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How does a presidential candidate reconcile their call for “big structural change” in the American economy with evidence that BSC might not be needed? The United States comes in second in the World Economic Forum’s (WEF) new global competitiveness report, an analysis built from hard data and a business leader survey. That showing is down one place from last year when the US took the top spot.
Still, it’s pretty impressive. Just ahead and behind the US are the tiny economies of Singapore and Hong Kong. The next country with a trillion-dollar gross domestic product (GDP) or higher is Japan at six. America “remains an innovation powerhouse,” the report concludes.
Indeed, it does. The US ranks first for “business dynamism,” which the WEF describes as “the private sector’s capacity to generate and adopt new technologies and new ways to organize work, through a culture that embraces change, risk, new business models, and administrative rules that allow firms to enter and exit the market easily.”
And the US ranks second behind Germany for “innovation capability,” or the “quantity and quality of formal research and development; the extent to which a country’s environment encourages collaboration, connectivity, creativity, diversity and confrontation … the capacity to turn ideas into new goods and services.”
Again, none of this is a big surprise, especially if you look downstream at American business competitiveness. Of the world’s ten most valuable public companies, eight are American. Of startups valued at $1 billion or more by venture-capital firms, 88 are American, 45 Asian, and 12 European. Of the Boston Consulting Group’s 50 most innovative companies, roughly half are American, including eight of the top ten. Of Fast Company’s 50 most innovative companies, 37 are American with no other country having more than two.
Yes, we’re doing something right (not to say we couldn’t do them better). But we’re also doing some things wrong. America’s worst showings in the WEF rankings are in things that aren’t so obvious when looking at, say, the global dominance of American-based Big Tech. The US ranks lowest in areas such as institutions (“checks and balances, transparency and ethics, public-sector performance, future orientation of government”), macroeconomic stability (“the level of inflation and the sustainability of fiscal policy”), and health (“the average number of years a newborn can expect to live in good health”). Those results all seems pretty non-controversial.
So some questions: Given that analysis — and I don’t want to overstate the insightfulness of the WEF report — what sort of BSC is called for? Is it wealth taxes, free college, and EU-style “accountable capitalism?” How would all that fix our most obvious problems and bolster our strengths (or at least not undermine them)? Have big-think politicians thought through their sweeping BSC agendas beyond the immediate political implications? Is their BSC the right BSC to help power innovation and productivity growth in the years ahead?
Given that America remains an innovation powerhouse, what sort of “big structural change” is called for?
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