David Walker on Why American Business Must Rethink Its Future
David Walker on Why American Business Must Rethink Its Future
David M. Walker, author of America in 2040, Still a Superpower, joins us to examine the complex future of the US fashion industry. We explore the fallout from American manufacturing’s decline, which has shifted production overseas, deepening reliance on foreign sources. With a sharp focus on the challenges this creates, David offers strategies for managing risks through diversified supply chains, highlighting creativity and innovation as key strengths for preserving America’s competitive edge. We unpack the careful interplay of strategic mergers, acquisitions, and the constant tension between cost efficiency and market access in a global economy.
Our conversation also zeros in on the critical skills future fashion professionals need to succeed. Beyond the runway, we underscore the value of a strong education, firm ethical grounding, and a dedicated work ethic—essentials for achieving real potential. By staying true to what drives them, individuals can excel personally and emerge as leaders who shape their industry. Join us as we break down these enduring principles, delivering practical insights on how today’s professionals can drive immediate results while building a stronger future for the US fashion industry.
Watch the Interview Here:
Show Transcript
00:00 - Speaker 1
Hi Dave, how are you?
00:01 - Speaker 2
Well, Ashley, good to be with you.
00:04 - Speaker 1
You as well. Thank you so much. So, Dave, I want to start out. In your book America in 2040, Still a Supercower, you discuss the decline of American manufacturing, and how do you see this impacting the future of the fashion industry in particular, specifically in areas like product development and sourcing?
00:26 - Speaker 2
Well, first, I think you have to keep in mind that there was a major effort on behalf of corporate America to minimize cost of production, which is a means of trying to maximize profit, which is a means of trying to increase shareholder value, because for corporations, as you know, they have a duty of loyalty to their shareholders. Rightly or wrongly, you know, they have a duty of loyalty to their shareholders. Rightly or wrongly, they don't have a duty of loyalty to the country. Hopefully, they have a duty of loyalty to their employees and their communities, but it's not a legal duty of loyalty, it's one that's more of an ethical and moral duty of loyalty.
00:59
So you have a lot of companies that went overseas for production, especially with regard to clothing and other types of activities, because the cost of labor was a lot cheaper overseas and therefore you could design it here. And, by the way, I don't think we're going to lose that. I think we'd probably compete with Italy and a few others for design, but we're going to maintain that. But the question is where is it produced? And that has to do more than anything else with cost. You can produce things a lot cheaper overseas, where they don't have labor laws, they don't have environmental laws where they don't have the kinds of things that we do in this country. So that's the reason it happened and I know there's increasing concern about what we can do to try to reverse some of that.
01:43 - Speaker 1
Right and given the potential for increased global instability mentioned in your book, how do you think fashion brands should adopt their supply chains to mitigate those risks?
01:55 - Speaker 2
I think what you have to do is supply chain management is a big issue right now because we're becoming unduly dependent upon certain other countries for certain critical materials and minerals and things of that nature, and I'm involved in that right now with regard to the Defense Department, but it exists with regard to a whole range of areas in our economy. So we need to understand what do we need? Where are we getting it from? What are the alternatives? Where are we getting it from? What are the alternatives and what are the risks associated with continuing the status quo versus looking to diversify and or move to alternative sources?
02:31
You know, from a government standpoint, we also have to look at what are the risks with regard to not only what do we need, who are we getting it from? And it's how do you get it here right? I mean because you know most of the world's goods are transmitted by sea. There are, there are real concerns now and challenges about what might happen in the South China Sea, around Taiwan and everything else, if conflict ever emerged. You know you know over primarily Taiwan. So those are issues that we, you know you got to have a plan and unfortunately, the United States doesn't have a plan, but that's the first thing we got to do.
03:11 - Speaker 1
That's another conversation, right.
03:13 - Speaker 2
It is a big one. It is a big one yeah.
03:16 - Speaker 1
So how can the US fashion industry leverage its strengths to maintain a competitive edge despite facing lower manufacturing costs in the other countries?
03:27 - Speaker 2
Well, you know, the bottom line is is I'm obviously not a fashion guru. I can't compete with you. I mean, there's no question about that. But you know, I think you have to kind of break it down right. The ideas, the creativity, those are things that people will pay for value right? Historically, we've led on those kinds of things. We've been on the leading edge with regard to camarical ideas, with regard to designs.
03:56
I think there are things that we can do to try to improve our competitive posture with regard to production. Competitive posture with regard to production and one of the things you'd hear the president talking about, the president-elect talking about is, to the extent that we think there are unfair labor practices going on, then we need to consider about imposing tariffs, which should be on a targeted and temporary basis with regard to certain industries, if you will, and so that's an issue that would potentially be on the table, depending upon the facts and circumstances. But, in the final analysis, I think we have to compete on creativity and do better with regard to domestic production, but we're never going to get back to where we were.
04:36 - Speaker 1
So, in a world of increasing geopolitical uncertainty, how can mergers and acquisitions activity in the fashion industry be strategically utilized to create these new opportunities?
04:49 - Speaker 2
Well, we're in a global economy and we have more and more corporations that are global corporations.
04:56
And I come back to what I said before Global corporations do not have duties of loyalty to countries. They have duties of loyalty to their shareholders. I actually think that you will continue to see corporations thinking more globally, not just because of the cost factor, but also because of access to markets. You know how can they end up getting more access to markets to generate more revenues rather than just reduce the cost, because the profit's a combination of the two. You want to maximize revenues, you want to minimize cost, you want to be closer to where your customers are all right with regard to production and distribution, and so I do think you're going to continue to see more globalization of corporations. And then the question is where are they headquartered? Where their headquarters are going to depend to a great extent, on what the tax laws are, what the regulatory laws are, and that's another thing that we have to keep in mind, because most Americans don't want to live anywhere other than the United States, but corporations can and will move.
05:59 - Speaker 1
Right.
06:01 - Speaker 2
We have to be aware of that. We have to make sure we remain competitive in the future.
06:05 - Speaker 1
And in your book you talk about laggardship versus beatership. I love that term Really. It stood out to me. And how can the US fashion industry avoid the pitfalls of leadership in areas like sustainability and ethical production and instead embrace leadership by setting new industry standards and driving global best practices?
06:30 - Speaker 2
Well, let's talk about what the differences are, and then you can apply it to your industry, because I don't profess to be an expert in the fashion industry.
06:38 - Speaker 1
Sure, I understand yes.
06:40 - Speaker 2
It's okay, no problem. Let's talk about what leadership is. Leadership is looking ahead, seeing the trends, the challenges, the opportunities, capitalizing on the opportunities, taking steps to mitigate the risk. Understand I use the word mitigate, not minimize. You can't maximize opportunities and minimize risk. It's an oxymoron. But leadership is also about getting things done with and through others, creating the vision, creating the commitment to a set of core values and desired outcomes All right. Laggardship is exactly the opposite. It's not looking ahead. It's not seeing the trends and challenges and opportunities. It's trying to dictate. This is what we're going to do without getting input. It is focused on today rather than helping to create a better tomorrow. And unfortunately, too many of our political institutions are suffering from laggardship, and that's one of the reasons that we are where we are today. By the way, I want to try to get that in the dictionary. I think it's a good term.
07:49 - Speaker 1
I think you should. That is an excellent term. I love that. As I was reading through your book, it just really stood out to me, so I wanted to touch on it.
07:58 - Speaker 2
I've never taken a concerted effort, but you may convince me now that I should.
08:02 - Speaker 1
You should 100% so, given the potential for disruptions discussed in your book. What are the most critical skills and knowledge that a fashion professional needs to develop and thrive in the future?
08:16 - Speaker 2
The same kind of skills and knowledge that anybody would need to have. What I've always found in the United States is, if you have a good education, if you have a positive attitude, if you have solid moral and ethical values, if you have a strong work ethic, you have unlimited potential. And if you follow you know the principles unlimited potential. And if you follow the principles I mean if you follow your heart and you focus on things that you love you will do better at it. And if you recognize it as a leader, your obligation is not just to generate positive results today, it's not just to leave things better off when you leave than when you came, but better position for the future. That's called stewardship. That applies to any leader in any field, now and forever.
09:05 - Speaker 1
Amazing. Well, Dave, thank you so much. It was an absolute pleasure to speak with you today and I hope to see you again in the future.
09:14 - Speaker 2
Thank you so much, Ashley. All the best.
09:16 - Speaker 1
Thank you.