What business should do to restore competitiveness

FORTUNE Americas feeble economy reminds us every day that our global competitiveness is in trouble. Whose fault is that? As usual in todays political environment, most opinions are extreme. One camp holds that national competitiveness is the responsibility of policymakers, not business leaders, who need to focus on running their companies. The opposite camp says companies owe loyalty to the country that supports them, and executives who move American jobs overseas are Benedict Arnold CEOs. Both positions are deeply flawed, reflecting simplistic views of how competition and economies really work.

We offer a third perspective. Managers must run their companies well. But every firm draw