Competitiveness is back on the Congressional agenda for the first time since the Japanese juggernaut of the 1980s produced a decade of soul-searching. Even in an extremely tight budget environment, bipartisan consensus is emerging in favour of priming the pump of US innovation through increased funding for basic research and development and scholarships in maths, engineering and the sciences. But top-down federal spending alone will not win the race for global leadership in science and technology. It will take a hands-on commitment from all involved in the US innovation enterprise to build world-class talent from the bottom up.

In contrast to the years when Japan was America's defining economic concern, today's competitive challenges have more to do with the relentless logic of globalisation than the policies and practices of any particular country. First, trade barriers do not loom as large as they once did. Aggressive market opening was the centrepiece of the US response to Japan in the 1980s and early 1990s. Since then, cross-border flows of goods, services and foreign direct investment have surged as much of the world has adopted more open, market-based economic policies. Today's core challenge does not stem from lack of market access, but rather from the virtually unlimited availability of well-trained, low-cost knowledge workers outside the US.