This week’s first trip to the U.S. in more than eighteen months was magical, and I dare say, emotional. I feel a strong attachment to the American nation from my student years on the East Coast and a stint in Chicago. The latter coincided with 9/11. It created an indestructible bond.
Besides, I have been missing the alternative, balancing perspectives provided by visits to the U.S. since starting to cover the Industrials sector in earnest twenty years ago.
According to European propaganda, American industrial companies do not sufficiently invest in innovation and capex. The tyranny of the U.S. financial markets fosters short-termism. U.S. firms’ financial performance is not sustainable, and their future should be heavily discounted. The higher the operating profit and return on capital, the louder the alarm bells. Success is suspect.
From a U.S. perspective, there is some condescendence towards Europe too. European industrial companies are consumed by over-engineering, whether in R&D and in the design of organizational structures where accountability gets lost. A long-term view is often a convenient excuse for unprofitable ventures, with success buried in an elusive terminal value. Time is slow, as is change, impeded by social and regulatory sclerosis.
Beyond these old stereotypes, there is a contest between intellectualism and pragmatism.
Unsurprisingly, ‘intellectualism’ finds its origin in the Old World. Socrates postulated that ‘one will do what is right or best just as soon as one truly understands what is right or best.’
‘Pragmatism’ was a significant late 19th-century philosophical movement that fittingly started in the U.S. It relies on the idea that ‘the usefulness, workability, and practicality of ideas, policies, and proposals are the criteria of their merit.’ At its extreme, truth is what works.
Now consider the following: A euro invested in the Euro STOXX Industrials index in early January 2002 would be worth €3.1 today. A dollar invested in the S&P Industrials index over the same period would have a value of… US$3.1. It is a perfect tie that does not leave much room for bragging about philosophical superiority.*
But that is for the past. What about the coming decades, which require a complete revamp of industrial thinking and dealing with new unknowns? In my view, the future calls for the rise of ‘pragmatic intellectuals,’ definable as ‘thinkers whose pragmatism tempers their intellectualism and whose intellectual dimension both underwrites and undermines their pragmatism.’
This balance and, with it, excellence cannot be achieved without the perspectives brought from travel. Jules Verne famously wrote in ‘Around the World in 80 Days’(1872): ‘Travel enables us to enrich our lives with new experiences, to enjoy and to be educated, to learn respect for foreign cultures, to establish friendships, and above all to contribute to international cooperation and peace throughout the world.’
So, for successful endeavors and a better world, let us not discount the value of travel, including in the sustainability cost-benefit equation.
* Note, however, that the USD has depreciated by about 20% against the EUR since early 2002