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82 Strategic Choices for a Turbulent World: In Pursuit of Security and Opportunity the globe; competitive advantage is fleeting. 24 New technologies allow enterprises to decentralize as never before. Where humans once moved in search of jobs and opportunities, jobs now move in search of humans and opportunities, creating bubbles of prosperity at their destinations and busts in the areas left behind. Since 1991, the global economy has swelled by 3.5 billion people, particularly from the nations of the former Soviet Union; from India, following the International Monetary Fund (IMF) reform programs it began that year; 25 and from China, whose economic integration accelerated after Chinese leader Deng Xiaoping’s landmark southern tour in 1992 to restart economic reforms. The sheer size of the labor force in China and India changed the global labor equation in ways that went far beyond the influence of U.S. policymakers or the voters they serve. For example, India alone added 161 million people to its labor force between 1991 and 2014, and China added 241 million people. Together, this represents five times the increase in the entire U.S. population (68 million) during that same period. 26 In the United States, well paying, lower-skill jobs evaporated over this period, and not only in manufacturing. The Great Recession compounded job insecurity. While the 8.7 million jobs that were lost during the recession had been regained by 2014, one study calculated that the recession also cost the United 24 Rita Gunther McGrath and Alex Gourlay, The End of Competitive Advantage: How to Keep Your Strategy Moving as Fast as Your Business, Boston, Mass.: Harvard Business Publishing, June 4, 2013; Steve Denning, “It’s Official! The End of Competitive Advantage,” Forbes.com, June 2, 2013. 25 Arvind Panagariya, India’s Economic Reforms: What Has Been Accomplished? What Remains to Be Done? Manila, Philippines: Asian Development Bank, ERDC Policy Brief No. 2, November 2001. 26 India’s total labor force grew from 336 million in 1991 to 497 million in 2014, while China’s grew from 645 million to 806 million, and the U.S. population increased from 251 million in 1991 to nearly 319 million in 2014 (World Bank, 2016a; U.S. Census Bureau, “Intercensal Estimates of the United States Resident Population by Age and Sex,” Washington, D.C., 1991). Immigrants to the United States constituted 53.1 percent of U.S. population growth between 1990 and 2000, falling to 30.7 percent between 2010 and 2014, presumably due to the weak economy. This excludes additional population growth from immigrants’ children. Shatz, 2016, pp. 49–50.
Leveraging U.S. Strengths, Dealing with Vulnerabilities 83 States economy 6.4 million “missing” jobs that were never created. 27 Although unemployment rates are now low, labor-force participation has continued to decline since 2000, even among men and women of prime working age. 28 Since 1991, earnings have been mostly flat. Real median earnings rose only 9 percent over 25 years, 29 not including benefits, such as employer-paid health insurance and other forms of compensation generally offered to better-paid workers. The percentage of Americans engaged in “alternative work arrangements”— temporary workers, on-call workers, freelancers or contractors—has also risen from 10.1 percent of the workforce in 2005 to 15.8 percent in 2015. 30 More than one in five adults were working more than one job, doing informal work as well as their main job, or both, 31 with some complaining about the lack of benefits and others welcoming the flexibility and earnings offered by this new “gig economy.” Meanwhile, population mobility, long a driver of economic advancement in the United States, has decreased for reasons that are not yet understood, exacerbating the unevenness of economic opportunity. 32 In contemporary U.S. politics, Chinese competition is often cited as the chief culprit in eliminating millions of well-paying factory jobs 27 Anthony P. Carnevale, Tamara Jayasundera, and Artem Gulish, Six Million Missing Jobs: The Lingering Pain of the Great Recession, Washington, D.C.: Georgetown University Center on Education and the Workforce, 2015. 28 There is considerable debate over the causes of the decline in labor force participation, some more worrisome than others. Factors include young people staying in school longer, young people unable to find jobs, more people retiring at a normal rate due to population aging, more demoralized older people retiring early and/or more people applying for disability payments. There is broad support for policies to improve the labor force participation rate as a means to boosting economic growth. See Ravi Balakrishnan et al., “Lost Workers,” International Monetary Fund, Finance and Development, Vol. 52, No. 3, September 2015. 29 Shatz, 2016, p. 20. 30 Lawrence F. Katz and Alan B. Krueger, The Rise and Nature of Alternative Work Arrangements in the United States, 1995—2015, Harvard University, Princeton University and National Bureau of Economic Research, March 29, 2016. 31 Consumer and Community Development Research Section of the Federal Reserve Board’s Division of Consumer and Community Affairs, 2016. 32 Raven Molloy et al., “Understanding Declining Fluidity in the U.S. Labor Market,” Brookings Paper on Economic Activity Conference Draft, March 10–11, 2016.
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STRATEGIC RETHINK STRATEGIC CHOICES
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Preface This is the sixth and final
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Preface v The RAND Strategic Rethin
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viii Strategic Choices for a Turbul
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Contents Preface...................
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Contents xiii Middle East..........
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Summary For more than seven decades
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Summary xix deal with because of it
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Summary xxi Familiarity does not ne
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Summary xxiii Whatever else is on t
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Summary xxv of richest Americans, i
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Summary xxvii reexamination arises
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Summary xxix Dwight Eisenhower—wh
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Summary xxxi of ISIS, the migration
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Acknowledgments RAND Corporation Pr
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CHAPTER ONE Introduction What is Am
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Introduction 3 that some allies hav
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Introduction 5 of distrust of the g
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Introduction 7 live with. Therefore
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Introduction 9 Bruce Jones points o
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Introduction 11 force decision make
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Introduction 13 United States for l
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CHAPTER TWO From Triumph to Stalema
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From Triumph to Stalemate: The Loss
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Part Two Strategic Choices
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CHAPTER EIGHT Option II: “The Ind
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Option II: “The Indispensable Nat
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CHAPTER NINE Option III: “Agile A
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Option III: “Agile America”: Ad
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CODA The Challenge of Leadership: A
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The Challenge of Leadership: Aligni
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