U.S. Competitiveness: Assessing the Impact of Government Activities on Productivity and Living Standards

GAO discussed U.S. competitiveness and the impact of government activities on the U.S. economy and living standards. GAO noted that: (1) the definition of U.S. competitiveness has shifted from comparisons of U.S. export market shares to a broader emphasis on productivity growth and improvements in living standards; (2) advances in living standards have historically been tied to technological progress and market expansion, but productivity growth is the most important determinant; (3) productivity can be increased by more capital, better technology, a higher quality workforce, improved management, and government activities that positively impact these factors; (4) the federal government can help increase productivity by decreasing the national debt, dedicating a greater portion of the federal budget to investment spending such as for infrastructure, linking federal technology programs to productivity, improving workforce training programs, and encouraging quality management practices; and (5) although it is difficult to quantify the impact of government activities on competitiveness, focusing on such assessments would introduce a discipline that would go beyond only considering the cost of government operations and would help ensure that government activities do not detract from competitiveness.