A new Harvard Business School survey has revealed serious concern about America's competitiveness trajectory, yet shows wide agreement between liberals and conservatives on the policy imperatives that Congress and President Obama should advance following the election.
A total of 58 percent of alumni business leader respondents expect a decline in U.S. competitiveness over the next three eyars, with U.S. firms less able to compete in the global economy, less able to pay workers good wages and benefits, or both.
Yet pessimism about the trajectory of U.S. competitiveness eased somewhat from a prior 2011 survey, though opinions diverged along ideological lines -- pessimism among strongly liberal business leaders who responded in both years declined from 72 percent in 2011 to 53 percent in 2012, while it fell only slightly among strongly conservative business leaders, from 71 percent in 2011 to 65 percent in 2012.
The survey, conducted in September, polled 6,836 HBS alumni, many in top management positions, and 1,025 members of the general public. This is the second annual survey on U.S. competitiveness.
Respondents in both surveys were asked to assess the state and trajectory of 17 elements that drive national competitiveness. Key findings included:
• Business leaders and the general public identified America's political system, tax code, K-12 education system, macroeconomic policy, regulatory environment and legal framework as weaknesses that were continuing to deteriorate relative to other economies.
• Business leaders saw entrepreneurship, quality of management, innovation, property rights protection and capital markets as American strengths that were improving. Members of the general public also saw these elements as strengths, but mostly on the decline.
• Between 2011 and 2012, business leaders remained stubbornly pessimistic about the complexity of the tax code, the K-12 education system and the regulatory environment even as their views of most elements of the business environment brightened somewhat.
The survey also provided a consensus roadmap for lawmakers to restore competitiveness, with business leaders across the political spectrum showing strong support for several policy directions, including a compromise for a sustainable federal budget, corporate tax reform and easing of high-skill immigration; responsible extraction of newly-accessible energy supplies and more aggressive pursuit of a level playing field in the international trading system; and greater infrastructure investment and selective streamlining of regulations.
The survey also found wide support among business leaders and the general public for a federal budget compromise involving both revenue increases and spending cuts.
The research is part of the HBS U.S. Competitiveness Project, a multi-year effort co-chaired by HBS professors Michael Porter and Jan Rivkin to assess structural challenges to the U.S. economy and identify ways that business, labor, government and academic leaders can work together to address those challenges.
"All sides agree that the United States faces existential competitiveness challenges. All sides agree on the basic direction that federal policies need to take. Yet, until now, no progress has been made in Washington. This failure to act is severely damaging America's competitiveness," Porter said. "With the election behind us, the president and the new Congress must act now to restore the United States as a highly productive and efficient business location for firms and workers."
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