Newsweek Looks at the Future of Global Leadership, How America Can Stay Competitive: United States Has History of Worrying About Losing Its Edge ... Problem Now is We're Not Scared, Writes Zakaria

NEW YORK, June 4 -- Americans have replaced Britons atop the world, and we are now worried that history is happening to us, writes Newsweek International Editor Fareed Zakaria in an essay, part of a package on Global Leadership -- the latest installment of Newsweek's "Leadership for the 21st Century" series. History has arrived in the form of "three billion new capitalists," as Clyde Prestowitz's recent book puts it, people from countries like China, India and the former Soviet Union, which all once scorned the global market economy but are now enthusiastic and increasingly sophisticated participants in it. And it's not just writers like Prestowitz who are sounding alarms. Intel's co-founder Andy Grove is blunt: "America ... [is going] down the tubes," he tells Newsweek in the June 12 issue (on newsstands Monday, June 5), "and the worst part is nobody knows it. They're all in denial, patting themselves on the back as the Titanic heads for the iceberg full speed ahead."

(Photo: http://www.newscom.com/cgi-bin/prnh/20060604/NYSU013 )

The United States has a history of worrying that it is losing its edge. This is at least the fourth wave of such concerns since 1945. The concerns in each one of these previous cases was well founded, the projections intelligent. But the reason that none of the earlier scenarios came to pass is that the American system-flexible, resourceful and resilient-moved quickly to correct its mistakes and refocus its attention. Concerns about American decline ended up preventing it. America's problem right now is that it is not really that scared, Zakaria writes. The best evidence of this lack of fear is that no one is willing to talk about any kind of serious solutions that impose any pain on society.

Politicians talk a great deal about competitiveness and propose new programs and initiatives. But the proposals are small potatoes compared with, say, farm subsidies, and no one would ever suggest trimming the latter to dramatically increase spending on the sciences. The great competitive problems that the American economy faces would require strong and sometimes unpleasant medicine. Our entitlement programs are set to bankrupt the country, the health-care system is an expensive time bomb, our savings rate is zero, we are borrowing 80 percent of the world's savings and our national bill for litigation is now larger than for research and development. None of these problems is a deep-seated cultural mark of decay. They are products of government policy, writes Zakaria. Different policies could easily correct them. But taking such steps means doing something that is hard and unpopular.

Elsewhere in the Global Leadership package:
* North Carolina is transforming its high schools from a model created in
the industrial age to a system that makes sense in the 21st century,
reports Senior Editor Barbara Kantrowitz. The plan is to create a
network of "early college" high schools that will eventually give every
student in the state the opportunity to get two years of college by the
time they graduate. The state is also pushing to create new small,
career-themed schools emphasizing subjects like engineering, science or
business-within larger high schools. The goal of both efforts is to make
sure all students graduate with the skills they need to succeed in
college or the workplace. And given that in the past decade, virtually
every county in North Carolina has felt the impact of global
competition, it's a critical mission.
* Augmentum, a modest Shanghai startup with plans to grow to near-
Microsoft-size within a decade-and perhaps become a template for the
next stage of U.S.-China competition-is going after the great jobs,
reports Senior Editor Steven Levy. The company undertakes software
projects for American companies, sophisticated tasks that were once
considered unthinkable to be relegated to an offshore company. "This is
a historical moment," says the company's founder Leonard Liu. "You know,
the U.S. had been the only chef in the kitchen since the second world
war. Now there is a second chef who needs to be dealt with."
* To get a sense of how the rest of the world judges America's prospects,
Newsweek spoke to several of the World Economic Forum's Young Global
Leaders, a group of several hundred decision makers in fields ranging
from politics to technology, business to entertainment. When asked what
the U.S. needs to do to maintain its leadership position, Jack Ma, CEO
of China's largest e-commerce company, Alibaba.com, replied: "The risk
is that Americans know the outside world much less than people outside
know the U.S. Americans believe 'this is the way, we are the world.'
When I watch TV interviews with [Americans] talking about China, I say,
'My God, they know nothing! They're just pretending to know everything.'
That will seriously damage U.S. leadership in the future, because people
will say, 'You don't know me, but you're thinking about leading me.'"
* Unsurprisingly, we are seeing not just the ever-faster advance of
globalization but of globalization's discontents too, writes Britain's
chancellor of the Exchequer Gordon Brown in a guest essay. Protectionist
forces are on the rise again: "economic patriotism" in Europe, populism
in Latin America, anti-immigrant feeling and sullen resistance to change
on just about every continent. Today an ambitious world-trade deal seems
more elusive than ever, with rich-country protectionism criticized for
standing in the way of poor countries' development. The paradox of
today's globalization is that even its winners feel themselves to be
losers, Brown writes.

(Read entire Global Leadership package at www.Newsweek.com. Click "Pressroom"

for news releases.)

Can the U.S. Compete?: http://www.msnbc.msn.com/id/13123358/site/newsweek/

Education for a New Century:
http://www.msnbc.msn.com/id/13122863/site/newsweek/
15 Ideas to Recharge America:
http://www.msnbc.msn.com/id/13117432/site/newsweek/
Shanghai Starts Up: http://www.msnbc.msn.com/id/13121969/site/newsweek/
Global Leadership Panel:
http://www.msnbc.msn.com/id/13117440/site/newsweek/
Gordon Brown: How to Embrace Change:
http://www.msnbc.msn.com/id/13121948/site/newsweek/

Data source: Newsweek