As we come to the end of the first month of the new year 2011, we can now reflect on our past mistakes and successes of 2010 and see what improvements can be made as we move forward.
A few highlights of 2010?
- Signs of recovery from the global economic recession are finally beginning to surface
- Women in power– the election of the first female heads of state in Kyrgyzstan, Costa Rica and Brazil
- Free Trade Agreement (hereinafter, “FTA”) between the United States of America (hereinafter, “US”) and South Korea
A few downsides of 2010?
- Unemployment numbers are still high
- Natural disasters have ravaged countries like Haiti, Pakistan, Indonesia, Russia, China and Chile (http://www.nydailynews.com/news/world/2011/01/03/2011-01-03_natural_disasters_made_2010_one_of_the_deadliest_and_costliest_years_in_history_.html)
- Fear of nuclear attacks have forced governments to focus moreso on defense tactics (specifically against North Korea)
I apologize for not including sports references (such as the Lakers beating the Celtics in the NBA finals, the US’ epic wins of Olympic medals, etc). I try* not be biased.
Now that 2010 is over, what can we expect from 2011?
Please note that this outlook pertains to the US and US policies which may potentially change the way the US does business globally.
In the past, the word of the year was “change”.
2010? The word of the year was “innovation”.
For 2011, we are already beginning to see the word of the year: “jobs”.
Throughout 2010, the US focused on innovation as being the main driver to lead the economy through the global economic recession. The idea of promoting innovation built the foundation of creating jobs. Now that states like Massachusetts are already rising above the recession and seeing signs of economic growth, US leaders are now pushing this idea of creating more jobs for the American people to not only continue to push the economy upwards, but to market the US globally and unite the country as we move forward.
In 2010, Senator John Kerry used the term “idiot politics” to describe the campaign strategies during the gubernatorial elections.
What did he mean by this?
Using terms like “promoting international business development” and manipulating the meaning as a direct hit against the other candidate. For example, manipulating “promoting international business development” as “giving American jobs abroad”.
As a non-partisan citizen of this great country, I was honestly appalled at 2010’s campaigns. The American people are not idiots and yet, is it ignorance, stubbornness or just plain laziness that continue to plague the minds of voters? We need to take action somehow in informing the public of public policies that are in the works for local cities, towns, communities, states and of the nation.
For 2011, in response to the elections of the past, startups are focusing on finding ways to tackle this problem and assist the American people in becoming more involved in voicing their wants and needs. We cannot afford to elect leaders based on superficialities and false truths.
In 2010, President Obama released his National Export Initiative (hereinafter, “NEI”): http://www.whitehouse.gov/the-press-office/executive-order-national-export-initiative.
What does this mean?
Promoting and assisting more US domestic SMEs to export their products globally to double the US export numbers in order to create over 2 million US jobs
So… what does this mean?
In essence, it means the government (both federal and domestic) are going to be taking major steps to help SMEs succeed in selling their products abroad to more diverse markets.
Many times, US companies have absolutely no idea how to do business abroad and with the major news outlets continuing to praise the rise of the emerging markets, such as Brazil and India, among others, some US companies have prematurely chosen to conduct business with countries without doing their due diligence.
The following is a case I have come across this past year:
Local company patents their product in the US and decides to open a manufacturing plant in China for the lower labor costs.
- Mistake #1: They engaged in business dealings with Chinese business people without understanding the Chinese market, the potential risks one could face and finding out the protocol needed to succeed.
- Mistake #2: They assumed that patenting one’s product in one country means the patent would be recognized throughout the world.
- Mistake #3: They entered into a market unknown to them over-confident, ignorant and alone.
Because of these mistakes, the Chinese manufacturing plant stole and patented the product line designs of this domestic company and filed a patent infringement law suit against the domestic company and… won.
For the past couple of years, China has monopolized the headlines of numerous Business sections of various newspapers presenting readers with false ideas like the following:
- China has a lot of money.
- If big companies (i.e. Staples) are doing well in China, my company can, too.
To be honest, this company’s biggest mistake was being ignorant, thus underestimating the China market. In all seriousness, Americans usually think they live in the most powerful country in the world. Dominating the US market, an American company may assume that the US will protect them if anything goes awry, which can be assumed is what happened here.
Please take note that I am not picking on China, nor am I telling you to not do business in China. I am merely stating that moving forward in 2011, Americans need to be more careful when it comes to doing business abroad. With the National Export Initiative, major programs are being created and promoted to better assist American companies.
Examples of a few federal and state government agencies here to assist and support American businesses:
US Department of Commerce
US Commercial Service
Massachusetts Office of International Trade & Investment
Massachusetts Export Center
Rise of the Emerging Markets
Throughout the recession, media outlets conveyed how various countries were doing remarkably well– more specifically, how the emerging markets were doing well. For instance, PWC released a report January 2011 entitled ‘The World in 2050’, “concludes that the financial crisis has accelerated the shift in global economic power to emerging economies.” (The Economist, “The Race Ahead”, January 10, 2011)
As more reports are made and more analysis are created, the US has begun to take on a new stance regarding having American businesses expand globally: playing it safe and “buy American”.
In an article from the New York Times, government officials are taking steps to promote the purchasing of American products only for certain projects. The article was entitled, “Pentagon Must ‘Buy American,’ Barring Chinese Solar Panels”: http://www.nytimes.com/2011/01/10/business/global/10solar.html?_r=1&src=me&ref=business.
Creating more jobs means producing more and purchasing more American products. With 2010 being the year of innovation, the US finally realizes that it needs to utilize the innovative juices to push America forward as a major exporting power.
Another piece of trade that was passed towards the end of 2010 was the signing of the Free Trade Agreement between the US and South Korea: http://www.whitehouse.gov/sites/default/files/fact_sheet_overview_us_korea_free_trade_agreement.pdf.
In the past, the US and Korea has had a very up-and-down relationship; however, with neighboring China becoming a powerhouse and Japan becoming more insulated, it seems it is S. Korea’s turn to shine.
What does this FTA mean for US businesses?
#1: It will increase exports of American goods by breaking down barriers that kept US exports out of Korea
#2: It will ensure that IP protection will be of the highest priority
#3: Better trade relationships lead to better political relationships, which leads to the US having a stronger ally in the Asian region
It seems that the highlights of 2010 are leaning towards building more global partnerships and strengthening the ones the US already has. Maybe we can finally see the Millennium goals reached?
This post is dedicated to those who just want to know more about the US government programs being enacted to ensure the success of American business people. Please feel free to contact me any time if you are interested.