Hard and fast rules for a soft economy

'Madonna runs a positive trade balance,' I told members of the US Congress at an informal briefing. 'Two-thirds of her revenue comes from outside the US. Welcome to the new soft economy - every bit as potent as the old hard one.'

I made 29 more points about the state of the nation:

All nations are pursuing the same economic strategy - a 'value-added, knowledge-based, export-led economy'. It's going to be one heck of a scrap.

We deal from strength - 94 per cent of Americans work in industries more productive than Japan's.

The much-maligned US service sector is a treasure. Our positive services trade balance is rising.

Don't cede Asia's markets to Japan. Go (farther) West.

This is an epochal change. If you are not confused, you are not in touch.

Churn is success - 'creative destruction'. Progress is made by elimination (mostly inferior jobs) and creation (valuable jobs).

Failure is a secret weapon. No failure, no progress.

Big-company job cuts are just beginning. Corporate crash diets hurt but help.

Mid-size growth companies are our salvation. They create jobs (mostly good) and become export stars.

Immigration is a boon. That energy is spurring Silicon Valley, Miami and LA as it spurred the East and Midwest a century ago.

The 'virtual corporation' is real. Disembodied companies, constantly changing shape and employing contract and temporary workers, are a must.

Brains are in. Heavy lifting is out. That's as true in manufacturing as in banking.

Education 'R' Us. It had better be: the wage gap between college grads and dropouts is big and growing.

Learning is lifelong. Shut the books after schooling and your future is dim.

Community colleges are an unsung asset. Apprenticeships are is not the answer to US skills training. Beef up community colleges instead.

Education needs overhaul. Forget the Japanese approach; foster imagination, not rote-learning.

Our widest global lead lies in research-university campuses. Nourish them.

Lifetime jobs are dead. British management expert Charles Handy says 10 or 12 jobs and two or three different careers will be the norm.

Kiss the nanny state goodbye. What happened to the spirit of self-reliance?

Benefit packages must mimic job realities. Encourage worker mobility. Part of the answer: pensions, training credits and health-care retained by individuals, not controlled by corporations.

Research and development is key. If knowledge is economic power, R&D is the engine of progress - for Nike as well as Intel.

Hi-tech can take care of itself. Heed venture capitalist Don Valentine who said to Washington: 'Please do not help us. The world of technology is complex, fast-changing, unstructured and thrives best when individuals are left to be different, creative and disobedient.'

Tomorrow's information highway system is more important than yesterday's interstate highway system.

Biotechnology, which may outgrow computers, needs friends. Don't let health-care reform throw out the baby with the bath water.

There's no place to hide. Embrace free trade. It will cause dislocation but stimulate better-paying jobs. Besides, free trade is essential to global political stability.

Investing offshore means jobs at home. A solid base overseas leads to market and export development.

The world is more stable and prosperous because of the Japanese-American partnership. Don't forget it.

If fear leads to loathing, we lose. Beware name-calling (immigrants, trading partners) that makes us turn inward and mean-spirited.

We must reinvent government. The world economy demands worker and corporate flexibility. Government must also become agile.

That ought to keep 'em busy for a while]

TPG Communications