How can America compete better globally?

How can America compete better globally? Will America be able to compete in foreign markets? What can be done to help U.S. business compete? To discover what financial executives think about the issue of competitiveness, Financial Executives Institute (FEI) questioned a sample of the most senior financial executives among its members. Survey questionnaires were sent to 2,000 senior financial officers (CFOs and vice presidents) representing a wide range of large and small companies. Over 400 responded to the survey.

Not surprisingly, 98 percent of the respondents agreed that U.S. business needs to improve its global competitiveness. Short-sighted investors and business managers are the greatest impediments to the competitiveness of U.S. business in the world marketplace, according to the executives who were asked to rank eight factors by their effect on competitiveness. These factors received 16 percent of the rankings as the first or second greatest impediment.

Following close behind were unfair foreign trade practices, an undertrained workforce, and government intervention. Fewer respondents ranked the cost of capital, the budget deficit, and U.S. tax policy as major impediments to competition.

In commenting on these issues, a number of respondents called for improved productivity, improved quality in the products and services offered by U.S. business, greater responsiveness to customer needs, and the need for some kind of government support of research and development. Others singled out increasing administrative and liability costs, frequent tax changes, an unwillingness by U.S. business to develop global strategies, and, finally, merger and acquisition mania. One respondent called business managers "slaves to Wall Street"; another stated that a climate dominated by takeovers and lawsuits "leaves senior management less time for improving competitiveness."

U.S. tax laws impede their companies' foreign business operations, say 88 percent of the respondents for whom this issue is applicable. Taken in conjunction with the rankings given for the most important impediments to competitiveness, it appears that, while financial executives don't like U.S. tax laws, they consider them less important than other factors in influencing business competitiveness.

The complaint most frequently registered against U.S. tax law is its complexity, which makes filing both time consuming and expensive, and not the tax rate itself. One respondent summed it up...