American Investment in Education Faulted

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WASHINGTON--America's investment in education has kept pace with that of other Western industrial nations since 1972, but it may not be growing fast enough to offset their gains in economic competitiveness, according to the first "Competitiveness Index.''

The index, released here recently by the Council on Competitiveness, was created to show "how U.S. economic performance compares with that of other nations and how current U.S. performance compares with its past record,'' the council's report says.

Formed in 1986, the council comprises executives from industry, labor, and higher education whose objective is to improve the ability of American companies and workers to compete in the world market.

For its index, the council developed a "pyramid of competitiveness'' that takes into account figures on standard of living, trade, productivity, and investment in future competitiveness. Using 1972 as the base year, the group set the competitiveness index at 100 for that year and then charted U.S. performance subsequently against that of seven other Western nations.

In all four categories, the U.S. performance index has dropped below 100, meaning the United States has been outperformed by the other industrialized nations.

Education spending is included in the category of investment in future competitiveness, along with spending for nondefense research and development and new plants and equipment.

The study concludes that the U.S. investment in future competitiveness "has not kept pace with the investment of the other summit seven nations as a percent of Gross National Product.'' As a result, the investment index for the U.S. has dropped from 100 to 96.2.

As a percentage of Gross Domestic Product, the United States spends more on education than the other "summit seven'' Western nations: Canada, France, Italy, Japan, Great Britain, and West Germany. In 1986, the U.S. education expenditure was 6.8 percent of G.D.P., compared with 3.48 percent for the other seven.

But U.S. spending on education has declined since 1972, when it was 7.2 percent of the G.D.P., the report says. The average percentage for the other countries also declined, from 3.72 percent in 1972. Japan's education spending, however, increased from 4.3 percent of the G.D.P. in 1972 to as high as 5.9 percent in 1980; it then dropped back to 5.6 percent in 1986, the last year for which figures were available.

"On paper, the U.S. is spending a lot on education,'' said Daniel F. Burton Jr., project director for the council's study. "Whether or not we're getting a big enough bang for our buck is another question.''

The council is working on a new study, to be released next fall, that will examine U.S. education in terms of world competitiveness.

"It will look at how U.S. students stack up to other students in the world,'' Mr. Burton said.--M.W.

Vol. 07, Issue 39

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