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Executives Lack Confidence in U.S. Competitiveness
Executives from around the world are profoundly pessimisticabout the ability of companies operating in the U.S. to competein the global economy and to pay high wages to U.S. workers, asurvey of more than 6,800 Harvard Business School alumnifound.
Some 58% of the respondents expect the U.S. to weaken on one or both of these two dimensionsof competitiveness over the next three years. Only 25% expect the country to improve on one orboth but decline on neither.
'It's not that the sky is falling,' said Jan Rivkin, a Harvard professor overseeing the project withcompetitiveness guru Michael Porter. 'We've got great strengths, but the strengths are weigheddown by weaknesses that are getting worse.'
The survey is one piece of a broader effort by a group of Harvard Business School professors torally executives to encourage business and government to pursue policies that will improve U.S. living standards and bolster the U.S. economy's competitiveness.
One bright spot in the new survey: Respondents were less pessimistic about prospects for the U.S. than they were in a similar survey last year. 'We are sinking more slowly,' Prof. Rivkin said.
That appears to reflect a deterioration of the outlook for Europe and Asia rather thanimprovements in the U.S.
'The perception of the rest of the world has slipped,' Mr. Porter said. 'The sense of doom is a littlebit less.' Indeed, the decline in pessimism about the U.S. was sharper among Harvard alumniabroad than those in the U.S.
Unlike some other efforts to diagnose the competitiveness of the American economy, the Harvardproject emphasizes both making U.S. companies more competitive, which could be achieved bycutting wages, as well as making the U.S. economy more competitive, so it can deliver risingwages.
The Harvard alumni are less gloomy about the former than the latter. Some 34% said companiesin the U.S. would be less able to compete in the global economy over the next three years; 28% said they would be more able. But 52% said the U.S. would be less able to pay high wages andbenefits; only 20% said it would be more able. The remainder in each case said 'neither more orless.'
The Harvard professors found particularly strong support among the alumni for encouraging moreimmigration of highly skilled individuals, for rewriting the corporate tax code to lower rates andeliminate loopholes and for making the federal budget more 'sustainable' with spending cuts andrevenue increases.
A parallel survey of 1,025 Americans found them far less pessimistic than the business-schoolalumni. That survey found, to the surprise of the professors, strong support among the public forcorporate tax reform. Both surveys also found enthusiasm for a multiyear effort to invest more incommunications and transportation infrastructure.
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