provide challenging jobs and rising incomes: a relatively stable political and regulatory environment that makes it possible to anticipate risks; private management that is skilled at accommodating change, containing costs, and making the best use of people and organization; application of new technology and continuous improvement at each technological level; adequate public sector investment in education and infrastructure; a macroeconomic climate that facilitates job creation and shifts of dislocated workers to new jobs; a supply of capital at reasonable cost; and financial and corporate investors who are able to take a long-term view of growth opportunities. This report addresses the latter two requirements, which are neither more nor less important than the others. On the basis of lengthy deliberations, we conclude that the United States has measurable saving and private investment problems that will, if not solved, seriously impede the fulfillment of American citizens’ material needs and expectations. These are problems of inadequate saving, underinvestment, and excessive pressure for short-term returns on private investment. This report considers their sources and calls for benchmarks for net national saving, investment, and productivity growth and for taking politically and economically difficult steps to move toward these benchmarks over the next decade.

Restructuring, Investment, and Growth

Among the economies in the world trading system, growth is not a zero-sum game. Agreements among governments to undertake growth-promoting policies are in the common interest, and no country, including the United States, entirely controls its own destiny in this respect. Sustained domestic economic growth, nevertheless, depends upon the nation’s enterprises achieving and maintaining a competitive position in the world economy by meeting or exceeding international standards of productivity in existing markets and by being innovative in developing new products and markets.

By the effective development and use of technology by private firms, the United States remains the most productive economy in the world. The radical restructuring and downsizing of U.S. business corporations in the past years have served to shore up this standing by improving the relative efficiency of domestic industry in global markets. This streamlining process is growth promoting in the longer term and, in that respect, beneficial. However, more than likely it is a one-shot gain in efficiency rather than an acceleration in the rate of productivity improvement. It



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