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View Full Version : US Loosing Competitiveness? NOT REALLY.


cessua
10-13-2006, 08:09 PM
How much of an argument we have if US keeps toping rankings of most competitive countries to do business in the world?

http://hbswk.hbs.edu/item/5454.html

http://www.weforum.org/pdf/Global_Competitiveness_Reports/Reports/gcr_2006/BCI.pdf

purgan
10-13-2006, 08:23 PM
The US is still the most competitive but the lead is shrinking...its clear that China, India and the emerging Asian economies have the size, the resources and the talent to catch up and probably surpass the US

dixie
10-13-2006, 08:36 PM
You are right .. the US has a big headstart; but that doesnt mean it will remain that way forever. For instance, close to 40% of all US patents are being bagged by either non-US entities or foreign outposts of US organizations. For a comparison, it was just 10% in 1995 .. dont remember where I read this, but I will post the link if I can find it again.

The US is still the most competitive but the lead is shrinking...its clear that China, India and the emerging Asian economies have the size, the resources and the talent to catch up and probably surpass the US

brb2
10-14-2006, 11:06 AM
US has been in number 1 in the past, moved to 2nd spot for a couple of years, in the world competitiveness rankings. For the first time, the US moved to the 6th Spot in the world rankings by the world economic forum (Europe based Institution). The main reason was because of the huge current account deficit and negative savings (mainly federal deficit) which is a threat to the US competitiveness. China moved down due to corruption etc. India moved up but any further movement will depend on structural reforms, especially controlling the huge public service and red-tape and a creaking infrastructure - power, roads, ports, water supply - all of which are run by the government. The health services in large parts of India is dismal and so is the public education system (K-12). With the left firmly controlling the ruling party, deregulation is slow and insipid, and it is the private sector which is basically contributing to the GDP and Competitiveness. Here is the link to the actual rankings for 2006-2007
http://www.weforum.org/pdf/Global_Competitiveness_Reports/Reports/gcr_2006/top50.pdf

The reasons for the rankings are given here
http://www.weforum.org/en/fp/gcr_2006-07_highlights/index.htm



The US is still the most competitive but the lead is shrinking...its clear that China, India and the emerging Asian economies have the size, the resources and the talent to catch up and probably surpass the US

brb2
10-14-2006, 11:14 AM
One of the reasons for huge number of patents in the US is that many companies, file frivilous patents to slow down competition not just to protect their intellectual property. No doubt the patents in the pharma industry are genuine, but a typical product like a freezer may have several hundred patents.

You are right .. the US has a big headstart; but that doesnt mean it will remain that way forever. For instance, close to 40% of all US patents are being bagged by either non-US entities or foreign outposts of US organizations. For a comparison, it was just 10% in 1995 .. dont remember where I read this, but I will post the link if I can find it again.

asanghi
10-15-2006, 12:51 PM
What are you saying? Health Services dismal? I thought it was better than US in many aspects. The cost is cheap for treatment (unless you have some uncommon disease. Since the system is churning up so many doctors, there is a lot of competition. Even in small villages you will find many doctors competing for patients. Maybe that is not true for everywhere, but that is what I have seen in my home state Haryana.

Also the education system may not be perfect, but kids don't have to go to private schools, because public schools have run out of capacity. There are problems like not all-around development, and not all kids doing great in studies. But that is true even in US, unless you are sending your kids to a fine private school (which by the way you can do in India, if you have money). JMHO

US has been in number 1 in the past, moved to 2nd spot for a couple of years, in the world competitiveness rankings. For the first time, the US moved to the 6th Spot in the world rankings by the world economic forum (Europe based Institution). The main reason was because of the huge current account deficit and negative savings (mainly federal deficit) which is a threat to the US competitiveness. China moved down due to corruption etc. India moved up but any further movement will depend on structural reforms, especially controlling the huge public service and red-tape and a creaking infrastructure - power, roads, ports, water supply - all of which are run by the government. The health services in large parts of India is dismal and so is the public education system (K-12). With the left firmly controlling the ruling party, deregulation is slow and insipid, and it is the private sector which is basically contributing to the GDP and Competitiveness. Here is the link to the actual rankings for 2006-2007
http://www.weforum.org/pdf/Global_Competitiveness_Reports/Reports/gcr_2006/top50.pdf

The reasons for the rankings are given here
http://www.weforum.org/en/fp/gcr_2006-07_highlights/index.htm

senthil1
10-15-2006, 08:03 PM
I do not think USA is losing ground. If China and India thinks that they are Really improving economy Why can't they make their currencies free Trade? Why are they artifically Keeping exchange rates. The reason is if really a country is stronger then currency should go up and US dollar should become weaker. But India and Cannot sustain as the export business will go down for India and China if their currency becomes too strong. So India and China are looking for US and europe Market. So inter dependence is always there. There is lot of speculation that India will exceed US in 2020. But it is far from true. For stronger Indian economy India needs US Consumption. For that USA needs to be stronger. May be lot of human resources are there in india. But that will be also resolved in another 20 Years because still Inflow is more than return to india. 80% of H1s are Indians apart from lot of L1 people.

asanghi
10-16-2006, 02:38 AM
Well your argument sounds one sided. It is true neither China nor India's currency is fully convertible. But what country does not like to have competitive edge when it can afford to.

Even US provides subsidies to its farmers to make its agricultural products artifically competitive. Another example, US banned Indian steel companies from doing business in US, because Indian steel companies were providing better steel for cheaper price.

I am not saying that India and China are great. Just wanted to bring the other side of your argument to fore.

I do not think USA is losing ground. If China and India thinks that they are Really improving economy Why can't they make their currencies free Trade? Why are they artifically Keeping exchange rates. The reason is if really a country is stronger then currency should go up and US dollar should become weaker. But India and Cannot sustain as the export business will go down for India and China if their currency becomes too strong. So India and China are looking for US and europe Market. So inter dependence is always there. There is lot of speculation that India will exceed US in 2020. But it is far from true. For stronger Indian economy India needs US Consumption. For that USA needs to be stronger. May be lot of human resources are there in india. But that will be also resolved in another 20 Years because still Inflow is more than return to india. 80% of H1s are Indians apart from lot of L1 people.

msp1976
10-16-2006, 11:14 AM
What are you saying? Health Services dismal? I thought it was better than US in many aspects. The cost is cheap for treatment (unless you have some uncommon disease. Since the system is churning up so many doctors, there is a lot of competition. Even in small villages you will find many doctors competing for patients. Maybe that is not true for everywhere, but that is what I have seen in my home state Haryana.

Also the education system may not be perfect, but kids don't have to go to private schools, because public schools have run out of capacity. There are problems like not all-around development, and not all kids doing great in studies. But that is true even in US, unless you are sending your kids to a fine private school (which by the way you can do in India, if you have money). JMHO

You can get reasonable education and health care in India if you are in the top 10% income range. You can get reasonable eduction and health care in US if you are in the top 50% income rage. That is the main difference...

Raju
10-16-2006, 01:25 PM
I do not think USA is losing ground. If China and India thinks that they are Really improving economy Why can't they make their currencies free Trade? Why are they artifically Keeping exchange rates. The reason is if really a country is stronger then currency should go up and US dollar should become weaker. But India and Cannot sustain as the export business will go down for India and China if their currency becomes too strong. So India and China are looking for US and europe Market. So inter dependence is always there. There is lot of speculation that India will exceed US in 2020. But it is far from true. For stronger Indian economy India needs US Consumption. For that USA needs to be stronger. May be lot of human resources are there in india. But that will be also resolved in another 20 Years because still Inflow is more than return to india. 80% of H1s are Indians apart from lot of L1 people.
Senthil,
When people talk about currencies, they miss a very very important point. US dollar has an in-built protection that most asian currencies do not have. Do you know the fact that majority of countries in the world have their reserves saved up in dollars. A free fall in dollar is less likely because that is also going to deplete the value of reserves owned by each country. Asian currencies (read Indian, chinese) do not have that in-built protection. Hope you take that into consideration next time you talk about currency restrictions.