Porter Hbs

SEPTEMBER 2014

AN ECONOMY DOING HALF ITS JOB

Findings of Harvard Business School’s 2013–14 Survey on U.S. Competitiveness

Michael E. Porter Jan W. Rivkin

with contributions from Joseph B. Fuller, Allen S. Grossman, Rosabeth Moss Kanter, and Kevin W. Sharer

EXECUTIVE SUMMARY A PIVOTAL MOMENT THE 2013–14 SURVEY THE U.S. BUSINESS ENVIRONMENT IN 2013–14 K–12 EDUCATION AND THE ROLE OF BUSINESS WORKFORCE SKILLS TRANSPORTATION INFRASTRUCTURE PATHS FORWARD APPENDIX: METHODOLOGY AND RESPONDENT PROFILE

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HARVARD BUSINESS SCHOOL SURVEY ON U.S. COMPETITIVENESS

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EXECUTIVE SUMMARY

In 2013–14, Harvard Business School (HBS) conducted its third alumni survey on U.S. competitiveness. Our report on the findings focuses on a troubling divergence in the American economy: large and midsize firms have rallied strongly from the Great Recession, and highly skilled individuals are prospering. But middleand working-class citizens are struggling, as are small businesses. We argue that such a divergence is unsustainable, explore its root causes, and examine actions that might mitigate it. We ask in particular, how can we create a U.S. economy in which firms both thrive in global competition and lift the living standards of the average American? Four patterns that shed light on this question emerged from survey respondents’ assessments of the U.S. business environment: • In gauging the future of U.S. competitiveness, the survey respondents were pessimistic on balance. By a ratio of three to two, those who foresaw a decline in U.S. competitiveness in the next three years outnumbered those who predicted an improvement. Reflecting the divergence described above, respondents were much more hopeful about the future competitive success of America’s firms than they were about the future pay of America’s workers. • Though pessimistic overall, respondents were less negative about the future of U.S. competitiveness than they were in prior surveys. This trend...