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Nearly nine years into an economic expansion, most Americans continue to believe their country is headed in the wrong direction. Now that attitude probably reflects more than just economic perceptions. And even feelings about the economy’s vigor seem influenced by political leanings.
That said, there’s some evidence that economic pessimism is unfounded. There is, of course, the continued expansion. And the American jobs machine keeps generating gobs of jobs, resulting in the lowest unemployment rate since 2000.
Then there are those global competitiveness surveys. And according to the latest from Switzerland-based IMD, which has been in the business since 1989, the US has jumped to #1 from a still respectable #4 last year. Even more impressive, there isn’t another large advanced economy — say, with a population at least 10% of America’s — until you get to Canada at #10. The US is also the highest-ranked large advanced economy in the World Economic Forum’s annual competitiveness report, behind only niche Switzerland overall.
Competitiveness reports generally use some combo of economic statistics and executive opinion survey data. And while I find these reports interesting, I don’t like the zero-sum bias built into the notion of “competitiveness,” a bias that IMD director Arturo Bris pointedly addresses in this year’s report as he tries to reframe the concept:
There is no single nation in the world that has succeeded in a sustainable way without preserving the prosperity of its people. Competitiveness refers to such an objective: It determines how countries, regions and companies manage their competencies to achieve long-term growth, generate jobs and increase welfare. Competitiveness is therefore a way towards progress that does not result in winners and losers — when two countries compete, both are better off.
At the same time, however, I don’t see how America could be considered the world’s leading military and economic power without also being at the technological frontier. And I want the democratic capitalist US to always be considered the best place in the world to live if you want to do something amazing with your life and/or your company (for a further look at some of these issues, I would recommend the latest AEIdeas experts symposium: “Cold War II: Should the US embrace high-tech industrial policy to counter China?”). In that spirit, another way to judge competitiveness might be by looking at a pretty important output: a nation’s ability to generate high-impact startups (the US vs. Asia vs. Europe via The Wall Street Journal):