Case studies of U.S. industrial performance show how recent gains in productivity in key sectors can serve as models for renewed growth in the economy as a whole. Compared to the early years of this decade, when concerns about the global "competitiveness" of U.S. industries reached an anxiety-laden peak, the past few years have looked positively rosy: inflation and interest rates under control, millions of new jobs created, the federal budget deficit well off its peak, and the stock market rising to unprecedented heights. At least one dark cloud still lurks on the horizon: the lagging overall rate of productivity growth, which has been stuck in low gear since the 1970s, retarding concurrent improvements in living standards. Recently, however, significantnew productivity gains have been reported in many important industries, both old and new, including automobiles, semiconductors, steel, electric power generation, and cellular communication. What is it about such industries, and...

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