Competitiveness of the US Economy: Problems of Locating. By Valeria Zaydman
Why Choosing This Topic? America’s financial system was almost wiped out during the crisis => it is extremely interesting how it restores The USA was a benchmark for all developed countries and still is the most flourishing and powerful economy USD is an international trade currency and the US is the one that controls it
Sources One of the most well-known periodicals in the realm of Economy – Harvard Business Review – and an article by two former members of the Council of Economic Advisers, well-known economists, Martin N. Baily and Matthew J. Slaughter
Restoring the US Competitiveness Strategy “Where Should We Locate? ”
Causes of America’s Deficiencies Poor policies Companies overlook the benefits of locating in the USA They underestimate the costs of moving They view circumstances in the US as fixed
Types of Business Activities Tied to natural resources Connected to customers and markets Mobile
Mobile Activities and National Prosperity Mobile activities Sophisticated. Generate the most value per worker = are the most desirable Low-end activities are more prone to relocation and are easy to replace
Why Choose the US and Why Not?
SO, WHAT IS THE SOLUTION OF THE PROBLEM? IMPROVE, NOT MOVE!
“Improve, Not Move” Policy: Consider Corning Athletic shoe makers (low-end activity): jumping Japan (60 s) – Taiwan, Korea (70 s) – China Indonesia, Vietnam. Productivity improvements are rooted in investment in individuals, infrastructure, long-term relations with local supplier The local business environment isn’t fixed Corning (glass, ceramics, optical fiber, LCD glass) – highly sophisticated processes, cutting-edge technologies Developing is in its US plants (250 patents/yr) Investing in local infrastructure & talent: granted $3. 7 mln to Corning school district, $110 k to a regional science and discovery center But 75% of its revenue comes from outside of US (60 plants in 14 countries) It replicated the policy of deep local investment in the major international locations – Taiwan, China, Japan
Conclusion How top management answers the question “Where to locate? ” The sources of the US deficiencies in this field Types of business activities The reasons of choosing the US or another country for locating The most efficient way of solving this problem & Corning Inc. as an example
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