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The vital role of entrepreneurs and tech in the US economy

In this season when we hasten to bail out weak entities that are sinking, we need to keep in mind where the strength in our economy comes from. Trade patterns reveal competitive strength and weakness.  While US trade balance overall is negative, the tech industry is the sector that shines.

The following analysis, from The Economist using OECD data, sums it up.

High and mid-high tech industries generate a net surplus for the US equal to 10% of total manufactured goods trade.  Low and mid-low tech goods create a deficit of roughly equal magnitude.  China is just about the mirror image of this – using a convex mirror that makes everything bigger.  ;-)

High tech (including life sciences and medical) is one of the strongest parts of our economy.  It supports a lot of the rest.  This is what the picture is telling us.  And high tech is the part of our economy where entrepreneurs play a large and special role.  Much of the industry can be traced to the efforts of entrepreneurs, much of it in the last 40 years.  And venture funders deserve some credit too, including the government’s own venture program (SBIC) which played a large role in the beginnings of venture capital in Silicon Valley and helped many now successful and private venture funds get started, including New Atlantic Ventures.

Our representatives in Washington have set about re-engineering nearly everything in our country, pouring a trillion dollars (sadly, not an exaggeration) into financial institutions and obsolete auto firms, paid for by raising taxes on successful people across the board. Here’s hoping that they will keep in mind that entrepreneurs, technology, and the ecosystem that supports them are a gem of our economy:  a key part of what makes our economy work and gives us advantage against all the aggressive challengers out there in the world.