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Michael Porter on a National Economic Strategy

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Michael Porter is doing a little politicking. He sees a need for a national economic strategy, something that the US government hasn't tackled since Porter last participated in such a session - in 1983 (Porter, 42).

Strategists think in terms of strengths and weaknesses. Porter sees these strengths of American economics right now (Porter, 40):

  1. Environment for entrepreneurship
  2. The best science, technology and innovation "machine" in the world.
  3. The world's best institutions of higher learning.
  4. The world's strongest commitment to competition and free markets.
  5. Strategic policy is de-centralized across states and regions.
  6. Deepest and most efficient capital markets in the world.
  7. The willingness to restructure, take our losses, and move on.

That's a list every American should be proud of. That's the strengths. Now America's weaknesses according to Porter (Porter, 40-42):

  1. Belief in competition is waning
  2. Lack of competitive oversight and capital requirements is undermining American financial markets.
  3. No plan to improve access to American universities and colleges.
  4. Federal government is ignoring the strengths of regional economies evidenced by lack of support for individual clusters.
  5. Lack of a transitional safety net for Americans laid off and seeking new jobs resulting in an inefficient protectionism harming growth.
  6. Cost of doing business is too high. It is ignored by government. This includes health care and energy costs.
  7. Theft of intellectual property abroad and barriers for entry for services is tilting the world trading system against a knowledge-based economy.
  8. Citizens retiring today are better educated than the young people replacing them.

These are nice lists. Everybody gets it. So, what do we do?

Porter, of course, has a recommendation: form a President's Commission on Industrial Competitiveness. Make a plan that isn't reactionary. Make it visionary. Porter even recommends a couple strategies to start things off like consolidating local educational systems to generate efficiency and inequality. Up above we quoted a strength about local control of industrial clusters. That local converts, really, to a regional approach to clusters. Porter is recommending a regional approach to education. Combine districts. Equalize investment. Focus on results.

Michelle Rhee (Ripley, 36) is doing that in Washington DC schools. Some people, indeed, hate her. However, and here's the however, things are starting to change for the better. Schools are starting to change. Results are better since she arrived.

The message for a nationwide economic policy addressing long term strategic goals like education? It's not going to be easy. True leaders have to be involved.

Now is the time for a lot of things in America. Strategy is one of them.

References

Ripley, Amada. Can She Save Our Schools? Teachers hate her. Principals are scared of her. How Michelle Rhee became the most revolutionary-and polarizing-force in American education. TIME. 8 December 2008. 36. http://www.time.com/time/magazine/article/0,9171,1862444,00.html 

Porter, Michael E. Why America Needs an Economic Strategy. BusinessWeek. 10 November 2008. http://www.businessweek.com/magazine/content/08_45/b4107038217112.htm