As Barack Obama takes office, he faces a deepening recession far different than previous recessions.

What makes this downturn different is that it comes at a time when U.S. businesses are facing unprecedented competition from a virtual tidal wave of companies from rapidly developing countries.

The heightened competition reflects the new era of “globality” in which the world economies are interconnected as never before. Little happens in isolation. As the recession is showing, virtually everyone, everywhere is affected by everything.

Americans need to embrace globality and do what we do best: work hard, think smart, move fast, innovate and invest.

In this regard, the new administration should focus on four key areas: energy independence, advanced technical education, infrastructure modernization and productivity.

On energy, President Obama must avoid the ideological trap of “either/or” choices and take an “all of the above” approach.

The United States pumps hundreds of billions of petrodollars each year into foreign economies, many of them hostile to our way of life. For economic, national security and environmental reasons, we’ve got to stop this reckless behavior.

The president’s strategy should include: raising federal gasoline taxes over time to reduce oil consumption and provide an incentive for Americans to commit to alternative fuel vehicles; increasing use of nuclear power and coal; expanding exploration and drilling for oil and natural gas; supporting basic research and providing tax incentives to develop economically viable alternative energy sources; and moving from an economy addicted to fossil fuels to an economy run on abundant renewable energy.

To increase U.S. competitiveness, infrastructure improvements also are needed. Infrastructure should not be considered a synonym for “make-work” projects. It should be seen as a long-term economic investment that produces benefits for 30 to 100 years. Infrastructure is essential to our economy – and ours is decaying.

The America of the future cannot afford an antiquated air traffic control system whose frequent hiccups tie up air travel for hours; it can’t risk highway bridges on the verge of collapse; it can’t afford overcrowded ports; and it can’t be a beacon for the world when parts of California and New York, two of our most populous states, suffer occasional blackouts.

The United States should follow the example of China, which has committed to building 100 new airports, 186,000 miles of new roads and 75,000 miles of new railroad track, and expanding port capacity by 85 percent by the year 2020. The United States needs to make similar investments.

Our ability to compete also should drive the administration’s education agenda.

Every American child deserves a proper education, but not every child should be encouraged to go to a traditional college. Instead, some young people should be encouraged to attend advanced trade schools, like Germany has. We would propose more: a new system of “vocational colleges” in which students would major in trades, but also take business and liberal arts courses.

The fourth component of long-term economic success is productivity. And the biggest hurdle we have to overcome is the adversarial relationship between unions and management.

Productivity isn’t just about widgets-per-hour, but about ingenuity, innovation and fluid management that can put the right people in the right place at the right time. The “new” U.S. automobile industry – Honda, Toyota, Subaru, Hyundai and Volkswagen plants in the South – has shown how it can be done. The Obama administration should do everything in its power to end the destructive relationship between unions and management so companies and workers have the flexibility they need to compete.

Energy, infrastructure, education and productivity are all inter-related, just like the world of globality in which we now live. Innovation and productivity require educated, well-trained workers. Manufacturing and mobility require energy. And so on.

To achieve these goals, we have to work together as never before. If we fail to do so, our companies may be unable to compete effectively in the decades ahead.

Spending to jump-start the economy has a specific short-term objective. Spending to rebuild the economy will produce benefits for decades.

Harold L. Sirkin and James W. Hemerling are senior partners of the Boston Consulting Group and co-authors, with Arindam K. Bhattacharya, of “Globality: Competing with Everyone from Everywhere for Everything.”


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