Is America Losing its Competitive Edge?

http://www.michaelpage.com.sg

In his State of the Union address last week President Obama told America that “the nation that leads the clean energy economy will be the nation that leads the global economy.” But will the US be that nation? There’s been a lot of hand wringing on the issue with the NY Times running a front page piece on how China is winning the clean energy race, while bloggers such as Alexandra Levit have fretted over whether America is losing it’s competitive edge generally due to a lack of adequate education and training.

At least one expert is willing to take on the Gray Lady and argue for optimism about the future of green tech in America, however. Robert Salomon, a professor at NYU’s Stern School of Business, calls some of the paper’s assertions “hogwash” and argues that while China manufactures more, “most of the technological advances in alternative energy (the knowledge creation portion of the value chain) are a product of the West.”

As to the Times’ worry that “the West may someday trade its dependence on oil from the Mideast for a reliance on solar panels, wind turbines and other gear manufactured in China,” Salomon retorts:

Nonsense. To the extent that China is reliant on the knowledge/technology developed in the West to manufacture equipment, it��s good for both sides. Western alternative energy firms have a market in which to sell their valuable knowledge and Chinese producers have a market to sell the output from the factories that use those productive knowledge inputs. This is how international trade works. In fact, without demand from the Chinese market, development costs for firms in the West would be much, much higher. This allows our alternative energy firms not only to prosper, but to create jobs in the nascent sector.

To the non-expert blogger this seems like a pretty standard defense of free trade, and one that I imagine would come as cold comfort to those who have heard the rhetoric before, still lost jobs in manufacturing and lack the skills to participate in “the knowledge creation portion of the value chain.” But that doesn’t mean anyone has a better idea.

Is it feasible for America to expect to manufacture green tech at home if they’re unwilling to work as hard as the Chinese for as little as the Chinese? Is there really an alternative to tackling the issue Levit raises and ensure more Americans get a better education?