Tags: America | competitive | economy | us

US Never Short on Innovation, It's Short on Getting Support From Government

US Never Short on Innovation, It's Short on Getting Support From Government


By    |   Tuesday, 01 November 2016 07:54 AM


No nation can out-innovate and out-perform the United States of America. So I was taken aback when Daniel Mitchell from the Cato Institute, as a guest on my Made in America radio show, shared the results of the World Economic Forum’s Global Competitiveness Report that indicated that America’s ranking dropped from number 1 to number 3, below Switzerland and Singapore.

We are less competitive than Singapore? How can that be?

The reason is that Singapore, like Switzerland, has much better free-market policies.

Dan pointed out that if you look at the top-10 nations and the three major measurements, the United States ranks extremely high in “efficiency enhancers” and “innovation and sophistication factors,” both of which have a lot to do with the private sector’s competitiveness.

But America has a mediocre (at least for developed nations) score for “basic requirements,” the area where government policy plays a big role.

The truth is that the world secretly or overtly roots for America. As the Harvard Business Review points out, “for more than a century global observers have considered the U.S. economy to be an exemplar and America a country to envy and imitate. Unfortunately, that’s no longer the case. Increasingly, outsiders view our political system as riven by politicians preoccupied with their own reelection, resulting in a tragic stalemate. Too many American CEOs talk about choosing to postpone decisions until after the next election, when things will be clearer—a profoundly disturbing attitude. U.S. prosperity and social mobility have attracted millions of immigrants, including me. But America’s reign as the global ideal seems to be waning.”

In a survey by The Harvard Business School, they found that 65% of business leaders perceive the U.S. political system to be an obstacle to economic growth. And among the general public, 50% perceive the U.S. political system to be an obstacle to economic growth.

Their conclusion is that too often, “America’s leaders, in government and business, have acted in ways that neutralize the country’s many strengths. However, the decline of U.S. competitiveness is far from inevitable. The United States remains the world’s most productive large economy and its largest market for sophisticated goods and services, which stimulates innovation and acts as a magnet for investment.”

One of the points they make is that improving competitiveness is not the same as creating jobs. But creating jobs without improving productivity will not result in sustainable employment that raises the nation’s standard of living.

This is why the push toward raising the minimum wage is doomed to failure. Our competitive future does not rest with creating low skilled, poor paying jobs, like those in the fast food sector that are being used to support a family; never its intention.

Instead the U.S. must focus on becoming a more productive nation by creating high-wage employment in areas like technology, engineering and manufacturing. This is the key to attracting foreign investment, and rising exports of American goods and services.

Are our politicians talking about this? As pointed out previously, our politicians are too busy focusing on short-term issues like getting re-elected, instead of the long-term future of the nation.

We’ve lost focus of the things that really make America competitive. Training in science and technology is one part of it, but research shows that companies say that the skills they find most valuable—collaboration, communication, creative problem solving—are not typically found in science and engineering graduates.

As the Educause on-line newsletter points out: “While the public debate has focused on the need for technical skills, it is the nontechnical skills that are often the hardest to find. Innovation, these companies realize, depends on more than science and technology. It requires a hard-to-define, and perhaps even harder-to-teach, ability to transform science and technology into products and services that customers can use.”

That’s it exactly. Think of all the products invented in America that have changed the world. If given the freedom to create new businesses and innovate without onerous taxes and piles of regulations, America can recover its ranking as the most competitive nation on earth.

America is never short on ideas or the will to succeed. It’s short on getting the support from government to help it innovate. Our entrepreneurs don’t need hand holding, they need to be unshackled so they can pursue their dreams. Part of that dream is to be able to send goods overseas to world markets that welcome U.S. goods.

But that is increasingly a problem. Free trade agreements that have helped America compete globally are suddenly out of favor. In fact, they are being attacked without any real validation.

Today not a single U.S. container port is in the top 15 container ports globally according to the Journal of Commerce. They note that "expanding trade will continue to put pressure on the existing system, increasing congestion and threatening U.S. economic competitiveness; looking forward, the demand to move goods and raw materials on the U.S. transportation system is predicted to increase by 45 percent by 2040.”

It’s time to stop standing idly by while other nations out flank us by getting favorable trade advantages. We’ve lost sight of what made America great. We are not a nation that accepts its fate without a fight. And a fight is what we need.

We must only elect and work with politicians that are willing to fight along with us. We need officials who care more about where we are headed, instead of where their next handout comes from. We can never accept being number 3.  

Neal Asbury is chief executive of The Legacy Companies.

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No nation can out-innovate and out-perform the United States of America.
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Tuesday, 01 November 2016 07:54 AM
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