An hegemony of management ideas and IT know-how, says Robert Heller, means that American companies, big and small, are posing a serious threat to European managers.
Thirty years ago Jean-Jacques Servan-Schreiber shocked Europeans with a scary warning that a massive challenge - le defi americain - was transforming Europe into an economic dependency of the US. That tide was in retreat even as he wrote. Today the American challenge rides again, more strongly and on a global scale.
The 1967 challenge was posed by three supposed gaps: money, management and technology. In 1997 an investment boom, ushering in a new phase of global economic acceleration, is led by insatiable demand for new micro-electronic technologies - dominated, in as complete a way as few world businesses have ever been, by the US. That's largely why its economy is leading the end-century expansion.
Microsoft and Intel, with 95% of microprocessor sales, enjoy dominance which even IBM never achieved. Such successes have fed wealth into the corporate cornucopia: in Business Week's last compilation of the Global 1000, the US companies mustered $5,108 billion of market capitalisation - double that of Japan, four times Britain's and a dozen times that of Germany.
The numbers also compare impressively - 422 from the US, a record, compared to 396 the previous year. In the Fortune 500, measured by sales, the US contingent of 153 is also the largest. More significantly, Americans are first by size in half the world's industries. In some sectors, Japan's best still set the standards but Americans have narrowed the gaps dramatically: in cars, for example, Japan's US penetration is now determined by the fluctuations of the yen.
Unlike the original defi, however, the current challenge isn't confined to the biggest battalions - though here, too, new forces are afoot: GE sat out the last round, but its current drive into Europe boosted sales there by 55% to $14.1 billion in 1995 alone. The broadening of the challenge is especially important: the US majority is evenly distributed across the Business Week 1000, partly thanks to IT stars like Netscape, which entered at 570th in its second year as a public company.
Legions of smaller gee-whiz companies whose inventions are capable of changing markets - as with Netscape's explosive development of the Internet - are making their global mark while still youthful. Nor is hi-tech the only area of thrust. In consumer goods, veteran McDonald's has all but doubled its country markets, quadrupling non-US sales, since 1990 (although it is doing less well in its own markets). Nike, sourcing production around the Pacific, is only one among many US upstarts which from early days have seen the world as their manufacturing and marketing oyster.
The Wall Street wheeler-dealers, too, have superior resources at their disposal and have leveraged that monetary power to dominate corporate finance. Salomon (the smallest of a top quartet with $55 billion of 1995 revenues) managed fixed-income deals last year in 47 countries totalling $310 billion.
The numbers are, of course, subject to the usual health warnings. The long Wall Street boom has swollen US market values, possibly to exaggerated size. Such numbers, anyway, don't measure competitive prowess. Much of the impressive global scale, moreover, has to be attributed to the sheer size of the domestic economy. But America was even larger relative to the rest of the world during the 1980s, a period when many great companies fell from grace. Many of the stricken (like IBM) have since made notable recoveries under skilled and effective management. And US management is gaining real advantage from closeness to two founts of competitive advantage, both based on brainpower: management thought and the IT that underpins the investment upsurge.
US management is not only the largest, but the most vibrant market for application of new ideas from the intellectual community. America's leading gurus and educators have a quasi-monopoly in management thought that matches Microsoft's hold over software. The brains may sometimes peddle shoddy goods, but their interplay with the best CEOs - like GE's legendary Jack Welch or Intel's Andy Grove - has underpinned the management strength that ultimately determines global success.
The relative lag in European corporate applications of IT remains a sorry fact. The Europeans will get there; but on arrival they may well find that US global competitors have moved on. The saving grace is that Europe's bigger and better companies have greater, growing and more effective global presence than 30 years ago. Whether it's Sage seizing the German market lead in PC accounting software, BT exploiting its merger with MCI, or Shell creating Global Office (a worldwide IT network), many Europeans have got the message. But most European managements have no option but to study the best and most thrusting examples of the new defi - and emulate them.
The new American challenge is based on management as much as muscle.
European managers have to raise their games to the US level - including state-of-the-art IT - or this time the challengers will win.