Adapting to the Future: Learning from the Harvard Business School U.S. Competitiveness Project

I recently attended Sen. Mike Lee’s Utah Solutions Summit. The focus was Utah’s workforce and economy. The program included a who’s who of education, business and economic leaders, as well as keynote presentations by Indiana Governor and Donald Trump running mate Mike Pence, and former presidential candidate Carly Fiorina. I left the conference thinking about the Utah economy and Utah’s future, and I want to share a few thoughts.

Whenever we engage in policy discussions in Utah, we compare our performance to that of the nation. Sometimes we do better, sometimes we do worse, but we appropriately use our nation as a tracking device to identify where we are and where we are headed.

My colleague at the Utah Department of Workforce Services, Carrie Mayne, shared data on Utah and U.S. job growth and unemployment. Interestingly, while the Utah economy does better, the peaks and troughs in our economic performance match almost exactly those of the nation. Utah’s economy is inextricably linked to national economic performance.

At the Summit I had the opportunity to introduce the audience to the Harvard Business School’s U.S. Competitiveness Project. It is a research-led effort to understand the ability of firms operating in the United States to compete successfully in the world economy and support high and rising living standards for Americans. I think the project is important to the Utah economy because of the strong connection between Utah and the national economic performance.

A hallmark of the U.S. Competitiveness Project is a survey on U.S. competitiveness. The Harvard Business School drew a representative sample from an alumni network of over 81,000 graduates. They then asked alumni to assess U.S. competitiveness compared to other advanced economies. The conclusions yielded several fascinating results.

First, let’s be honest—we live in the greatest country in the world. We have so much to be grateful for. American universities, innovation, entrepreneurship and legal framework are the envy of the world.

But there’s an ugly underbelly we need to discuss: Many of the most important components of global competiveness are deteriorating in this country. And the sad reality is that most of these components reside in the hands of government.

In the survey the Harvard Business School divided economic components into four quadrants: strong and improving, strong and deteriorating, weak and improving, and weak and deteriorating. The deteriorating quadrants included these categories:

  • Tax code
  • Political system
  • K-12 education
  • Legal framework
  • Regulation
  • Macro policy
  • Skilled labor
  • Health care
  • Logistics infrastructure

Do you see what I see? The alarming reality is that every single one of these components includes a dominant if not complete public sector leadership role. If you believe the results of the survey, government is deteriorating in this country and damaging our economic competitiveness.

By the way, most of the components in the survey that were strong and improving were dominated by the private sector: entrepreneurship, firm management, innovation, hiring practices and capital markets. The only government-dominated components in the “strong and improving” quadrant were America’s universities and property rights.

So what do we do? What is the policy response? I think it can be boiled down to this: We need to change.

Utahns and Americans are the beneficiaries of a rich legacy of economic and government achievement. We’ve done a lot of things right. But the future demands change. We’ve reached a tipping point. Something’s wrong. Technological advancements and globalization continue to alter our economy and lifestyles. We are not adapting fast enough. We face many challenges and the old ways of doing things are not good enough. We must adapt.

In The Age of Paradox, management expert Charles Handy made an astute observation. He said:

“It is one of the paradoxes of success that the things and the ways which got you there are seldom those that keep you there.”

Nowhere is this more important than in public policy. If we want to remain the greatest country on earth and a prosperous state, we must face the future with bolder and brighter ideas. And we must get government, particularly at the federal level, working again. I’m ready for it … how about you?

Natalie GochnourNatalie Gochnour is an associate dean in the David Eccles School of Business at the University of Utah and chief economist for the Salt Lake Chamber.