Challenge for the Next President: Productivity

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This is what the future could look like if the right policies were in place and the Big Three and the UAW had the will to work together, rather than continue their MAD combat. Can a President bring labor and management to their senses? You will at least have to try.

Most people naturally think of labor when they think of productivity: How many widgets are produced per worker-hour of labor? And labor is certainly an important component. But many other factors can influence productivity as well: ingenuity, innovation, fluid management, having the right people in the right places at the right times. The topics I discussed in my earlier letters—education (BusinessWeek.com, 10/28/08), energy (BusinessWeek.com, 9/28/07) and infrastructure (BusinessWeek.com, 10/21/08)—all bear this out. Innovation and productivity require educated, well-trained workers. Manufacturing and mobility require energy. Living well and getting goods to market require infrastructure.

So what is it that a President can do to affect this?

He can make America's productivity—in government as well as the private sector—a White House priority. He can tell union officials that the days of featherbedding and counterproductive work rules and job classifications are over. In a world in which we are competing with everybody from everywhere for everything, we can't afford this anymore.

The President also can propose tax incentives for worker training and R&D programs, to make sure American companies remain not only cutting-edge manufacturers, but highly efficient, highly productive manufacturers: producing more and better products with the same labor. This is how economies grow. This is how you increase the overall number of jobs.

Most of all, the President can provide leadership. In the coming era of globality, Americans need to work together as never before. If we don't do that, our economy will wither over time. In 20 years there may be no jobs for our children.

In a poster for Earth Day 1970, cartoonist Walt Kelly, creator of the Pogo comic strip, coined the famous saying: "We have met the enemy and he is us." That, Senators Obama and McCain, describes our economic situation as well.

Sure we will continue to face increased competition from low-cost manufacturers from China and other developing countries for many decades to come. But we don't have to lose this competition. If we do lose, it will not be because of anything they have done—but because of the many things we haven't done.

Squandered Birthright

The U.S. has had things good for a very long time. Since the end of World War II, we've been the country of choice, where millions of people fleeing poverty, ignorance, bureaucracy, and repression have come to study, work, succeed, and build better futures for themselves and their descendants. But recently, we've taken our success for granted, assuming it's a birthright. While others have been investing in their future, we've been consuming ours.

We can continue along this course and leave our children a country that is less than it was when our parents handed it to us. Or we can invest our resources in ways that will ensure that we are always—always—No.1.

If we make ourselves energy independent, expand our talent, and build an infrastructure that keeps America mobile and moving, and enhance our productivity, we can ensure that the U.S. will remain the greatest nation on earth.

It makes little difference to me whether the next President is a Democrat or Republican, a younger man or an older man, a great orator or a great war hero. What I care about is that the country set itself on a long-term course of action that will ensure its economic strength, which is necessary for everything else we may hope to accomplish.

We need a President with a long view, the patience to see the challenge through, the courage to say no as easily as he might say yes, and the knowledge that the world as we knew it in our youth no longer exists. It has been displaced by the far more complicated and rapidly changing world of globality—a world in which American companies and workers will have to compete with everyone else or fail.

I realize the economy is in serious trouble today. Still, the next President needs to focus on tomorrow. If our children are to prosper, we need to think beyond mere survival.

Harold L. Sirkin is a Chicago-based senior partner of The Boston Consulting Group and author, with James W. Hemerling and Arindam K. Bhattacharya, of GLOBALITY: Competing with Everyone from Everywhere for Everything (Business Plus, June, 2008).