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The U.S.'s Strength Is Leadership: The Innovators

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK ( TheStreet) -- At the recent Clinton Global Initiative, Andrew Liveris, Dow Chemical's (DOW) CEO cautioned that America will lose its technology leadership position if it does not produce more engineers.

We have heard such warning s for decades now, but still today, eight out of 10 of the world's largest tech companies (by market cap) and nine out of nine of Fortune's Most Admired Global 500 technology companies are in the U.S.

How can this be? It's because the U.S. does not compete on engineering capabilities; it competes on leadership and innovation. A country succeeds when it understands and leverages its unique competitive advantage.

Switzerland is a country that does this. It's strength is global management. A landlocked country with fewer people than the greater Houston area and few natural resources, Switzerland maintains powerful global positions in insurance, banking, watches, pharmaceuticals and chemicals. The country's extraordinary global management capabilities enable it to locate units in talent-rich locations.

By contrast, Japan's competitive advantage is high-quality manufacturing. Quality is deeply ingrained in the Japanese culture. In many high-rise apartment buildings in downtown Tokyo, building maintenance will use a rug shampoo machine to "shampoo" the parking garage floor. No one can beat Japan in quality.

The U.S.'s competitive advantage is leadership and innovation.

Let's focus on leadership. Here are the facts: All of the top 20 companies in Fortune's Most Admired Global Companies are American. And American companies dominate global service industries -- managing services is a more difficult leadership task than managing manufacturing.

Maybe the U.S. should strengthen its strengths by producing better and more global leaders. The U.S. offers its youth many leadership opportunities: Boy and Girl Scouts, 4H, student council, school club leadership, sports teams, etc. But for many people, leadership opportunities dry up once they leave high school.

Clayton Christensen, a Harvard Business School professor and an authority on innovation, recently co-authored a book with Henry Eyring, a senior administrator at Brigham Young University - Idaho.

Their book, The Innovative University, arrives at a time when many parents are no longer able to pay exorbitant tuitions and states are cutting back funding. Education, one of the most change-resistant professions, needs to change.
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