Alert reader Alon Levy responded to my question about industries where the US is still on top:

Right now, I’d say the number one answer is semiconductors. The semiconductor/hi-tech industry is powering the Bay Area and Dallas. In addition, several Midwestern cities – Pittsburgh, Indianapolis, St. Louis – are trying to develop strong health care and biotech industries.

Usually, the objection to these industries is that they’re highly specialized, and require much more education than most Americans have— at least, that’s the main objection I’ve encountered. The answer is that as late as the 1940s, the same could be said about the auto industry: it produced a very specialized item, and required its workers to have completed high schools, which at the time most Americans hadn’t. In fact, today’s auto populism has a lot of parallels with the farm populism of William Jennings Bryan.

I think it makes sense in general that our continuing advantage will be in high-tech and other things that require good education; and the nice thing about this analysis is that it comes with a policy prescription: focus on education.  We already have a formidable university system… the problem is in primary and secondary education, where we lag most industrial countries and many non-industrial ones. 

That Malcolm Gladwell has a New Yorker article pointing out the huge difference between good and bad teachers: one finding is that a good teacher can advance students 1.5 years in a class year; bad teachers, just 0.5 years.  So, we should hire good teachers instead of bad ones.  But, as he points out, almost nothing predicts teaching excellence— especially not the teacher’s own education level.

My worry about tossing the American auto industry is that transportation technology seems like it’s an industry that Americans should be leading in. It’s hard to imagine Detroit doing the leading, to be sure.  But transplanted Japanese and German factories aren’t going to do it either.