[Note: This is a re-formatted manuscript that was originally published in On the Horizon, 1992, 1(1), 7. It is posted here with permission from Jossey Bass Publishers.]

Thomas E. Hall, Miami University (Ohio), sums up the U.S. economic problem as the loss of its competitive edge during the past 20 years. The question now dominating political debate is why and what can be done about it. Hall says the problem is rooted in the slow growth of labor productivity since 1973.

Labor productivity in the U.S. grew at an average rate of 2.4 percent a year between 1960 and 1973. From 1973 to 1989, the rate was only 0.8 percent per year. Productivity growth in Japan during the same time has averaged about 6 percent.

Two factors are at play in the slow growth of productivity-inadequate investment in plants and equipment, and a declining rate of technological innovation. Both of these, in turn, are caused by the high cost of capital in the U.S.

Hall sees no immediate remedies, but stresses the need for actions to begin rebuilding productivity. Polices to encourage savings and reduce the budget deficit would be a good start. ["The Real Problem: Productivity Deficit," (1992, Summer), The Forum]

Implications

The relevant question is how to increase technological innovation at the lowest possible cost and boost the research and development capacity of universities? Encourage and support corporate-university partnerships that allow universities to reduce development costs by actively participating in the product development process. Of course, problems vis a vis proprietary ownership of knowledge versus free discourse of knowledge arise from such collaboration. However, a well-managed private industry-university research system can be a win-win solution for industry and for universities.

Another implication of the push for productivity is the expectation that colleges and universities will become more "productive." Increasingly, state legislators are questioning what they perceive as low teaching loads and overly liberal leave policies. As the dialogue between the state house and the campus becomes more heated, college and university public relations people will have their work cut out for them.