Now a nation’s political influence depends on

A standard for measuring power has changed. These changes foretell a new standard for measuring power. No longer will a nation’s political influence be based solely on the strength of its military forces. Of course, military effectiveness will remain a primary measure of power. But political influence is also closely tied to industrial competitiveness. It’s often said that without its military the Soviet Union would really be a third-world nation. The new standard of power and influence that is evolving now places more emphasis on the ability of a country to compete effectively in the economic markets of the world.
      America must recognize this new course of events. Our success in shaping world events over the past 40 years has been the direct result of our ability to adapt technology and to take advantage of the capabilities of our people for the purpose of maintaining peace. Our industrial prowess over most of this period was unchallenged. It is ironic that it is just this prowess that has enabled other countries to prosper and in turn to threaten our industrial leadership.
     The competitiveness of America’s industrial base is an issue bigger than the Department of Defense and is going to require the efforts of the major institutional forces in our society—government, industry, and education.