The Innovative Importance of Supporting Small, Medium and Large Businesses in the Political Process

Somewhere in our political process we began to focus on large companies and their needs for economic growth. While well intentioned, our political leaders may not be seeing the bigger picture of why small and medium size companies also need to be encouraged through appropriate legislation to create the best long-term performing economy. Reorienting their perception is helpful so they can understand how all three levels of business interact to create maximum growth and should ensure legislation aligns well to ensure all three thrive.

Small business provides innovation. Entrepreneurs start businesses based on new ideas they believe the market is lacking. While many of these businesses may fail, some will move onto become star performers. Others will be bought out by larger companies and others will have their ideas and patents bought out. The entire process leads to new knowledge being dispersed throughout the system.

Medium level businesses have reached a critical stage where they are growing. Often these are the business that hire lots of employees as they speed up production to meet needs. Their expansion efforts lead to economic growth in the region as they seek to become star performers and large companies. Retaining them in an area, even if they expand globally, leads to higher benefits in the area.

Large companies are currently successful but as their structure grows to support their business operations they often begin to slow down in innovation and development. They move through stages that eventually need to be rejuvenated or they begin to decline. Small business are often incorporated into their operations to enhance their current products and services.

Such mamouth companies often invest in supply chain and other innovations that help them coordinate their large structures. This is where the magic happens as companies begin to coordinate their efforts, anchor around major producers, and develop/draw human capital into the area. They eventually solidify clusters into a working unit.

Governments sometimes focus on the big businesses because of ease of discussion and their visibility. Large companies can contribute significantly to candidate elections, provide available research findings, and in general can negotiate with government. Thus they have an inherent advantage in the system and can skew the political process. Therefore, politicians need to understand that supporting these big businesses is helpful but they must ensure they are also supporting small and medium businesses for the long-term viability of their economy. There should be a balance between all three that leads to maximum growth potential. 

China Views the US as a Mature Economy but The U.S. May Be Moving to a Higher Performance Platform

China is following suite with the American economy. While their growth is higher they seek to raise overall consumption and appear to be opening up their borders to more imports. At least this is in theory. They are seeking to mimic the American economy in many ways but the U.S. is poised to move onto the next level of economic development in the next decade.

While Chinese technology and innovation has risen they are still primarily using cheaper labor and costs to attract manufacturing work. The American manufacturing environment is more expensive but also more advanced.

While we can't say the American economy is stagnant we can say that it doesn't experience as high growth as emerging economies. This stagnation may change the way we invest our income in technology and labor efficiencies.

We should first consider that we have low level of unemployment and so labor will get more expensive as wages rise. It is a basic law of supply and demand. This pressure will push manufacturers to invest in technology.

That investment will also require different types of infrastructure that can support more data for block chain processing, artificial intelligence, digitization, and higher levels of data streaming. More money will move into changing these data highways for more capacity.

The next economy improve labor efficiency and profit margins with increased productivity across multiple sectors of society. The greatest value will be created through design and innovation and not necessarily through simple labor power. Big data will become part of this game as it creates and adjusts with ever more sophistication to the market.

Consistency and Pace are Key in Fitness

I'm sitting with a good friend having breakfast and he discusses how he hasn't been to the gym in a while. He is a good natured fellow but very much overweight. As I ordered eggs, whole grain bred and a little meatball I noticed he jumped right to the crepes, fries, and pigs in a blanket. He discussed how his trainer has him do really heavy weights and he is so sore he can't move the next day.

It got me thinking. I think his trainer is very wrong and possibly could end up injuring him in the long run. At this stage he should focus on his eating, moderate weights and significant amount of cardio. So he asked for some advice and I gave it.

Not that I am an expert in this field but I can say that first you have to manage your eating. That is 70% of the battle. If you are eating fatning foods and lots of carbs and dairy you are going to gain weight.

Second advice was split his time between cardio and weights. Don't just go to the weights because it is "manly" and your trainer is a body builder. It isn't necessary. Cardio will help improve his cardiovascular health and his weight.

Third, focus on medium weights that are just a little difficult on the 10th rep. He wants to ensure that he is burning calories and still being able to push for moderate growth. Pain in soreness is a red flag your body can't handle it. Slow repetitions will ensure you are maximizing muscle engagement.

Economist Believes US. Could Crash in 2019

Economist Jorge Angele from Austria's Raiffeisen Bank International believes that the economy may overheat in the future according to an article in Market Watch.  He argues that we are riding at maximum growth and have low unemployment so speeding up the economy more could cause it to overheat and eventually become a recession.

Much of this depends on how the international markets react and whether or not protectionist policies end up damaging trade. If they don't they are unlikely to make a large impact.

However, if the U.S. moves to a higher plane of economic development this may not come true. Lets consider a place where more companies move to the U.S. and more investment flows in. With proper stability and growth the U.S. could just function better.

All these things are dependent on many different factors of which some is out of the U.S. control. My personal belief that with wise policy we could change our overall level of functioning to a higher growth rate that is stable.

Should Economists Have Moral Leanings?

Arguments for and against economist having moral leanings is something debated within their community. Some of us roll our eyes when people throw moral judgments out in the world with radical beliefs on both sides of nearly any political or economic argument. However, there is a place for some warnings but analysis must be bias free.

No: Economists are like scientists and should not have moral leanings. They should seek to be objective in all cases and simply evaluate the economy and determine the findings. The more moral they get, the more skewed their judgement.

Yes: The economists should not seek to create wealth for the already wealthy. Where and how they focus will determine what information is available and how that information can be used. Focusing more on the needs of raising all of society could lead to better management.

However, an economist certainly could give warnings as human behavior and people's beliefs are part of what runs the economy. Growing income gaps, consolidation of power in the hands of the few, desperate poor, pollution and unfair court systems all would have an impact on economic growth.

To answer this question we can say "yes and no". They should be objective in their analysis but not be afraid to give warnings if research supports the idea that violation of standard moral principles may lead to economic calamity. Since when wasn't ethical business part of opportunity and economic advancement?