It hasn’t been too hard to detect a note of schadenfreude in reporting on global finance recently. For scions of the Left, the irony of emergency nationalisation measures at the largest Western capitalist states has afforded rich pickings. And the barely submerged contempt and bewilderment at the machinations of bankers has finally surfaced: even if we never understood how they made their millions, at least it turned out that they didn’t know what they were doing either.
A sideshow to this bonfire of the vanities has been the ugly anti-Americanism displayed as US banks and lenders have taken a beating. This has led many watchers to speculate that this is the beginning of the end as a superpower as globalisation finally catches up with the most powerful economy of recent times. If this is so then leadership in technology may be the last bastion to crumble.
Whatever you think of the US, it has played a dominant role in the building of the technology economy. Companies like Microsoft, IBM, HP, Cisco, Dell and Oracle have provided the underlying infrastructure for companies across the world and continue to underpin new developments in biosciences, medicine, energy and every other sector you can name.
Even today, the new companies that are challenging this old guard are predominantly American: think of Google, Yahoo, Red Hat and Salesforce.com.
It is certainly true to say that competition is changing and that eastern European, Chinese, Indian, Korean and Taiwanese companies in particular are emerging to challenge the hegemony. Companies like Nokia, Samsung, Lenovo, Asustek, Acer, Infosys, Wipro, Parallels, Kaspersky Labs are redrawing the map provide very welcome competition to the US, Japan and Germany. In some sectors, such as mobile handsets, the US can even be said to be receiving a drubbing (although even there Motorola remains a major competitor) but mostly it dominates IT. In servers, all four of the biggest makers by revenue are American; the biggest two PC makers are American despite bloodbath pricing; IBM, HP and Accenture remain the largest IT services providers; and, in arguably the most important category of all, six of the seven largest enterprise software makers are American.
Why is this? American firms benefit from having a huge local market to serve but also from a large and deep talent pool and go-getting culture that rewards risk-takers and understands what it takes to make a successful technology company. The US still has the best model for encouraging startup companies and for allowing those companies to continue their growth or make profitable exits.
Many of us are disturbed by the valuations of some of these companies, by the short-termism apparently encouraged by the way stock markets are configured and firms judged, and by the staggering personal wealth individuals are able to accrue. However, nobody should seriously doubt what these companies have provided to the enterprises and individuals they serve, nor that - albeit in a rough and ready way - the system ensures the demotion of underperforming companies and the advance of outperformers.
Besides, as a nation of immigrants, the US understands very well that it has no entitlement to always being the kingpin of IT, hence the near hysteria of tech CEOs demanding access to more foreign visas and the desperate push to improve education standards. The world is changing very quickly at the moment but the US is top dog in the technology economy and will take some shifting.