Harvard Business School revealed last week the results of its first Survey on U.S. Competitiveness, which examines America’s position in the global economy. The survey of nearly 10,000 alumni reveals that, while 57 percent see the current U.S. business environment as somewhat or much better than the average advanced economy, respondents are much less optimistic about the trajectory of the United States as a competitive location.
When asked to assess how the trajectory of the U.S. business environment compares with emerging markets, 66 percent see the U.S. falling behind, while just eight percent see it pulling ahead. Dean Nitin Nohria and professors Michael E. Porter and Jan W. Rivkin presented the findings at the National Press Club in Washington, D.C. last Wednesday.
“The U.S. is losing out on business location decisions at an alarming rate, and those activities being offshored are more job-rich than those coming in,” Porter said in a press release.
“However, the U.S. retains its core strengths in a number of important areas such as university education, innovation, and entrepreneurship, which means that we have the resources to reverse this trend. The vast amount of data from this survey highlights the need for business leaders, policymakers, and academics to collaborate on practical ways to make progress.”
The survey also examines the desirability of the U.S. as a business location and decisions by firms to relocate existing activities or establish new ones. Of 1,767 alumni who had faced such situations, 57 percent were debating whether to move their business activities abroad and just nine percent were contemplating a relocation into the United States. Respondents cited government regulation and taxes, as well as the cost of hiring workers in America and concerns about immigration issues, as factors that prevented their companies from creating jobs stateside.
The survey is part of the school’s ongoing U.S. Competitiveness Project, which defines competitiveness as “the ability of companies in the U.S. to compete successfully in the global economy while supporting high and rising living standards for Americans.”
“When we were first laying the groundwork for this Project and this survey, we thought long and hard about how competitiveness should be defined, and why it was such an important goal for the nation’s future,” said Dean Nohria. “We made sure not to focus on job growth or inequality alone, because that ignores the need for healthy wages that will support America’s middle class. Adopting a broader definition was paramount in this effort.”
These findings will be presented in a special March 2012 issue of the Harvard Business Review.