Become sharper, smarter players.

• Position: Views of Steven J. Ross, Chairman and co-CEO of Time Warner Inc. - Special Section: Being a Global Leader

Become Sharper, Smarter Players

In its oldest sense, entertainment means "to hold," to grip the imagination, to command attention. And when we're at our best, that's precisely what first-class entertainment does. It doesn't only divert. It engages as much as amuses, reflecting our human expectations, hopes, desires, dreams, and aspirations. Most important, it educates. It's my belief that, at root, the implicit message of the films and programming we make is profoundly democratic.

Taking the widest possible look at the prospects for this industry, those of us who are part of it have a right to be proud as well as optimistic. Our industry is now America's second-largest net exporter, behind only the aerospace industry. But the one thing we can't afford is complacency. We must work to prevent the imposition of regulatory frameworks that embody a complete misunderstanding by our political leadership of the competitive environment we operate in. Besides the immediate damage such cynical political maneuvering does, there is the danger that it will result in protectionist legislation that will provoke - as it always does - retaliation.

Protectionism is a dead-end street. The real choice we face isn't between closing our markets or opening them but between learning to compete internationally or accepting the leadership of those who can.

There are no instant, ready formulas for ensuring success, but I think it is very clear that four fundamental forces will drive those corporations that thrive into the next decade and the next century. Those forces are globalization, vertical integration, strategic alliances, and technology.

Globalization is basic to everything we do. It is an economic fact of life for our industry and for every American corporation. In order to succeed and be leaders in industry, companies must understand international markets.

Unfortunately, as the events of the last few years have underscored, both as a nation and as an industry we seem to be fumbling the very global opportunities that America, more than any other nation, has done so much to create. Instead of building on our success and finding new and better ways to use the underlying reality of globalization to our advantage, we've been selling the store. Since 1985, multinational companies based outside of the U.S. have spent over $35 billion to acquire a wide range of American media and entertainment properties.

Although I think this fire sale is a long-range disaster for...