Manufacturing Magazine Features Council President and Five for the Future

Any perception that the country is standing at the edge of an economic cliff with one foot dangling in thin air is just not borne out by the economic data.

What is undeniable is that the global economy is reshaping the competitiveness landscape in ways that few would have predicted even a decade ago. The global economy is transforming rapidly, driven by new competitors, revolutionary technologies, new industries and growing numbers of sophisticated consumers.

The game has changed. The policies and approaches that once ensured the United States’ economic pre-eminence during the past 20 years will not sustain our competitive edge in the decades ahead. We must adapt and face these new challenges to ensure America’s future growth and prosperity or risk leaving future generations a legacy of lost opportunity.

The Council on Competitiveness and its membership of corporate chief executive officers, university presidents and labor leaders have issued a new report, Five for the Future, in an effort to keep the national focus on innovation, especially in anticipation of the 2008 presidential and congressional elections. Five for the Future is a call to action for policy makers, presidential candidates and private sector leaders to move forward decisively to secure America’s future in the global economy.

In 2004, we released our Innovate America report, which positioned innovation as the key to economic growth and success in global markets. Three years later, the president signed into law the bipartisan America COMPETES Act, which drew heavily from Innovate America. This was a significant victory, but it is not enough to guarantee America’s long-term economic leadership.

Five for the Future is the next phase of the council’s unwavering call for a comprehensive national innovational agenda. The United States must seriously reassess national and global economic factors to make certain that we are on a trajectory of success.

America’s future competitiveness demands that we:

Challenge the frontiers in science and technology

Science and technology are being rewritten in atomic, digital and genetic codes, with game changing innovation rising from the digital, biotechnology and nanotechnology revolutions. Leadership at the frontier of science and technology conveys competitive advantage in the global economy, particularly to those poised to rapidly translate new knowledge and insight into new high-value products and services. Generators of new knowledge and technology will serve as a powerful magnet to attract and retain business activity, technical talent and capital.

Similar to the nation’s response to the launch of the Soviet Sputnik program in 1957, the United States must redouble its efforts to create new knowledge and technology. This knowledge and technology will be critical to addressing the major challenges facing humanity in the 21st century.

Renew access to secure and sustainable energy

A secure and sustainable, environmentally prudent and balanced energy system will drive future economic prosperity for the country and companies alike. Within the private sector, growing global energy demands and energy supply vulnerabilities will help drive a transformation in America’s energy portfolio. The private sector can play a starring role in this transformation as energy innovator, adaptor, investor and agent of change. New energy realities have already caused leading companies to address their energy competitiveness in internal operations and in the marketplace.

The Council’s new Energy Security, Innovation and Sustainability program—composed of more than 40 chief executive officers, university presidents and labor leaders—is working to drive private-sector demand for sustainable energy solutions and support the creation of new industries, markets and jobs. Increased investment in 21st century energy infrastructure, private sector innovation and energy management will dramatically improve the U.S. economy, environment, national security and standard of living.

Achieve advantage with creative and cutting edge talent

The structure of the job market has fundamentally changed. A growing number of American workers face competition from worker immigration, off-shoring, corporate global sourcing and automation. High-speed communications and the digitization of work processes are enabling the commoditization of work involving routine skills, and every day it becomes easier to ship work around the world. As the economy globalizes and the marketplace for innovation flattens, many products and services are being transformed into commodities.

Conceptual thinking and knowledge will trump industrial-age efficiency and traditional skills. American workers can establish a new competitive edge at the intersection of disciplines—for example, science and business, math and economics, cultural anthropology and marketing, or art and telecommunications. Educational institutions must continue to adapt to prepare Americans for the rapidly changing global economy. And through partnerships and other means, these institutions must ensure that individuals can constantly upgrade their skills to exploit the cutting edge of scientific discovery, technological change and market opportunity.

Transform risk intelligence into enterprise resilience

When risk becomes reality, severe disruptions can cripple enterprise operations and spread quickly across IT networks and geographical borders. The ability to anticipate, manage and bounce back from disruptions will be a competitive difference maker in the 21st century. The resilient enterprise will be risk intelligent, flexible, agile and adaptive.

Many companies equate security to purely a loss avoidance strategy for fixed assets, but studies show that all-inclusive security measures have direct financial benefits such as streamlined processes, elimination of unnecessary redundancy, improved productivity and lowered insurance premiums.

Engage in the global economy

By 2020, 80 percent of the world’s consumers will live outside the United States—disengagement is not an option. The landscape of global competition is radically different today than it was when the council was founded 22 years ago. In the past, our domestic economy, large domestic markets and domestic business enterprises offered us a degree of independence and insulation from the world’s troubles. Now we are incredibly connected through global enterprises, global markets, global supply chains and global talent networks.

Although this new global economy creates growth, productivity and wealth, it also contributes to a burgeoning trade deficit, wage arbitrage and global redistribution of assets and operations. But much of America’s understanding of competitiveness in the global economy is based on 20th century measurements and assumptions.

Open dialogue with key trading partners is critical to creating collaborative paths to competitiveness. Our citizens and businesses’ ability to thrive in the new global economy depends largely on our ability to understand and act on the new forces of change and to attract high-value economic activity to regions across America.

In summary, the United States remains today’s global economic leader, but our position is not guaranteed. Our long-term success largely depends on our ability to respond to today’s challenges and opportunities with new forms of value, game-changing innovations and groundbreaking competitiveness strategies.

Five for the Future forms a roadmap that will create a competitive advantage for America in the 21st century. These five imperatives demand an environment that supports innovation of all forms and creates competitive advantages for robust risk management and productivity-enhancing approaches to sustainability. The Council on Competitiveness and its membership is committed to addressing the impact of globalization on the United States’ competitiveness and individual prosperity.