America's Emerging Economic Reincarnation

Everyone is familiar with the blockbuster movie Avatar, set in the 22nd century, when genetically engineered creatures inhabited by humans are mining precious metals on a distant planet. Most are not aware of the meaning of the term "avatar" which derives from the Indian Sanskrit language and literally translates into "new incarnation." The term could be used to describe how the United States is positioning itself today for the second phase of globalization that will lead to new American jobs, economic power and worldwide capabilities.

Four global forces, as they are leveraged and exploited by American business and political leaders, will help the United States recreate itself and revive into a 21st century economic powerhouse by 2025.

First, an historic economic migration is occurring in the four great rapidly developing BRIC countries (Brazil, Russia, India, China), moving people from poverty to the middle class status (or a version of it). Tens of millions of Chinese have already been elevated from desperately poor conditions to a greatly improved economic status. In India, the McKinsey Group estimates that the middle class could grow to 600 million people, a number equal to two Americas. The numbers of potential "climbers" or mobile consumers for other Asian economies in Indonesia, the Philippines, and Vietnam are significant. Already, the Obama Administration has adroitly rebalanced to a "Look East" foreign policy and export strategy. In light of the diversity of our economy and technologies, the purchasing power and investment opportunities for this new Asian middle class will include any number of things "made in America."

Second, labor, transportation and energy costs are rapidly rising in Asia, shifting opportunities and jobs back home. Twenty years ago, it was highly profitable for businesses to decide, based on bottom line numbers and wages, to locate in "cheap" markets. Since 2000, labor costs in China have increased by over 20 percent per year. When you add escalating oil prices to ship goods, transportation costs and growing concerns about the "quality of the products," many U.S. companies are recalibrating this equation and now favoring "insourcing" jobs back home. Recent examples include G.E. locating a new plant in Louisville; Otis Elevator Co. moving its production from its factory in Mexico to a new plant in South Carolina; Canton-based Suarez Corp. moved its entire production of EdenPure portable heaters, from China to Ohio creating more than 400 jobs.

As President Obama and his administration have recognized, more investment in the United States creates more American jobs and helps to rebuild our economy. That's why last year he launched the SelectUSA initiative, creating the first comprehensive federal program to promote and facilitate investment throughout the United States. More can be done on regulatory reform, manufacturing incentives, worker training programs and business/state partnerships to attract more business.

Third, the shift of manufacturing back to the U.S. will increase exports and multiply additional job creation, and shift trade balances back in our favor. President Obama has launched a National Export Initiative, seeking to double our exports to new markets over five years. According to the Department of Commerce, in the two years since the initiative was announced, U.S. exports are up 34% and U.S. jobs supported by exports increased by 1.2 million. In fact, our exports to India grew nearly 32% in 2011 compared to 2009. If this momentum is sustained, the overall rate of growth will meet the target of doubling exports, and significantly increase the percent of jobs in the manufacturing sector of the GDP.

We certainly have the room to grow. Today, manufacturing is 20% of the jobs in Germany and more than 30% in China, but dropped to 9% in the United States over the past decade. As the American middle class helps build products for the world's middle class, the U.S. could move up to 15% or 16% of its jobs in manufacturing, a win-win scenario. When we leverage these enumerated exporting opportunities with the huge discoveries of new oil and shale deposits in the United States, we could become a net exporter of energy.

Fourth, there is yet another emerging technology revolution brewing in America. John Steele Gordon wrote in his book An Empire of Wealth published in 2004: "Virtually every major development in technology in the 20th century originated in the United States, and as the products of these technologies traveled around the globe, the result was a subtle, peaceful and pervasive spread of American culture and perspective." Here, history can repeat itself.

According to physicist Mark Mills of Forbes and Julio Ottino, dean of the Engineering and Applied Sciences School at Northwestern University, the mother of all technological transformations is percolating in America through "big data, smart manufacturing, and the wireless revolution." They state that the emergence of the "cloud" will allow meta-data analysis and number crunching in social media and medical revolutions "for unimaginable services and businesses." A new era of meta-materials combined with 3D printing will produce parts for high-value applications, for hip joints, teeth and aircraft parts. The unfolding communications revolution will allow billions of people to connect wirelessly and will rival the change as big as those following "the dawn of telegraph and telephony" in the 1800s.

The progress and miracles of the 19th century -- telegraphs, newspapers, running water, lighting, railroads and heating -- combined to create an environment of optimism and a belief in the American dream for the next century of progress. Now, new technological, demographic and global opportunities are emerging again. Seizing the moment, pulling together, and building anew are endemic to the American spirit. Not only is the United States beginning to rise again from a great economic challenge, it is redesigning the "Made in U.S.A." label. America is "back to the future"!