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Management article
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Reference no. 89414
Published by: Harvard Business Publishing
Published in: "Harvard Business Review", 1989

Abstract

A country''s competitiveness is a matter not of sales but of incomes - earned, not borrowed. To be competitive means to raise incomes as rapidly as competitors do and to make the investments necessary to keep up in the future. From this perspective, U.S. competitiveness is eroding, despite the dramatic recovery of exports and sharp profit and employment increases in the Rust Belt. The United states must make three changes in its economic strategy to improve its standing in world markets: 1) promote investment and exports, not consumption, as the engine of economic growth; 2) shift management focus from short-term financial calculations to a long-term commitment to building market share; 3) replace its implicit, shortsighted, cost-based policy with one that is explicit, opportunity oriented, and industry led.

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Abstract

A country''s competitiveness is a matter not of sales but of incomes - earned, not borrowed. To be competitive means to raise incomes as rapidly as competitors do and to make the investments necessary to keep up in the future. From this perspective, U.S. competitiveness is eroding, despite the dramatic recovery of exports and sharp profit and employment increases in the Rust Belt. The United states must make three changes in its economic strategy to improve its standing in world markets: 1) promote investment and exports, not consumption, as the engine of economic growth; 2) shift management focus from short-term financial calculations to a long-term commitment to building market share; 3) replace its implicit, shortsighted, cost-based policy with one that is explicit, opportunity oriented, and industry led.

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