It was once said that the battle of Waterloo was won on the playing fields of Eton. If that’s true regarding the England of 1815, perhaps the playing fields of Beijing during the 2008 Summer Olympics offer insights on the economic direction of the US.

The Summer Olympics marked the first time since the fall of the Soviet Union that America’s athletes hadn’t won the most gold medals. Over the preceding three Summer Olympics, China’s tally rose from 16 to 28 to 32 gold medals, while the US gold medal count fell every four years, from 44 to 37 to 36. This year, US athletes leveled off at 36 gold metals, and the Chinese totaled 51.

PwC projects Summer Olympics medals and interprets totals as one very interesting, fairly reliable indicator of economic robustness.¹ China’s share of medals stands as a perfect metaphor for its newfound pre-eminence on the world stage. However, beyond sport, questions emerge: How will the US react to its loss of unchallenged economic dominance? How should companies factor this information into their strategies? How do our most gifted businesspeople continue to lead and win when the competition raises its game?

Luckily, corporate management teams—unlike governments—don’t have to make decisions with broad national interests as their foremost consideration. Nor should they; today’s global enterprises operate astride the world, with employees, shareholders and strategic partners everywhere. Rather than reflexively supporting legacy “American” business practices, the best companies adopt a flexible philosophy—namely, “If it works, it wins.” This follows a much older American tradition of pragmatism—doing what it takes to adapt and get the job done.²

The current debate in corporate America regarding accounting standards provides a good example. Even though the SEC still requires US companies to use US GAAP, some American companies are preparing for the day when they will be expected to move to International Financial Reporting Standards (IFRS).

Whether the issue is accounting standards, a stronger China, a weaker US dollar or finding new ways to attract and retain knowledge workers, companies that embrace the inevitable— what’s “working and winning”—have the best chance to thrive.

That’s not to say that US businesses can’t retain the same spirit of innovation and customer focus simply because we no longer hold dominion on the terms of international business debate. As one US executive told us, technology—one of America’s specialties—will “solve problems we don’t know that we have yet.”

By embracing the world in enlightened and productive ways—and by leading in the effort to coordinate constructive policies worldwide—US companies will free themselves to work on the big challenges, like finding solutions for climate change, minimizing systemic risk in the financial system and sustaining our leadership. With this strategy, the US won’t be retreating from any Waterloos. We’ll engage with the rest of the world in a positive, productive, life-enhancing quest for the best ideas.

¹ Modelling the Olympics: An economic primer, PwC, 2008. ² “Equality begets in man the desire of judging everything for himself: it gives him, in all things, a taste for the tangible and the real, a contempt for tradition and for forms.” Alexis de Tocqueville, Democracy in America, Translated by Henry Reeve, 1873.