Compared to 10 Years Ago, USA is Losing Competitiveness

Compared to 10 Years Ago, USA is Losing Competitiveness at the Margin vs. lts Peers e McKinsey conducted a study in 2010 that compares the USA with other countries on 20 attributes related to economic fundamentals, business climate, human capital and infrastructure. McKinsey compared current status vs. status in 2000. e We augmented the McKinsey study with 9 additional attributes across those aforementioned areas as well as government spending metrics. e Through this study, we found that America, relative to other countries, improved on none of the 29 attributes, remained the same on 9 attributes (including GDP per capita, public debt as % of GDP, public spending on healthcare, public spending on education, growth in local innovation clusters, population & demographic profile, retention of foreign-born talents, total healthcare spending and cost-adjusted labor productivity) and deteriorated on 20 (including trade surplus, national spending on R&D, industrial production, corporate tax rate, business environment, FDI, tax incentives for R&D, number of patent applications, availability of high-quality labor, higher education penetration, telecom & transportation infrastructure, etc.). KP www.kpcb.com USA Inc. | What Might a Turnaround Expert Consider? 391 USA Ranking High in Country Attractiveness Indicators But Losing Share at the Margin... US Relative Position Key metrics Ten Years Ago Today Trend Economic Household consumption B B Vv Fundamentals Household consumption growth | iss Vv GDP | | Vv GDP per capita? Oo GB = Stock market capitalization oO Oo Vv Technology company market cap? oO | Vv Industrial production B | Vv Trade as % of GDP o iia v Trade surplus2 oO Oo Vv National spending on R&D | i Vv Defense spending? oO | v Spending Government public debt as % GDP2 | | a Public healthcare spending as % of GDP2 Oo | = Government surplus as % of GDP? Oo ol Public expenditure on education B B = ®@ Top Ranked @ Top Quartile ™ Average Hi Bottom Quartile Source: 1) Growth and competitiveness in the United States: The role of its multinational companies, seme cor MennseY COSA Ine. [What Might a Tumeround Expert Consider? 302 HOUSE_OVERSIGHT_021037