Global Economic and Political Issues Acording Crooks
The author of the article “America: Riveting Prospects” tries to shed the light on some of the issues that have been affecting American companies for the past several decades. The companies have sustained several financial crises in the past that were caused by economic and property sectors. These crises have had significant effect on the performance of the American companies. Financial challenges have made the companies’ stakeholders decide on the paradigm shift as far as the manufacturing sector in the United States is concerned (Crooks, 2011). Currently, the organizations have given more priority to expenditure, debts and imports. However, there is need for the U.S. companies to focus their attention on production, earnings and export. The author highlights five reasons in his article which have caused the current problems, and they will be discussed below.
First, the American businesses have never exploited the option of export of their products. They manufacture their products mainly for local consumption. Facts given by the Department of Commerce indicate that the amount of goods exported by the United States is lower than of many other developed countries. Second, the United States has shown little interest in signing trade agreements that enhance international business. This reluctance has translated to harsh tariff barriers for exporters to the United States, thereby discouraging international trade (Crooks, 2011). Third issue affecting the U.S. companies is the unavailability of skilled personnel to work in the manufacturing industries. This problem can make the American companies shrink their production capacities; moreover, it can affect the future of manufacturing sector.
The fourth problem, according to the author, is the fact that the undeveloped countries are now emerging as the production power houses. These emerging economies have an advantage over the United States because they enjoy low cost of production. Lower manufacturing expenses result in the countries’ ability to sell the products at a cheaper price than the American counterparts. Finally, according to the author, the idea of the U.S. companies to produce their goods in the region where their market is located is a misguided priority. He explains that instead of focusing on exportation, the American businesses normally concentrate on foreign operations, where they have business affiliates. The reason behind this approach is to allow better understanding of the local customers’ requirements and protecting the finances against changes in currency (Ostrea, Larsen, & Ditterich, 1997). Also, the author claims that the U.S. companies opt to invest in foreign markets in order to enhance their affiliation with governments in those areas, which provide great support for the business.
The author further helps to shed the light on the controversy between economists’ and industrialists’ views on the development of the America’s economy. According to the industrialists’ point of view, more emphasis should be put on the manufacturing sector because it often dominates in the international market. In addition, the manufacturing sector offers higher wages for its employees as compared to other sectors of the economy.
On the other hand, the economists’ perspective rules out the need for giving higher priority to some sectors of the economy. The perspective further explains that the modern economy is gradually turning to be knowledge-based, whereby services are traded to improve the economy. Moreover, most of the employees in the public and private sectors usually get hired because of the skills that they possess (Crooks, 2011). Also, the concept of knowledge-based economy and provision of services to drive the economy has made most of the companies invest in the intangible assets. The intangible assets are mainly the intellectual capabilities of the employees in these organizations. Lastly, knowledge-based economy allows for international trade of intellectual skills. Therefore, I agree with the economists’ view on the U.S. companies.