Michael Porter's Advice to Obama: Write an Economic Strategy

Michael Porter's Advice to Obama: Write an Economic StrategyIn a recent Op-Ed in BusinessWeek, Why America Needs an Economic Strategy, Harvard Business School professor Michael Porter outlines the strengths and weaknesses of the U.S. economic system. It is an enlightening analysis by one of the acknowledged leading thinkers on strategy and competitiveness.

His remedy, written just before the election, is that the next president needs to formulate a long-term economic strategy for the country. For Porter, here are the essential questions that the Obama White House must answer:

What is the fundamental competitive position of the U.S. in the global economy?

What must we do to remain strong when other nations are making rapid progress?

"The stark truth is that the U.S. has no long-term economic strategy -- no coherent set of policies to ensure competitiveness over the long haul," Porter writes. The result:
  • Inadequate reinvestment in science and technology is damaging America's "feeder system" for entrepreneurship.
  • Government policy that is increasingly anti-competition, allowing mergers to dominate markets and supporting protectionism.
  • Lack of a plan to widen access to colleges and universities for 25- to 34-year-olds, who must improve their skills to justify higher wages.
  • Top-down, fragmented economic development programs from Beltway Bureaucrats when what is needed are programs that support the decentralization and regional specialization at the heart of our economy.
  • No credible transitional safety net for retiring Americans.
  • Federal polices that harm entrepreneurs by driving up the cost and complexity of doing business, especially for smaller companies.
Republicans and Democrats come under equal scrutiny.

"Republicans keep repeating simplistic free-market thinking, even though the absence of all regulation makes no sense..."

"Democrats, meanwhile, keep talking as if they want to penalize investment and economic success."

A strategy will help address these ills, says Porter. "A strategy would direct our spending to priority investments that also put money into the economy, such as educational assistance and logistical infrastructure, rather than tax rebates. With a strategy, we would stop counterproductive and expensive practices such as farm subsidies and spending earmarks."

Do you agree with Porter's analysis? Is our hodge-podge approach to managing the economy doing more harm than good? Is such an economic strategy even politically doable?

(The Plan image by neil alejandro, CC 2.0)