BIZTIPS - January 13, 2008
Biz Tips: New Report Tells "Rest of the Story" of US Competitiveness
Sunday, Jan. 13th, 2008
By Art Hill
Paul Harvey is famous for telling "the rest of the story" to 22 million weekly listeners. Harvey has been a champion of critical thinking for decades, advocating that we examine issues from multiple perspectives.
That's how we should view the 2007-2008 Global Competitiveness Report published by the World Economic Forum. The U.S. ranks #1, due primarily to strong scores in innovation and markets. Close on our heels are Switzerland, Denmark, Sweden and Germany, with Finland, Singapore, Japan, the UK, and Netherlands rounding out the top 10. There are 12 major criteria from health and education to labor market efficiency and technology. On-line readers can get more details by clicking on the web link near the end of this column.
But as Paul Harvey might say, it is important not only to be proud of our top ranking, but also to be aware of the rest of the story. An overview of the report in the Wall Street Journal points out that the U.S. does poorly in some categories. High government debt levels and feeble personal savings put our financial stability at risk. The recent worldwide credit crunch caused by U.S. mortgage defaults is a perfect example. Pain at home, pain in world financial markets. Not exactly what you'd expect from "numero uno."
The goal of the report is to identify the potential for national economies to raise their productivity and prosperity. Although India and China have plenty of top-quality engineers and managers, they are swamped by a sea of poverty and low-skilled workers. And while Germany ranks second to the U.S. on business criteria, declining educational achievement jeopardizes Germany's long-term viability and that of other European Union countries.
Some of the greatest potential lies in nations with natural wealth, especially energy resources. So it isn't surprising that Kuwait and Qatar rank higher than even some E.U. countries. But oil-rich Venezuela ranks in the bottom third thanks to its loopy dictator, and Italy drops lower every year due to stagnation from chaotic bureaucracy.
Lessons for the U.S. and other top tier countries? First, national prosperity is based on personal prosperity. If we continue to discourage saving and condone irresponsible credit, our financial house of cards will crumble.
Second, we can follow Germany and ignore the critical role of education in competitiveness. According to one of the report's authors, that's a "potential show stopper" for productivity and prosperity. We can only hope this message gets through loud and clear to American voters and elected leaders when they set public education budgets.
Third, in this year of political theater from the Iowa caucuses to local college campuses, we can exercise critical thinking and support candidates of principle, not showmanship. Venezuela's lurid president is flying his country into the ground. We can't afford the same mistake.
We can be proud of our top rank in global competitiveness. But we need to take personal responsibility for maintaining our strengths in innovation, education, and other key areas, and for correcting our potentially disastrous shortcomings in financial accountability at all levels from the Federal government to our personal credit cards. That, as Paul Harvey would say, is "the rest of the story."
Abstracts and commentaries on the 2007-2008 Global Competitiveness Report can be found at the World Economic Forum website: http://www.weforum.org/en/initiatives/gcp/Global%20Competitiveness%20Report/index.htm.
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