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Can the US Regain its Competitive Edge?

With all the new offerings from companies like Apple and Microsoft, it might seem hard to believe that the United States is lagging behind in innovation and other areas. According to a report issued by the US Department of Commerce, the United States has lost the luster it had in the 20th century. Today, US citizens are less educated than the citizens of other countries. Job growth has all but ceased and the economy continues to struggle.

“Innovation is the key driver of competitiveness, wage and job growth, and long-term

economic growth,” say the authors of the report. When they looked back to determine what made the United States so great in the 20th century, they discovered three key factors:  federal support of basic research, education and infrastructure.

Government support of research brought about advancements in agriculture and medical science as well as computers and the Internet. Support of education produced more college graduates who went on to become business leaders and entrepreneurs. Government support of infrastructure led to the development of the US highway system, clean water and electricity. Since the private sector doesn’t invest heavily in these areas, the authors of the report stress that the government must continue to finance them if the United States hopes to regain its competitive edge.

The benefits of the government’s support of basic research, education and infrastructure are far reaching. We still enjoy clean water and electricity today. We drive from state to state on the highways. Many of today’s business leaders and small-business owners graduated from college in the 20th century. There’s a PC in almost every home because of the basic research the government supported in the 20th century. Generations to come will continue to benefit from those past innovations, and they could benefit from those of the 21st century, too, if the government lends its support.

“By some accounts, the United States’ system of higher education remains the best in the world,” say the authors of the report, “and educates our country’s and our competitors’ future scientists and engineers. Factors such as poor preparation in math and science and the high cost of college tuition and expenses are restricting the flow of American science, technology, engineering and mathematics (STEM) graduates from our universities.” So, the government’s support of basic research becomes irrelevant if it doesn’t also spend the necessary dollars to educate future innovators.

The third leg of the stool is infrastructure. Say the authors of the report, “In today’s economy, the nature of infrastructure needed to compete is changing, and the United States is lagging behind in certain key aspects of a 21st century infrastructure (such as broadband Internet access) and facing capacity constraints for other aspects (wireless communications) given the high demand for these services.” In an Internet-dominated world, the US has to catch up … and fast.

The authors of the report also stressed the importance of manufacturing for competitiveness, saying that manufacturing generates high-paying jobs, accounts for the majority of US exports and encourages innovation. But the US manufacturing industry isn’t what once was. The authors of the report say that the success of manufacturing in the United States depends heavily upon the success of research, education and infrastructure.

There’s no easy fix to this problem. But if the United States government is willing to invest in basic research, education and infrastructure, then the state of manufacturing in the US has a chance to improve, and the US’ chances of regaining its competitive edge will improve right along with it.


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