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Business Leader: US Must Adapt to Face Global Competition

The head of the U.S. Chamber of Commerce, Thomas Donohue, says the United States will lag behind in global competition, unless it makes some changes. Mr. Donohue says the worldwide business scene is shifting as China and India join leading industrial nations as global competitors.

Mr. Donohue's organization represents three million U.S. companies and business groups, and, surveying the economy, he says it is in good shape. The United States is creating jobs and is growing at a rate of more than three-percent a year. Its unemployment rate is low, lending rates are reasonable and seven out of 10 Americans own their own houses.

But he says other data suggest the United States may be losing its competitive edge. The competition comes not only from established industrial powers, such as Germany and Japan, but from new ones, such as China and India. He says both are producing large numbers of technically trained workers.

"When you look at how many people they're educating, scientists and engineers and mathematicians, between them, it's probably 30 times the number we're educating," he noted.

He says the United States still dwarfs the economies of both India and China. Moreover, those nations are coping with high levels of poverty, and in China's case, with growing discontent by those left behind in the march to prosperity.

But other trends, says Mr. Donohue, paint a troubling picture for the United States. The business leader outlined his concerns before a civic group, called Town Hall Los Angeles, and also spoke with VOA. He says 120 chemical plants are under construction around the world. Fifty are in China. Only one is in the United States. The United States also trails nations such as South Korea in broadband penetration for high-speed data transmission.

He says the U.S. legal system also puts business at a competitive disadvantage. The Chamber of Commerce is lobbying members of Congress to limit the number of lawsuits filed against U.S. businesses, demanding what it calls tort reform.

"They have to deal with a legal crisis in this country where we have let the legal system get out of control, in terms of class action and mass action lawsuits," he added. "It's discouraging innovation. It's causing people to do things offshore that they would otherwise do here. It's hurting the pharmaceutical industry. It's hurting the technology industry. It is a tremendous drain on American competitiveness."

Others, including many Democrats, say consumers need access to the courts for redress, if they are harmed by faulty or dangerous products. The Chamber of Commerce and its Republican allies say the current system encourages frivolous lawsuits.

Mr. Donohue also echoes another complaint widely heard from U.S. business, saying that new accounting rules intended to ensure corporate transparency are ineffective and expensive. The rules, now in the process of implementation, resulted from corporate scandals, such as the one surrounding the energy company, Enron.

In area after area, the business leader says, American companies face competitive hurdles, including soaring health care costs, rising energy prices, and a shrinking U.S. workforce, with 77 million people born after World War II getting ready to retire.

Mr. Donohue says the American system is resilient, but Americans have become complacent.

"We have more individual liberties and freedoms. We have more opportunity to be entrepreneurial and effective and create capital. And what we're doing, because we're so comfortable with that, we forgot how that happened," he explained.

The Chamber of Commerce official says the United States faced a similar challenge in 1957, when the Soviet Union launched Sputnik, the first unmanned satellite ever put in orbit. The United States responded quickly, and soon led in the space race, landing a man on the moon just 12 years later. He says that kind of response is needed today, if the United States is to retain its global leadership in business.