Already a Bloomberg.com user?
Sign in with the same account.
The U.S.'s deteriorated reputation abroad has real economic and security costs, and businesses need to become active in improving it
Now that Al Gore's global-warming documentary An Inconvenient Truth has won its Oscar (see BusinessWeek.com, 3/20/07, "Hybrids Stuck in Neutral"), there appears to be room atop the list of the Biggest Problems No One Cares About. I'd like to nominate anti-Americanism.
It won't take too many slides to define the problem. Everyone knows the U.S.'s reputation around the world has never been more dismal. In fact, it has fallen to the level of an "ism"—"anti-Americanism," the principled distrust and dislike of anything that issues from the U.S. Unfortunately we can't show slides of Florida under water to convince people that anti-Americanism matters. The CEOs of U.S. companies with customers around the world don't consider anti-Americanism a problem. "We're not an American company," they declare. "We're global."
Americans would prefer that the world like them, but if it doesn't, so what? Wasn't it Machiavelli who said it was safer to be feared than loved? For his part, President Bush displayed new depths of cluelessness when he reacted to protests during his recent Latin American tour by saying, "I love freedom and the right for people to express themselves."
These days, those expressions include South African billboards touting the Smart car for its "German engineering," "Swiss innovation" and "American nothing." South Korean restaurants have hung signs in their windows advising "Americans Not Welcome." And Starbucks' very presence in China's Forbidden City brewed so much controversy the company may lose its lease.
The Cost of Anti-Americanism
Anti-Americanism does matter—to our economy, to our health, and to our safety. For the moment, the effect of anti-Americanism on U.S. companies' foreign sales is masked by a declining dollar. Skeptics point to a widely circulated study that compared the European sales of Coke, McDonald's, and Nike between 2000 and 2004. All three companies increased their European sales an average of 26%—even though anti-Americanism was at a fever pitch following the March 2003 invasion of Iraq. But it's important to note that the U.S. companies' sales were made in euros and reported in dollars, which fell by 31% in the period.
On the other hand, the U.S. share of the international tourism market, which should have benefited from the weak dollar, fell by a third from 1992 to 2006. The absolute number of foreign tourists to the United States didn't return to pre-9/11 levels until last year, and even then the increase was due entirely to visitors from Canada and Mexico. In 2006, overseas visitors to the U.S. declined by 1% from the prior year. Even taking into account the extra hassle of getting through stepped-up U.S. security post-9/11, the drop-off in overseas visitors to the U.S. is striking.
And expensive—according to the Discover America Partnership, the U.S.'s loss of market share in 2005 cost $44 billion in sales and taxes. Plus, every share point represents 153,000 U.S. jobs.
Finally, anti-Americanism costs the U.S. the cooperation of other countries in dealing with such global problems as terrorism, climate change, HIV/AIDS, avian flu, counterfeiting, organized crime, the trafficking of women and children, or the next security crisis, whether it breaks out in Iran, North Korea, or the Taiwan Strait. The list of problems that will yield to unilateral action is getting shorter even faster than the cost of going it alone is rising. None of that is good for business.