of its economic benchmarking report called Competitiveness Index: Where America Stands. The Index spotlights obvious and less obvious changes in the global economy and their powerful impact on America and Americans. [A summary of the findings begins on the opposite page.] The 2006 Index is unique because it evaluates two-decades of economic data, and offers the first in-depth assessment of the American competitiveness landscape since the terrorist attacks of September 11, 2001.

Clearly, America stands at the dawn of a conceptual economy in which insight, imagination and ingenuity determine competitive advantage and value creation. To succeed in this hyper-competitive, fast-paced global economy, we cannot, nor should we want to, compete on low wages, commodity products, standard services and routine science and technology development.

As other nations build sophisticated technical capabilities, excellence in science and technology alone will not ensure success. Lower costs and improving quality will not answer the new competitive realities either. Today, competitive pricing and high quality are merely the baseline for entry into global markets.

The United States must focus on its strengths—€”on what it means to be American.
We must innovate and embrace the opportunities of the rapidly emerging, high-value conceptual economy. It is increasingly clear that the most important competition is being fought in the arena of ideas, learning and delivering new kinds of value to the marketplace. Looking back at the tremendous growth of America's gross domestic product over the past half century, information and ideas have been equally, if not more, important than materials and manpower to sustaining America's economy.

The information age of new ideas and new technologies is no longer an exclusive club guaranteeing economic leadership and personal prosperity. Access to global information and, increasingly, technology are commodities in today's world. As a result, those who have a great deal of information and technology, or know how to manage it, do not necessarily achieve competitive advantage. Rather, rewards go to those who know what to do with knowledge, information and technology once they get it. This new system of wealth favors judgment, intuition, creativity and insight.

In the conceptual economy, our success will be measured by our ability to transform industries, reshape markets old and new, stay on the leading-edge of technology creation, and fuse diverse knowledge, information and technology.
This new global economy will be much different than the industrial economy of the 20th century, or even the information economy of the past two decades. The conceptual economy will favor nations that reach globally for markets, and those who embrace different cultures and absorb their diversity of ideas into the innovation process. It will be fueled by the fusion of different technical and creative fields, and thrive on scholarship, creativity, artistry and leading-edge thinking. These concepts are America's strengths. These concepts are our competitive advantage. These concepts are uniquely American—€”for now.

Deborah Wince-Smith is president of the Council on Competitiveness.