“The United States is competitive to the extent that firms operating here do two things: win in global markets and lift the living standards of the average American. The U.S. economy is doing the first of these but failing at the second”

Michael E. Porter

Said : Harvard’s Michael E. Porter, Bishop William Lawrence University Professor, based at Harvard Business School, and co-chair of HBS’s U.S. Competitiveness Project. “This is a critical moment for our nation. Business leaders and policy makers need a strategy to get our country on a path towards broadly shared prosperity,” according to a news release by the Harvard Business School.

According to findings of the third alumni survey (2013–14) of Harvard Business School (HBS), on U.S. competitiveness, "large and mid size firms have rallied strongly from the Great Recession, and highly skilled individuals are prospering. But middle- and working-class citizens are struggling, as are small businesses." The report on the findings of the survey titled "An Economy Doing Half Its Job" argues that such a divergence is unsustainable. After exploring its root causes, the authors examine actions that might mitigate it. They opine that in order to create a U.S. economy in which firms both thrive in global competition and lift the living standards of the average American, the US business leaders must focus on hugely enhancing their contribution to support : students and schools (education), workers and small businesses to develop workplace skills (skill investment), and to increase the nation’s mobility and opportunities resulting from mobility. (transportation infrastructure). 

The reports notes that "the recent divergence of outcomes, with firms (especially larger firms) thriving and workers struggling, is unusual in the United States. Historically, American companies and citizens have tended either to thrive together, as in the boom after World War II, or to suffer together, as during the Great Depression." 

The report clearly states that : "business leaders must act to move from an opportunistic patchwork of individual projects toward strategic, collaborative efforts that make the average American productive enough to command higher wages even in competitive global labour markets. Without such actions, the U.S. economy will continue to do only half its job, with many citizens struggling. Businesses cannot thrive for long while their communities languish."

Overall, the survey findings on the U.S. business environment depict an economy that is on the mend in a cyclical sense and is faring better than some other advanced economies, but is not structurally equipped to do its full job: the prospects for broadly lifting living standards are dim, and smaller businesses, important job generators in the U.S. economy, are especially disadvantaged.

"ANY LEADER WITH A LONG VIEW UNDERSTANDS THAT BUSINESS HAS A PROFOUND STAKE IN THE PROSPERITY OF THE AVERAGE AMERICAN."

Another interesting finding has been that younger U.S. workers have better literacy skills than older workers bu the main challenge to America, however, is that America has among the most literate 55- to 65-year-olds in the world, but the same is not true of younger cohorts.

"WORKERS ARE CAPTIVES OF THE WEAKEST ASPECTS OF THE U.S. BUSINESS ENVIRONMENT, WHILE FIRMS ARE THE BENEFICIARIES OF AMERICA'S GREATEST STRENGTHS."

“Short-sighted executives may be satisfied with an American economy where firms operating here are winning without lifting U.S. living standards,” said Professor Porter. “But leaders with longer perspectives understand that companies can’t thrive for long while their workers and their communities struggle.”