During the mid 1800’s, the United States (U.S.) surpassed the British Empire economically thanks to, among other things, a rapidly growing population and a dynamic business environment.
Fast forward to today, and China is on the verge of eclipsing the U.S. as the world’s biggest economy.
The days of China acting as the world’s factory for low-cost, low quality products may soon be coming to an end. More than building products for other countries, China is now doing some innovation of its own. Chinese companies like Huawei and Alibaba are equally as big and successful as their foreign counterparts.
In terms of economic numbers, analysts predict that in about 25 years, China will eclipse the U.S. as the world’s largest economy and will still have a lower GDP per capita to boot. That means that even when it surpasses the U.S., China will still have more room for growth.
But the U.S. have always been competitive. It simply wouldn’t be taking China’s challenge sitting down. The same competitive spirit and dynamism that enabled Uncle Sam to wrestle global dominance from Great Britain will allow it to compete with China in this modern connected world.
To stay ahead of China, the U.S. need to focus on these three-point strategy:
The U.S. has to “out-innovate” China and the world
American entrepreneurs, engineers, and scientists are among the most innovative in the world. They changed our lives when they invented the microchip, developed the Internet, led the revolution in biotechnology, and sent humans to the Moon.
This long history of innovation needs to be nurtured even further. This can be achieved if the government creates the right policy and regulatory environment that supports and stimulates private-sector investment.
The U.S. has to “out-educate” China and the world
China got to where it is today by educating their younger population earlier and for longer. They put great emphasis on math and science that enabled them to learn and develop new technologies. Now, China is building faster trains and more technologically-advanced airports thanks to research and education. Meanwhile, the U.S. is lagging behind its peers. According to the Organization for Economic Cooperation and Development (OECD), an economic thinktank, the U.S. is currently 28th in terms of Math and Science proficiency.
The U.S. has to “out-build” China and the world
Back in the day, when an appliance or a piece of clothing had a tag that said, “Made in America” that meant quality and top of the line features. Now, almost everything is made in China.
The government and businesses need to strengthen U.S. manufacturing, including restoring the nation’s leadership role in the manufacturing world. By reinvesting in the supply chain and supporting manufacturing startups, the U.S. will be able to bring manufacturing back to its shores.
Currently, American manufacturing supplies nearly 75% of all U.S. private-sector research and development, making it an essential cog to American innovation.