THE COMPETITIVENESS INDEX: WHERE AMERICA STANDS Deborah Wince-Smith December 5, 2006 National Governors Association Phoenix, AZ
THE COMPETITIVENESS INDEX:WHERE AMERICA STANDS
Deborah Wince-Smith
December 5, 2006National Governors Association
Phoenix, AZ
THE COMPETITIVENESS INDEX: WHERE AMERICA STANDS2
The Competitiveness Index: Where America Stands
• The Changing Global Competitiveness Environment
• U.S. Prosperity — How Are Americans Doing?
• U.S. Economic Performance — How Is the American Economy Doing?
• Foundations of Future U.S. Competitiveness
> Innovation — Can the United States Sustain Its Advantage?
> Entrepreneurship — Does the U.S. Economic Engine Face Threats Or Is It Primed for Continued Success?
> Education — Are Americans Equipped to Prosper in the 21st Century?
> Energy — How Will We Fuel Future Growth?
THE COMPETITIVENESS INDEX: WHERE AMERICA STANDS3
• Competitiveness depends on the productivity with which a nation can utilize its human, capital, and natural resources. High incomes require high productivity.
COMPETITIVENESS IS NOT BASED ON> The size of the economy> Low-cost labor> Share of exports> The rate of economic growth
• Competitiveness raises the bar for performance• Competitiveness is a positive-sum game
> As productivity improves, wages rise, markets expand and more human needs can be met
• American prosperity depends on:The ability to create the conditions under which companies operating in the U.S. can achieve high and rising productivityAn international economic system in which American productivity is not undermined by subsidies, government intervention, and theft of intellectual property in other nations
What is Competitiveness?
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THE COMPETITIVENESS INDEX: WHERE AMERICA STANDS
The United States Has the World’s Largest Economy and Growth Has Outpaced Other Developed Economies
Source: Global Insight, Inc.
THE COMPETITIVENESS INDEX: WHERE AMERICA STANDS5
THE COMPETITIVENESS INDEX: WHERE AMERICA STANDS
Source: Global Insight, Inc.
The United States Leads All Major Economies in GDP Per Capita
THE COMPETITIVENESS INDEX: WHERE AMERICA STANDS6
Source: Global Insight, Inc.
U.S. Productivity Growth Has Accelerated, Increasing Its Lead over Europe and Japan
THE COMPETITIVENESS INDEX: WHERE AMERICA STANDS7
Source: Global Insight, Inc.
America Continues to Attract the Largest Share of Foreign Direct Investment
THE COMPETITIVENESS INDEX: WHERE AMERICA STANDS8
THE COMPETITIVENESS INDEX: WHERE AMERICA STANDS
Source: U.S. Bureau of Labor Statistics
The United States Has High Levels of Job Churn
THE COMPETITIVENESS INDEX: WHERE AMERICA STANDS9
THE COMPETITIVENESS INDEX: WHERE AMERICA STANDS
Source: U.S. Census, Income, Poverty, and Health Coverage in the U.S.: 2005 (Aug. 2006)
The Greatest Gains in Income Have Gone to the Highest Income Households
THE COMPETITIVENESS INDEX: WHERE AMERICA STANDS10
THE COMPETITIVENESS INDEX: WHERE AMERICA STANDS
Emerging Markets Already Have the Largest, Fastest Growing Populations
Source: U.S. Census
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Source: U.S. Bureau of Economic Analysis
U.S. Multinationals Sell Three Times More Through Foreign Operations Than Through Exports
THE COMPETITIVENESS INDEX: WHERE AMERICA STANDS12
THE COMPETITIVENESS INDEX: WHERE AMERICA STANDS
The United States Has Trade Surpluses in Services and Intangibles
Source: U.S. Bureau of Economic Analysis
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THE COMPETITIVENESS INDEX: WHERE AMERICA STANDS
Source: U.S. Census Bureau, Current Population Survey, Annual Social and Economic Supplements
Only Households Headed By a College Graduate Saw Their Incomes Rise over the Past 20 Years
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THE COMPETITIVENESS INDEX: WHERE AMERICA STANDS
Source: OECD, Education at a Glance (2006)
The United States Invests Significantly More in Education, Yet Test Scores Are Low Compared to Other Nations
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THE COMPETITIVENESS INDEX: WHERE AMERICA STANDS
Source: U.S. Bureau of Labor Statistics
High-Wage, Fast-Growth Occupations Require Higher Levels of Education
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Source: Updated version of Figure 1 in David H. Autor, Frank Levy, and Richard J. Murnane, “The Skill Content Of Recent Technological Change: An Empirical Exploration,” Quarterly Journal of Economics, 118(4), November 2003. See also Frank Levy and Richard J. Murnane, “How Computerized Work and Globalization Shape Human Skill Demands,” (May 31, 2006)
Higher-Order Skills Have Grown in Importance, Driven by Technological Change and Globalization
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THE COMPETITIVENESS INDEX: WHERE AMERICA STANDS
Source: NSF, Science and Engineering Indicators (2006), OECD, Main Science and Technology Indicators (2006), U.S. Patent and Trademark Office
U.S. Share of Global Output Has Fallen Across a Range of Science and Technology Metrics
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THE COMPETITIVENESS INDEX: WHERE AMERICA STANDS
Source: Global Entrepreneurship Monitor, 2005 Executive Report and High Expectation Entrepreneurship, 2005
Total Entrepreneurial Activity In The United States Continues To Outpace All Major Industrial Economies
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Source: Office of Advocacy, U.S. Small Business Administration
Small and Medium-Sized Firms Create Most New Jobs