Turner argues that nations seem most open to economic innovation when they feel threatened. In the late 1970s the United States experienced this: slipping competitive position compared to Japan convinced policy-makers that strategic adjustments to compete were necessary. Today many in the United States again feel threatened by international competition. The edge the U.S. achieved through innovation policy changes in the 1980s and early 1990s has largely disappeared. Other nations have adopted, and in some cases improved upon, most of these policies. The U.S. is now experiencing record trade deficits and budget deficits and international competition is fierce. Once again, key American companies are on the ropes.
