The competitiveness debate that today focuses on America’s industrial performance will soon confront something even more that fundamental: money. The rise of Japanese financial power and the contradictions of U.S. economic policy are weakening the competitive position of the U.S. financial services industry—one of the few sectors where the United States still regards itself as more creative, more sophisticated, and more aggressive than its foreign rivals. As a consequence, the United States may soon face the same market erosion in financial services that has afflicted its producers of machine tools, automobiles, and semiconductors.
A version of this article appeared in the January–February 1990 issue of Harvard Business Review.