This afternoon, President Obama gives a speech at a GE plant in Schenectady NY. According to numerous press reports, he will announce the creation of a new White House Council on Jobs and Competitiveness -- to be headed by GE CEO Jeffrey Immelt. Immelt outlined his vision for competitiveness in an op-ed in this morning's Washington Post. This focuses on three areas:
Manufacturing and exports: We need a coordinated commitment among business, labor and government to expand our manufacturing base and increase exports.
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Free trade: America cannot expand its manufacturing base without greatly increasing the volume of goods it sells overseas.
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Innovation: Businesses should invest more of their cash and resources in advanced products and technologies that will create jobs in the United States, and government should incentivize this investment in innovation.
I applaud the President for setting up this new Council -- something that I have been advocating for years. However, I would warn of taking too narrow of a focus. If it simply becomes an export promotion policy council -- well, we have one of those already. Nor should it be a "innovation means R&D" council -- we already have an one of the those as well (PCAST).
The Council on Jobs and Competitiveness needs to look at a much greater range of issues. As I've noted before, The AMERICA Competes Act requires Commerce Department to undertake a study on economic competitiveness and innovative capacity of United States and develop a National Economic Competitiveness Strategy. That strategy (as described in Section 604 of the Act) is to include recommendations on the following:
(i) How the United States should invest in human capital.
(ii) How the United States should facilitate entrepreneurship and innovation.
(iii) How best to develop opportunities for locally and regionally driven innovation by providing Federal support.
(iv) How best to strengthen the economic infrastructure and industrial base of the United States.
(v) How to improve the international competitiveness of the United States.
I hope that the White House Council is guided by a similar larger strategic vision. I would also hope that this new Council would be guided by an understanding that the competitiveness challenges facing the US are different from what they were decades ago. That, of course, includes a recognition of the key importance of intangible assets and intellectual capital.
I would also note that the White House Council is an external advisory body. There still needs to be an internal coordinating process that can implement any policy suggestions. That should be under the purview of the National Economic Council. My guess is that the new NEC head, Gene Sperling, will see this as his number one task. Given the new political climate, I think Gene's job may be the hardest of them all. Let hope the new Council can not only come up with needed policy recommendation, but can also draw attention to the problem and forge a broad consensus on the path toward solutions.