‘Ask yourselves what you can do to bring jobs back to your country,” President Obama dramatically implored business leaders in his State of the Union address, “and your country will do everything we can to help you succeed.”

In fact, Michael E. Porter, co-chair of the Harvard Business School’s U.S. Competitiveness Project, has asked this very question — and 10,000 alumni, most at the highest levels of business, have answered. Their words aren’t necessarily what President Obama wants to hear, nor what Republican leaders emphasize, and their views certainly aren’t what business lobbyists peddle in closed-door meetings on Capitol Hill. But it’s the start of an agenda that is remarkably doable — and in less heated political times would be likely to draw bipartisan support.

The alumni are not an optimistic bunch. A whopping 71% expect U.S. competitiveness to decline over the next three years, with American employees feeling the pinch more than the profitable firms they work for. Those who were personally involved in decisions about relocating operations report that the U.S. lost out two-thirds of the time.

Tax and regulatory burdens topped the alumni’s list of complaints — but not for the reasons we often hear cited. “They were more concerned about complexity and uncertainty, rather than the actual level of regulation or taxes,” says Porter.

Individual industries, of course, have thrived on building complexity into the tax code with self-interested loopholes and subsidies. Likewise, President Obama’s plan to improve U.S. competitiveness rests on further mucking up the tax system by “rewarding companies that create jobs right here in America.”

Porter’s response? “Let’s not add another layer of complexity to the tax code,” he says. “It’s not [tax] incentives or spending that drives behavior, it’s about creating a fertile environment here that justifies higher U.S. wages.”

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Republicans and the business leaders who support them, Porter says, are guilty of focusing on the policies to help companies compete without emphasizing the other half of the jobs equation: maintaining and improving the living standards of their workers.

Executives say they look overseas for talent because they can’t find American workers with adequate skill sets. But they could be filling that gap with their own training and college partnerships. “As companies globalized, both overtly and subtly, they started thinking that what was happening in the U.S. didn’t matter to them,” Porter notes. “If there was a problem they could just move elsewhere.”

Corporate America has a self-interest in building a pipeline of trained workers right here at home, Porter says, and it can be done relatively cheaply. The HBS project is finding costs to operating offshore — like added supervisory expenses and defect rates — that companies don’t take into account when racing toward the bright lights of lower wages and cheaper factories.

There is plenty of advice coming out of the HBS project for Washington’s leaders. President Obama ignored the advice of his own commission, known as the Simpson-Bowles panel, to dramatically rein in entitlement and other government spending. But passing that plan would ease the business community’s concerns that the U.S. is heading for a fiscal crisis.

Likewise, the U.S. has been largely missing in action on the global trade agreement front — yet should be leading the charge. “The U.S. has a profound interest in a trading system that is fair,” Porter notes.

Still, the HBS project is mostly aimed at developing advice for business leaders. And Porter argues that competitiveness abroad actually starts here at home, with companies taking a vested interest in the American workforce. When those interests align, what’s good for American business ends up also being good for America.

This article is from the February 27, 2012 issue of Fortune.