“Some 150 years ago, 90 percent of Americans worked in agriculture and related fields. Today, it’s only 3 to 4 percent. What if the government had decided to protect and subsidize all those agricultural jobs and not embrace industrialization and then computerization? Would America as a whole really be better off today?  Hardly.”  —Thomas L. Friedman, The World Is Flat.

We are currently experiencing an economic change as fundamental as industrialization. There is a simple fact that must be embraced by any U.S. community as it tries to compete for jobs and investment: We live in a global free-market economy. We are not competing against our neighboring communities but against countries around the globe. There is no such thing as a local, state or national economy. Global competition impacts every aspect of our lives. The firms located in a community must compete on a global stage and so must the community. This fact is convenient for some and inconvenient for others, but it is a fact nonetheless.

Entire nations are positioning themselves along the value chain. For instance, Malaysia has become the leader in labor-intensive, low-skilled manufacturing (such as textiles); China can produce raw steel at approximately 1/33 the cost of production in the United States or Germany; and India is gaining strength in the areas of information technology and advanced manufacturing (such as automotive components). If you think of the world as the departments of a corporation, it might look something like this:

As you can see, the competitive advantage of the United States is at the top of the value pyramid, where skill requirements are high. To be competitive, our region needs a highly skilled and highly productive workforce.

We have only one choice: to compete under the rules of the global economic system. We must focus our competitive advantages, let go of lost advantages, leverage our community assets to achieve economies of scale, and invest in the resources of the future–particularly a highly skilled and highly productive workforce–not in the practices of the past.

A community cannot shield itself through legislation or other protectionist measures. Prevailing wage ordinances and other types of protectionism can only result in a greater competitive disadvantage for the region. The fact is simple: A community cannot isolate itself from the global, free trade system. Do we try to achieve the impossible (isolation), or do we rally our world-class people, institutions and companies to become the global leader we have every right to be?

		Matt Dugener is president and CEO of the Lansing Economic Development Partnership (LEAP).