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2. EXECUTIVE SUMMARY 2A PIVOTAL MOMENT 3THE 201314 SURVEY 5THE U.S. BUSINESS ENVIRONMENT IN 201314 6K12 EDUCATION AND THE ROLE OF BUSINESS 14WORKFORCE SKILLS 21TRANSPORTATION INFRASTRUCTURE 27PATHS FORWARD 32APPENDIX: METHODOLOGY AND RESPONDENT PROFILE 34HARVARD BUSINESS SCHOOL SURVEY ON U.S. COMPETITIVENESS 1 3. EXECUTIVE SUMMARYIn 201314, Harvard Business School (HBS) conductedits third alumni survey on U.S. competitiveness. Ourreport on the findings focuses on a troubling divergencein the American economy: large and midsize firmshave rallied strongly from the Great Recession, andhighly skilled individuals are prospering. But middle-and2working-class citizens are struggling, as aresmall businesses. We argue that such a divergence isunsustainable, explore its root causes, and examineactions that might mitigate it. We ask in particular, howcan we create a U.S. economy in which firms both thrivein global competition and lift the living standards of theaverage American?Four patterns that shed light on this question emergedfrom survey respondents assessments of the U.S.business environment: In gauging the future of U.S. competitiveness, thesurvey respondents were pessimistic on balance.By a ratio of three to two, those who foresawa decline in U.S. competitiveness in the nextthree years outnumbered those who predicted animprovement. Reflecting the divergence describedabove, respondents were much more hopeful aboutthe future competitive success of Americas firmsthan they were about the future pay of Americasworkers. Though pessimistic overall, respondents were lessnegative about the future of U.S. competitivenessthan they were in prior surveys. This trend seemsto reflect the cyclical rebound of the U.S. economy.Accordingly, respondents were more favorablethis year in their assessments of every element ofthe U.S. business environment. Respondents sawrelatively small gains, however, in areas that posesome of the nations toughest challenges, includingAmericas tax code, its K12 education system, itspolitical system, and its regulations. Overall, respondents saw weaknesses in thoseaspects of the U.S. business environment thatdrive the prospects of middle- and working-classcitizensfor instance, the education system, thequality of workplace skills, and the effectivenessof the political system. And they saw strengthsin aspects that influence company success, suchas the quality of management, the vibrancy ofcapital markets, and firm access to innovation. Thisdichotomy is likely at the root of the divergencedescribed above. Compared to the typical respondent, alumni workingin small businesses had more negative (or lesspositive) views of virtually every aspect of the U.S.business environment. This finding echoes growingevidence from other sources that small businessesare disadvantaged in America.Beyond a general assessment of the U.S. businessenvironment, the survey explored three areas of concernwhere smarter approaches might improve the prospectsof the average American: the K12 education system,workplace skills, and transportation infrastructure. Ineach of these areas, this report draws not only from thesurvey but also from wider HBS research efforts. In K12 education, we found that business leadersare already engaged in many generous partnershipsto support students and schools. However, businessis mostly involved in fragmented, subscale effortsthat alleviate weaknesses in the education systemwithout strengthening the system for the long run.Fortunately, a number of new initiatives pointtoward better ways for business leaders to work witheducators to improve U.S. education. Similarly, in the arena of workplace skills, we foundthat businesses are already involved in an arrayof internal and collaborative efforts to developskills. But we also uncovered tendencies in firmsto hire in ways that discourage skills investments;poor information flows along the supply chainfor talent; and inadequate collaboration amongcompanies, educational institutions, andgovernment. In transportation infrastructure, we found a hostof promising individual projects but no nationalstrategy for increasing both the nations mobility andthe opportunity that accompanies mobility.Cutting across these three areas, we see a need forbusiness leaders to actto move from an opportunisticpatchwork of projects toward strategic, collaborativeefforts that make the average American productiveenough to command higher wages even in competitiveglobal labor markets. Without such actions, the U.S.economy will continue to do only half its job, withmany citizens struggling. And in the long run, Americanbusiness will suffer from an inadequate workforce, apopulation of depleted consumers, and large blocs ofanti-business voters. Businesses cannot thrive for longwhile their communities languish. 4. THE RECOVERY MAKES THIS A DECISIVEMOMENT AND POTENTIALLY A DANGEROUS ONE.WILL WE AS A SOCIETY NOW SIGH IN RELIEFAND CONTINUE BUSINESS AS USUAL? OR WILLWE SEIZE THE OPPORTUNITY TO REPAIR THESTRUCTURAL WEAKNESSES IN OUR ECONOMY?HARVARD BUSINESS SCHOOL SURVEY ON U.S. COMPETITIVENESS 3A PIVOTAL MOMENTSince early 2008, the American economy has faceda succession of intense storms: the collapses of BearStearns and Lehman Brothers, the credit crunch, thesubprime mortgage crisis, the downgrading of U.S.government debt, the Great Recession, a brush withnational default, and a federal government shutdown.As we write, the economy is slowly recovering. Manybusiness leaders see smoother waters ahead, with thepromise of stronger and steadier growth in America. Thisgreater optimism is reflected in the survey findings wereport below.But oddly, the recovery makes this a decisive moment,and potentially a dangerous one. Will we as a society nowsigh in relief and continue business as usual, grateful forcalmer waters? Or will we seize the opportunity to repairthe structural weaknesses in our economy that the stormsrevealed and that, arguably, brought on recent troublesand may bring them on again?This choice emerges starkly from a careful look at U.S.competitiveness. The United States is competitive tothe extent that firms operating here can (1) competesuccessfully in the global economy while also (2)supporting high and rising living standards for theaverage American. The nations trajectories on those twogoals point in very different directions.A focus on the first goal alone could lead us simply todeclare success. After all, corporate profits in America areat an all-time high, and the Dow Jones Industrial Averagecontinues to hit new records. With wages now rising inemerging economies and energy costs falling in the U.S.,some manufacturing and other activities are returning toAmerica. Americas technology sector is booming again,and total initial public offering proceeds in 2013 reachedlevels not seen since 2000. Particularly compared toother advanced economies, America seems to have thewind at its back.Yet on the second goalhigh and rising living standardsfor the average Americanany thoughtful look at thedata reveals reasons for deep concern. The U.S. economyhas structural weaknesses that show up in a host ofdisturbing, long-run trends. In the lower and middlestrata of the income distribution, household incomeshave remained stagnant in real terms for decades.Long-run growth rates in private-sector jobs startedfalling from historical levels around 2000 and remainlow. The meager job creation that has occurred has beenoverwhelmingly in local industries, not those facinginternational competition. Labor force participation inAmerica peaked in 1997 and has now fallen to levels notseen in three decades. Real hourly wages have stalledeven among college-educated Americans; only those withadvanced degrees have seen gains. Notably, all of thesetrends began well before the Great Recession. They arestructural, not cyclical.Our sense that the American economy is doing only halfits job is amplified by the recent business cycle, with itsjobless, low-wage recovery. After the recession that beganin late 2007, real gross domestic product recovered topre-downturn levels in three and a half years, but it tookthree more years (until May 2014) for the number ofjobs in America to return to its prior peak. During thosesix and a half years of net-zero job creation, the U.S.population grew by roughly 15 million. A recent reportfrom the National Employment Law Project finds thatjobs lost during the 200810 employment contractionwere disproportionately in higher-wage industries suchas construction and electronics manufacturing, whilejobs gained during the recovery have been concentratedin low-wage industries such as food service and nursinghome care.1 Tellingly, all of the low-wage industrieswith job gains were local in character, not exposed tointernational competition.The recent divergence of outcomes, with firms (especiallylarger firms) thriving and workers struggling, is unusual inthe United States. Historically, American companies andcitizens have tended either to thrive together, as in theboom after World War II, or to suffer together, as duringthe Great Depression. The survey results we report belowshed some light on the roots of this divergence.1National Employment Law Project, The Low-Wage Recovery: IndustryEmployment and Wages Four Years into the Recovery, April 2014. 5. Shortsighted executives may be satisfied with anAmerican economy whose firms win in global marketswithout lifting U.S. living standards. But any leader witha long view understands that business has a profoundstake in the prosperity of the average American. Thrivingcitizens become more productive employees, morewilling consumers, and stronger supporters of pro-business4policies. Struggling citizens are disgruntled atwork, frugal at the cash register, and anti-business at theballot box. We agree strongly with this view: businessescannot succeed for long while their communitieslanguish.Indeed, those business leaders with a long view see notonly hard-pressed citizens but also signs of trouble forcompanies. Yes, some firms are trying to bring businessactivity back to the United States. But once here, theyoften struggle to find the skilled labor, the reasonablecosts of doing business, and the physical infrastructurethey need. Entrepreneurship is growing in parts of thetechnology sector, but small business as a whole is ashrinking portion of the American economy. Moreover,the rate of formation of new firms has declined in everyU.S. state during the past three decades.2Confronting a mix of positive and negative economicsignals, policymakers and business leaders alike face atough task. To make wise choices about how to bolsterU.S. competitiveness, they need an accurate andnuanced view of the structural strengths and weaknessesof the U.S. economy. Developing such a view has beena central goal of Harvard Business Schools project onU.S. competitiveness, a multi-faculty effort launched inMarch 2011. A key tool toward achieving that goal hasbeen a series of surveys of HBS alumni, who work on thefront lines of all parts of the global economy. This reportshares the findings of the third HBS alumni survey onU.S. competitiveness.2Ian Hathaway and Robert E. Litan, Declining Business Dynamism inthe United States: A Look at States and Metros, Economic Studies atBrookings, May 2014.ANY LEADER WITH A LONG VIEWUNDERSTANDS THAT BUSINESS HAS APROFOUND STAKE IN THE PROSPERITYOF THE AVERAGE AMERICAN. 6. HARVARD BUSINESS SCHOOL SURVEY ON U.S. COMPETITIVENESS 5Like the 2011 and 2012 surveys, the 201314 surveyasked HBS alumni to assess the state and trajectory ofU.S. competitiveness and to evaluate elements of thebusiness environment that prior research has shown tobe drivers of national competitiveness. Posing the samebattery of questions each year allows us to track howimpressions of U.S. competitiveness have changed overtime.The 201314 survey also explored three specificelements of the business environment in depth: the education system through high school (K12); the skills base of the workforce; and the nations transportation infrastructure.We chose to focus on those elements for several reasons.First, prior surveys and previous work identified each ofthese areas as a significant weakness or deterioratingstrength in America. Second, a deeper understandingof each area may help to explain the central concernwe described earlierwhy the average Americansliving standard has stagnated even as U.S.-based firmssucceed in global markets. Weaknesses in education orskills, for instance, could contribute to this divergenceby making it difficult for U.S. workers to compete withpeers around the world and thereby justify a higher livingstandard.Third, each of the three elements is an arena in whichbusiness leaders have already taken actions to bolsterU.S. competitiveness but can do much more. From itsinception, the HBS project on U.S. competitivenesshas focused on the ways that business leaders canmake America more competitive. While much of thepublic discourse on U.S. competitiveness emphasizesthe important role of government, our distinctive focushas been on the potential contributions of business.By supporting schools, training workers, or promotinginvestments in infrastructure, how can business leadersmake the U.S. more competitive? Indeed, what arebusiness leaders already doing in these arenas?Fourth, HBS faculty members involved in the U.S.competitiveness project have significant research effortsunder way in each of the three focal areas. The surveyfindings provide unique insights for those efforts.It is important to keep in mind the timing of the surveysince events at the time could influence responses. Thesurvey was administered in December 2013 and January2014. Two events seem especially pertinent: In a year marked by a government shutdown andgridlock, Congress ended 2013 on a high note.Just before Congress went into recess for theyear-end holidays, members of the House andSenate averted a budget crisis and staved off thethreat of sequestration for two years. Instead ofbrinkmanship and uncompromising positions, theyreached an agreement on a bipartisan budget dealby focusing on common ground. As described in thenext section, this seemed to influence respondentsassessment of the health of Americas politicalsystem. Early in December 2013, the Program forInternational Student Assessment (PISA) announcedthe 2012 global rankings in which Americanteenagers continued to lag students in otheradvanced countries in math, reading, and science.The media attention given to the PISA results couldhave influenced some respondents diagnosis of thestate of public education in America.An appendix describes the survey, our methodology, andthe respondents in greater depth. The rest of this reportpresents our findings on the U.S. business environment,K12 education, worker skills, and transportationinfrastructure.Alumni respondents were solicited with the help ofAbt SRBI, a leading survey research firm, via an e-mailmessage to alumni of Harvard Business Schools MBA,doctoral, and longer executive education programs.Prior survey efforts contacted all alumni, but thisyear, to guard against survey fatigue, we soliciteda representative sample of all alumni15,099individuals. Of these, 1,947 (12.9%) completed thesurvey. Respondents weighed in from 46 U.S. states(66.7% of respondents with known locations) and 72other countries (33.3%). They ranged in age from 26 to98, and the 75.6% who currently work came from everysector of the economy, with heavy representation in thefinance and insurance, manufacturing, professional,scientific, technical, and information sectors. Amongthe respondents who are currently working, just over40% reported a title of chief executive, chair, president,founder, owner, managing director, managing partner, ora similar title at the very top of an organization.THE 201314 SURVEY 7. THE U.S. BUSINESS ENVIRONMENT IN 201314Pessimism AbatingIn each alumni survey, we gauge the overall trajectory ofU.S. competitiveness by asking two questions that reflectthe definition of competitiveness. In three years, willfirms in the U.S. be more or less able to compete in theglobal economy? And in three years, will firms be more orless able to pay high wages and benefits?In the 201314 survey, 47% of respondents expectedU.S. competitiveness to deteriorate, with firms less ableto compete, less able to pay well, or both (red boxes inFigure 1; numbers in red boxes do not sum to precisely47% due to rounding). A smaller portion, 33%, wasoptimistic, anticipating one or both dimensions of U.S.competitiveness to improve and neither to decline (greenboxes). The remaining 20% were neutral, expecting nochange from current conditions on either dimension(yellow box).6Respondents expect the prospects of U.S. firms andworkers to continue to diverge. Respondents wererelatively bullish on the future of firms, with 31%expecting them to be better able to compete in globalmarkets in three years and 26% expecting them to beless able. (See the right and left columns of Figure 1,respectively.) In contrast, 41% foresaw lower wages andbenefits, and only 27% anticipated higher wages andbenefits. (See the top and bottom rows, respectively.Numbers in the top row do not sum to precisely 41%due to rounding.)FIGURE 1: U.S. COMPETITIVENESS IN THREE YEARS (201314 FINDINGS)Will firms in the U.S. be more or less able tocompete in the global economy?8%18%8%5%LESS 20%1%15%5%MORELESSNEITHER LESSNOR MORE MORE20%Will firms in the U.S.be more or less ableto pay high wagesand benefits?NEITHER LESSNOR MORERed, or fallingcompetitiveness:47% in totalGreen, or risingcompetitiveness:33% in totalPercentages in boxes may not sum to total because of rounding. 8. STABLECOMPETITIVENESSFIGURE 2: U.S. COMPETITIVENESS IN THREE YEARS, ACROSS THREE ALUMNI SURVEYSHARVARD BUSINESS SCHOOL SURVEY ON U.S. COMPETITIVENESS 7In 201314 as in past years, those who saw U.S.competitiveness as waning outnumbered those whosaw it as rising. But the overall level of pessimismhas declined over time. For instance, the portion ofrespondents who expect U.S. competitiveness to declinein coming years fell from 71% in the 2011 survey to47% in 201314. (See Figure 2.) One interpretation isthat the typical respondent sees U.S. competitiveness asdeclining but doing so more slowly than in therecent past.Pessimism about the trajectory of U.S. competitivenesshas abated across respondents in all age groups, inboth U.S. and non-U.S. locations, and in every industrywith a large number of completed surveys. Between the2011 and 2012 surveys, the reduction in pessimismwe observed was concentrated especially in the subsetof respondents with liberal political views. In contrast,liberal and conservative respondents expressed a roughlyequal decline in pessimism between the 2012 and201314 surveys.33The political leanings of respondents were inferred from policypreferences they expressed when completing the 2012 survey.Respondents who approved of the Buffett rule to place a minimumtax rate on high earners and disapproved of the Paul Ryan tax planand budget proposal were deemed to be liberal. Respondents with theopposite preferences were considered to be conservative.71%58%47%13%17%20%16%25%33%2011 2012 201314Survey dateRISINGCOMPETITIVENESSFALLINGCOMPETITIVENESSPercent of respondents 9. A Recovering Business EnvironmentRising confidence in America was also evident when weasked respondents to compare the overall U.S. businessenvironment to that of other advanced economiesand that of emerging economies. Figure 3 contrastsresponses in 2011 and 201314. Across the board, therelative assessment of the U.S. business environmentimproved. Especially striking is the shift in trajectoryversus emerging economies: the portion of respondentswho perceived the United States as falling behindemerging economies fell from 66% in 2011 to 38%in 201314. This may, of course, reflect the well-publicized8slowdown in emerging economies as much asprogress in America.To develop a more granular view of the U.S. businessenvironment, we asked respondents to assess individualelements of the environment that prior research hasshown to be drivers of competitiveness. The sidebar onpage 9 describes the elements we examined. Note thatin the 201314 survey, we added a new element forconsideration: the quality of health care relative to cost.Health care is a major driver of workforce well-being andproductivity in all countries, and especially in America, itis a large and growing cost of doing business.Figure 4 summarizes the assessments in our originalalumni survey, in 2011. The horizontal axis captures thecurrent position of each element: it records the portionof respondents assessing each element in the UnitedStates to be better than in other advanced economies,minus the portion assessing each to be worse. Thevertical axis summarizes trajectory: the portion feelingthat the United States is gaining versus other advancedeconomies on each element, minus the portion feelingthat the nation is falling behind. In 2011, respondentssaw great strengths in the U.S.for instance, strongentrepreneurship and innovation, world-class researchuniversities, high-quality management, and vibrantcapital markets. They also noted historical strengths indecline, including infrastructure and workforce skills,as well as worsening weaknesses, including Americaspolitical system, tax code, K12 education system, andmacroeconomic policies.Figure 5 on page 10 shows subsequent shifts inassessments in the 2012 and 201314 surveys. Theposition and trajectory of every element improvedbetween 2011 and 201314. To some extent, weattribute this movement to generalized sentiment aboutthe United States and other economies rather than realchange. It is implausible, for instance, that the actualstate of Americas logistics infrastructure relative toEuropes or Japans changed much in two to three years.Nonetheless, the relative movements are revealing. Mostimproved from 2011 were Americas macroeconomicpolicies and capital markets. This probably reflectsAmericas comparatively rapid post-crisis stabilizationand a return to normal conditions in its credit markets,FIGURE 3: ASSESSMENT OF THE OVERALL U.S. BUSINESS ENVIRONMENT100%80%60%40%20%0%Percent of respondentsMUCHBETTERSOMEWHATBETTERABOUTAVERAGESOMEWHATWORSEKEEPINGPACEFALLINGBEHINDKEEPINGPACEFALLINGBEHINDPULLINGAHEADDONT KNOWPULLINGAHEADFALLINGBEHINDSOMEWHATBETTERABOUTAVERAGESOMEWHATWORSEPULLINGAHEADKEEPINGPACEFALLINGBEHINDMUCHBETTERPULLINGAHEADKEEPINGPACEDONT KNOW DONT KNOWMUCHWORSE2011 2013-14 2011 2013-14 2011 2013-14Current positionvs. otheradvanced economiesTrajectoryvs. otheradvanced economiesTrajectoryvs.emerging economies 10. FIGURE 4: ASSESSMENTS OF ELEMENTS OF THE U.S. BUSINESS ENVIRONMENT IN 2011Strength and ImprovingCOMMUNICATIONSINFRASTRUCTUREWeakness but ImprovingWeakness and Deteriorating Strength but DeterioratingHARVARD BUSINESS SCHOOL SURVEY ON U.S. COMPETITIVENESS 940%20%0%-20%-40%-60%-80%ELEMENTS OF THE NATIONAL BUSINESS ENVIRONMENTMACRO ELEMENTSMacroeconomic policy: soundness of governmentbudgetary, interest rate, and monetary policiesEffectiveness of the political system: ability of thegovernment to pass effective lawsProtection of physical and intellectual property rights andlack of corruptionEfficiency of legal framework: modest legal costs; swiftadjudicationComplexity of the national tax codeEducation system through high school: universal access tohigh-quality education; curricula that prepare studentsfor productive workMICRO ELEMENTSContext for entrepreneurship: availability of capital forhigh-quality ideas; ease of setting up new businesses;lack of stigma for failureAvailability of skilled laborFlexibility in hiring and firing of workersInnovation infrastructure: high-quality scientific researchinstitutions; availability of scientists and engineersRegulation: effective and predictable regulations withoutunnecessary burden on firmsStrength of clusters: geographic concentrations of relatedfirms, suppliers, service providers, and supportinginstitutions with effective collaborationQuality of capital markets: ease of firm access toappropriate capital; capital allocated to most profitableinvestmentsSophistication of firm management and operations:use of sophisticated strategies, operating practices,management structures, and analytical techniquesQuality of health care relative to costLogistics infrastructure: high-quality highways, railroads,ports, and air transportCommunications infrastructure: high-quality and widelyavailable telephony, Internet, and data accessHigh-quality universities with strong linkages to theprivate sectorLOGISTICS INFRASTRUCTURETAX CODEK12 EDUCATION SYSTEMUNIVERSITIESENTREPRENEURSHIPSKILLED LABORHIRING AND FIRINGINNOVATIONREGULATIONCLUSTERS CAPITAL MARKETSMACRO POLICYPOLITICAL SYSTEMPROPERTY RIGHTSLEGAL FRAMEWORKFIRM MANAGEMENT-100%-60% -40% -20% 0% 20% 40% 60% 80% 100%U.S. trajectory compared to other advanced economiesCurrent U.S. position compared to other advanced economies 11. FIGURE 5: SHIFTS IN ASSESSMENTS OF ELEMENTS OF THE U.S. BUSINESS ENVIRONMENT1040%20%0%-20%-40%-60%-80%-100%2011 2012 2013-14Strength and ImprovingWeakness but ImprovingCOMMUNICATIONSINFRASTRUCTURELOGISTICS INFRASTRUCTUREENTREPRENEURSHIPWeakness and Deteriorating Strength but DeterioratingINNOVATION-60% -40% -20% 0% 20% 40% 60% 80% 100%U.S. trajectory compared to other advanced economiesCurrent U.S. position compared to other advanced economiesTAX CODEK12 EDUCATION SYSTEMUNIVERSITIESSKILLEDLABORHIRING AND FIRINGREGULATIONCLUSTERS CAPITAL MARKETSMACRO POLICYPOLITICAL SYSTEMPROPERTY RIGHTSLEGALFRAMEWORKFIRM MANAGEMENTHEALTH CARE(ONLY 2013)contrasted to lingering doubts about the banking systemsof Europe and Japan. Least improved were Americas taxcode and system of property rights, followed by its K12education system, its political system, and its regulatoryframework. These findings point to some of the countrysmost stubborn long-term issues. Note also that healthcare debuted in the 201314 survey as a weakness thatis getting worse.The survey responses were clearly sensitive to currentevents. On December 26, in the very middle of oursurveying period, President Obama signed into law abipartisan federal budget compromise that had beennegotiated by Democratic Senator Patty Murray andRepublican Congressman Paul Ryan. The compromiseeased automatic spending cuts and made a governmentshutdown less likely. Individuals who completed the201314 survey before December 26 assessed theeffectiveness of the U.S. political system as beingsignificantly worse than did 2012 respondents.Individuals who responded after December 26 saw thepolitical system as much improved.Figures 4 and 5 shed light on the diverging conditions ofworkers and firms in America. Workers and firms dependon quite different elements of the business environment.The economic fates of workers are bound up with thequality and scarcity of their human capital, whichparticularly in the middle classhas been eroded byweaknesses in the nations K12 education system andworkforce skills. Moreover, American workers cannotescape the consequences of a weak political systemor a convoluted tax code, for instance. In contrast, thesuccess of firms (and the highly educated professionalclass) depends not just on the human capital they cantap but also on the quality of American management,the vibrancy of U.S. capital markets, and accessto innovation and world-class research universities.Global mobility allows firms to offset a poor businessenvironment and break free from poor governmentpolicy, at least in the short run. In essence, workers arecaptives of the weakest aspects of the U.S. businessenvironment, while firms are beneficiaries of Americasgreatest strengths.WORKERS ARE CAPTIVES OF THEWEAKEST ASPECTS OF THE U.S. BUSINESSENVIRONMENT, WHILE FIRMS ARE THEBENEFICIARIES OF AMERICA'S GREATESTSTRENGTHS. 12. 32% 31% 32% 37% 31%17% 22% 22% 18% 25%STABLECOMPETITIVENESSHARVARD BUSINESS SCHOOL SURVEY ON U.S. COMPETITIVENESS 11Serious Concerns among SmallerBusinessesFor the first time with the 201314 survey, we askedeach respondent who was working to specify the numberof employees in his or her firm. This allows us to uncoversignificant differences in how leaders of small and largebusinesses view America's business environment.As Figure 6 reports, respondents working in small firmstended to be more pessimistic about the trajectory ofU.S. competitiveness than those from large firms. Atthe other end of the spectrum, respondents working forrelatively largebut not the largestfirms, with 1,000to 9,999 employees, were the most likely to expect U.S.competitiveness to improve in the next three years.Examining individual elements of the U.S. businessenvironment gives us a clearer view of small businessesconcerns. In Figure 7 (see page 12), we look at howrespondents in each firm-size class assessed the currentposition of each element of the business environment,compared to all survey respondents. A dark red boxappears when the respondents in a particular firm-sizeclass judged an aspect of the business environmentto be much weaker (by 10 or more points) than thecorresponding aspect in 201314 in Figure 5. Forinstance, respondents from companies with 10,000 ormore employees were more negative on the quality ofAmericas health care relative to its cost. At the otherextreme, dark green boxes signify that respondents in afirm-size class are unusually positive or far less negativeon an element. For example, respondents from midsizedfirms with 100 to 999 employees were not nearly asnegative on Americas regulatory conditions as was thetypical respondent.Figure 7 reveals that respondents in the smallest firms,with one to nine employees, were more negative, orless positive, on virtually every element of Americasbusiness environment. The areas where the smallerbusinesses were especially pessimistic, or lessoptimistic, include the countrys education system,regulations, infrastructure, and tax code. In contrast,respondents in firms with 1,000 to 9,999 employeeswere more positive than average on almost all aspectsof the business environment. They were particularlymore sanguine about the political system and severalareas it affects, including macroeconomic policy, thetax code, and logistics infrastructure. Respondents frommidsized firms with 100 to 999 employees were nearlyas positive.FIGURE 6: U.S. COMPETITIVENESS IN THREE YEARS, BY RESPONDENT'S FIRM SIZE50% 47% 46% 45% 44%19employees1099employees100999employees1,0009,999employees10,000 or moreemployeesFirm SizeRISINGCOMPETITIVENESSFALLINGCOMPETITIVENESS 13. The deep concerns among survey respondents in thesmallest firms echo broader, long-term evidence ofproblems facing Americas small businesses and newcompanies. Figure 8 shows, for instance, that growth intotal employment in small firms has not kept pace withgrowth in large firms in recent decades. And as Figure 9reports, the number of companies dissolved in Americaeach year has crept up on, and now surpasses, thenumber of new firms founded in America. In 201415,the HBS project on U.S. competitiveness will focuson the challenges that small and new businesses facein America, via a study co-led by Karen Mills, formerhead of the Small Business Administration and now asenior fellow at Harvard Business School. This work hasbegun in the working paper "The State of Small BusinessFIGURE 7: RELATIVE ASSESSMENTS OF ELEMENTS OF THE U.S. BUSINESS ENVIRONMENT, BY RESPONDENT'S FIRM SIZE12Lending: Credit Access During the Recovery and HowTechnology May Change the Game."Overall, the survey findings on the U.S. businessenvironment depict an economy that is on the mend ina cyclical sense and is faring better than some otheradvanced economies, but is not structurally equippedto do its full job: the prospects for broadly lifting livingstandards are dim, and smaller businesses, importantjob generators in the U.S. economy, are especiallydisadvantaged.We turn next to three elements of the U.S. businessenvironment that are key to any long-term improvementin the economic future of the average American.Number of employeesK-12 educationCommunications infrastructureMacroeconomic policyRegulationHealth careInnovationLogistics infrastructureTax codeUniversitiesPolitical systemEntrepreneurshipCapital marketsClustersHiring and firingLegal frameworkProperty rightsSkilled laborFirm management19 1099 1009991,0009,99910,000or more- - - + +++ +++ - -- - - ++ + -- - - ++ +++ +++- - - +++ ++ +- - + + ++ - - -- - + ++ + +- - + ++ +++ - -- - ++ ++ +++ -- - ++ ++ +- - +++ +++ -- + + + +- + + + +- + ++ + -- ++ - - ++ ++- ++ ++ ++ -- ++ ++ ++ ++- +++ ++ ++ ++ + - - +Negative Positive- - - - - - + +++Compared to the average respondent as shown in Figure 5 in 201314, respondents in thisfirm-size class placed this element:- - - - - - + ++10 or more pointsto the left5 to 10 pointsto the left0 to 5 pointsto the left0 to 5 pointsto the right5 to 10 pointsto the right+++10 or more pointsto the right 14. FIGURE 8: INDEX OF TOTAL NUMBER OF EMPLOYEES IN FIRMS OF VARIOUS SIZES1978 1982 1986 1990 1994 1998 2002 2006 20101,0009,99910099910,000 or more1099Firms CreatedFirms DissolvedHARVARD BUSINESS SCHOOL SURVEY ON U.S. COMPETITIVENESS 1320018016014012010080Source: U.S. Census Bureau Business Dynamics Statistics.FIGURE 9: U.S. FIRMS CREATED AND DISSOLVEDNumber ofemployeesin each firm19Total number of employees, indexed(1978 = 100)6505504503502501978 1983 1988 1993 1998 2003 20082011GreatRecessionNumber of firms (000s)Notes: Shaded area indicates the recession of December 2007 to June 2009 as defined by the National Bureau of EconomicResearch. Chart adapted from Ian Hathaway and Robert E. Litan, Declining Business Dynamism in the United States: A Look atStates and Metros, Economic Studies at Brookings, May 2014.Sources: U.S. Census Bureau Business Dynamics Statistics. 15. K12 EDUCATION AND THE ROLE OF BUSINESSAllen S. Grossman, Jan W. Rivkin, Kevin W. Sharer, and Michael E. PorterThe challenge that Americas education system posesto U.S. competitiveness has been obscured by a lackof long-run information on student performance thatis comparable across countries. Last fall, however,the Organisation for Economic Co-operation andDevelopment (OECD) released new data that make itpossible to see the issue in a fresh light. For the firsttime, the OECD evaluated the workplace competenciesof adultsin literacy, numeracy, and problem-solvingskillsby age and country.4 The data allow us toexamine adult competencies in successive age cohortswithin a country and thereby get a sense of how well acountrys education and training systems have performedover long periods.Figure 10 shows the OECD results for literacy, witha measure of proficiency on the vertical axis. Theblue columns show that younger U.S. workers havebetter literacy skills than older workers. This reflects,presumably, an education system that is making progressin absolute terms. The challenge to America, however,is that the green columns, representing the internationalaverage, have progressed much faster than the bluecolumns. America has among the most literate 55- to65-year-olds in the world, but the same is not true ofyounger cohorts.Figure 11 shows that America faces similar challengesin problem-solving and numeracy skills. What were onceAmerican advantages in human capital have turned intodisadvantages. Relative performance matters in globalcompetition, where American workers must out-produceand out-innovate the worlds best.Some would argue (and we would agree) that Figures10 and 11 reveal an ethical issue: our society isnot fulfilling its promise to children to educate andprepare them. Others would argue (and again we wouldagree) that the figures point to a political problem: ourdemocracy cannot work well when many citizens aredenied the opportunities that strong educations afford.We would add that the figures highlight a fundamentalbusiness problem: companies operating in the U.S.cannot succeed without well-educated, highly skilled14employees. Moreover, the living standards of mostAmericans will not rise if their workplace skills lag muchof the worlds. The situation captured in the OECDdataand reflected also in the mediocre performanceof U.S. students on international testsdoes not allowbusiness leaders to sit on the sidelines.Furthermore, signs of progress in U.S. education makethis a promising time for business to be on the fieldrather than on the sidelines. A number of trends, somea generation in the making, are converging in ways thatmake possible rapid improvement in America's educationsystem. In recent years, U.S. schools have seen markedinvestments in teaching and management talent; theadoption of rigorous standards, most recently with theCommon Core State Standards; new technologies andmodes of teaching that enable personalized learning; awave of data collection and analysis that highlights whatworks in education; growth in options that allow parentsa role in choosing their childrens schools; and newincentives that catalyze innovation such as the federalRace to the Top Fund. This new dynamism in K12education gives business an unprecedented opportunityto support changes that will bolster Americas futurecompetitiveness.4M. Goodman, R. Finnegan, L. Mohadjer, T. Krenzke, and J. Hogan(2013), Literacy, Numeracy, and Problem Solving in Technology-RichEnvironments Among U.S. Adults: Results from the Program for theInternational Assessment of Adult Competencies 2012: First Look(NCES 2014-008), U.S. Department of Education, Washington, DC:National Center for Education Statistics.A Problem for Business 16. 10%50-5Source: Goodman, M., Finnegan, R., Mohadjer, L., Krenzke, T., and Hogan, J. (2013). Literacy, Numeracy, and Problem Solving inTechnology-Rich Environments Among U.S. Adults: Results from the Program for the International Assessment of Adult Competencies2012: First Look (NCES 2014-008). U.S. Department of Education. Washington, DC: National Center for Education Statistics.HARVARD BUSINESS SCHOOL SURVEY ON U.S. COMPETITIVENESS 15FIGURE 10: ADULT LITERACY COMPETENCY BY AGE COHORT70605040302010055-65 45-54 35-44 25-34Percent of adults in top two proficiency categories-1055-65 45-54 35-44 25-34U.S.Intl.avg.More recently educatedU.S. disadvantage U.S. advantageFIGURE 11: RELATIVE ADULT COMPETENCIES BY AGE COHORT10%50-5-10-15-20Literacy Problem-solving Numeracy556545543544253416245565455435442534162455654554354425341624U.S. disadvantage U.S. advantageVertical axis = % of U.S. adults in top two proficiency categories minus % of all international adults in top two proficiency categories.Source: Goodman, M., Finnegan, R., Mohadjer, L., Krenzke, T., and Hogan, J. (2013). Literacy, Numeracy, and Problem Solving inTechnology-Rich Environments Among U.S. Adults: Results from the Program for the International Assessment of Adult Competencies2012: First Look (NCES 2014-008). U.S. Department of Education. Washington, DC: National Center for Education Statistics. 17. Broad, Generous, Helpful, andInadequate EngagementHow well is business tapping this opportunity? We usedthe 201314 alumni survey to gauge how businessleaders are involved in education todaywhether theyare on the sidelines, on the playing field, or elsewhere.More broadly, since late 2012, the HBS project on U.S.competitiveness has been working with the Bill andMelinda Gates Foundation and The Boston ConsultingGroup (BCG) to ask, How can business leaders partnerbetter with educators to support Americas students andschools? The rest of this section draws on that work,including what we believe to be the first-ever nationalsurvey of school superintendents on the role of businessin education. The survey invited the superintendentsof the 10,000 largest school districts in America toparticipate, and more than 1,100 did. The full findingsof the Gates/BCG/HBS joint effort appear in thepublications shown at the bottom of this page.The superintendent and alumni surveys agree thatbusiness is broadly engaged in supporting K12education in America. Among the superintendents,95% reported at least one business-based effort in theirschool districts. Of the alumni working at firms with U.S.operations, 63% reported at least one company activityto support schools.16There are multiple signs, however, that this businessengagementwhile broadis not deep. Only 12%of superintendents characterized their businesscommunities as deeply involved in their school districts.And only 7% of alumni respondents described their firmsas deeply involved in public education. (See Figure 12.)There seem to be many business bystanders.Moreover, when asked how business engages,superintendents reported a great deal of checkbookphilanthropy: businesses give money, support studentsthrough scholarships, donate backpacks or computers,and so on. (See the left half of Figure 13.) Deeperengagements to support the professional development ofteachers or to align curricula with workplace needs weremuch less common. Like superintendents, alumni alsoreported a lot of checkbook philanthropy, and tellingly,they often didnt know whether their firms supportedschools in certain ways. (See the right half of Figure 13.)Fortunately, the business engagements in schools seemto work. Well over 80% of surveyed superintendents saidthat business efforts have a positive effect on studentoutcomes, and virtually none reported a negative effect.Superintendents also reported that business-sponsoredefforts in schools that were part of a larger state-wideor national program were more likely to have a majorpositive effect on students than were purely localprograms. Yet collectively, they said that local programshttp://www.hbs.edu/competitiveness/research/pk12-education/publications.html 18. Assist in district-levelimprovementContribute to curriculumHARVARD BUSINESS SCHOOL SURVEY ON U.S. COMPETITIVENESS 17outnumbered larger efforts by six to one. Businessesseem to be allocating resources to local programs,perhaps pet projects, even though efforts associated withstate-wide or national programs are more effective.Overall, then, a strong impression emerges from thesurveys as well as interviews with leaders in the field:today, business leaders support schools through afragmented array of subscale efforts that are generous,well-intended, and effective at alleviating some of thesymptoms of a weak educational system, but inadequatefor helping to strengthen the system.Superintendents:Which statement best describes thebusiness communitys overallengagement with your school district?Business Leaders:Which statement best describes yourfirms engagement with the publiceducation system?12%51%37%7%25%62%6%Barely ornot at allinvolvedBarely ornot at allinvolvedSomewhatinvolvedSomewhatinvolvedDeeply involved Do not know Deeply involvedSuperintendents:Do businesses in your district do this?Business Leaders:Does your firm do this?Donate moneySupport studentsDonate goodsAdvocate for schoolsdevelopmentSupport professionaldevelopment0% 25% 50% 75% 100% 0% 25% 50% 75% 100%YES NO DO NOT KNOWFIGURE 12: BUSINESS ENGAGEMENT IN EDUCATIONFIGURE 13: ACTIONS TAKEN BY BUSINESSES IN SCHOOLS 19. Promising Models of DeeperEngagementFortunately, our work with the Gates Foundation andBCG has identified progressive business leaders who arepartnering with educators in creative ways that promiseto have greater, lasting impact on the nations educationsystem and its students.The models of deeper engagement fall into threecategories: Laying the policy foundations for education innovation.18Some business leaders are joining with educatorsand using their substantial local influence toadvocate for policies, such as the CommonCore State Standards, that enable innovation ineducation. In Denver, for instance, business leadersrecently lobbied successfully for tax increases thatwould protect school innovation in the face of cutsin the wider city budget. Scaling up proven innovations in education. There isno lack of success stories in Americas schools, butsuccessful efforts that emerge in one locale are toorarely replicated elsewhere. A number of businessleaders, working with educators, are now usingtheir competence in scaling operations to expandprograms proven to boost student outcomes. Forexample, ExxonMobil has sponsored the NationalMath and Science Initiative, enabling it to take twolocal efforts to improve science and math instructionand move them toward national scale. Reinventing local education ecosystems. ManyAmerican cities and towns have a host of programsto support children but lack strategies for aligningthose programs, filling gaps between programs,eliminating redundancies, agreeing on goals,measuring success, and investing behind whatworks. In a growing number of cities, businessleaders are bringing their strategic skills to bearon this problem. The GE Foundation, for instance,is investing deeply in seven school districts whereGE has major operations, in efforts to upgrade themanagement processes and strategic capacity oflocal education systems.The reports listed at the bottom of page 16 discuss thesethree types of transformational actions in depth.School superintendents say that they are open to deeperbusiness engagement. When surveyed, more than80% of superintendents called for greater businessinvolvement in their districts in the future, and most ofthem hoped to see new forms of engagement. Only 0.5%called for business to be less involved. Superintendentswere especially eager for business engagements thatwould better prepare their students for the workforce.Overcoming Barriers to BusinessEngagementBusiness leaders who aim to partner deeply witheducators, however, should be aware that our surveysreveal at least four important barriers to suchengagements: First, educators and businesspeople lack a sharedview of the reality of U.S. education. We askedschool superintendents to assess the very sameelements of the U.S. business environment, inthe very same way, as did alumni, and Figure 14summarizes their responses. On most elements ofthe environment, superintendents and businessleaders saw eye-to-eye; Figure 14 resembles Figures4 and 5. But superintendents had a much morepositive assessment of the nations K12 educationsystem than did business leaders. Second, no one knows with confidence whichbusiness engagements in education work well andwhy. Only 10% of superintendents reported thatthe impact of any of the business activities in theirdistricts had been evaluated and measured in formalstudies. Third, superintendents have little confidence thatbusiness leaders deeply understand education.Only 3% of superintendents characterized theirbusiness communities as well informed about publiceducation, while 14% described their businesscommunities as misinformed. (See Figure 15.) 20. FIGURE 14: ASSESSMENTS OF ELEMENTS OF THE U.S. BUSINESS ENVIRONMENT BY SCHOOL SUPERINTENDENTSUNIVERSITIESStrength and ImprovingCOMMUNICATIONSINFRASTRUCTURELOGISTICS INFRASTRUCTUREWeakness but ImprovingWeakness and Deteriorating Strength but DeterioratingBarely ornot informedHARVARD BUSINESS SCHOOL SURVEY ON U.S. COMPETITIVENESS 19TAX CODEK12 EDUCATION SYSTEMENTREPRENEURSHIPSKILLED LABORHIRING AND FIRINGINNOVATIONREGULATIONCLUSTERSCAPITAL MARKETSMACRO POLICYPOLITICAL SYSTEMPROPERTY RIGHTSLEGAL FRAMEWORKFIRM MANAGEMENT40%20%0%-20%-40%-60%-80%-100%-60% -40% -20% 0% 20% 40% 60% 80% 100%U.S. trajectory compared to other advanced economiesCurrent U.S. position compared to other advanced economiesSuperintendents:Which statement best describes howknowledgeable business leaders in yourdistrict are about public education?Business Leaders:Which statement best describes howknowledgeable you are about publiceducation?1%3%14%30% 52%35%54%10%1%Barely ornot informedSomewhatinformedWellinformedWell informed Do not knowMisinformedDo not knowSomewhatinformedFIGURE 15: BUSINESS LEADERS KNOWLEDGE OF PUBLIC EDUCATION 21. Meanwhile, 35% of alumni described themselves aswell informed about public education. We may be inthe worst scenarioin which business leaders arenot well informed but believe they are. Finally, educators often question the motives ofbusinesspeople who get involved in education. AsFigure 16 shows, superintendents are much morelikely than businesspeople themselves to believethat business leaders are not deeply interested inimproving K12 education or are engaged just forreasons related to workforce development.FIGURE 16: BUSINESS LEADERS COMMITMENT TO EDUCATION IN THE UNITED STATES20Superintendents:Which statement best describes the commitment toK12 education among business leaders in your district?Business Leaders:Which statement best describes your personalcommitment to K-12 education?0% 10% 20% 30% 40% 50% 60% 70%Deeply interested in improving K12education primarily because every childdeserves a good educationDeeply interested in improving K12education primarily because todaysstudents are tomorrows workersDeeply interested equally because every childdeserves a good education and becausetodays students are tomorrows workersNot deeply interested in improvingK12 educationDo not knowWe highlight these barriers not to discourage businessleaders from deeper and enduring engagements witheducators, but rather to raise the odds that suchengagements will succeed. The barriers may be high, butso are the stakes. A stronger education system is vitalnot only for the economic future of the average Americanbut also for the long-run health of U.S. enterprises. Thetime is right for every business in America to rethinkhow it supports schools and studentsto move fromprograms that patch over weaknesses in the educationsystem toward strategies that help educators transformthe system. 22. HARVARD BUSINESS SCHOOL SURVEY ON U.S. COMPETITIVENESS 21The OECD data discussed on page 14showing agrowing U.S. disadvantage in adult competenciespointto weaknesses not only in Americas K12 educationsystem but also in the way we develop skills after highschool and on the job. Troubles in workforce skills havebeen evident in the United States for years. In annualsurveys conducted by ManpowerGroup since 2006,the portion of U.S. employers reporting difficulty infilling positions reached as high as 52%, with lack oftechnical skills in applicants among the top causes.5In the 2011 HBS survey on U.S. competitiveness,alumni involved in firm location choices reported thataccess to skilled labor was more often a reason to movea business activity out of the United States than it wasa reason to keep an activity in America.6 In 201314 asin past years, alumni assessed workforce skills as a U.S.strength that is in decline. (See Figure 5 on page 10.)Skills shortages make it hard for firms operatingin the United States to increase their productivityconsistently, the major driver in sustaining their abilityto compete and raising their capacity to pay workers.Thus, skills issues are at the heart of the aspect of U.S.competitiveness that worries us the most: the stagnationof living standards among most Americans. Historically,the prosperity of Americas middle class rested on afoundation of world-class workplace skills.That has proven especially true for workers in so-calledmiddle-skills jobsroles that require more educationand training than a high school diploma but less than afour-year college degree. Middle-skills jobs are estimatedto account for as much as 48% of all work in America.7They have provided high and rising living standards forgenerations of American welders, machinists, health careworkers, computer technicians, and others. Any path togreater U.S. competitiveness, and especially to higherliving standards in America, will require reinvigoratingthe skill base of Americas workforce, particularly formiddle-skills occupations.The HBS project on U.S. competitiveness launched aneffort in 201314 to examine deeply the past, present,and future of workforce skills in America. Led by SeniorLecturer Joseph Fuller, the effort has drawn as keypartners Accenture, the global consulting and technologyfirm, and Burning Glass Technologies, an analyticscompany that focuses on workforce data. A full report onthe skills effort will be published in 2015. Early work,including questions on the 201314 alumni survey,reveals four overarching findings: Managers in America have developed approachesto hiring that discourage skills development andexacerbate the shortage of talent with highlydemanded skills. Americas public discourse on skills takes place at ahigh level of aggregation, obscuring the true natureof the challenges facing the country. Real hiringoccurs in a multitude of micro-markets that may ormay not have skills gaps. Most of those micro-markets are marked by poorinformation flow, resulting in a perverse combinationof outcomes: employers cant find the skilledworkers they need, but at the same time, a growingnumber of workers are overqualified for their jobs. Better skills development in America will requirecollaboration across traditional boundaries, buttoday in practice, such collaboration is rare.We will elaborate on each finding in turn.5Annual ManpowerGroup Talent Shortage Surveys.6Michael E. Porter and Jan W. Rivkin, Prosperity at Risk: Findings ofHarvard Business Schools Survey on U.S. Competitiveness, page 15,January 2012. The report is available on the HBS U.S. CompetitivenessProject website at http://www.hbs.edu/competitiveness.7Thomas Kochan, David Finegold, and Paul Osterman, Who Can Fix theMiddle-Skills Gap? Harvard Business Review 90 (December 2012):83. Harry J. Holzer and Robert I. Lerman, The Future of Middle-SkillJobs, Brookings Center on Children and Families, February 2009.WORKFORCE SKILLSJoseph B. Fuller 23. Your firm prefers to invest in new technology to perform work rather than hire or retain employees17% 29% 19% 17% 9% 6% 4%Your firm prefers to rely on vendors that can be outsourced rather than hire additional employees15% 34% 15% 21% 9% 4% 3%An Aversion to Full-time HiresFirst, our survey reveals that business leaders in Americaare reluctant to hire full-time workers. When possible,they prefer instead to invest in technology to performwork, outsource activities to third parties, or hire part-time22workers. For instance, 46% of survey respondentsstrongly or somewhat agreed that their firms U.S.operations prefer to invest in technology to perform workrather than hire or retain employees, while only 25%disagreed.8 (See Figure 17. Numbers in figure do notsum precisely to numbers in text due to rounding.)Similarly, 49% said that their firms prefer to rely onvendors for work that can be outsourced, while only 29%reported that their firms would rather hire additionalworkers.9 Respondent firms that increased their relianceon part-time workers during the past three yearsoutnumbered those that relied less on part-timers by aratio of two to one.Those tendencies do not bode well for skills in theAmerican workforce: firms invest most deeply in full-timeemployees, so preferences for automation, outsourcing,and part-time hires are likely to lead to less skillsdevelopment. True, the workers who run the automatedequipment, the employees of outside vendors, andthe part-timers may receive some training, but that isunlikely to offset the skills that are no longer developedin equivalent full-timers. And indeed, by one estimate,spending on training in America fell from 0.52% of grossdomestic product in 2000 to 0.34% in 2012.10A Multitude of Micro-marketsA lack of training by employers and insufficient skills-buildingby the education system can lead to skillsgapssituations in which employers seeking additionaltalent cannot find workers with relevant skills. In recentyears, fierce debates have raged over the question ofwhether skills gaps are truly prevalent in the U.S.118We were concerned that the phrasing of the survey question wouldunduly influence responses. To guard against that possibility, werandomly split the respondents into two groups. Half were presentedthe statement, My firms U.S. operations prefer to invest in technologyto perform work when possible rather than hire or retain employees,and the other half read, My firms U.S. operations prefer to hireor retain workers when possible rather than invest in technology toperform work. For the former statement, 53% agreed and 19%disagreed. For the latter, 39% disagreed and 32% agreed. The 46%reported in the text is the average of those who agreed with the formerstatement and those who disagreed with the latter.9This question was also handled in the manner described in the previousfootnote.10Cait Murphy, Is There Really a Skills Gap? Inc., April 2014, citingTraining magazine. The figures are derived from Training IndustryReports, Training magazine, 2002 and 2013, and the Bureau ofEconomic Analysis, National Income and Product Accounts Tables.11For example, see Edward P. Lazear and James R. Spletzer, The UnitedStates Labor Market: Status Quo or A New Normal? National Bureauof Economic Research Working Paper No. 18386, September 2012;Harold L. Sirkin, Michael Zinser, and Justin Rose, The U.S. SkillsGap: Could It Threaten a Manufacturing Renaissance? The BostonConsulting Group, August 2013; Heidi Shierholz, Is There Really aShortage of Skilled Workers? Economic Policy Institute, January 23,2014; Paul Krugman, Jobs and Skills and Zombies, The New YorkTimes, March 30, 2014; Cait Murphy, Is There Really a Skills Gap?Inc., April 2014.STRONGLYAGREESOMEWHATAGREENEITHER AGREENOR DISAGREESOMEWHATDISAGREESTRONGLYDISAGREEDO NOTKNOWN/ASTRONGLYAGREESOMEWHATAGREENEITHER AGREENOR DISAGREESOMEWHATDISAGREESTRONGLYDISAGREEDO NOTKNOWN/ACompared to three years ago, your firms U.S. operations use part time workers20% 49% 10% 9% 13%MORE ABOUT THE SAME LESS U.S.OPERATIONSESTABLISHED
