Since the postwar era of WWII, the United States has dominated the global economy and created constant economic growth through its manufacturing and purchasing power. At one point in time, the United States produced over half the world’s output therefore creating a stable global economy.
Over the past three decades, America has become greatly dependent upon outsourcing and has accumulated an astronomically large sum of debt which has also become known as the “Debt Bubble.” Not only has this “Debt Bubble” been financially devastating to the U.S. economy but it has also created a global financial crisis.
Global growth is highly dependent upon the economic stability of the United States. The United States is the key player. It has the power to shape the direction of our global future. If a balance is not developed to drastically improve the economic financial crisis, the future of America will be uncertain and a new global leader will ignite.
It is important for all of us to take a good hard look at the economic issues that America is currently facing, how they affect the global economy and the benefits of reconstructing America’s manufacturing and procurement process. By strategically reconstructing the American economy, more eco-friendly jobs will be created and a new profound global economy will take form.
The American government system is old, broken and dysfunctional. The housing market, jobs, educational system, politics, outsourcing, and health care concerns have all created fear and uncertainty about our countries future. Over the past decade, the American government has failed to bring order to its economic crisis. This economic crisis has not only affected the American system but it has also immersed into the global system.
In order for the global system to be corrected, first America will need to take a comprehensive approach to fix its own nation issues which will enable the global system to reform itself.
Outsourcing comes with consequences for us all. There are many winners with the emerging development of outsourcing while there are also many losers. The United States is the one who is feeling the greatest lost in so many ways as outsourcing intensifies.
Most Americans have continued to adapt to these changes with very little knowledge of the challenges and threats that economic globalization place upon their nation. There is an even bigger threat to our nation if jobs continue to be outsourced to other countries. What will happen to America if it loses another fifty percent of its job market? If our country continues on this path, everyone will become a target in some way. Job security, health care, freedom and education opportunities will be somewhat a thing of the past. If America is not careful and chooses not to be the leading global driver, Global Capitalism will monopolize and a new world system will be dangerous for all of our well-being.
The benefits of bring back American manufacturing facilities and procuring domestic goods outweigh outsourcing. It is said that outsourcing save big corporations money therefore they can push those saving costs onto the consumers. As many of you have notice, the price of the same goods that we use to procure has significantly risen and they are continuing to rise. If what the big corporations are telling use is true than why is the American economy collapsing?
One of the negative affect to outsourcing is the rise in oil price. Many people do not associate the cost of oil with outsourcing and the affect that outsourcing has on the price of oil. When goods are outsourced, the oil prices associated with those same goods double from a logistical aspect. Let’s review how. Outsourced goods are transported from other nations into the United States. First of all, the average price of oil is twice as expensive in other nations when comparing it to the United States. As manufactured goods are produced and processed to be shipped, they are normally transported by truck to a shipping dock. Once those goods arrive to the United States, they are once again transferred throughout the country to be distributed. Keep in mind that same manufactured product is transferred in one nation by truck, then by water/plane, and once it arrives to the U.S.it is transferred for a third time.
If goods were manufactured within the United States, it would reduce the cost of transportation and it would also lessen global carbon emission.
If we take a closer look at the New York Stock Exchange, it will undeniably tell us that Big Businesses are failing when it comes to outsourcing. More businesses than ever have disappeared, joined forces or sold off their subsidiary companies to stay alive.
Although labor may be cheaper, cheap labor also comes with a price tag. As manufacturing facilities continue to relocate to other nations, less and less Americans are able to afford to purchase those same goods. Big Business will also strive to stay alive during the economic downturn.
The American economy has always been the driving force of the global economy. If Big Businesses do not work with the American government to find some sort of median that creates a win-win situation for us all, there may be little hope for our nation.
If manufacturing facilities were given better business tax incentives for creating jobs, manufactures would be more prone to do business within the U.S. If all manufacturing facilities implement the Lean Six Sigma approach, they would also save additional costs, become more eco-friendlier, and those saving costs would increase their revenue.
The Lean Six Sigma approach could also serve as a guiding point for our government officials and other business entities. The lean approach opens many doors to make organizations more socially responsible/eco-conscious and improve their bottom line. If the American government ran our country like a business and implement Lean Six Sigma methodologies, jobs opportunities would be created, it would remove and identify any bottlenecks we may have, help to create a strategic procurement process, assist in planning ahead for the future, identify the right people and put them in the right place to do the job, and create growth opportunities.
These lean, eco-friendly approaches can not only work to create more job opportunities and stabilize our economy but they can also work to create a governmental system that works.
It is estimated that 250,000 to 300,000 illegal immigrants come to the United States per year to work and receive some form of government assistant. Over half of them enter the US legally and overstay their visas. The U.S. government need to finds a better ways to deal with our immigration problems. Immigrates contribute a great deal to our country but because of their citizen status, half of them do not contribute to their share of taxes.
According to The Federation for American Immigration Reform (FAIR), illegal aliens cost the U.S. taxpayers more than $100 billion each year. Most of immigrants never pay a single tax and over half of them receive some form of government assistants; free education, medical care, etc. American citizen are the ones stuck with the rising cost of taxes to support those who come here to work, receive a free education, etc.
If immigrants were to contribute their share of taxes to the growing economy, this would also help to improve our financial crisis. The more money contributed, the more jobs created; the more jobs created, the more stable our economy becomes.
In order for America to overcome its financial crisis, the country must realize the importance of procuring goods which are “Made in the USA”. America must first start by educating their citizens on why it is so important to procure domestic goods, give incentives to small businesses and manufacturing facilities who solely operate in the USA. The problem will not correct itself as some economist and business gurus would like us to believe. Citizen education and involvement is essential if the problem is going to be corrected.
Procuring goods from multi-national corporations such as McDonalds, Wal-mart, and Lowes just to name a few, makes the American economy even weaker. Those large corporations reinvest the money they make to expand and hire employees in other counties. Only a very small portion of the money Americans spend with these corporations is being reinvested back into the American economy.
More than half of U.S. workers are employed by small businesses. If the citizens increased their spending in the support of U.S. small businesses, it would create more jobs and more American citizens will be able to open up more small businesses therefore creating additional jobs.
It doesn’t take political rocket scientists to figure out a solution to our financial crisis. Our solution takes the involvement of “The People” to turn things around.
At one point in time, America dominated the technology industry. Due to a poor educational systems, they have been left behind. In order for the United States to keep up with the changes and become the driving force, they must give incentives to students (aid), schools, and colleges who implement these levels of programs.
These programs are essential for the growth of our economy. If business technology programs are introduced at an earlier stage, they could be used to encourage students to become more technically savvy.
Let’s look at Silicon Valley High School in California for example. This high school is breaking the mold in the Science and Technology arena. A lot of their student come out of high school and become entrepreneurs. Here is a list of a few A-lister companies that were started by some local Silicon Valley students; eBay, Google, Yahoo, Facebook, Pinterest, and Zynga. This program is very similar to the one that is being implemented throughout China’s educational system.
If all American schools took on the same educational approach that Silicon Valley High School and China has taken on, America would become the new global leader in Business Technology.
Technology growth within any country helps to stabilize the economy by creating more manufacturing facilities which in turn indirectly create additional job.
From a global prospective, the U.S. Government has sacrificed the financial future of its own nation by becoming too heavily involved in multinational affairs. There is nothing wrong with working with other countries to help them resolve their economic issues but there is something wrong with the solution to their problems being at the cost of one’s own nation.
It would be inhuman of us to ignore the problems that poverty stricken nations are faced with. Instead of approaching these problems from a global prospective, they should be approached from a national prospective.
If we want other nations to be able to sustain without the assistant of other countries, we have to learn to “Plant Seeds”. Individually planting seeds within other nations will teach them how to become productive at their home front from a manufacturing, farming, educational, financial, sustainability, health care, and procurement stand point. This will enable them to create jobs and a healthier economic system.
We can continue to plant and water the seeds of other nations by having global meeting where all nations are able to come together to discuss their ideas, issues, and receive advice from nations such as America and Europe. This will allow them to implement these ideas into the growth of their own country. Some countries may need financial assistant to get started but this solution is no different than investing in a business and having mentors to steer you in the right direction.
All nations can be very similar economically wise to the United States regardless of their population if all nations were willing to put forth great efforts to resolve one’s own issues. All poverty issues will not be totally resolved and this solution is not intended to create an equal income distribution but it will help to stabilizing the global economy.
There is nothing wrong with outsourcing but it should be minimized to ensure that our country is able to sustain. If we continue to become solely dependent on other countries, we will destroy the one thing that our country was founded on…the American Dream!
By developing new economic courses of action, America will become the leader of a new revised Global Economy. The development of a “Leaner, Greener American Infrastructure” will significantly balance global distribution of economics therefore securing a positive outlook for our global future. Our future lye in the hands of our leaders but it’s up to the people to invoke healthier, positive changes.
There are many protectionists who will object to such forward thinking but the truth to the matter is nothing else has worked and nothing else will work. The question is “Will America lose its power and influence to outsourcing or will a New Leaner and Greener society ignite as a result, with more resources that it will be able to muster?”
Sabrina Ward is an Accredited Business Intermediary with over 18 years of entrepreneur experience. Her practice includes assisting buyers and sellers of privately held businesses in the transfer of ownership and restructuring struggling businesses to maximize their supply chain value. She may be reached at (972) 755-9707 or by email at Sabrina@WardingtonIntl.com. Her business broker and consultant website may be viewed at www.WardingtonIntl.com.