The first decade of this century has seen the economic standing of the U.S. slip in the world. Middle class jobs are moving abroad at an alarming rate, real wages have stagnated, Americans aren’t saving for retirement, the U.S. dollar has been supplanted as the currency of choice and the country’s trade deficit is soaring. New York has been overtaken by London as the center of global finance and London, in turn, is being challenged by Dubai and Hong Kong as the preferred destination for capital.
Perhaps most threatening to U.S. hegemony is the rise of China and India atop the economic ladder of the global economy. In her book The Elephant and the Dragon, Robyn Meredith asks: “How should the West respond to the economic metamorphoses brought about by the rise of India and China?” To grapple with that question, she presents an action-plan that can help restore U.S. competitiveness (recommendations by the Council on Competitiveness).
1) Education. Increase investment in K-12 public schools with focus on improving reading, math, language and science. Expand government-sponsored tuition programs to help make college more affordable to working families.
2) Deal with the “Twin Deficits.” The U.S. must pay down its growing budget deficit as it impedes the government’s ability to execute on plans to improve education and health care. The country’s trade deficit means that Americans become more and more reliant on foreign governments like China for borrowing money.
3) Technology and Innovation. Establish regional “innovation hubs” throughout the country linking local technology start-ups with universities, non-profits and local governmental agencies. Federal grants should support R&D in areas which will best position the economy to compete globally in the future such as nanotechnology, green engineering, Internet connectivity and the life sciences.
The rest of the world has caught up to the U.S. The next administration must focus on giving current and future American workers the tools to succeed in the global economy by investing in new technology and primary education. If America is going to maintain its stature as the primary economic power in the world, the children of today must be given the skills, tools and knowledge to become effective entrepreneurs and innovators in tomorrow’s world.
The Elephant and the Dragon: The Rise of India and China and What It Means for All of Us
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