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Government reorganization and competitiveness

In an earlier posting on the State of the Union Address, I drew attention to the President’s plan for government re-organization.  Yesterday, the White House announced that Deputy OBM Director Jeffrey Zients to head up the government reorganization efforts.  Zients is also currently also the federal government’s Chief Performance Officer (CPO).  The announcement noted that “Our first focus will be looking at trade and exports to see how we can better reform these functions to give American companies a leg up in the global economy.”

This is a good step forward.  But there are other steps the President can take immediately to push forward the competitiveness agenda.

As I mentioned earlier, Center for American Progress (CAP) published a report outlining a number of process steps the Administration could take to address policymaking on competitiveness.  In that earlier posting, I highlighted the coordination and planning activities recommended in the report — based on the national security model.  I will come back to those recommendations.

However, the report (A Focus on Competitiveness) also addressed the reorganization question, with the following suggestion:

“To address the fragmented responsibility for key competitiveness functions, the president should also ask the National Academies panel to study the needs of interested parties and evaluate an executive branch reorganization plan that could include:

* Creating a Department of Business, Trade, and Technology by combining relevant agencies within the Department of Commerce with trade and business focused agencies and offices, including the Office of the United States Trade Representative, the Small Business Administration, the Export-Import Bank of the United States, the Overseas Private Investment Corporation, and the U.S. Trade and Development Agency. Separate evaluations would determine where to put existing Commerce “administrations” not closely aligned with the new department’s mission. Specifically, these evaluations should assess:

– Whether the National Oceanic and Atmospheric Administration is a better fit in the Interior Department, whose mission includes protecting America’s natural resources and heritage. NOAA distributes environmental information, manages coastal and marine environments, and conducts applied scientific research on ecosystems, weather, climate, and water.

– Whether the Economics and Statistics Administration (including the Bureau of Economic Analysis and the U.S. Census Bureau) should be moved along with other federal statistical agencies to a new crosscutting U.S. Statistical Agency. Another option is to create two separate statistical agencies–one for demographic, economic, and business information, and another for environmental information, leaving other unrelated statistical functions where they are. As these options are being evaluated, we recommend the president issue an executive order that directs the design and implementation of a “virtual” U.S. Statistical Agency. (See box on page 28)

* Creating a more expansive “competitiveness agency” by adding to the new department described above job training and higher education programs from the labor and education departments

* Creating an even more comprehensive competitiveness agency by also including programs that promote science for economic development purposes, such as those in the departments of energy, transportation, and housing, and some science coordination functions from the White House Office of Science and Technology Policy”

I doubt very much that the Administration will look to hard at the last two options of an expansive “competitiveness agency” or a super-agency.  Those, especially the latter, are probably a bridge too far.  President Nixon once tried the super-agency approach, but it never received serious attention.

But the creation of a Department of Business, Trade, and Technology is within the realm of possibility, as is the creation of a U.S. Statistical Agency.  Although, the centralization of statistical functions has its own problems and pitfalls (I know — I looked into this back in the 1980’s as part of my role in the last attempt to create a Department of Trade and Industry).

While I may support such as reorganization (and clearly support the Administration looking at the options), let me add a note of caution.  <strong>No form of reorganization will completely solve the coordination problem.</strong>  I’ve noted before in the context of both financial regulation and homeland security that we don’t necessarily need to create new hierarchical structure.  We need to empower the network.

In that regard, I hope the Administration will look very carefully at the parts of the CAP report I highlighted earlier:

  • A Quadrennial Competitiveness Assessment by an independent panel of the National Academies whose objectives are to collect input and information from many sources and perform a horizon scan that identifies long-term competitiveness challenges and opportunities
  • A Biannual Presidential Competitiveness Strategy that lays out the president’s competitiveness agenda and policy priorities, and captures the attention and buy-in of cabinet principals
  • An Interagency Competitiveness Task Force led by a new deputy at the National Economic Council that develops the biannual strategy, oversees White House coordination of competitiveness initiatives, and monitors their implementation by agencies
  • A Presidential Competitiveness Advisory Panel of business and labor leaders, academics, and other experts who assist the administration in developing policy details.

A version of the last point is taken care of with Council on Jobs and Competitiveness.  I suspect that the Interagency task force might be in the works.  The first two — the assessment and the strategy — can be implemented by Executive Order.  In fact, the President can build upon the strategy report mandated in the reauthorization of the AMERICA Competes Act.

Reorganization is tricky and will use up a fair amount of political capital.  In contrast, creating a Quadrennial Competitiveness Assessment and a Biannual Presidential Competitiveness Strategy is easy.  And I suspect will have a greater long term impact.

The President should go ahead immediately with these two actions.  It will show how serious he is about the competitiveness agenda.  And it will start the process moving.  Otherwise his agenda risks getting bogged down in the seemingly endless debate over budgets and government reorganization.

Cross posted from The Intangible Economy.

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