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China and India rival the United States in business competitiveness and firms of the two Asian countries may soon surpass American rivals in technological innovation, according to a new survey.



U.S. consulting firm A.T. Kearney surveyed more than 300 executives in the U.S. and released a report on February 24. About 63 percent of those surveyed said competition would come from the United States, while 59 percent said ti would come from China, and 45 percent said it would come from India. Nine in 10 executives surveyed said the competition posed by Chinese and India companies would by Chinese and Indian companies would likely intensify in the next two years.



Five years of extreme cost-cutting have made many American technology firms downsize research and development departments. American managers have also given foreign competitors a boost by outsourcing important business functions to workers in low-cost countries. "At one time, the U.S. was head and shoulders above the rest as the most competitive market, but there's been a big shift. China and India are now on the same level as the U.S. in terms of competitiveness," said Donovan Neale-May, executive director of the BPMF.




The lack of competitive planning among U.S. companies shocked survey organizers, prompting concerns about the United States' ability to continue to dominate the global technology sector. Two-thirds of American executives said their companies have not started formal practices for tracking and analyzing competition.





Many executives said they were shifting emphasis away from product innovation and customer service, focusing instead on cost-cutting since the technology industry began falling in 2000.