Our View: No nation an island in global economy

The Spirit of ‘76 and what it wrought for this nation and the free world deserves to be celebrated this July 4th weekend. So bring on the parades, fireworks and backyard barbecues in praise of independence.

Another word — interdependence — is worthy of consideration this holiday weekend. Today’s world demands that nations and states such as Georgia simultaneously compete and collaborate across a global field. These often-noisy skirmishes continue through economic times both good and bad.

That silence you hear about now, though, may be the sound of the smartest nations and states turning inward to plot strategies that will carry them to the next level of prosperity once the storm tides of global recession calm down. And there’s little doubt that the world’s economic landscape will look different once recovery gains traction.

Ken Stewart, commissioner of the Georgia Department of Economic Development, says “Our independence is dependent on our interdependence.” That’s well put and true. Competing in this emerging economic realm will require next-level thinking on the part of governments, businesses and academia.

Georgia and the Southeast have gotten a nice head start, thanks to a combination of planning, actions taken and even geography.

Georgia’s an attractive state for investment, thanks to our relatively low costs of living and doing business. An abundance of research universities and other academic institutions helps, too. Two deep-water ports and a location within two days’ ground travel of most of the U.S. facilitates both imports and exports. Hartsfield-Jackson International Airport puts the world within hours of businesspeople.

Georgia’s efforts at the state and local levels have paid off in recruiting companies like Kia Motors to LaGrange and NCR Corp. to Gwinnett County. And goods worth $27.5 billion were exported through Georgia ports last year.

There’s more that can be done, though — in Georgia, in the Southeast and in the nation’s capital.

Consider this intriguing thesis. Manufacturing in the U.S., long thought by many to be a stagnant holdover from the Industrial Age, might well make a comeback of sorts. Here’s why. Thanks to a deep recession’s pounding, as a nation we’ve fundamentally altered our buy-now-pay-later shopping habits. We’ve even become a country of savers in recent months, abandoning, at least for now, a savings rate that had reached negative numbers.

Saving more means spending less. That means less consumer demand in an economy largely driven by the chirping of cash registers. As people purchase fewer goods and services, imports have fallen off. That lowers trade imbalances, but the U.S. is still borrowing heavily outside our borders. Thanks to global currency gyrations, that can make imported goods more expensive.

Costlier goods could mean that, in years ahead, we manufacture more items within our borders, says Clyde Prestowitz, founder and president of The Economic Strategy Institute in Washington. We’d add that, from a jobs and investment standpoint, it matters little where these new factories are owned. That’s especially true in Georgia, which has seen good success in attracting foreign-owned plants.

While states should aggressively pursue economic development, there are limits on what they can do alone.

Prestowitz is correct in thinking that governors should be knocking hard on Washington’s doors for help in enacting national policies that encourage new types of economic activities. Even better, this type of development assistance would likely not involve mega-bailouts of the sort currently popular in D.C.

In the case of manufacturing, Prestowitz says a lead-off national question is “What exactly is it we’re going to make?” Next come questions of how to attract and align the necessary investments in physical assets and work forces that could make such a renaissance a reality, with real jobs to show for it.

An article in the latest Harvard Business Review suggests that the federal government’s a natural for this facilitator role, bringing together public, academic and private interests for a greater, quantifiable good. It’s been done before, with the partnership that created the Internet’s framework being a prime example. Government as proactive intermediary should be a lot less expensive to taxpayers than its acting as savior of flailing business sectors.

Until states can get Washington’s ear, Georgia should keep our doors open to the world in the search for economic development. Commissioner Stewart describes Georgia’s “stickiness,” meaning people and businesses that locate here tend to stick around. “It’s that reputation that will help us grow as a world capital,” he said.

Here’s to even more stickiness in the Peach State.

Andre Jackson, for the Editorial Board