4 Areas of Improvement for US Businesses to Consider
While there are many advantages for starting a business in the United States, there are also reasons for caution. In the previous post we examined advantages why the US is still the place to be for high growth technology-based businesses. In this, our second installment of a four part series examining the strengths, weaknesses, opportunities and threats (SWOT) for a post-American world, we will be exploring the potential weaknesses of starting and growing a business in the United States. Here, in no particular order, are our 4 areas of improvement for American businesses to consider.
- Limited Perspective: For many businesses, small or large, the common misperception is that the US market is big enough such that there is no need to expand into global markets. Certainly the US has the world’s largest and most dynamic economy, but that does not mean it is the only market in which a small business could be successful. With the recent downturn in the US economy, many business owners have started to look beyond the borders for market opportunities, for example in the emerging economies of Brazil, India and China.
- Regulatory Barriers: There is no doubt that regulations and legal protections are critical for long term sustainability of an economy, and the protection of property rights create opportunities for companies to compete and thrive. However, an overabundance of regulation or inefficient regulatory agencies has the potential to impede innovation. For example, it took BRI eight years to get a patent approved by the US Patent and Trademark office. While that is on the high side, the length of time for US patent approvals is closer to three years and the duration appears to be lengthening due to an overburdened and under-resourced patent office.
- Human Capital: Our previous post stressed the availability of an educated workforce as a driver for technology-based companies to thrive in the US. The flip-side of this equation is that the pool of educated workers who come to the US from overseas to study at our top-ranked educational institutions, especially those in the STEM (Science, Technology, Engineering and Mathematics) fields, have an increasing array of opportunities to choose from upon graduation, whether working in their native countries or in other countries. The US must recruit and retain the best and the brightest workers to be successful in the new global economy.
- Manufacturing Base: It is a natural progression of an economy that as it develops, it moves from producing goods to providing services. It is also widely known that the resilience of an economy comes from the diversity of its businesses. A big gap in the US economy is the erosion over the last few decades of US-based manufacturing businesses as lower cost countries like China and India have become more competitive. In recent years, however, due to higher productivity in the US and rising labor costs in China, some of that manufacturing has been coming back to the US in the form of “on-shoring.” High end manufacturing, such as biomanufacturing or rapid prototyping, could be the chance for the US to regain some of our former leadership in manufacturing.
Despite the challenges, we at BRI remain optimistic in the long run about the future of US businesses in this post-American world. It is likely that the companies that will be successful in the future are those who can dynamically adapt, combine and manage the best elements of their worlds, whether it be technology and business, or East and West, or old and new.