such choices primarily affected assembly workers, but as time has passed the migration impacted back-office administrative workers, logisticians, engineers and, more recently, researchers, architects, and accountants … among a growing list of threatened skills. If the growth markets are abroad, research is performed abroad and manufacturing is abroad, “U.S.” companies can still prosper financially, shareholders can benefit, and management can be rewarded…but no jobs are created domestically. While there are recent examples of United States firms repatriating some activities that had previously been moved overseas, particularly those requiring close management controls, the number of such jobs is overwhelmed by the number moving or being created elsewhere by U.S. firms.

The Gathering Storm report concluded that, “Market forces are already at work moving jobs to countries with less costly, often better-educated and highly motivated workforces, and more friendly tax policies.” From a shareholder’s perspective, a solution to America’s competitiveness shortfall has already been found—but it is at the expense of those seeking employment here at home. This represents a major dislocation of interests and loyalties that has as yet not been widely addressed or in many cases even recognized. The overwhelming body of United States law provides little latitude for management to stray beyond the economic interests of a publicly-owned firm’s shareholders when making decisions. Similarly, generally accepted economic principles do not support protectionism. But as Ralph Gomory, former senior vice president for science and technology at IBM, stated, “… what is good for America’s global corporations is no longer necessarily good for the American people.”3


From America’s perspective, events that have occurred over the past five years have both positively and negatively impacted the nation’s competitiveness stature. On the positive side, there is a much greater awareness of the peril implicit in continuing in the direction the nation has been drifting for several decades. This is a non-trivial development, given that the basic nature of the competitiveness challenge does not lend itself to any sudden “wake-up call”—such as was provided by Pearl Harbor, Sputnik or 9/11. Also on the positive side of the ledger are past actions that have been taken by the federal government, particularly as part of the American Recovery and Reinvestment Act of 2009. Perhaps of even greater import, a number of states have undertaken their own


R.E. Gomory, Testimony to the Committee on Science and Technology, U.S. House of Representatives, June 12, 2007. Available at:

The National Academies | 500 Fifth St. N.W. | Washington, D.C. 20001
Copyright © National Academy of Sciences. All rights reserved.
Terms of Use and Privacy Statement