The competitiveness of America’s economy has been recently placed at the forefront of the policy debate by the White House. Improving our competitiveness, President Obama argues, is important in “winning the future.” More specifically, Obama calls for investment in innovation and infrastructure, such as the proposed $53 billion in developing high speed rail links.
Competitiveness is a rather elusive concept. In economic terms, it refers to how productively a nation utilizes its resources – human, financial and natural. Everything matters to competitiveness: from transportation and financial markets, to education and business regulation.
That's why, in politics, competitiveness can easily mean different things to different people. To President Ronald Reagan it meant expanding free trade. To President George W. Bush it meant tax cuts. To President Obama it means more government investment in infrastructure and innovation, such as transportation, education or Internet access. And according to Obama, it is government – not business – that knows best how, when and where to invest in competitiveness.
But an overall look at America’s competitiveness does not reveal a dire picture – certainly not one that requires immediate and huge funding in our rail transportation links.
Generally, America’s competitiveness is strong, notwithstanding a recent drop in world ranking. The World Economic Forum ranked the United States first in 2008-09 and only fourth in 2010-11.
The drop, however, has been mainly due to the financial crisis and macroeconomic instability of the last three years. In terms of business-led innovation, in fact, the United States ranks No. 1 in the world. This seems to suggest that if Obama is to venture beyond getting our financial and economic house in order, he ought to focus on a sector that lags behind that of so many other countries – that is, our primary and secondary-level education system.
According to the Organization for Economic Co-Operation and Development, America's 15-year-old students come in below average in scientific and mathematical literacy among industrialized, OECD-member countries and 23rd and 31st respectively out of 65 developed and developing economies. -- And that picture gets grimmer when one takes into account that only a handful four countries in the world spend more than the United States on educating their secondary school students.
We are placing our future competitiveness in peril by neglecting our human capital, not our transportation links.
What America knows best is how to compete. The U.S. university education system is by far the best in the world particularly because it is an inherently competitive system. At its core lies the freedom students and their parents have in choosing the best college without restrictions, even on their government grants and loans.
But when it comes to the K-12 education system, centralized public control at all levels repeatedly fails to ensure that no child is left behind. Regardless how much funding and regulations local, state and federal governments inject into the system, public schools keep coming up short of that goal.
The solution lies with competition and its introduction into the K-12 system. Parents increasingly want choice. Conservative legislators now have an opportunity to deliver.
Last year, publicly funded, privately run schools, or charter schools, grew by 10 percent across the country. These schools – just like private and parochial schools do – are doing more with less money for about 1.7 million white and minority students alike. Home schooling is also on the rise, with 1.5 million children being educated at home, an increase of 75 percent in the last eight years. Both growing trends reflect a greater awareness among parents to find alternatives to failing school districts.
Conservatives in state legislatures need to take notice. The newly elected GOP legislative majority in North Carolina serves as a good example. It recently introduced a tax credit bill supporting private education. Their state would be joining nine others in the country already offering some kind of tax deduction or credit program for individuals and/or businesses in support of school choice.
There is an historical opportunity to push for reforms and introduce competition in public education. Our economic competitiveness needs it. But just as importantly, parents are pleading for it. They want to choose what is best for their children.
Investing in advanced transportation infrastructure is certainly important. But what good does a high speed rail system do to our competitiveness, particularly if we are going to buy those high speed trains from France and China anyway? When it comes to competitiveness, it is a bit like buying an extra powerful computer but with little software on it. What do you really do with it?
We must focus on educating American students. They are the human capital and innovators of tomorrow. Only they can ensure America’s future competitiveness.
Nino Saviano is a political strategist and Republican consultant. He previously taught science and technology policy at Georgetown University as well as competitiveness policy in Europe.
You can follow him @ twitter/ninosavian