The current issue of BusinessWeek has a particularly insightful article by Harvard professor Michael Porter. A leading expert on strategy and competitiveness, Porter points out the underlying failure in our government’s economic policies — there is no strategic framework. This is not a question of too little versus too much regulation, nor is it a Republican versus Democrat divide. The simple fact is that our economic policies are a mish-mash without coherent direction.
Porter sensibly argues that an effective strategy must reinforce our strengths and shore up our weaknesses. He counts our strengths as 1) “unparalleled environment for entrepeneurship,” 2) “a science, technology, and innovation machine that remains by far the best in the world,” 3) “the world’s best institutions for higher learning,” 4) “the strongest commitment to capitalism and free markets,” 5) the decentralized nature of economic policy and policymaking, 6) the deepest and most efficient capital markets, and 7) a history of dynamism and resiliency.
We can take great pride in these advantages, but should not take them for granted. Porter outline how many of these features of the American economy are being eroded. No matter who wins the elections this week, we will have an opportunity to start fresh. Professor Porter offers us a thoughtful starting point.