America's Economic Challenges on the Global Stage
Point of View by Kent Hughes, Centerpoint, January 2007
Today's America is prosperous, if not at peace. But while the country is understandably preoccupied with war and foreign policy, there are growing challenges that threaten the economy of tomorrow.
In a series of major conferences (see this month's cover story), and planned future meetings, the Program on Science, Technology, America and the Global Economy is exploring the changing nature of the American economy and rising global competition, with an eye to defining economic policies for the future.
Many of our problems are homegrown. Trade, current account, and fiscal deficits demand not just international solutions, but also domestic ones. We have a troubled K-12 education system, an overdependence on imported energy, and a portfolio of lagging public investments in education, research in the physical sciences and engineering, and modern infrastructure.
But the global challenges are real enough. China alone is a force in manufacturing, an attractive site for new research facilities, and has even begun to compete with California in agriculture. India now competes in an array of online services and as a site for advanced research. Established competitors in Europe and Asia are competing for global talent. Truly global corporations, international supply chains, and overseas research facilities are changing the very underpinnings of the American economy.
America needs new strategies to compete. Let me highlight four: First, American economic policies must account for global realities. Second, America needs policies that stimulate investment, innovation and job creation for Americans. Today, that means tackling the trade deficit and developing incentives that turn American innovations into American businesses and jobs.
Third, education reform requires redoubled effort and targeted funding. Schools must enlist the help of American families and communities to guarantee every child a globally competitive education. Fourth, America must encourage the development of alternative sources of energy to become less dependent on imported energy.
Americans struggled through the Great Depression, fought to victory over fascism in World War II, won the Cold War, and responded to the competitive challenge of the 1980s by changing public policies and private sector strategies. Americans can compete and win in the 21st century. The time to start is now.
Kent Hughes is director of the Wilson Center's Program on Science, America, Technology, and the Global Economy.