American Business: A Two-Minute Warning.

From history we find that leadership and world dominance tend to cause complacency. Leaders overlook the relative growth rates of challengers, the changes are so gradual that leaders have difficulty sensing the crisis, and their relative size gives them a false sense of security.History also teaches us that the challengers to world leadership have enormous drive that more than compensates for a lack of re-sources. They stress education, and they all copy and improve upon the ideas and technology of the leader. Improved quality and cus-tomer focus are key strategies, and they use trade barriers to protect their "infant" industries.The world is fast becoming a global economy, not only in manu-facturing, but in money and ideas. And, the long-term competitive forces are not coming from Europe or South America, but from the Pacific Basin, which will be the center of the global economy in the 21st century. Within that arena, Japan is dominant, with the greatest overall economic strength and technological skills, and has dramat-ically outperformed all developing nations in productivity over the past three decades. Nonetheless, the Japanese are not invincible, flawless, or innocent, nor should they be blamed for America's economic problems. It is crucial that we understand as much as possible about the myths, the strengths, and weaknesses of Japanese competitiveness.