ASPEN, COLORADO, August 19 – The last day of the Aspen Summit began with a plenary address from the inimitable President of the Fed Reserve Bank of Dallas, Richard Fisher. One of the day’s themes will focus on US global economic competitiveness and a notorious optimist in regards to the sustaining entrepreneurial and innovative spirit that drives the US economy like Mr. Fisher was a great choice to get everyone thinking about what it will take.
The First Panel of the day:
· Bret Swanson, Senior Fellow and Director of the Center for Global Innovation, The Progress & Freedom Foundation
· Katherine McGuire, Vice President, Government Relations, Business Software Alliance
· Peter Pitsch, Director, Communications Policy, Intel Corporation
· Steve Stewart, Director, Public Affairs, IBM Governmental Programs
Timothy Stratford, Assistant US Trade Representative for China
Leading off, Bret Swanson asks the panelists on their outlook for the future of free trade, US global economic engagements, and the innovation economy and asks “engage or retreat?”
Katherine McGuire says “clearly we can’t retreat, we’ve moved into the eye of the storm” in terms of our integration with the global economy. In considering the current state of US global competitiveness, Ms. McGuire focuses on soon-to-be-released research by her company (and the Economist Intelligence Unit), the 2nd annual competitiveness index. The study focuses on global economic indicators like Human Capital, the Innovation Friendly Culture of a nation (including infrastructure capacity like broadband deployment and computers per capita), Open Competitive Business environment, and Government leadership that strikes a balance between open-market principles and policies to facilitate innovation.
Some early results from the study, according to Ms. McGuire: the US is still #1 in terms of its overall global competitiveness and Taiwan, Sweden, Denmark, South Korea earn high ranks, with Taiwan moving from 6 to 2; Denmark from 8 to 5 thanks to business environment and infrastructure; Canada from 9 to 6; Japan suffered the deepest decline because of changes to R & D and Patent filings, which is down. According to the latest Economist data, the number 1 area where US competitiveness is under threat is in infrastructure, with broadband penetration levels well below Western Europe and East Asia. Ms. McGuire concluded by saying that the US’ open competitive business environment is now also under threat because of increasing protectionist calls to restrict access to markets.
Steve Stewart of IBM is not about to echo those protectionist calls – his company’s growth last year was immensely imbalanced in favor of international markets. “Global integration is the new playing field and innovation is the way you win the game” Steve says, quoting his boss.
The importance of integration and international trade was re-iterated by the US Trade Representative for China, Timothy Stewart who posited that if US businesses want to succeed globally, then they can’t ignore China. But China also “creates problems for us,” like IP infringement and problems associated with a (now partially) centrally planned economy that doesn’t always respect the rule of law. Mr. Stewart’s advice to US business owners: “Make sure you know what’s going on in China in regards to your industry and when you see things you don’t like, let’s talk.”
Meanwhile, Intel’s Peter Pitsch had his own advice for the US government, urging policy makers to sustain a sound currency, facilitate free trade, support sound education policies…and facilitate the discovery of innovations that positively impact the global market place. Peter also warned against the type of isolation that Katherine MaGuire fears is approaching, saying that “there’s a bit of a regression going on…in part it’s the fault of the dot-com bust and imperfect markets, but more fundamentally…there seems to be a reversion to a very old approach to these economic problems.”
There was some optimistic news to report from this panel on the continued openness of the global economy with Timothy Stratford saying that Doha is not quite dead. “The dust is still settling,” he says, and Pascal Lamie is making the diplomatic rounds as we speak. Additionally, Mr. Stratford submits that current ruptures in the global economy could shift the interests of China to bring them more into line with other parties to Doha.
The key policy recommendation that emerged from the panel’s discussion is that if the US is to enhance and expand its global economic engagements (and thus, its global economic competitiveness), then policy makers will have to facilitate a shift in America’s skill set so that it can both benefit and compete. Math and Science education was the foremost priority according to many of the panelists and audience members. The US needs to work towards creating a vibrant laboratory at home where innovations can develop and be easily exported to the rest of the world.