No sitting still in Europe either

How Computer Games Help Children Learn focuses on conditions in the United States, but the signs abound that in an era of global competition, any high-wage country that wants to prosper needs to prepare its young people for innovation and creativity. Consider, for example, this from the Economist on furniture making in Italy:

“Chinese competition and a weakening dollar have made the past four years terribly painful,” says Pasquale Natuzzi, whose firm is the biggest in the furniture-making cluster that sprang up around the south-eastern town of Matera in the 1960s….

Like many other local firms, Natuzzi has had to lay off workers at its factories near Matera. “Five years ago the cluster had around 400 firms  and employed more than 11,000 people. Probably one-third of those businesses have shut,” says Saverio Calia, chairman of the local industrialists. But he expects the situation to get even worse over the next few years, with more closures and job losses, as well as temporary lay-offs under a national scheme to help firms in difficulty.

Mr Calia’s own firm has temporarily laid off about one-third of its 600-strong workforce. Matera’s sofa cluster is suffering because its firms did not foresee the threat to their traditional, low-technology business of making medium- to high-quality leather furniture posed by low-wage economies in the developing world. “Labour costs in China are one-tenth of ours,” says Eustachio Nicoletti, managing director of his family’s business, “and Chinese workers are far more flexible.” Mr Calia says the quality of Chinese furniture is just as good as Italian, and the Chinese copy Italian designs quickly and accurately.

Sound familiar?