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At Harvard Business Review , Nilofer Merchant has strong words for Yahoo's new leadership . It is time, Merchant says, to be "fearless." The first step is to figure out how the company got to where it is today, and she uses this graph to illustrate the point: Merchant: After working with dozens of complex companies and observing hundreds more, what I've learned is that the companies that create the next big thing are the ones who go beyond talking about doing things differently; they work through the denial, resistance and inaction, and truly shift and adapt. After all of the struggle, they finally both decide that they must, and they actually do. This appears to be where Yahoo has just arrived. A shift. Some movement in saying that what's worked in the past isn't working anymore, and it's time for a change. Bravo. Finally. This shift could be called "feckless to fearless." Feckless is when a company doesn't know its mission, is weak in its decision-making, and thus ineffective in its output. Fearless is seen in bold moves, created by people who trust one another, and backed up by accountability. This shift is the difference between freaking out at the possibility of an imperfect bold bet and making the worst of all choices: zero bold bets. In actually bringing in new talent and letting them lead you to new edges, instead of just saying it's time for a new approach. It's deciding to stop talking about the competitive threat, and instead asking what it will take to leapfrog those competitors. It is worrying less about getting it right, and more about getting started — now. Merchant's advice is directed simultaneously at Yahoo and at other companies that have lost their momentum. Read Yahoo's Shakeup Demands Fearlessness here .

Menzie Chinn has a collection of useful charts at Econbrowser illustrating the state of manufacturing in the US. Here's one, showing "cumulative changes in real exports vis a vis 2009Q2." Chinn writes: Clearly, export growth is decelerating -- not surprising given the collapse in trade volumes that took place during the great recession. Nonetheless, I find it interesting how much capital goods exports have increased. Now, as I mentioned in an earlier post, vertical specialization means that it’s unclear how much value added is incorporated in particularly the goods exports. Still, I think there is evidence for a manufactured exports rebound. Finally, there has been substantial skepticism that manufacturing employment will rebound strongly, even if the President’s initiatives outlined in the State of the Union are implemented. [4] I think that skepticism is largely warranted, given rapid productivity growth in that sector. However, that doesn’t mean that manufacturing value added won’t necessarily rebound. BEA only released data up to 2010 last month, so one can’t be sure. So while we have seen some marked improvement in U.S. exports and a a trimming of the trade imbalance, the question remains whether we will see sustained growth, and the sort of recovery-driving rebound of the manufacturing sector that President Obama has been calling for. Read Net Exports, Exports, Real Exchange Rates and Manufacturing here .

This Global Ethics Corner from the Carnegie Council does a nice job of laying out the core questions we should be asking about the bipartisan push in Washington for a revival of manufacturing in the U.S.: "Is the rebirth of America's manufacturing industry necessarily a good thing?" This, and the other questions raised in the slide-show about factories and innovation, should be good conversation starters for a class discussion on the role of manufacturing in the U.S. economy today.

In a compelling post for Fast Company , Shawn Parr tells us it is time for companies to stop looking at fostering a strong workplace culture as "touchy-feely," and recognize that the conditions that build a vibrant culture also build profit and sustainability. He points to some of the usual standouts like Southwest Airlines, Costco, and Zappos as models: A vibrant culture provides a cooperative and collaborative environment for a brand to thrive in. Your brand is the single most important asset to differentiate you consistently over time, and it needs to be nurtured, evolved, and invigorated by the people entrusted to keep it true and alive. Without a functional and relevant culture, the money invested in research and development, product differentiation, marketing, and human resources is never maximized and often wasted because it's not fueled by a sustaining and functional culture. Look at Zappos, one of the fastest companies to reach $1 billion in recent years, fueled by an electric and eclectic culture, one that's inclusionary, encouraging, and empowering. It's well-documented, celebrated, and shared willingly with anyone who wants to learn from it. Compare that to American Apparel, the controversial and prolific fashion retailer with a well-documented and highly dysfunctional culture. Zappos is thriving and on its way to $2 billion, while American Apparel is mired in bankruptcy and controversy. Both companies are living out their missions--one is to create happiness, and the other is based on self-centered perversity. Authenticity and values always win. Read Culture Eats Strategy For Lunch here .

In his book, The Growth Map: Economic Opportunity in the BRICs and Beyond , Jim O'Neill argues that the term emerging markets no longer applies to the BRIC nations (and a few others, including Mexico and Korea). While he has long been bullish on the economies of Brazil, India, and China, O'Neil--chairman of Goldman Sachs Asset Management--has come to realize that, in many ways, these economies have earned a little more respect as strong, stable markets. He spoke recently with Charlie Rose about the strength of the BRIC economies, and how we all need to stop regarding "growth markets" as "developing." Here is an excerpt: Watch the full interview here .

Take a look at this figure from Barclays Capital : A sign of progress? Sure. China is rapidly building more skyscrapers because of its recent economic growth. But this could also be a sign of the bad things to come. The Barclays Capital Skyscraper Index has shown "an unhealthy correlation between construction of the next world’s tallest building and an impending financial crisis." With 14 new skyscrapers going up in China, the question we have is whether this portends bad things for China's economy or the global economy as a whole? Hat tip BBC News .

Der Spiegel has a fascinating, and at times provocative, interview with Wolfgang Reitzle , one of Germany's most prominent and respected business leaders. Reitzle argues that, while he does not expect the euro zone to fall apart, he believes that the EU's leading economies, Germany in particular, need to draw some clear lines to prevent policy makers from doing too much to protect the currency. And he, like so many Germans worth a fraction of his wealth, is tired of feeling like his country has to keep propping up Greece and Italy. Here is an excerpt from the interview: SPIEGEL: Are you saying that withdrawing from the monetary union would be advantageous for Germany? Reitzle: No, but I believe that the German economy would have weathered such a shock within a few years, and would even become more competitive in the long run. To put it clearly: I don't think this scenario is desirable, but it also shouldn't be declared a taboo. And from a personal standpoint, I don't agree with a large share of my taxes ending up in countries that don't manage their economies responsibly. SPIEGEL: At the moment, the German economy is actually benefiting from the crisis. The weak currency and low interest rates act like an economic stimulus program. Reitzle: And we need this prosperity, because it's inevitable that we will be presented with the bill for the euro in the end. But this imbalance in the euro system must be corrected in the long term. The debt-ridden countries don't just have to reduce their debts. They also have to revamp their economies… SPIEGEL: …which is difficult, if not impossible, because they lack their own currency to devalue. Reitzle: And that's why the lack of competitiveness in the euro zone has become practically set in stone. If Italy still had the lira, it would have been devalued long ago to make the country competitive again, because wages there, as in Spain and France, have risen far too quickly -- in sharp contrast to Germany, by the way. SPIEGEL: But all of this shows that the euro brought together things that don't belong together: highly developed, industrialized nations and agricultural countries… Reitzle: …as well as different mentalities. And, most of all, countries that are dissimilar in terms of efficiency. It is evident that the euro was introduced far too soon. In retrospect, anyone can come up with the perfect explanation for why all of this couldn't possibly work. But that doesn't do us any good. Now we have to see where we stand and what steps to take so that everything doesn't fall apart. There's more to it than just muddling through. Germany is being given the leading role here, whether we like it or not. Not everyone ticks the way the Germans do, but sloppy economic management will no longer be tolerated. There will still be substantial differences, just as there are in the United States of America. SPIEGEL: Do you see the United States of Europe as a goal? Reitzle: Yes, in the long term. In 2050, the United States will still be a global power and China will probably be the dominant economic power. Europe will only be able to keep up if it manages to achieve a political unification process in addition to the monetary union, and if it includes Russia. However, if we even mess up the monetary union, Germany will be an attractive island, just as Switzerland is. But will we be relevant in the world anymore? Probably not. That's why it's worth doing everything we can. Read the full interview here .

In a new report at the McKinsey Quarterly , McKinsey analysts Richard Dobbs , Jeremy Oppenheim , and Fraser Thompson point out that we are in the midst of an historic expansion of middle class consumers globally. They estimate the global middle class will reach 5 billion people by 2030, with China and India leading that growth. This has brought on a significant challenge for economies and for global business: resource costs. While the economic growth of the 20th century was aided by "cheaper natural resources," commodity prices have been high for the start of this century, and are likely to remain so. Dobbs, Oppenheim, and Thompson argue that this problem represents an opportunity to companies that are willing and able to lead a "resource revolution," and take measures to adapt. The chart below shows their estimates of how much value companies can find in adjusting strategies to account for rising costs. They call this the "resource prize": The authors write that the key is to "create cost advantages" and "generate new stresses on the management of risk and regulation" by pursuing the following: Pursue growth opportunities. Helping consumers and companies to use or access resources more efficiently should be very good business in the years ahead. For instance, the fastest-selling elevator line in Otis’s 150-year history is the Gen2, which uses up to 75 percent less energy than conventional elevators. Major companies, such as General Electric and Siemens, are building resource productivity businesses by investing heavily in emerging clean-energy and clean-water opportunities ranging from wind turbines to industrial-energy efficiency. And in technology centers such as Silicon Valley, a broad range of clean-tech investors and entrepreneurs seek profits by revolutionizing resource productivity. In fact, venture capitalist Vinod Khosla predicted in a recent paper that positive “Black Swans” will “completely upend assumptions in oil, electricity, materials, storage, agriculture, and the like.” Boost internal efficiency. Companies have large, profitable opportunities to improve the efficiency of their resource use across the value chain. Consumer-packaged-goods manufacturers have cut their energy costs by up to 50 percent by pulling productivity levers that pay back their costs in less than three years. Wal-Mart Stores has implemented a sourcing strategy that aims to reduce supplier packaging from 2008 levels by 5 percent no later than 2013, for estimated direct savings of $3.4 billion.7 Capturing many of these supply chain opportunities will require much closer collaboration between upstream and downstream players. Manage risk. As resource inputs to production processes become increasingly scarce, companies need to develop a more sophisticated understanding of their exposure to different natural resources, including supply chain dependencies and regulatory risks. Steel, for example, is becoming ever more critical in the oil-and-gas sector because of the shift to offshore deepwater drilling. Steel production depends crucially on the supply of iron ore, which in turn relies heavily on the water used to extract it. Almost 40 percent of iron ore mines are in areas with moderate to high water scarcity, and a lot of steel is produced in places where water is relatively scarce. Read Mobilizing for a resource revolution here .