America today sits at an economic crossroads, unsure of what path to take to confront its competitiveness challenge of too little economic growth and too few jobs. The good news is there is a future in which America can create millions of good jobs and strengthen its economic growth by seeking opportunities in global markets via international trade and investment. Doing so will require thoughtful U.S. policies that promote U.S. competitiveness and are based on a sound understanding that the success of American companies, and of the U.S. workers they employ, increasingly hinges on their success as globally engaged companies.
This report aims to provide that understanding by explaining what American companies must do to succeed in today’s dynamic global economy: an explanation — based on current statistics, academic and policy research, and case studies — of the mindset, goals and methods that create success in innovative, forward-looking companies. The report makes three main points about globally engaged U.S. companies.
- First, they are fundamentally American companies driving the capital investment, research and development (R&D), and international trade that support economic growth and wellpaying jobs in the United States. As a group, they have long performed large shares of such productivity-enhancing activities in America. They employ tens of millions of Americans, invest hundreds of billions in U.S. R&D and capital, and buy trillions in goods and services from U.S. vendors, ultimately producing trillions in American goods and services. They foresee maintaining a major U.S. presence well into the future. In the United States, like much in America, they are a richly diverse group in size, employment, industry and customers.
- Second, their success in America increasingly hinges on their being globally engaged. To remain dynamic and innovative, they must engage with the world. They venture abroad to meet the growth in global demand that, over the past generation, has been much faster than that in the United States and thus presents vast new markets with billions of new customers. They venture abroad to refine their operations by creating and integrating into global supply networks, which include both U.S. and foreign companies. Their success in America increasingly hinges on creative new ways to make goods and services around the world. “Made in America” increasingly involves the rest of the world.
- Third, their engagement around the world boosts hiring, investment, and R&D in their U.S. operations. They create and support the jobs that America needs, but their job creation is neither simple nor static. They create jobs in America connected to growth in global demand and to their global supply networks. Expansion abroad by U.S. companies tends to complement their U.S. operations, with more hiring and investment abroad often boosting hiring, investment, and R&D in their U.S. operations. And they create jobs in America in other companies, not just in themselves. In particular, they create jobs in small and medium-sized American enterprises that become part of their global supply networks.
There is no single strategy for what American companies must do to succeed and create jobs when venturing abroad. To stay ahead of intense international competition, American companies must create, implement and change strategies from a truly global perspective, with dynamic differences in successful strategies both across companies at a point in time and within companies over time. The intensity of worldwide competition means globally engaged U.S. companies need flexibility to experiment, learn, fail, adjust and succeed.
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Momentum for America
Business Roundtable is focusing its efforts on greater job expansion and economic growth – national priorities that are inextricably linked. Informing our plan is our collective business experience as CEOs of America’s leading companies, experience that tells us what it takes to build momentum for the United States in in 2016 and beyond.