Two Global Essentials: Skilled People, Infrastructure
WHAT do we mean by a ``nation'' in the emerging global economy? Almost all factors of production move effortlessly across national boundaries: Designs and blueprints for advanced technologies bounce from computers in one nation, up to satellites, and then down again to computers in another nation, all in a matter of seconds.
Money sloshes across borders in search of the highest returns on investment. State-of-the-art factories are built almost anywhere by corporations headquartered in other nations; the goods they produce are then exported to destinations around the world.
In reality, there are only two factors of production which are relatively immobile - and it is on these two factors that the future living standards of a nation's people are coming to uniquely depend:
First, the skills and insights of the nation's work force.
Second, the transportation and communication systems linking these skills and insights together, and to the rest of the world.
Thus it is that national investments in human capital and infrastructure are becoming critical to future prosperity.
The sad irony is that while other nations have been working toward stepping up their investments in human capital - in primary and secondary schools, colleges and universities, vocational training, pre- and post-natal health, infant care, and preschool education - the United States has been disinvesting in all of these areas for the last decade.
And as most other nations have been dramatically increasing their investments in infrastructure - good roads, bridges, sewage-treatment systems, fiber-optic cables, ports, and airports - the United States has been pulling back.
Combined federal expenditures on human capital and infrastructure declined about 30 percent since 1980, and most states and localities have been unable to make up the difference.