By Thomas J. Donohue, President and CEO, U.S. Chamber of Commerce
America has been knocked off its perch as the world’s most competitive nation, according to the “Global Competitiveness Report” released last week by the World Economic Forum (WEF), an organization that provides a platform for world leaders in politics, business, and academia to discuss big issues of the day. In fact, the United States finished sixth this year, behind Switzerland, Finland, Sweden, Denmark, and Singapore. What are we to make of this?
The short answer is we should be concerned, but not panic. The WEF report correctly points out that America’s budget and trade deficits are hurting our competitiveness. But at the same time it misses the mark by suggesting that the Nordic model of high taxes and generous government spending promotes competitiveness. We know it doesn’t.
The WEF report is the latest in a string of warnings about how America is losing its competitive edge, and the Chamber has been sounding the alarm on this topic for several years. We’ve pointed out that our education system fails many of our children, our taxes are too high, our burdensome regulatory system saps productivity, our infrastructure is underfunded, and our legal system is a mess.
Unfortunately, many of America’s elected officials and citizens want to blame foreign nations for our challenges and withdraw from the global economy. But no country in the world has succeeded by walling itself off from the rest of the world. They are right to point out that global trade must be fair and equitable, a view shared by the Chamber. That’s why last week we issued a tough report on how China needs to further lower trade barriers, let its currency float, and enforce intellectual property rights.
But to paraphrase Shakespeare, the fault lies not in foreign countries, but in ourselves. It’s up to us to fight for and win domestic policies that will make our country more globally competitive. A more market-driven health care system, a sensible national energy policy, an education system that stresses accountability and emphasizes math and science, a simpler and fairer legal system, a lighter regulatory footprint, and lower taxes and less government spending will do more to bolster America’s competitiveness than trying to protect ourselves from competition by creating “Fortress America.”
Today our economy is in good shape–it’s growing steadily, productivity is high, we’re leaders in innovation and technology, and we have most of the best universities and research institutions in the world. Our greatest strength remains the entrepreneurial spirit of our people. But as investment advisers so prudently warn, past performance does not guarantee future results. That’s why we must act to improve our competitive position with the right domestic policies, and we must act now. Our future is in our own hands.
