America’s Economic Future: Why the Conventional Wisdom Could be All Wrong
By: Geoffrey Colvin

Do you ever wonder why so many articles seem alarmed by the huge numbers of engineering graduates coming out of Chinese and Indian universities? Why do all these experts seem so worried about engineering graduates? After all, those universities are turning out graduates in every discipline – law, medicine, philosophy, the social sciences, the arts. Why this obsession with engineers?

The conventional answer is clear, but the bigger question is whether that conventional answer is still correct in today’s economy. Some analysts now argue that the conventional answer is becoming irrelevant – that in effect we’re still worshipping the logical, linear, left brain, when our economic future lies with the creative, intuitive, right brain. If that’s true, then the implications for America’s place in the world economy could be large.

The issue is where economic dominance comes from. Most economists will tell you that the source of economic dominance is leadership in science and technology. Certainly this has been true for hundreds of years. Remember, for most of human history everyplace had pretty much the same per capita GDP – the subsistence level, which in today’s money works out to around $400 or $500 a year. That started to change with the scientific and technological revolution that began in western Europe a few hundred years ago. Advances in ships, navigation, metallurgy, and agriculture began to create significant additional wealth, and then the industrial revolution turbocharged those increases. The places that have achieved technology leadership – western Europe, joined later by the U.S. and much more recently by Japan – have become the world’s wealthiest countries by far. The left brain, driver of science and technology, has been triumphant.  

That’s why so many people focus on the most left-brained people in the world, engineering graduates. With India annually producing five times more engineers than the U.S., and China almost ten times more, the worry is that they will eventually seize technology leadership from the U.S. If that happens, the reasoning goes, then the U.S. standard of living will inevitably slide toward the Chinese and Indian standard of living. The effects could be calamitous.

That argument, troubling as it is, seems hard to argue with. The most intriguing rebuttal holds that the whole basis of economic growth is changing radically, at least in the most developed countries. This line of argument, advanced most forcefully by Daniel Pink in his book A Whole New Mind, contends that the economic future of wealthy countries will be based not on products or services, but on creating experiences that consumers will value – a creative, intuitive, right-brain exercise.

An excellent example is the iPod. Yes, it’s a product, but inventing the product was not the breakthrough. Digital music players have been around for years before the iPod came along. Nor is it by any means the cheapest player on the market – far from it. The iPod became a phenomenon because it created a superior complete experience for the customer, combining the elegant design of the device, the extraordinary simple and intuitive way of controlling it, and the ease of buying music through the iTunes music store. Apple didn’t need any technology geniuses to create the iPod. It needed creative thinkers and gifted designers. That is, it needed right-brain traits more than left-brain traits.

That example, goes the argument, is being re-created across the world’s developed economies in virtually every industry that touches consumers. Technology is becoming commoditized. Competitive advantage will come from imaginatively creating superior experiences.

Is it true? Clearly the argument makes an important point, but the question is how extensively it will alter the economy. If developed economies become based overwhelmingly on creativity, intuition, and imagination, then we’re foolish to obsess over the number of engineering graduates in china. Let them turn out ten million engineers a year – in the U.S. we’ll be producing MFAs (masters of fine arts) and increasing our economic dominance.

But if the shift from left brain to right brain turns out to be economically minor, then it won’t do us much good. Asia could indeed wrest economic dominance from us, with terrible effects on our standard of living, at least in the near term.

Bottom line, no one knows yet if Daniel Pink is right. But we’d better hope that he is.

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Geoffrey Colvin is a Senior Editor at Large at  FORTUNE.