4 December 2008

Pinto's Point

America's opportunity for global competitiveness

By Jim Pinto

In the 1990s, Americans regarded globalization and free trade as positives. Initially, America got all the upside. Now we are getting some of the downside. As a result, we are now more inclined to see ourselves as victims of globalization, rather than beneficiaries.

Increasing anti-globalism has been justified because the typical American got nothing out of economic expansion. Adjusted for inflation, the median wage is lower than it was in 2000, and jobs are less secure. Americans want to cast blame, and it is easiest to blame foreigners, multinationals, or illegal aliens.

In fact, globalization means freer markets and more political freedom worldwide. Multinationals expand our business globally; immigrants are usually people who are willing to work at the lowest paid jobs, which no one wants. These are major contributors to our prosperity, productivity, and standard of living.

America needs to focus on education and boost R&D spending. We still lead in building intellectual property—high-tech products and services, computer software, biotech, marketing, and finance.

The decline of the dollar gives us an opportunity to reestablish competitive manufacturing here in the U.S. We must push for more industrial exports. In order to remain an economic leader, America must attract the best talent. But our restrictive immigration policies are in danger of stifling that process.

The U.S. remains the leader in the global economy. Americans succeed in the global marketplace because we are the most productive and creative people on earth and our economic system has welcomed investment and rewarded success. Even now, U.S. exports are a key pillar holding up a shaky economy.

America already has one of the highest corporate tax rates in the world, and some of the current election proposals would sharply increase taxation of entrepreneurs and people in high-tech, finance, and engineering, the skills most in demand in the global market place.

To prosper, we must invest and create jobs to make America the best place in the world to do business. Success will directly relate to America’s ability to leverage new thinking combined with new business models on an increasingly complex global scale.

The latest world financial crisis simply highlights America’s opportunity to become a world leader through innovation and global competitiveness.

Related links:

• Top Countries in Global Competitiveness:
  http://www.businessweek.com/globalbiz/content/oct2008/gb20081022_377709.htm?campaign_id=rss_daily
• It Isn’t a Zero-Sum Game:
  http://www.newsweek.com/id/156251
• Is America Losing At Globalization?
  http://www.newsweek.com/id/156343

Behind the byline

Jim Pinto is an industry analyst and founder of Action Instruments. You can e-mail him at jim@jimpinto.com or view his writings at www.JimPinto.com. Read the Table of Contents of his book, Pinto’s Points, at www.jimpinto.com/writings/points.html.