With hurricanes, political conventions and attacks on American diplomats capturing our attention it would be understandable if you somehow missed a rather dense report from the ‘World Economic Forum’ that assesses global competitiveness by comparing the “industry, infrastructure, labor market efficiency” and economic performances of nations large and small.
Reports like these warrant a closer look if you want an honest assessment of whether the U.S. is moving backward or forward. Of course, our position on the global stage all depends on what other nations are doing at the same time.
2012-2013 Global Competitive Index
According to the report, the U.S. slipped from 5th place in the Global Competitive Index produced in 2011 to 7th in the latest report for 2012-2013. The top 10 are listed as follows: 1. Switzerland; 2. Singapore; 3. Finland; 4. Sweden; 5. Netherlands; 6. Germany; 7. United States ; 8. United Kingdom; 9. Hong Kong; 10. Japan.
Interestingly enough the report says “Energy is “the oxygen of the economy. The energy industry is known for being highly capital intensive, but its impact on employment is often forgotten. In the United States, for example, the American Petroleum Institute estimates that the industry supports more than nine million jobs directly and indirectly, which is over 5% of the country’s total employment. In 2009 the energy industry supported a total value added to the national economy of more than US$ 1 trillion, representing 7.7% of US GDP.”
Additionally, the report states: “The energy industry significantly influences the vibrancy and sustainability of the entire economy – from job creation to resource efficiency and the environment. The key factors in maintaining the health of this nexus of resources (energy, food and water) are sustained investment, increased efficiency, new technology, system-level integration (e.g. in urban development) and supportive regulatory and social conditions. Looking towards the decades ahead, this nexus will come under huge stress as global growth in population and prosperity propel underlying demand at a pace that will outstrip the normal capacity to expand supply. To face this strain, some combination of extraordinary moderation in demand growth and extraordinary acceleration in production will need to take place.”
That last sentence is worth a second look. American motorists have already reduced demand growth (where oil and gasoline is concerned) for the past 10 years. We’re driving less and the vehicles we drive are more fuel efficient. What’s missing? ‘Extraordinary acceleration in production.’ OPEC recognizes this. China and India invest accordingly.
And yet the U.S. still has no discernible energy policy. Instead we have indecision and uncertainty impeding long-term economic growth.