Restoring American Competiveness * Discuss the gist (key message) and implications of Thomas Friedman’s video presentation The World is Flat. * Discuss the gist (key message) and implications of Colvin’s article Can American(s) Compete? * Discuss the gist (key message) and implications of Porter’s and Xu’s articles: The Looming Challenge to U.S. Competitiveness and U.S. Competitiveness and the Chinese Challenge. * In a flat world filled with strong and emerging challenges to U.S. competitiveness, discuss how the United States can restore, achieve and/or sustain competiveness.
The key message and implications of Thomas Friedman’s video presentation “The World is Flat” is that almost everyone on the planet now has access to the Internet and to distributed tools and applications with which they can innovate and compete. Friedman explains how the world became “flat.” He starts with recounting the three ages of globalization: 1.0 where countries were globalizing agents; 2.0 where companies became globalizing agents; and now 3.0 where individuals are globalizing agents. In the second chapter of his book he discusses the 10 days that flattened the world. He starts out with the fall of the Berlin wall and Windows 3.0 and ends with fast wireless Internet access and VOIP. The final coup de grace came with perfect political storm when the dot com bubble burst, 9/11 occurred, and the Enron scandal and follow on financial meltdown. The result was 3 billion more people in Russia, China, and India joining the flattened world. So now what? According to Friedman, we can’t behave in a business as usual way. We need harness our talents and creativity and resources from around the globe to be competitive. We need to get smarter, faster and more creative than the rest of the world.
The key message found in Colvin’s article, “Can American’s Compete?” is that America has lost its competitive edge. There are several reasons for this state of affairs. First, our educational system is failing behind our competitors. Second, many iconic American firms are either foreign owned or now multi-national and they do not have allegiances to America as companies have had in the past. Manufacturing job are being out-sourced and going off-shore. Even the service sector jobs which make up 76% of the U.S. economy is threatened. This is because the world is flat and competitors have well-educated work forces that can do these service sector jobs for less. In addition, this trend of jobs moving offshore is also putting a downward pressure on wages in America. Colvin’s enumerates several solutions to our problem: revolutionize our school systems to get our students back on top; immigration reform to create an incentive to keep highly educated foreign students in this country after they complete their education; rebuild America’s info-tech infrastructure; and finally increase R&D spending in the public and private sectors.
Porter’s article “The Looming Challenge to U.S. Competitiveness,” suggests that America’s competitiveness has diminished over the years and needs to be restored. Porter cites several economic performance metrics that negatively impact competitiveness: falling productivity, weak job creation, depressed wages, slowing foreign investment in the U.S., and a negative outlook by mangers. Porter’s solution to our problems is for the U.S. to develop a long term strategy with a plan that should engage government at all levels and allow business to lead the way.
Xu Xiaonian’s article “U.S. Competitiveness and The Chinese Challenge,” describes the fading Chinese advantages and structural problems the Chinese have such as lack of original research, disregard for intellectual property rights and corruption and government cronyism. He goes on to highlight the advantages America has such as an economy which is market driven and not planned, the way it rewards innovation, respect and protections for intellectual property rights, and trustworthy institutions that minimize corruption. His prescription for America is to restore confidence in its innovation machine and to minimize government intervention in the marketplace.
The U.S. can restore and sustain competitiveness in a flat world by forcing competitors to play by the same rules, by investing in education and infrastructure and by developing a long term strategy for competitiveness. The U.S. should levy a currency manipulation and IP theft tariff on Chinese goods to recover the billions they have stolen. This money should be directly invested into U.S. education and infrastructure. The U.S. needs to stop spending so much on entitlements and more on projects that enhance U.S. productivity including education and infrastructure. Finally, the government and business must develop a long term plan for increasing and sustaining competitiveness and work in partnership to achieve the plan’s goals.