Today’s Le Défi Américain

On the plane back from Russia to Boston I got to thinking about Jean-Jacques Servan-Schreiber, the French journalist who wrote Le Défi Américain (The American Challenge) in 1967. Incredibly for a European intellectual, he argued persuasively that the U.S. and Europe were engaged in a furtive economic battle in which Europe was completely outclassed by American on all fronts -- management techniques, technologies, and R&D capacity -- and on the verge of being set back permanently and for a sustained period of time.

Forty years later, in 2007, there is a new American challenge: Loss of geopolitical and economic leadership due to war in Iraq, loss of moral high ground, the impact of the dollar-trade-deficit syndrome, and other economic policies. Also, resisting some of the economic and productivity benefits described by Thomas Friedman in The World is Flat is retarding America's ability to remain competitive. Open Source is a very good example. As an extension, ODF (the Open Document Format) is another.

But the emergence of BRIC, and especially China, goes beyond the factors discussed in The World is Flat. It has something to do with America’s loss of power and capabilities. The competition has managed to learn from the teacher, and the student is now more capable and getting stronger with each passing day.

How does this affect American business' competitive position? How does this affect non-U.S. multinationals?

The beginning chapter of the economic and geopolitical history of the 21^st century is being written right before our eyes. No one knows how the book will end, but fewer people around the world are hoping American will be the main character.