It's not good news: The U.S. will become less competitive in the next three years, (no) thanks to a broken tax code and an inefficient political system.
The U.S. is falling behind when it comes to competing in the global economy, say two-thirds of Harvard Business School alumni.
Just eight percent of the nearly 10,000 alums polled for the school's first ever "Survey on U.S. Competitiveness" see the U.S. pulling ahead of emerging markets.
The alums fingered a complicated tax code, an inefficient political system, a struggling K-12 education system, and persistent pressure from abroad as reasons why the U.S. will become less competitive over the next three years–something 71 percent think will happen.
The broken tax code was tops on the alumni's list of criticisms, followed by the U.S. political system. “In the eyes of survey respondents, government officials in America are not doing their part to lay the groundwork for U.S. competitiveness,” the report said.
It also observed that a fundamentally weakened U.S. economy "is not only an American problem but also a global risk. If the U.S. struggles, global growth will falter, the pace of innovation will slow, and the U.S. will find it hard to lead efforts to open the global trading and investment system," states the report.
Some 1,700 MBAs surveyed said they help decide whether to place business and jobs at home or abroad–and the U.S. lost two-thirds of the time.
Employers offering mass numbers of jobs and high-end work moved out of the U.S. much faster than they moved in–57 percent head out while just 9 percent thought about moving in. For companies that actually moved headquarters, the U.S. lost out a whopping 84 percent of the time.
Where did companies most often consider moving? China (42 percent of respondents), India (38 percent), and Brazil and Mexico (both 15 percent). Part of what made these countries attractive was that workers there could be paid lower wages.
"The U.S. is losing out on business location decisions at an alarming rate, and those activities being offshored are more job-rich than those coming in," said Michael E. Porter, head of the Institute for Strategy and Competitiveness at the business school.
One bright spot, he said: "The U.S. retains its core strengths in a number of important areas such as university education, innovation, and entrepreneurship, which means that we have the resources to reverse this trend.”
Inc. contributing editor COURTNEY RUBIN was for five years a London-based staff writer for People magazine. Rubin, a former senior writer for Washingtonian magazine, has written for the New York Times magazine, Time, Marie Claire, and other publications. She is the author of The Weight-Loss Diaries.