What ails the American economy? Surely theGreat Recession – the cyclical contraction thatbegan in December 2007 and bottomed out inJune 2009 – continues to weigh on the UnitedStates. But ample evidence now points to aseries of structural changes that began wellbefore the Great Recession and threaten toundermine the long-term competitiveness ofthe U.S.Given these circumstances, Harvard BusinessSchool recently launched a multi-year projecton U.S. competitiveness, which aims to layout facts and realities of international compe-tition and implications for the U.S. in anonpartisan way. The School brings to thepublic discourse a number of assets, includingits network of more than 78,000 alumni wholive and conduct business around the world.In October 2011, nearly 10,000 of thosealumni completed an in-depth survey on U.S.competitiveness. The survey provides Ameri-cans, for the ﬁrst time, with judgments anddata from a broad group of central actors inthe global economy. The survey gathers notonly opinions but also actual experience withcorporate decisions on where to locatebusiness activities.This report summarizes the survey’s mostimportant ﬁndings. The March 2012 issue of
Harvard Business Review
will present analysesof critical areas that drive U.S. competitive-ness as well as action agendas for restoringAmerica’s economic vitality.The survey results provide strong evidence thatthe United States faces a deepening competi-tiveness problem. A large majority of surveyrespondents, 71%, expect U.S. competitive-ness to decline over the next three years, withworkers’ living standards under greaterpressure than ﬁrms’ success. Pessimism aboutU.S. competitiveness was widely shared.Respondents in their prime decision-makingyears, those in the manufacturing sector,those in the U.S., and those whose own ﬁrmsare exposed to international competition wereless hopeful than others.During the past year, more than 1,700respondents were personally involved indecisions about whether to place businessactivities and jobs in the U.S. or elsewhere.In these choices, the United States competedwith virtually the entire world and fared poorly,losing two-thirds of the decisions that wereresolved. Facilities involving large numbers ofjobs, high-end work, and groups of activitieslocated together moved out of the U.S. muchfaster than they moved in.The survey ﬁndings help us pinpoint wherethe roots of the competitiveness problem lie.Respondents saw the underlying businessenvironment in America as still strong incritical areas, but not keeping pace with othereconomies, especially emerging economies.They perceived the greatest current oremerging weaknesses to be in America’s taxcode, political system, K-12 educationsystem, macroeconomic policies, legalframework, regulations, infrastructure, andworkforce skills.
HARVARD BUSINESS SCHOOL SURVEY ON U.S. COMPETITIVENESS