U.S. COMPETITIVENESS PROJECT
HARVARD BUSINESS SCHOOL
In June 2015, 73 chief executives, mayors, governors, university presidents, economists, and thought leaders from across the political spectrum gathered at Harvard Business School to work on a question of deep and growing concern in the United States: How can our nation continue to grow while also providing a path to prosperity for more Americans? This briefing shares the highlights of the group’s deliberations.
Definition and Data
The group’s discussions began with a definition that HBS faculty members adopted when the School launched its Project on U.S. Competitiveness four years ago: The United States is competitive to the extent that companies operating in the country can both win in global markets and lift the living standards of the average American. The group reviewed data showing that by this definition, the U.S. economy is doing only half its job today. Large businesses and highly skilled workers are doing well, but small businesses and the average American are falling further behind. The economy is growing, but few are sharing in the resulting prosperity. A rising number of citizens believe that the American Dream is at risk of becoming only a dream, and many U.S. parents believe that their children will not be better off than they are.
Roots and Remedies
The group then debated what has undermined shared prosperity in America. The ensuing discussion focused on three roots of the problem:
Inexorable forces of globalization and technological progress have put pressure on most U.S. workers—even as they have created enormous economic opportunity for individuals with scarce skills.
Institutional changes—such as the creeping polarization of the U.S. Congress—have made it increasingly difficult to make the policy, programmatic, and resource allocation choices and changes necessary to respond to globalization and technological progress.
With hobbled institutions and globally mobile firms, America has systematically underinvested in “the commons”—that is, the shared resources that countries and citizens rely on in order to be productive and competitive. Underinvestment in the commons has left many Americans undereducated, inadequately skilled, unsupported by strong infrastructure, and with poor access to entrepreneurial opportunity.
These three roots help us pinpoint what can and cannot be done to address America’s lack of shared prosperity. It is very unlikely, for instance, that we can reverse recent trends in globalization and technology. Similarly, the gridlock in Washington politics is unlikely to loosen in the immediate future, despite our highest hopes. Rebuilding the commons, however, is within reach. In fact, many of the convening’s participants have personally led coalitions that strengthen elements of the commons, such as education, workforce skills, infrastructure, and ecosystems that support innovation and entrepreneurship.
Rebuilding the Commons
Looking more closely at these efforts, three core aspects stand out. First, the efforts are intensely local, typically focused at the metro level. In essence, leaders in cities across the country have chosen to act to boost shared prosperity in their locales and not to wait for change in Washington, or even regionally.
Second, the efforts involve participants from multiple sectors—government, business, education, nonprofit, labor, philanthropy, and others—working together in innovative collaborations. We see, for instance, community colleges working with companies to train the graduates that employers want to hire; universities spurring innovations that entrepreneurs turn into new businesses; and elected officials leading coalitions that restore critical transportation infrastructure. Yet, spanning the diverse cultures of different sectors is hard work, and the leaders at our convening universally reported that such efforts are difficult to start, build, and sustain.
Third, the convening discussions emphasized the important role of business in efforts to rebuild the commons. In a number of American cities, business leaders have quietly but persistently assembled civic alliances that pursue growth and shared prosperity. After all, business is deeply affected by the erosion of many of the commons’ elements, particularly the lack of skilled workers and the deterioration of key elements in both our country’s physical infrastructure and the infrastructure that underpins innovation.
Furthermore, business leaders often have the skills and the ability to assemble the resources needed to take on large, complex problems with multiple constituencies and sustain them well beyond election cycles and political terms in office. In Minneapolis-St. Paul, for example, business and civic leaders have coalesced under the Itasca Project to confront crumbling infrastructure, gaps in skills training, and economic disparities. In Columbus, Ohio, the CEO-led Columbus Partnership has channeled the resources and expertise of the local business community to promote economic development and, increasingly, to help city agencies tackle thorny issues such as education reform.
About the U.S. Competitiveness Project
The U.S. Competitiveness Project is a research-led effort to understand and improve the competitiveness of the United States—that is, the ability of firms operating in the U.S. to compete successfully in the global economy while supporting high and rising living standards for Americans. The Project focuses especially on the roles that business leaders do and can play in promoting U.S. competitiveness. The Project approaches current challenges to U.S. competitiveness as a matter of global concern, not just an American issue.