Michael Porter’s Strategic Plan For The American Economy
I am an optimist. My wife would call that an understatement, but I am what I am. To say these are difficult times for business is an understatement so, here’s a little something I read not long ago that helps sustain me. Michael Porter “wrote the book” on competitive strategy. In a Business Week article published October 30, 2008, he turned his strategic gaze upon the United States Of America. What he came up with is a compelling list of things that distinguish the American economy as unique entity in the world. Herein, I offer this for your consideration and, I hope, as encouragement for the notion that we will get through these historically difficult times. As we move forward, let’s keep focused on what we do best. Let’s keep our eye on the ball. We must do this as a nation through government policy, and as individuals, business leaders, and employees.
Mr Porter lays out seven competitive strengths that he considers uniquely American:
- America has a deeply held appreciation for entrepreneurship. The people who came here from all over the planet were self-selected risk takers striving for a better future. Complacency is the death of entrepreneurship as is fear of failure. We must be bold in our aspirations. America remains the premier place globally for creating new businesses.
- America has nurtured science and technology as drivers for progress. While we haven’t always capitalized on inventions discovered here, more new technology and scientific discovery occurs on our shores that anywhere else on the planet combined.
- Higher learning institutions in America are unparalleled. The best and the brightest young minds in the world come here for graduate and post-graduate education. Many stay. We should do all we can to keep them here.
- America has harnessed the free market to an extent unknown in the rest of the world. I would argue that we have more to learn about regulating free markets in such a way to enhance the free market’s positive qualities while avoiding the all too obvious negative aspects. No one can reasonably deny that free markets are the best system know for harnessing human innovation and drive for achievement.
- The American economy is decentralized across regions and states. This diversification makes the nation resilient to economic shock and creates “laboratories” where we learn what works and what does not. I would characterize this as entrepreneurial governance and economic diversity.
- America has the largest and most efficient capital market. As evidence, one would only need point out that the world is sending it’s money here as the safest haven during these difficult times. Again, I would caution that we have more to learn about efficient regulation of capital market for all too obvious reasons.
- Mr Porter completes his list with the observation that America is resilient and willing to take losses. One could argue that we are testing that very character trait these days. What is unarguable is that America has demonstrated this character on many occasions including during the Great Depression when it was America’s resiliency that lead the world to economic renewal.
There are weaknesses discussed in Mr. Porter’s article as well and they should be considered and addressed. He also wrote an entire book on the subject entitled Competitive Advantage of Nations if you are interested. However, for me, I take on faith that the goodness of America’s character and the blessing of our nation’s founding remain and will endure. I pray that you will take hope and keep the faith. We need only keep our eye on the ball in order for the American Economy to remain strong.