71 % Harvard business grads expect US economy to sink further

With an inefficient political system, a struggling K-12 education system, a complicated tax code and persistent pressure from abroad, 71 per cent of nearly 10,000 alumni surveyed around the world said US competitiveness would decline over the next three years.

Less than 60 per cent of former students of the esteemed business school believe the US was performing better than the average advanced economy, while only 8 per cent thought the country would overtake emerging markets.

Of the nearly 2,000 respondents surveyed were personally involved in their company's plans to relocate, 57 per cent were contemplating a move out of the US and only 9 per cent thought about moving in. The US lost out 84 per cent of cases when companies switched headquarters.

The nations that were most favoured as new homes for businesses included China ( 42 per cent of respondents), India (38 per cent),  Brazil and Mexico (both 15 per cent). The countries were mainly attractive as workers there could be paid lower wages.

According to Michael E Porter, head of the Institute for Strategy and Competitiveness at the business school, the US was losing out on business location decisions at an alarming rate, and those activities being offshored were more job-rich than those coming in.

He added, however, that the US retained its core strengths in a number of important areas such as university education, innovation and entrepreneurship, which meant that the US had the resources to reverse the trend.

''Business leaders and policy makers in America must find ways for Americans to work smarter and more productively than workers who are paid lower wages overseas,'' they said in the report.

The report which summarised results of a survey conducted on 9,750 respondents in October was designed as a census of Harvard Business School alumni, and calculations of a margin of error did not apply to it, the authors said.