America is the epicenter of innovation and entrepreneurship, but that's not enough to keep us ahead of the rest of the world, according to a recent Harvard Business School study. We're increasingly moving jobs, manufacturing and R&D outside the country — and that has huge implications for long-term productivity and living standards in the U.S.
In fact, 71% of Harvard Business School grads think U.S. competitiveness will decline in the next three years (via WSJ). HBS professors Michael Porter and Jan Rivkin surveyed 10,000 of the school's 78,000 grads in October for a study they released this week at Davos, Prosperity At Risk, which revealed wide-scale pessimism.
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The findings are interesting because Porter and Rivkin surveyed a large demographic; not just recent grads. And almost 20% of respondents had been directly involved in making offshoring decisions, according to the study:
"During the past year, more than 1,700 respondents were personally involved in decisions about whether to place business activities and jobs in the U.S. or elsewhere. In these choices, the United States competed with virtually the entire world and fared poorly, losing two-thirds of the decisions that were resolved. Facilities involving large numbers of jobs, high-end work, and groups of activities located together moved out of the U.S. much faster than they moved in."
The authors concluded that:
"Ample evidence now points to a series of structural changes that began well before the Great Recession and threaten to undermine the long-term competitiveness of the United States. For the first time in decades, the business environment in the United States is in danger of falling behind the rest of the world. With this, pressures on jobs, wages, and living standards will only grow."
Of the 10,000 HBS grads who took the survey, 26% work in finance or insurance, 15% work in manufacturing and 12% are in professional, scientific or technical services
71% expect U.S. competitiveness to decline; 14% are neutral; and 16% are optimistic
Those between the ages of 40 and 59 — or the majority of key decision makers — had the most pessimistic outlook on U.S. competitiveness. Those based outside the U.S. were slightly more optimistic than those who aren't
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