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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 .

There are those who think that GDP is limited as a measure of a nation's progress. Bhutan, for example, has its GNH: Gross National Happiness. Could there be a way to measure inventiveness? If there were, Nathan Myhrvold would surely get on board and push that measure as a way to forecast future economic health. In a column for Bloomberg , Myhrvold--former chief strategist and chief technology officer at Microsoft, and founder and chief executive officer of Intellectual Ventures--argues that inventiveness and innovation are difficult to measure, and therefore get short shrift by economists. The economy of the world is not based on the simple interplay of capital and labor. Sure, these are involved. But they are secondary characteristics, not fundamental ones. Macroeconomists are often said to have their fingers on the pulse of the economy, and that’s an apt analogy. A pulse is a decent secondary indicator of life because blood flow is one prerequisite for the body’s survival. But the pulse is a weak and incomplete measure of life. A brain-dead patient, after all, may have a pulse even though the person’s life is over. Conversely, a machine can drive a pulse without giving life. So while it’s all well and good to measure the flow of capital and the markets for labor, don’t mistake this data for the forces that really drive growth, which are inventions (or, if you prefer, ideas) and the ways that they are made real. In response to these forces, capital is deployed and labor is expended. Physics is obsessed with conservation laws; mass and energy can be neither created nor destroyed. Economics, on the other hand, obsesses about growth and recession, in which economic value is explicitly created and destroyed. Invention is, directly or indirectly, a primary source of the value we call growth. Yet economists give invention short shrift. That is partly because they are still hazy about the origin of inventions. I find talking to economists about invention’s role in the economy a bit like talking to fourth graders about where children come from. A smart fourth grader can tell you all about how kids progress through elementary school. They can even tell you about infants, and that mommy’s belly gets big before one appears. But how and why the spark of conception occurs may be a mystery. Read Invention Is the Mother of Economic Growth here .

Historian Edward Tenner wants us to take a positive view of unintended consequences. In a speech just made available by TedTalks , Tenner runs through all the remarkable innovation that came about somewhat accidentally. We've made a point here at The Watch to note all the successful companies that were born during economic downturns, and Tenner makes sure to highlight some of these examples as well. But this is a much longer view of important shifts in culture, development, and business.

Successful companies depend on successful collaboration: employees working together whether they like each other or not. If the collaboration is not working, don't blame the employees. Blame the leader. So says John Abele , cofounder of Boston Scientific . Abele writes about managing successful collaborative efforts in the Harvard Business Review article, Bringing Minds Together . Abele discusses managing collaboration in this HBR IdeaCast interview:

Steve Jobs stepped down as CEO of Apple yesterday . From his resignation letter : I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple’s CEO, I would be the first to let you know. Unfortunately, that day has come. I hereby resign as CEO of Apple. I would like to serve, if the Board sees fit, as Chairman of the Board, director and Apple employee. While Jobs had been on medical leave, and it seems clear that his ongoing battle with pancreatic cancer and the effects of that battle (this was Jobs's third medical leave from Apple, according to the New York Times), is not going well. So our first thoughts are focused on the health of one of the most innovative leaders in American business. As for the future of Apple, the company now has a significant challenge: remaining an industry leader without its leading visionary. David Pogue presents three reasons to expect Apple will continue to be Apple: The good news: First, Mr. Jobs isn’t leaving Apple. He’ll remain as chairman of the Apple board. Tim Cook, who’s been Apple’s director of operations for seven years, will take over as chief executive. (He’s been acting C.E.O. since January.) You can bet that as chairman, Mr. Jobs will still be the godfather. He’ll still be pulling plenty of strings, feeding his vision to his carefully built team, and weighing in on the company’s compass headings. Second, the tech world doesn’t turn on a dime. Apple’s pipeline is already stuffed with at least a couple of years’ worth of Jobs-directed products. In the short term, you won’t see any difference in Apple’s output of cool, popular inventions. Third, even if Mr. Jobs isn’t sitting at every design meeting, ripping apart or heartily embracing each idea presented to him, his tastes, methods and philosophies are deeply entrenched in the company’s blood. But Pogue says that these reasons may not trump the potential damaging affect of Apple losing Jobs's "personality." Read Steve Jobs Reshaped Industries here .

Jeff Dyer , professor at Brigham Young University's Marriott School of Business , studies "disruptive innovators." And he says other business leaders can learn a lot by studying the ways in which these innovators come up with disruptive ideas through experimentation. In this Harvard Business Review IdeaCast , Dyer discusses techniques to introduce more innovative thinking in the workplace:

Michael Greenstone finds the debate between proponents and opponents of government regulation "tired." Greenstone, director of the Hamilton Project at The Brookings Institution . Greenstone argues that regulation has both costs and benefits. What we need to do, he says, is to come up with better ways of measuring which regulations work . And by work , he means simply that the benefits of the regulations outweighs the costs those regulations place on business. He discusses the need to better evaluate potential regulations, across federal agencies, in this @Brookings interview:

IBM is marking the 100th anniversary of its incorporation. And far from being a relic, IBM seems to have caught its stride once again in the last decades. Take a look at the company's market capitalisation compared to its young competitors in the tech sector (from The Economist ): It is a remarkable feat for any company, but especially so for a high tech company. IBM operates in a field where the basic foundation of business products changes rapidly. But, as The Economist details, the company has survived by doing what so many companies across a variety of fields fail to do. Its business was based on punch cards, but it did not allow itself to become a dinosaur when punch cards started to fade in favor of the early calculating machines. As leadership of the company passed from Thomas Watson, Sr., to Thomas Watson, Jr., IBM became the global leader in computing. From The Economist: Under the younger Watson, IBM became by far the world’s biggest computer-maker. He did the trick by betting the company on the System/360, IBM’s first family of mainframe computers, which took years and $5 billion (in 1960s dollars)—more than the Manhattan Project that led to the atomic bomb—to develop. Launched in 1964, the System/360 became the first dominant computing platform, mainly because all the family’s machines, big or small, were “compatible”, meaning they could run the same software. By 1969 IBM’s market share had grown to 70%. It thus became the first IT company to be called an “evil empire” and aroused the ire of America’s antitrust authorities. The Reagan administration eventually dropped the case in 1982, asserting that it had been “without merit”. The second platform shift—from costly mainframes to “distributed” computing systems, including PCs—was a much closer shave. Even while the antitrust case was dragging on, technological progress had begun to undermine IBM’s near-monopoly and, more importantly, its business model of renting its expensive machines to customers. Since this was highly profitable, IBM was very slow to deliver cheaper and distributed computing systems, made possible by new processors. When these systems took off in the early 1990s, IBM’s business collapsed. Mainframe revenues dropped from $13 billion in 1990 to $7 billion in 1993 and losses of $16 billion piled up. “Only a handful of people understand how precariously close IBM came to running out of cash,” wrote Lou Gerstner, who was brought in to turn the company around, in “Who Says Elephants Can’t Dance?”, his book about the revival. He fired 35,000 employees to cut costs. The lesson of the story appears to be that companies that develop a strong sense of what the company is rather than being simply a vehicle for a certain product or certain type of product stands a better chance at long term success. Read IBM: 1100100 and counting here .