Harvard Business School

The Institute for Competitiveness and Strategy at the Harvard Business School licenses a course called the Microeconomics of Competitiveness. The course has been licensed by 100 universities from around the world, including the Moore School of Business at USC. Ed Sellers and I had the opportunity to present the New Carolina story to the annual meeting of the group at Harvard on December 13.

The two day session ended with a review of Harvard’s US Competitiveness project. This project will be detailed in a series of articles in the March issue of the Harvard Business Review. The project surveyed some 10,000 graduates of the Harvard Business School. There were also 12 faculty members who addressed specific issues. The conclusions of the study were pretty grim.

Since 1980, America has experienced:
• Globalization of competition
• Countries with effective economic strategies
• Shortened time horizons
• Intense pressure on the middle class in terms of job loss and stagnation of wages
• Significant percentage in the upper .5% (5 % in 1977 to 18% in 2006)
• The cost of two wars

As a consequence, there have been unsustainable benefits that were primarily, but not exclusively, directed to the middle class:
o Badly thought out housing policy
o Retirement benefits
o Health care (Medicare and Medicaid)
o Cheap products from China, who is not competing on a level playing field

The problems are the result of choice, but not unstoppable forces. However, the federal government can’t seem to make even no brainer decisions.

Michael Porter said “Just do the math on the budget. We are a few years away from a real catastrophe.”

More on this subject in future blogs.