A lot has happened in the auto industry recently. Fisker and Coda Automotive each filed for bankruptcy, while Tesla Motors has had a banner year, reaching a market capitalization of $20 billion. The Big Three automakers -- General Motors, Ford, and Chrysler -- have all rebounded from the depths of the Great Recession.
Two decades ago, people questioned whether America could still manufacture world-class cars. Tesla has shown we cannot only manufacture them, but we can outcompete anyone.
The major German newspaper Die Zeit recently declared (roughly translated): "What fascinates you about the Model S is the courage to act: Tesla banished the (internal combustion) engine completely. In contrast, premium German cars rule cumulative boredom and sameness." That's a striking change of events.
This flurry of activity indicates that American entrepreneurs are more active than ever and that domestic manufacturing is coming back. The presence of both hits and misses in our economy is healthy because it means that people are innovating and that the marketplace is dynamic.
To continue this momentum, we need to think long and hard about doing four things:
Immigration reform: It is time for Congress to get serious about attracting the brightest talent from around the world by passing Startup Act 3.0. The bill creates 75,000 new visas for immigrant entrepreneurs who attract $100,000 in funding and create at least two permanent jobs, and 50,000 new visas for foreign students who receive graduate degrees in science, technology, engineering, and math from U.S. universities to ensure that American companies have access to the best possible workforce. Deporting the very people we have just educated defies common sense. It is no coincidence that the CEO of Tesla Motors is an immigrant.
Manufacturing matters: Many people say America's move to a service economy is inevitable and that domestic manufacturing will suffer an inevitable decline. It doesn't have to. America can still out-manufacture anyone, and it is strategically important to our future that we continue to do so. Tax incentives such as accelerated depreciation for equipment purchases and placing an educational priority on job retraining for new and growing industries like cleantech can grow American manufacturing for another generation.
Do not complain: There has been a feeding frenzy in the media about Solyndra, Fisker, A123 Systems, and other failed companies. Take it from a Silicon Valley investor -- there are no successes without failures. Companies compete in a dynamic and free market, and that competition leads to failure as well as innovation and success. Washington needs to learn there is no shame in that. In fact, it is precisely what gives us an edge over cultures that do not tolerate failure.
Think big: The next big idea in automobiles is driverless cars. It sounds like science fiction today, but the technology is here now and these vehicles may be on the road in five to 10 years. Cars are already equipped to automatically parallel park, brake and maintain a safe distance from the car in front. And who is leading the charge? Is it German or Japanese automakers? No, it is not even automakers at all. It is American technology companies like Google that are not afraid to think big, and they are about reap the rewards.
Capitalism is about creative deconstruction and reconstruction. That is what America excels at. One of our greatest American athletes, Babe Ruth, understood this when he said, "Don't let the fear of striking out hold you back." We never have, and I hope we never do.
Steve Westly is managing partner of The Westly Group, a clean technology venture capital firm. He previously served as California state controller.