By August Cole, adjunct fellow,The Hill- 11/29/12
America’s competitive position is slipping, and it’s time to acknowledge this decline as a national security issue.
Current policies and objectives in the public and private sector, taken together, dangerously undercut America’s current and future global position through instability, inefficiency and risk. America’s political and business leaders must understand that improving our nation’s competitiveness is an urgent priority with much higher stakes than is acknowledged today.
For example, the toxic political battle over the country’s fiscal future threatens everything from U.S. sovereign credit ratings to geopolitical dynamics in the Pacific, where China and Japan together hold more than $2 trillion in U.S. debt.
This crisis offers an opportunity to redefine national security in a way that reflects America’s true strength and power — and its vulnerabilities. The U.S. military is unmatched, but focusing on that might as the best measure of American power in the 21st Century is a strategic mistake. While the U.S. has been at war, nations such as China, India, Russia and Brazil have emerged as economic and geopolitical players with clout the United States is still coming to grips with. With the U.S. out of Iraq and exiting Afghanistan, policymakers have been given a unique chance to construct a vision for the future that is not tied to the political, economic and social dynamics of the past decade.
America’s competitive profile is a good place to start. We need to look at its interrelated elements at the same time, rather than careening from one hot-button issue to another. These elements include business climate, infrastructure, national debt, labor market and immigration, defense industrial base, as well as education and healthcare.
There are more signs that this is an increasingly urgent issue.
In less than five years, the U.S. has fallen in one of the main benchmarks of national competitiveness: the World Economic Forum’s 2012-2013 Global Competitiveness Report. The report currently ranks the U.S. 7th overall, just behind Germany, while in 2011, the U.S. ranked 5th. The last time the U.S. held the title as the top ranked nation was 2009.
Meanwhile, debt-crisis politics cause credit ratings agencies to downgrade the sovereign debt of the U.S. while high corporate tax rates with extensive loopholes create an unpredictable business climate.
The American Society of Civil Engineers gave the U.S. a “D” rating on its infrastructure report card and found investment in infrastructure underfunded by more than $1 trillion over a five-year period.
While China and Japan remain taciturn about the fiscal fracas in Washington with each holding more than $1 trillion in U.S. debt, other nations are becoming increasingly vocal, including Europe’s biggest economy: Germany.
The U.S. immigration system is out of phase with a globalized market for the world’s brightest workers and can do much more to retain foreign students who study science, technology, engineering and mathematics.
The defense industrial base’s small firms often provide crucial technologies and systems yet are becoming increasingly vulnerable to cash crunches and tight lending, while the largest contractors and the Pentagon endlessly wrestle to get major weapons program costs under control.
At the household level, healthcare costs rise year after year and the risk of medical-related financial trouble is ever present. Tuition costs for higher education have surged and only 75% of high school students graduate in four years.
Each of these trouble spots deserves attention given their acuity, yet the only way to make meaningful progress is to address them as part of a consensus that aims to achieve something much bigger: improving America’s competitive position in the world.
In Washington, bipartisan political action is fraught with risk. November’s election is still in the rear-view mirror and is a reminder of the stakes lawmakers are playing for when they decide to take action, or stand aside. Beyond politics, the public sector in general needs a sense of urgency so that process does not impede progress.
As for the private sector, one of its most important steps will be a self-examination of what the role of business in 21st Century America should be. By extension, one measure will be how a business leader’s actions might help or hurt America’s competitive position, or national security itself.
This will require balancing some of today’s toughest and most contentious issues in a way that is faithful to the needs of shareholders and business owners while also bringing empathy and understanding to the needs of employees and their communities.
However, none of this will be possible without acknowledging the seriousness of the current situation and the clear paths available to improve America’s competitiveness, and by extension, our national security.
Cole is a writer and analyst specializing in national security issues. He is an adjunct fellow at the American Security Project, a non-partisan think tank, where he focuses on the defense industry.