Thu, Sep 04, 2008

Business

Saturday Reader

Rekindle U.S. entrepreneurship to head off China

By Cecil Johnson
McClatchy Newspapers
Tucson, Arizona | Published: 10.14.2006
"In China's Shadow: The Crisis of American Entrepreneurship" by Reed Hundt; Yale University Press ($26)
To counter the potentially nightmarish consequences to America of China's new great economic surge forward, this country must move resolutely and creatively to reinvigorate the entrepreneurial spirit that sustains the threatened American dream.
Those are not the exact words used by Reed Hundt, a management consultant and former member of the Federal Communications Commission, in his insightful new book, "In China's Shadow." But they encapsulate the essence of his well-written, soundly reasoned and impeccably documented thesis.
"The only adequate response to rising Asia lies in the cultural reform that will vastly increase entrepreneurship," Hundt writes. "Leaders need to encourage broader (more markets) and deeper (more entrepreneurs) new initiatives without knowing what specific results will follow. They must renew focus on architectural changes that support the culture of entrepreneurship."
Such enhanced support for a culture of entrepreneurship, Hundt maintains, is needed to trigger the creation of enough startup technological companies in more markets to meet the China challenge.
Unlike many among the plethora of new books about the China challenge, "In China's Shadow" focuses more upon what is happening in this country that is putting it in jeopardy of being overshadowed by the rising economic dragon than it does upon what's going on in China. Hundt does, however, recount enough Chinese history and provide enough analysis of the economic and political state of affairs in China to provide a comparative context for his recommendations for what America needs to be doing.
Education ranks among the highest priorities on Hundt's list of reforms needed to enable the United States to avoid being overshadowed by China. He calls for major reforms in teaching beginning at the elementary level and for subsidization of education at the college and graduate-school levels to make it possible for the country to make adequate use of its intellectual resources.
Hundt criticizes the Bush administration for failing to adequately fund No Child Left Behind, attacking teachers unions, pandering to the religious right's educational agenda and neglecting advanced teaching methodologies.
"Education has produced an undereducated work force in large part because of unsound methods, not because of teachers' unions or Charles Darwin," he writes.
"Although teachers and courses use new technology to ever greater effect, hardly any schooling at any level employs individualized testing and large databases in order to develop specialized teaching."
Decrying the emphasis on standardized testing, Hunt maintains that every student should be tested for learning style and taught in a manner best suited to that student.
"Businesses seek individualized marketing. Communications firms track individual locations. Politicians appeal to individual tastes and biases," he writes. "Using one method to teach all students is archaic, cruel, and contrary to the best economic interests of the society."
The overriding concern that pervades "In China's Shadow" is not as much the rapidly closing gap between the size of the United States' economy and China's as it is the expanding gap between incomes of rich and low-income Americans.
Unless that problem is solved, in Hundt's view, America will not be able to compete effectively in the global marketplace.
"In China's Shadow" would be an important book any time. But it is particularly timely now because of the November elections.