Return of old-line companies?

According to Business Week’s list of top 100 small business’s (The Shock Of The Old), old is new:

This year’s list, however, is dominated by Old Economy businesses: metal benders, defense contractors, and others that measure their history not in decades but in centuries.

But don’t let that misnomer “old economy” fool you. These aren’t your grandfather’s companies. Take for example the BW story’s poster child – Wabtec Corp. Wabtec is the spin off of Westinghouse’s locomotive part’s business:

A lot has changed since George Westinghouse dreamed up the idea of pneumatic locomotive brakes. Wabtec—still on Air Brake Avenue—mirrors the history of American business. It was bought by conglomerate American Standard Cos. (ASD ) in 1968, taken private in a management-led leveraged buyout 12 years later, and went public in 1995. Since then the company (No. 97) has grown by acquiring other railroad equipment makers, focusing on international markets, and reinvesting some $30 million a year in research and development. One result of that R&D: a cleaner-burning diesel locomotive that helps municipal transit authorities meet federal air-quality standards.
Wabtec Chief Executive Albert J. Neupaver can look out the window of the company offices and see the ornate stone castle that once served as Westinghouse’s headquarters. It’s now a museum devoted to George Westinghouse. The days of vertically integrated manufacturing are over. The foundry, which once cast steel parts, is a parking lot. Assembly lines where each employee added one bolt have been replaced by a single worker assembling an entire compressor or brake directly from a customer’s order. Employee empowerment is in. Several times a year, management and line workers hold brainstorming sessions in keeping with Japan’s kaizen philosophy of continuous improvement.

International markets? R&D intensive? Highly automated assembly lines that make parts to customer order? Employee empowerment? That sound a lot like a number of “high-tech” companies now days (can you say “Dell?”).
Here are some other examples:

Ceradyne Inc. (CRDN ) (No. 17), which makes ceramic plates for body armor, and Emergent Biosolutions Inc. (EBS ) (No. 27), whose products include a vaccine for anthrax. . . .
Genesco Inc. (GCO ), founded in 1924, once was one of the largest shoe manufacturers in the U.S. As low-cost imports flooded the market, the company became a retailer.

So, can we drop the misleading and distracting mindset of “old economy/new economy”? There is no such thing – at least not based on industry or product. There are companies that are leading edge and there are companies who are lagging behind. Often they are found in the same industry.
The public policy lesson is clear: our job is to help all sectors adapt to the I-Cubed Economy, not write off portions of the US economy as “old” and concentrate only on the trendy “new”. That may be a good strategy in the fashion world. But even there, it often pays to stick with the basics. So it is in economic policy. Too bad we often forget that and go chasing after the next big thing or the latest fad (can you say “nanotech”?). The new and the old — as in many things, balance is important.

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