The words "Industrial Policy" harken back to an era of Lenin and Trotsky. But with climbing unemployment, 10% of all households at risk for foreclosure, an inefficient educational system, eroding pension security - if not "Industrial Policy", then what is needed? America's political system, especially as it has evolved in recent times, almost guarantees an absence of strategic thinking at the federal level. The stark truth is that the United States has no long-term economic strategy - no coherent set of policies to ensure competitiveness over the long haul.
Michael Porter is the Bishop William Lawrence University Professor of the Harvard Business School. Porter is one of the leading authorities on competitive strategy and competitiveness of nations and regions. His undergraduate degree is in aerospace engineering from Princeton University. In an October 30, 2008 BusinessWeek article entitled "Why America Needs an Economic Strategy," Porter writes the following:
We need a strategy supported by the majority to secure America's economic future. Yet Americans hear the same old divisive arguments. Republicans keep repeating simplistic free-market thinking, even though the absence of all regulation makes no sense. Self-reliance is preached as if no transitional safety net is needed. Some Republicans even argue passionately that the country should have no strategy because that would be "industrial policy." Yet the real issue is not picking industry winners and losers but improving the business environment for all American companies, something we cannot do with identifying our top priorities. Overall, Republicans seem to think business can thrive without healthy social conditions.
Democrats, meanwhile, keep talking as if they want to penalize investment and economic success. They defend unions obstructing change in areas like education, cling to cumbersome regulatory approaches, and resist ways to get litigation costs for business in line with other countries. Democrats equivocate on trade in an irreversibly global economy. They seem to think social programs can be achieved only at the expense of business.
To make America competitive, we have to get beyond this thinking. Political leaders, business leaders, and civil society must begin a respectful, fact-based dialogue about our challenges. We need to focus on competitive reality, not defending past policies.
Michael Porter is the Bishop William Lawrence University Professor of the Harvard Business School. Porter is one of the leading authorities on competitive strategy and competitiveness of nations and regions. His undergraduate degree is in aerospace engineering from Princeton University. In an October 30, 2008 BusinessWeek article entitled "Why America Needs an Economic Strategy," Porter writes the following:
We need a strategy supported by the majority to secure America's economic future. Yet Americans hear the same old divisive arguments. Republicans keep repeating simplistic free-market thinking, even though the absence of all regulation makes no sense. Self-reliance is preached as if no transitional safety net is needed. Some Republicans even argue passionately that the country should have no strategy because that would be "industrial policy." Yet the real issue is not picking industry winners and losers but improving the business environment for all American companies, something we cannot do with identifying our top priorities. Overall, Republicans seem to think business can thrive without healthy social conditions.
Democrats, meanwhile, keep talking as if they want to penalize investment and economic success. They defend unions obstructing change in areas like education, cling to cumbersome regulatory approaches, and resist ways to get litigation costs for business in line with other countries. Democrats equivocate on trade in an irreversibly global economy. They seem to think social programs can be achieved only at the expense of business.
To make America competitive, we have to get beyond this thinking. Political leaders, business leaders, and civil society must begin a respectful, fact-based dialogue about our challenges. We need to focus on competitive reality, not defending past policies.
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