U.S. global competitiveness is under stress

In 2014 and beyond, business leaders need to address bigger picture, longer-term trends that have plagued Wisconsin and the United States in a global economy, said Katherine Gehl, president and chief executive officer of Gehl Foods Inc.

“I think there’s a much bigger picture that we need to be concerned about, across all industries,” said Gehl, who was a featured panelist at the Northern Trust Economic Trends Breakfast presented by BizTimes Media on Jan. 17. “And that particular trend is that U.S. competitiveness is under stress.”

Citing data from the Harvard Business School’s U.S. Competitiveness Project, which surveyed 10,000 business leaders on U.S. competitiveness, Gehl said there are “disturbing trends” on how the U.S. measures up to other countries.

“People have to realize that it’s a mistake to just look at southeastern Wisconsin, just look at 2014, just look at one industry,” she said. “We, as business leaders, need to look at what’s coming down the pike.”

Gehl said that though she sees positive signs in the region’s economy, particularly in the developing food and beverage manufacturing cluster that Gehl Foods is a part of, business leaders need to be mindful of larger forces at play.

“There are cracks in the foundation,” she said. “It’s incumbent on business leaders to be aware of those and be looking at the long-term.”

A number of troubling long-term trends were identified in the Harvard Business School study, she said, that point to fundamental competitiveness being strained.

“Wisconsin and the U.S. is competitive to the extent that companies operating in the U.S. have to do two things: compete successfully in the global economy, and do so while ensuring high wages and good living standards for the average American employee,” she said. “If they do not ensure those two things, they are not competitive. The U.S. has traditionally been the most competitive place to do business, and now that competitiveness is under stress.”

One way the data shows this challenge, Gehl said, is in the types of jobs that are being created.

“In the last 20 years, the job growth we’ve had has been in industries that serve local markets – virtually no job growth that is exposed to international competition,” she said. “That shows that as a location, we are losing the competitiveness game versus international competition.”

Among the issues contributing to this, she said, are problems with the K-12 education system.

“Our K-12 education system is broken,” she said. “It’s not delivering students with skills that match (the job market).”
Gehl said that while America’s educational system is a historical strength and its universities continue to get better, other countries are catching up.

“There have been some disturbing trends in how well the U.S. stacks up to other countries in educational competencies of the working population,” she said. “We have a responsibility to look at where we’re deteriorating against other countries and take action.”

Another “glaring” weakness in business competitiveness identified by the Harvard study is our political system and its inability to make necessary changes, Gehl said.

“(Our) political system is in gridlock and can’t get anything done,” she said.

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