Harvard Business School recently surveyed 10,000 alumni about the state of U.S. economic competitiveness. Unfortunately, 71 percent said national competitiveness will decline over the next three years. That result actually tracks numerous public surveys finding the vast majority of Americans think the U.S. is headed in the wrong direction. More interesting is the evaluation of our strengths and weaknesses, summed up in the following graphic:
I think the red quadrant has it about right. The big problems are macroeconomic policy (soundness of government budgetary, interest rate, and monetary policies), political system (ability of the government to pass effective laws), legal framework (modest legal costs; swift adjudication), regulation (effective and predictable regulations without unnecessary burden on firms), K-12 education system (universal access to high-quality education; curricula that prepare students for productive work), and complexity of the national tax code. And improving those things will make our perceived strengths, the stuff in the green quadrant, even stronger.