Last month, the Harvard Business School released the findings from its 2012 Survey on U.S. Competitiveness, Competitiveness At A Crossroads. Directed by Michael Porter, Jan Rivkin and Rosabeth Moss Kanter, this survey updates their earlier October 2011 survey of HBS alumni (Prosperity at Risk) and includes a survey of the general public. (Additional information both surveys is available here).
The survey reports a what it believes is a basic consensus:
Across the political spectrum, business leaders and the general public strongly called on the President and Congress to:
• put the federal budget on a sustainable path by increasing revenue and controlling spending;
• reform the corporate tax code, reducing statutory rates and eliminating loopholes;
• enact a multiyear program to improve America’s infrastructure;
• address distortions of the international trading system that disadvantage the U.S.; and
• craft a responsible framework for developing newly accessible gas and oil reserves.
Both liberal and conservative business leaders strongly supported moves by Washington to:
• streamline regulations; and
• ease immigration for high-skill workers.
Streamlined regulations won majority support among the general public but not across the political spectrum. High-skill immigration won a majority among liberal members of the general public but not among all members.
While corporate tax reform was high on the list, a shift to a territorial tax code was not ranked as highly. (See a recent WSJ story on the differences between sectors on taxes.)
The survey was generally pessimistic about the future of U.S. competitiveness, although not as pessimistic as before. Respondents identified a number of areas that are weak and deteriorating: the tax code, K-12 education. The political system, legal framework, regulation and macro policy were also seen as weak and generally deteriorating, but not as badly as before. Skilled labor and the logistics infrastructure were categorized as strong but deteriorating. Areas such as universities, entrepreneurship and innovation were seen a strong and improving.
Of special interest was the survey of what companies said they were doing to improve competitiveness:
Internal training was overwhelmingly the most common action. But it was not necessarily accompanied by other, external steps to ensure a strong talent pool.
Fully 89% of respondents reported that internal training applied to their enterprises, and 86% of these said their firms offer training. But only 43% of firms with internal training also had apprenticeships, which provide vocational education for new workers, and only 36% also had partnerships with community colleges or others for workforce training.
One has to wonder what they consider internal training and how much they are actually investing in it. Our lack of accounting measures that treat investment in human capital (intangibles) is once again on display.
The report closes with a set of recommendation the authors believe flow out of the findings:
• Accelerate action to build skills collaboratives that ensure a work-ready talent pool
• Mount a national campaign to engage companies in mentoring high-potential American suppliers
• Enhance the role that education and healthcare institutions, especially higher education and major medical centers, play in U.S. competitiveness. This includes the proposal for 20 “manufacturing universities” (see yesterday’s posting)
• Create a national “Census of Business Actions to Enhance Competitiveness” that provides an inventory of actions businesses are undertaking, region by region.
Based on the earlier finding on worker training, I would add one recommendation: conduct a detailed survey of what companies are doing with respect to worker training. While almost all business leaders say they are doing internal training, it is not at all clear what is actually happening and how effective it is. On the face of it, it appears there is no problem. However, we know from basic observation that this is not the case. In order to craft a workable policy on worker training and human capital in general, we need better information.