By definition, countries that wish to successfully compete in the global economy must have highly competitive traded sectors. A nation’s traded sector comprises those industries and establishments that compete in international marketplaces and whose output is sold at least in part to nonresidents of the nation. Traded sectors include almost all of a nation’s manufacturing activity, some services (such as software, Internet, engineering services and entertainment content like music, movies and video games), and some of the extraction sectors (e.g., farming or mining).
Because these industries face market competition that is global in nature in a way that non-traded, local-serving industries (e.g., retail trade or personal services) do not, their success is by no means assured. For example, while we may not know whether Safeway, Giant or Walmart are going to gain market share in the U.S. grocery store industry, we do know that the industry itself will be healthy, dependent only on the income and purchasing habits of American consumers. On the other hand, while we may not know whether Boeing or Airbus are going to gain market share in the global aircraft industry, we also do not know whether there will be aviation industry jobs in the U.S., since this depends on the U.S. winning in global competition in this industry. Put differently, if a grocer goes out of business another will emerge to take its place to serve local demand, but if a traded sector enterprise such as a manufacturer or software company closes, the one that takes its place may well be located in another country.
This report presents 50 federal-level policy recommendations to help restore U.S. traded sector competitiveness (and an additional 13 state-level recommendations). The recommendations are organized around federal policies regarding the “4Ts” of technology, tax, trade and talent as well as policies to increase access to capital, reduce regulatory burdens and enable better analysis of the competitiveness of U.S. traded sectors.