I think companies are trapped in a chicken or the egg dilemma. They have savings but don't want to invest because they see demand is low... but maybe by creating new products, better R&D, etc, they could jump-start it.
Companies like Apple are still posting huge numbers, why can't other companies do it as well?
@Anna, I like your tax relief idea, it will definitely help companies invest more. Obama has to crunch the numbers and figure out the right incentive, so that the end result is positive (for companies, but also for the USofA as a whole).
I agree with everyone’s comments so far. I equally understand the need for the government to encourage businesses and High tech industries to spend more, to ease the high unemployment and encourage growth. President Obama has taken the right step forward now, however, the administration needs to do more
The only clear language high tech industry and businesses alike would understand at this present time is tax relief. As you rightly mentioned Bolaji that Businesses will do what’s in the best interest of their shareholders – in effect profitability.
For businesses and high tech industries to spend, in order to energize the economy and increase employment globally, I think the government ought to look closely into resolving tax related issues.
Parser, The employment challenge faced by the US isn't going away anytime soon, too. Ben Bernanke, the chairman of the Federal Reserve Bank, said in a presentation before Congress today hiring will not rise for years to the level required to make a serious dent on the unemployment rate. Businesses will modestly hire in the quarters ahead but they are being very cautious to avoid getting burned.
This issue should be a global concern. The US economy is by far the world's biggest and this is unlikely to change for at least a decade or more. This means the entire world cannot really grow at the optimal pace without its biggest component and its biggest consumer region. Let's hope the US gets it right eventually.
I am surprised that this topic does not generate wave of heated discussions.
Why Obama was elected to head United States in the main sense and he also has to lead the United Nations in business sense where national borders have faded. The main issue for the U.S.A. remains employment. This can be improved by increasing production and services done here not abroad. Traditionally the government invested in the communication infrastructure, schools and sciences. After all many things (internet, GPS …) have proliferated to private sectors with various new business. One could say it is a trickle down economy, but not from millionaires. But what really can Obama or government do?
Anandvy, Correct. The US has a multi-pronged strategy with regard to employment creation. It's investing in green technology as Barbara pointed out and working on resolving tax issues that some companies say hamper growth. It is also, as you noted, moving to improve export to developing nations. Obama said he would like to double US export in 5 years or so. All of these hinge on corporate investment, however. This is one situation where even the richest nation in the world can use some help.
Nice article Bolaji. But I found one point missing here.
Its the effort by the Obama administration to create jobs for americans by increasing the trade between US and developing nations. I belive the prosperity and the growth of the BRIC nation is inturn helping US to sell its advanced technology to these nations. Infact this was the main agenda of the Obama when he visited India last year.
I totally agree. So many companies do not see a reason to add employees because for the past two years they have done more with less. I listened to the President's State of the Union address and it did focus on investing in people, technology and the future. If the government leads by example, maybe companies will follow suite. Companies need to feel more confident in the rebounding economy before they can start Capital investment which in turn is critical for the rebounding economy. So as Bolaji said, what will make American companies feel comfortable with spending some of the Capital they are hoarding?? I have wondered that very question for sometime now.
The bad news is that companies have gotten used to doing more with less, so established organizations may not be so quick to hire. It's start-ups and new businesses that fueled the growth of the late 1990s.
I'm not saying we should repeat that business model, but late-stage capital investment isn't a bad idea. And we shouldn't just cede some things to China--yes, they are investing a bundle in green technology but we are more dependent on fossil fuels. It's in our best interest to leapfrog green technology if possible.
Any improvement in a smarter grid has an upside. And, if the government can freeze pay and/or spending as promised, companies and individuals alike may be more inclined to open their wallets. It's time the government leads by example.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.