The big flaw in this argument is that it assumes that Asian countries cant manufacture "high end" products. Even with the most sophisticated high end products, the vast majority of the manufacturing can be carried out by semi-skilled operatives. In the science and technology sector, the only way Western Europe can compete longterm is through generating intellectual property, not manufacturing.
It is also possible to generate wealth and run a trade surplus through the services sector. Any added value service can generate income that is independent from physical manufacturing.
Services or manufacturing it doesn't really matter which, the West needs to offer the world something again!
We need a much more balanced economy, with the largest share of GDP coming from the private sector entrepreneurs involved in 'primary' and 'secondary' industries. We need big government to get out of the way and allow the free market to grow again.
Science, engineering, infrastructure, agriculture, education are the future for the West. Offering services and products to the new emerging markets. Offering them things they need to develop.
Finance needs to become the 'tertiary' sector again. There to support the capital required for the 'real' industries to thrive. Finance should not be the central driving sector again. I am as capitalistic as they come but running your country on the basis of the financial sector alone is a flawed system, guaranteed to fail.
In the tounge in cheek words of the legend Jim Rogers:
'But I really think agriculture is going to be the best place to be. Agriculture's been a horrible business for 30 years. For decades the money shufflers, the paper shufflers, have been the captains of the universe. That is now changing. The people who produce real things [will be on top]. You're going to see stockbrokers driving taxis. The smart ones will learn to drive tractors, because they'll be working for the farmers. It's going to be the 29-year-old farmers who have the Lamborghinis. So you should find yourself a nice farmer and hook up with him or her, because that's where the money's going to be in the next couple of decades'
With regards to the East, yes of course Asia can and are producing world class products and services. The problem is we have let them take the lead due to our obsession with finance as the be all and end all of the economy.
As an example, how many civil engineers are wasted to the city every year due to the lack of an engineering/intellectual/service lead econony? Far too many. It is endemic in our society.
We need to produce, design, engineer, grow, educate and provide to the world again. I don't buy the argument that because the East are producing, we can't. The world will have countless infrastructure, energy, population, consumer demand issues in the future to satisfy plenty of newer industries in the West. We are going from 6 billion to 9 billion people on the planet over the next 30 years. The global 'middle class' is growing massively each year. There are 300 million in the middle class alone in China, near on the total poplation of the USA.
Once the dollar is dropped as the world's reserve currency and if the governments get out of the way of controlling the industrious private sector through taxation and regulation, then there will be plenty of scope for the West to thrive once again. The countries in the 'developed' West which grasp this will thrive, those that don't will suffer massively.
You don't build a whole economy off the back of tertiary industries. Required in a developed economy? of course. The main contributor to GDP? no chance...
http://www.investopedia.com/terms/t/tertiaryindustry.asp
Tertiary Industry
What Does Tertiary Industry Mean?
The segment of the economy that provides services to its consumers. This includes a wide range of businesses including financial institutions, schools, transports and
restaurants.
Also known as "tertiary sector of
industry," or "service industry/sector".
Investopedia explains Tertiary Industry
The tertiary industry is one of three industry types in a developed economy, the other two being the primary (raw materials) and secondary (goods production)
industries. As an economy becomes more developed, it will shift its focus from primary to secondary and tertiary industries.
The tertiary industry is split into two main categories. The first is made up of companies that are in the business of
making money, such as those in the financial industry. The second comprises the non-profit segment, wich includes services such as state education.