Will the US be competitive in 10 years?

Two factors could revive concerns about how America finds a stronger footing in today's increasingly competitive global economy. One is economic. One is political.

Politically, the sudden ascendance of Democrats on Capitol Hill promises to put the trend of globalization under a more skeptical lens -or at least to seek sharing the gains of global trade with a larger slice of US society.

The economic factor is related: America's is importing a lot more than it exports. And when other nations sell goods to the US, they often plow the resulting dollars back into the US as loans or investments. It's a good deal for now, but it effectively makes US dependent on foreign lending.

In the view of many economists, that line of credit won't last forever.

Against this backdrop, a report Monday offered a hopeful assessment of America's economic standing in the world.

The Council on Competitiveness, a nonpartisan organization that has tracked the health of the US economy since 1986, says America's position today is strong, even though its continued leadership is not guaranteed.

"No one would have predicted the US productivity performance" of recent years, says Deborah Wince-Smith, president of the council. "[The US has] really led global growth."

Indeed, the US has accounted for one-third of all global economic growth in the past 15 years.

Despite years of concern about inroads from foreign competition, the nation still sets the standard in scientific research, entrepreneurial activity, and worker productivity.

But the report also says the nation can't rest on its laurels.

Concern about the long-term standing of the US economy – and its ability to generate a rising standard of living for Americans - are shared by politicians of both major parties.

"It's going to be very much on the radar of US policymakers," Ms. Wince-Smith says.

Many governors have joined Arizona Gov. Janet Napolitano in state level policies to encourage innovation-driven growth, for example.

President Bush pushed a competitiveness initiative early this year. A bipartisan bill was introduced in the Senate, but lacked momentum in the House. With the latest election results, Ms. Wince-Smith says, that may change.

"We're very optimistic ... that 2007 is going to really accelerate what was gotten under way in 2006," she says.

The council's new report, in fact, opens on that note.

"The competitiveness of the US economy is once again the subject of public concern and political debate," Michael Porter, a Harvard University economist, writes in the study. "This increased attention offers an opportunity for needed reforms that will boost America's prosperity."

But adds an important caveat: "It also runs the risk of promoting common misunderstandings ... that could lead to steps that are counterproductive."

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