Business Management US

Falling imports help US shrink deficit

Fri, 12 Mar 2010 11:27:00 PST

America's struggling economy may finally be showing the first genuine signs of recovery after it was announced that its trade deficit shrank to $37.3 billion during the month, down by 6.6 percent on the previous month, and well below predictions of an increase of up to $41 billion.

Oil and cars are the biggest casualties of America's trimmed imports as the US Commerce Department insist the measures taken by Washington to reign in the country's escalating trade deficit have proved successful. Imports dropped 1.7 percent, with crude oil imports at their weakest level since February 1999, at 245 million barrels.

"It's very early days, but January's figures suggest that the external sector will be a modest drag on GDP growth in the first quarter," said Paul Dales, US economist at Capital Economics. If the current deficit were sustained in February and March, he said, "net trade may subtract anything between 0.5 percent and 1 percent from annualised GDP in the first quarter."

However, despite the deficit in general decreasing the trade gap with China has widened even further to $18.3 billion.

Caution remains

Elsewhere, in the job market the latest data showed a continued rise in the number of people claiming unemployment benefits. The number of people filing continuing, long-term claims rose by 37,000 to 4.558m in the week to February 27, while first-time claims fell 6,000 to 462,000 in the week to March 6, the latest available.

However the current numbers are being artificially buoyed by the US government's hiring of approximately 750,000 temporary workers as part of the 2010 Census, but once this is completed it's feared an unemployment spike is likely.

Reasons to be optimistic but caution remains, "The fact that exports and imports fell in January does not mean that the rebound in world trade is over," said Dales.

"Further ahead, though, a fading of the economic recovery is likely to hold back import growth."

Related Articles:

How the recession remade manufacturing | US trade deficit climbs unexpectedly | Are foreigners to blame for the global recession?

Daniel Jones

Daniel is a Politics and Philosophy graduate from Cardiff University where he also worked as a section editor on the award winning student newspaper. After university he joined an IT support company where he was a B2B online writer. He loves anything to do with sport and joined GDS in July 2009.

Kodak keep on developing

Tue, 09 Mar 2010 09:02:00 PST

In 1999, US imaging and photographic equipment giant Kodak's photographic film sales stood at little over $5 billion. The company was floundering and in danger of vanishing from the market as it struggled to keep pace with the emerging digital scene.

However, by 2008 film sales stood at $200 billion as CEO Antonio Perez succeeded in putting the stoppers on quarter after quarter of losses.

Difficult decisions had to be made as the company underwent some serious streamlining. The 129-year-old Rochester-based company pared its payroll from 64,000 to 26,900 from 2004 to 2007. It eliminated another 4,100 jobs last year, shrinking its work force to a 1930s-era low of 20,300 from a 1988 peak of 145,300.

Kodak have become an exciting digital tech star after being hounded for years by the rapidly disappearing traditional film business. Then growth in Kodak's digital plays, including sales of cameras, online prints, and digital snapshot-producing kiosks, came to the rescue.

By the time of the global financial meltdown the company had signed in a number of lucrative licensing deals with some big names and intellectual property rights helped to keep things ticking over (and with even more patents owned today this will only continue - On average, it expects to generate $250 million to $350 million annually through 2011 in licensing fees and royalties from its intellectual property).

But the recession hurt Kodak and they returned to times of profit hunting with little gain.

Progress interrupted

However, at the start of this year it was announced Kodak posted profits of $443 million in 2009's Q4. The company broke a series of four straight quarterly losses and sent its share price soaring, indicating that the companies second-coming - that was so rudely interrupted by the global economic crisis - may be gathering momentum once again.

"I'm very pleased ... with the positive momentum with which we're entering 2010," Perez said.

However the company's vision remain long-term in nature, and still may not produce a profit in 2010. Kodak said it expects to post results this year that range from a loss from continuing operations of $50 million to a profit of $50 million.

Kodak said it sees revenue for its traditional segment, which includes film, paper and movies, falling 14 percent to 18 percent in 2010 after falling 24 percent in 2009.

Beyond 2010 the outlook looks positive for Kodak and with Perez at the helm the company seem to be in good hands.

How Kodak got back on track has become the stuff of legend, and Jeffrey Hayzlett, the company's Chief Marketing Officer and Vice President, puts himself on the line to promote it.

See the whole interview at MeetTheBoss.tv

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Building a successful brand | The art of building brand identity | Wal-Mart: The biggest brand in the world

Daniel Jones

Building a successful brand

Mon, 08 Mar 2010 07:25:00 PST

Thanks to advances in travel and the development of the internet brand, competition has because increasingly intense over the last thirty years and building a successful brand and providing a return to investors has become very difficult.

The challenges appear to be overwhelming, especially with many companies operating on a quarter-to-quarter basis for fear of a negative reaction from the stock market and stockholders, especially in a post-recession climate.

But there is a way companies can effectively negate fluctuations in stocks and roller-coaster economies - build a brand. Put simply, any product can be copied but a brand cannot.

There are plenty of challenges to brand building that make it hard to convince investors to pump cash into doing so, such as a modern obsession with short-term objectives and opportunities to make your money work for itself on the market but if you get it right, the rewards are limitless.

Brand building is far from a new idea but as mentioned above, thanks to technological advances, today's consumers have more access to information and more choices than ever before.

Google's innovative branding techniques

The best thing to do is to look at examples of how the very best have done it. If you look at how one of the most fresh faced big brands have got where they are, it's easy to see the importance of brand building. A little over a decade since the search engine's launch, we can learn from Google's innovative branding techniques.

When Sergei Brin and Larry Page set up Google Inc. in a California garage back in 1998 the two founders had big plans for their company, but even they would have been stunned to learn that 12 years later Google would become arguably the biggest brand in the world.

Google proved that a heavy dependence on market research is not necessary. The tech firm's initial success was down to brilliance and innovation moving at a pace most of the world could not keep up with. But they didn't make the mistake of trying to meet all of the immediate needs of the consumer and were willing to invest in what they believed consumers would benefit from in the future. Look at UK company Amstrad who didn't move very far from the personal computer, and the best they could come up with after some early success was an email phone that wanted to charge people for sending emails because that was the tech darling of the time. Where are they now?

Expensive advertising no longer necessary

Google are also a perfect example of how traditional, expensive advertising is no longer necessary in today's business world. Google was built without any ads. Instead, it used two cheaper and far more effective brand building tools: viral marketing and public relations.

The California-based tech giant also quickly learnt that change was far more important than consistency when developing a brand.

But take Coca-Cola; introduced in 1886 and developed in a time far removed from today's high-tech world, Coke is now the only true ubiquitous brand known today.

They went about things pretty differently to Google, but have developed a brand so strong it is pretty much untouchable. Even a shift in global health consciousness worldwide has done nothing to jeopardize the brand. With the population gearing toward a healthier lifestyle, carbonated drinks' consumption has undergone a rapid decrease. However, Coca-Cola simply broadened their product offering to include sub-brands under the main Coca-Cola brand including teas, health drinks, bottled water and others. It was a clever move, one that was imminent and endlessly rewarding for the early adopters.

A strong brand is the key to surviving any major shocks the business world may encounter, a theory that is seriously being put to the test today as Toyota struggle to defend the technical faults in some of its models that has lead to a dizzying media circus.

Check out the infographic to see which companies have built a brand strong enough to be named amongst the most successful in the world.

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The art of building brand identity | The amazing world of Coca-Cola | Wal-Mart: the biggest company on the planet

Daniel Jones

Ford profits from Toyota's woes

Thu, 04 Mar 2010 07:50:00 PST

After Toyota dropped the ball in the global auto industry, American car manufacturers Ford and General Motors were left to pick up the pieces and it would seem that, despite GM's very own mini-recall crisis, the two are beginning to see the benefits.

Ford in particular have seen an uptick in profits since Toyota's downfall, announcing that the company's February sales were up by more than 43 percent, beating out GM's monthly sales for the first time in more than a decade.

It appears that buyers that may have otherwise chosen a Toyota over a Ford may have had their heads turned by recent events, leading to a sales jump. In total, Ford sold 142,285 vehicles during the month of February. Ford said that they sold a total of 334 more cars than General Motors during the same time period.

Customers abandoning Toyota

GM recently announced it was recalling 1.3 million small cars across North America due to power steering problems, but the firm still posted a more modest rise of 11.5 percent, as it benefited from customers abandoning Toyota over the Japanese firm's recall problems.

"We got what we thought was our fair share of Toyota sales," said Mike DiGiovanni, GM executive director.

Toyota reported a fall in sales of 8.7 percent for the first full month since it announced major recalls in January, not surprising considering the world's biggest car company has now recalled more than 8 million vehicles over concerns about accelerator and brake systems.

"We expect our progress to continue"

However the sales slump was not as big as the company had feared. "I'm surprised that we sold as many vehicles as we did," said Bob Carter, a Toyota group vice president. But this has not been enough to dampen spirits over at Ford, who aren't putting all of the recent success down to Toyota's failings: "The strength of our new products and Ford's leadership in quality, fuel efficiency, safety, smart design and value are resonating with customers," said Ken Czubay, Ford vice president, US marketing sales and service.

"The good news is we have even more new products and fuel-efficient power trains coming this year, and we expect our progress to continue."

Related Articles:

Toyota could face criminal prosecution | China: The world's biggest car market | How the recession remade manufacturing

Daniel Jones

US & China meet (again) to build bridges

Thu, 04 Mar 2010 00:46:00 PST

Senior diplomats from the US and China have commenced meetings in Beijing as part of the latest charm offensive by the Obama administration to try and build bridges between the two.

Sino-US relations have been famously frosty for as long as the writer can remember, but in the light of America's gigantic trade deficit and China's increasingly important role in the global renewable energy markets the two are now waking up to the true (economic) value of a peaceful relationship.

The Deputy Secretary of State James Steinberg (pictured) and White House adviser Jeffrey Bader arrived in the Chinese capital on Tuesday to discuss a wide range of issues. However the visit didn't get off to the best start as the two delegates were greeted with calls by China to forgo further sanctions on Iran - a major US foreign policy goal.

The most recent hostilities have involved disagreements over Tibet, trade, Taiwan and the very recent dispute over who's to blame for the notorious Google hacking.

Finding common ground

China was upset when US President Barack Obama met Tibet's spiritual leader, the Dalai Lama. It was also angered by Taiwan securing a weapons deal from the US.

But one issue where the two can find common ground is over North Korea, both agree on the need to bring the rogue state back to the negotiating table over plans to end its nuclear programmes.

China has led the six-party talks - bringing together the two Koreas, China, the US, Russia and Japan - which its ally, North Korea cancelled last year.

This three day meeting is ahead of a series of extremely important forums including a global nuclear security summit in Washington in April, and the next round of Sino-US "Strategic and Economic Dialogue", which last took place in July 2009.

"If this (visit) suggests that we are refocusing on the future and the important issues that we can work on together, I think we are encouraged by this.

"A car with two drivers"

"This is expressly why we sought this meeting - to be able to refocus on very specific issues, not the least of which is obviously our joint concerns about Iran," State Department spokesman Philip Crowley said.

Zhao Qizheng, spokesman for the Chinese People's Political Consultative Conference (CPPCC), gave a slightly different take on the atmosphere between the two nations, comparing the Sino-US relationship to a car.

"It has two drivers. Americans should know this. China also has control over the steering wheel, the accelerator, and the brake. The two drivers must consult with each other to drive the car. Otherwise it will only spin around."

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Daniel Jones

InZero: The unhackable, virus proof device

Mon, 01 Mar 2010 09:00:00 PST

An American technology start-up claim to have developed a device that can make a computer totally protected from cyber-attacks.

After the news that even Google has become a victim of internet hackers, it has become glaringly obvious that the current stock of internet security software available to us is not enough to keep the cyber-criminals at bay.

The problem is that the bad guys always seem to be five steps ahead of the good guys in a game of cat and mouse that has left the cat scratching his head over what to do next, whilst the mice keep themselves very, very busy. 85 percent of companies and agencies surveyed by the Ponemon Institute, a research firm, have suffered security breaches and data losses over the previous year - roughly one-quarter of which involved hackers. The losses resulting from such crime is thought to be around $1 trillion every year, so anybody that comes up with the ultimate weapon to stop these hackers dead in their tracks can expect a massive payday.

Enter InZero Systems. The Herndon (Va.) start-up that claims to have built a hack-proof hardware-based system capable of doing the impossible - shutting the door to all intruders.

"There isn't a way to circumvent it"

As reported by Business Week, so far everyone who has tested the device has failed to get past it. Its approach has been tested by the military's Defense Advanced Research Projects Agency (DARPA) and several companies that specialize in finding gaps in computer security.

"It was very secure," says former DARPA director Anthony J. Tether, who bought 10 devices to test just before he left the agency in early 2009. "As best we can tell, there isn't a way to circumvent it."

The device's approach was first dreamed up in 2002 by Ukrainian computer engineer Oleksiy Shevchenko, whilst trying to help out a friend experiencing some PC internet security problems. Instead of simply installing software that seeks out and tries to destroy all viruses and intruders one by one, Shevchenko set up some hardware that could act like a second computer (or "sandbox") that can sit between the internet and the vulnerable computer in question.

No bigger than a paperback book

Put simply, the sandbox acts like a sponge in-between you and the internet that can soak up any viruses and hacking attempts before they have chance to reach your computer, and because the InZero is read-only it cannot be changed or controlled by a hacker or virus.

InZero CEO Louis R. Hughes offers his own analogy, that of a patient with an unknown disease quarantined behind a glass wall. "Our device is the equivalent of that glass wall," he says.

The idea of a second computer that can be wiped and rebuilt acting as a screen between another machine and the web isn't new, but InZero differs because it doens't have to be constantly "wiped down" and is no bigger than your average paperback book.

Hughes, former president of General Motors' international operations and of Lockheed Martin, was won over by the device after watching a number of expert hackers fail to break the InZero. He took Shevchenko with him to the US and put millions of his own dollars into the creating a new US company, InZero, making himself CEO and appointing Shevchenko as chief technology officer.

Convincing the US government

As Business Week reports, since then the company has filed additional patents and spent several years simplifying the steps a user must take to operate the device.

The company look set to take the internet security market by storm and hopes to market a family of devices for PCs, servers, and entire networks, with prices starting in the low hundreds. But in two or three years, the hardware could be embedded into laptops adding as little as $25 to hardware costs.

However, InZero still needs to pass the toughest of all tests - convincing the US government that its engineers haven't built in a back door for spies, "We have to show that nothing will be reported to Putin," says Alexander Pyntikov, Alexander V. Pyntikov, a top Soviet Union government innovation official-turned-entrepreneur who is also chief operating officer at InZero.

Check out the video to hear the company describe exactly how they plan on stopping anyone planning to get past the InZero device.

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Daniel Jones

Death of the Hummer?

Thu, 25 Feb 2010 08:06:00 PST

Bad news for those of you who like your vehicles militaristic and completely fuel-inefficient; General Motors has announced they are to 'wind down' operations on its Hummer range, after a takeover by a Chinese firm failed to happen.

The Hummer, originally designed as a military off-road vehicle by AM General, was in the late 90s the off-road vehicle of choice for many a celebrity that cared not about good gas mileage. It was rumoured that Arnold Schwarzenegger had over six...

However, in these economic trying times and when the Hollywood elite prefer hybrids over former-military vehicles, the Hummer has seen sales fall.

General Motors has faced hard time itself during and in the wake of the recession and when it went into bankruptcy, was forced to offload famous names to keep itself afloat.

GM said it was 'disappointed' the deal with the China-based Tengzhong has collapsed.

"GM will now work closely with Hummer employees, dealers and suppliers to wind down the business in an orderly and responsible manner," said John Smith, vice-president of corporate planning and alliances.

The firm has stated though, that it will continue to honour Hummer warranties, and provide service support and spare parts to current owners around the world. So good news for the Governator...

Click for a larger view

Poor sales and image

The fact that the Hummer traditionally weights five tonnes and does about 15 miles to the gallon has not served it well it recent years, with people focusing more on greener, more fuel efficient models such as the Prius.

In fact in the US, due to the pure off-road nature of Hummers, dealerships were required by GM to organize a minimum of four off-road events per year in order to push sales.

It was hoped that the deal with Tengzhong, who specialises in making equipment for the road, construction and energy industries, would be able to utilise the Hummer for more 'down and dirty' purposes but Beijing allegedly refused to approve the purchase.

Plans for the Hummer under Tengzhong included focusing on improving efficiency in Hummer models by including the introduction of diesel engines.

So if you still want a vehicle that can drive through 30 inches of water, you'd better hurry up and get one now before they vanish for good.

Relevant articles:

Travelling to work in the US | Has the US hit a 'car saturation' point? | Mr Toyoda goes to Washington

Timon Singh

Timon Singh is a graduate of Liverpool University where he received a degree in Social and Economic History. He has previously worked for BBC Magazines on BBC Who Do You Think You Are? Magazine, the publication for the popular genealogy show.

Venture project to invest $3.5bn in start-ups

Wed, 24 Feb 2010 08:19:00 PST

One of the major concerns surrounding the global economic crisis was the damage it could do to enterprise in the US, particularly in the tech sector. Technologists have been worrying for some time, even before recession hit, that the United States was falling behind in the global innovation stakes.

It has been evident for years that heavy investment in technology education and innovation by nations such as China and Taiwan has left America fighting tooth and nail to maintain its competitive edge.

Thus, Intel Corp. CEO Paul Otellini has just announced the company and a group of 24 venture firms are committing $3.5 billion to US technology companies over the next two years.

In a kind of Marshall Plan for the US tech economy, the Invest in America Alliance hopes to put American technology industry back at the sharp end of global innovation. A number of the world's largest tech firms are still US-based, such as Google, Microsoft and Intel itself, but the fears that began circulating a few years ago that the number of successful tech start-ups was starting to wain turned to full blown panic mode when the financial crisis hit.

"Investments in education and research"

Intel, the world's largest chip maker, are spearheading the venture with an investment of $200 million and in a speech at the Brookings Institution in Washington this week, Otellini expressed his personal concerns over the downward trend in the US technology industry:

"Unfortunately, long-term investments in education, research, digital technology and human capital have been steadily declining in the US.

"So, too, has the commitment to policies that made us such an entrepreneurial powerhouse for more than a century."

Other countries, including China, India, Taiwan, Finland, Korea and the Netherlands, have become "far more potent competitors in the next phase of the global economy," he said.

Another key aspect of the Alliance's plan is to create more jobs in the tech sector, as a result Google, Cisco Systems, Microsoft and 13 other employers pledged to add jobs in 2010 - specifically by hiring 10,500 graduates of American colleges, largely those with computer science and engineering degrees.

Less than ten percent of US graduates have degrees in engineering compared with over one-third in India and China, and foreign students returning home after gaining their degrees is also a growing problem.

Encouraging enterprise

Some huge companies, including Kleiner Perkins Caufield & Byers, Venrock and DCM have promised to invest chunks of their funds in start-ups founded in the US.

But Intel have often proved to be the industry leader in stimulating activity and have singled out particular sub-sectors ripe for investment, including molecular diagnostics; bioinformatics; electric vehicle ecosystem and wireless infrastructure. Intel itself has made over 1,350 investments in US businesses totaling $6.2 billion over two decades.

Investing in start-ups, not just in the tech industry but across all sectors, leads to the creation of jobs and the encouragement of enterprise, both vital to stimulating a sustainable economic recovery and making America the patent capital of the world once more.

Related Articles:

Start-ups step up in Silicon Valley | Economy grows but unemployment stays | How the recession made manufacturing

Daniel Jones

Silicon Valley start ups, step up

Mon, 22 Feb 2010 08:57:00 PST

One minute America is about to emerge from recession, the next Wall Street and Main Street start to wobble and the message comes from Washington to tighten our belts once again as we try to avoid a second dip into crisis.

But there is one place that has started giving out some positive vibes - Silicon Valley.

On February 10, the AP reported that Silicon Valley's economy took a pretty big hit during the global economic meltdown and predicted that it could have some trouble climbing out of the crisis unscathed.

The 2010 Index of Silicon Valley said the region is entering a "new phase of uncertainty" where job losses, a shrinking foreign talent pool, a drop in investments and state legislative gridlock could put its standing as the center of technology at risk.

Returning to relative normality

However it appears that the new kids on the block (or should I say, in the Valley) are doing their best to drag it back to relative normality, as Silicon Valley's start-up economy stepped up a gear.

Mercury News reports that within just two-weeks, a diverse group of start-ups raised a staggering $600 million in investments, topped by $350 million for Better Place, a Palo Alto company with a global vision for a 21st-century electric car battery-charging network. Meanwhile Tesla Motors, widely seen as the poster child for the infant electric car industry, filed for an initial public stock offering.

As a whole venture investments experienced an uptick nationwide in the final months of 2009, albeit only modestly, but the yearly total of $17.7 billion was a steep drop from $28 billion in venture investments in 2008 and $30.5 billion in 2009.

This essentially means that the art of fund raising will be made difficult through most of 2010, but news of this has so far failed to reach companies like QuinStreet, an Internet marketing firm based in Foster City, who earlier this month became the valley's first Wall Street debut of the year, raising $140 million despite an initial lukewarm response from investors.

Pessimism reigned

Investments in Cleanteach remain a relatively safe bet and will benefit companies like Tesla and thin-film solar panel manufacturer, Solyndra.

The number of IPO candidates in Silicon Valley still remains relatively low at just six, but this is encouraging after such an IPO famine over the last 24 months.

Since the economic crisis hit analysts and experts have had to realign their view of "normality", not just with Silicon Valley, but across the whole of the United States. The new look normal may well include a slight IPO rebound but will likely see far more mergers and acquisitions. But as the AP points out, "there are still a lot of great opportunities available for tech giants such as Cisco Systems, Google, Microsoft, EMC, Oracle and HP", which have a history of growing through acquisition.

The new found optimism will help to breath new life into the Valley, where pessimism has reigned for far too long.

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Daniel Jones

Economy grows but unemployment will stay high

Thu, 18 Feb 2010 08:57:00 PST

2010 should see the US economy gather strength after a torrid last two years as we really start to see the benefits of Obama's economic stimulus fund. However the Federal Reserve has warned that unemployment is likely to remain high throughout the year.

In its latest forecast, the Fed said that the economy would expand between 2.8 percent and 3.5 percent in 2010, better than its previous estimate of 2.5percent to 3.5 percent.

Yet the unemployment rate is expected to remain between 9.5 percent and 9.7 percent in 2010, easing to 8.2 percent to 8.5 percent next year. President Obama has repeatedly said throughout the start of this year that many American families are still struggling to make ends meet.

Millions struggling

"Millions of Americans are still without jobs, millions more are struggling to make ends meet," said the president.

"It doesn't yet feel like much of a recovery. I understand that."

The US officially exited recession towards the end of last year but companies and consumers remain reluctant to expand their spending habits after the nation has been advised by experts and top officials to remain cautious as the US tries to avoid a "W"-shaped economy.

The most recent official figures showed that the US unemployment rate in January was 9.7 percent, slightly down from 10 percent in December, which has given people room for a little more optimism but the Fed themselves have insisted it will take "some time" for things to return to relative normality for the both the jobs market and the economy in general.

Job-creation schemes

"The pace of the economic recovery will be restrained by household and business uncertainty, only gradual improvement in labour market conditions, and a slow easing of credit conditions in the banking sector", the Fed predicted.

Job-creation schemes have been a priority for Washington, with $179 billion being spent so far on increasing government projects such as road-building schemes, job training initiatives.

In addition, $93 billion worth of tax cuts for both individuals and companies have been issued.

Daniel Jones

How the recession remade manufacturing

Tue, 09 Feb 2010 08:57:00 PST

There are many, many reasons to be fearful during a recession. Much of the population sits and waits nervously for the red numbers to turn green as they watch the television bring more news of businesses folding and entire industries teetering on the edge of collapse.

But a recession can also serve to keep a nation's economy dynamic. The threat of going out of business forces companies to shift focus and diversify capacity. The most recent recession, the worst in living memory, has reshaped US industry as companies increase capacity in some areas and cut it in others.

The Federal Reserve has released figures that show how a number of sectors, including semi-conductors and plastics and rubber products, have changed capacity through contraction and expansion over the course of the recession.

The figures basically translate that firms with commodity - or close to commodity - products have "closed US capacity and moved oversea", as Seeking Alpha's Gad Allon explains. Where a company moves operations to is often indicative of where the majority of that particular market now lies.

US manufacturing base being "remade"

The example given by Allon is of Huntsman Corp, a global manufacturer and marketer of differentiated chemicals, which has been expanding its production of basic chemicals in China and the Middle East in part because that is where they are being used. What it has left in the US focuses on industries such as aviation.

From this it is appropriate to conclude that the US manufacturing base is being "remade", as Allon puts it.

The flexibility of US manufacturing is the main reason behind it being one sector that has emerged from the recession relatively strongly, because even though many firms did choose to transfer operations overseas a lot of companies would still rather produce domestically - the semiconductor production industry falls under this category. But again, that's because the market is in the US with US-based design centers of major chip users like computer maker Dell and consumer-electronics makers like Apple.

Sustainable economic correction

This report arrives just as news circulates about how the manufacturing sector is largely responsible for the US economy correcting in a sustainable fashion. RBS point out that on both sides of the Atlantic the recovery appears to be gaining a firmer foothold in the manufacturing sector than in the larger service sector.

Furthermore, outlook for US employment became a bit less bleak with January's unexpected decline in the unemployment rate, which fell to 9.7 per cent from 10 per cent as more people said they had jobs. The manufacturing sector added jobs for the first time since January 2007 and its gain of 11,000 jobs was the most since April 2006.

However the majority of firms in highly productive industries that are keeping operations within US borders tend to be companies whose manufacturing entails little human labor or is highly complex. This means the prospect of a significant recovery in the job market still remains some distance away.

Related Articles:

Are foreigners to blame for the global recession? | US jobs on their way back? | Spending freeze could hurt Obama

Daniel Jones

Super Bowl: Amazing Non-Football Stats

Mon, 08 Feb 2010 04:04:00 PST

Consistently one of the most watched TV events in the US broadcasting schedule, the Super Bowl is an American institution, regularly reaching a viewing audience of over 160 million. Last year, Super Bowl XLIII was the most watched game in the history of the event and this year's predicted viewing figures of 168 million.

However, in the aftermath of the game which saw the New Orleans Saints triumph over the Indianapolis Colts, it is easy to forget that, among the touchdowns, kicks and transfer fees, how much the event actually generates for the US economy.

Of course, one of the most well-known facts about the Super Bowl is the cost of advertising space, with film companies and other firms this year having to spend $3 million for a 30 second advert. However, the size of the audience that these companies are able to reach isn't lost of them and even the more mundane groups have realised the benefits - after all, a recent survey revealed that 24.3 percent of viewers watch for the ads and that 7.1 percent say the commercials influence them to buy the products shown. As such, the Census Bureau spent $2.5 million to air one 30-second Super Bowl ad this year.

However, one day of Super Bowl madness generates the US economy an estimated $8.9 billion with the average viewer spending $52.63 on food, merchandise, apparel and other game-related purchases. Not just that, but the sheer amount of money bet on the game (officially) was estimated to be between $80 million and $85 million according to the Nevada Gaming Commission.

Massive income and outcome

Of course like all successful businesses, the Super Bowl is a mega-franchise made up of numerous individual smaller franchises. The two teams that featured in this year's final are individually worth close to a billion dollars each, with the estimated franchise value of the New Orleans Saints said to be around $942 million (pre-Super Bowl win. Expect that to now rise dramatically). Meanwhile, the value of the Colts was (also pre-Super Bowl) said to be worth $1.025 billion.

The high salaries of football players is well documented and as such, these two teams have annual payrolls of between $100-120 million. In fact, some of the players are paid so much, a pound of their weight earns as much as the average US citizen does in a year.

To explain, the total weight of Saints' starting defensive line is 1,167 pounds. The starting defensive line's combined salary is approximately $18.8 million - that's $16,110 per pound of Saints' defender. In comparison, a pound of premium Tajima Kobe beef Chateaubriand steak found in New York's top restaurants costs $320.

However, these figures go up even further with lucrative sponsorship deals. While it may be no huge surprise to learn that these teams earn as much as they do, fans would be more shocked to learn that since the first Super Bowl in 1967, ticket prices have risen by over 22,225 percent. In comparison, the average US home price has risen 'only' 999 percent.

Of course, it's not just about the players and teams. One of the joys of the Super Bowl is kicking back for a Sunday with friends and family while drinking and eating during the game. As such, Domino's projects that the number of pizza slices they would sell this weekend would top nine million while, for the more healthier fan, avocado sales - due to guacamole making - would top 160 million according to the California Avocado Commission.

So no matter who win, and despite the amazing facts and figures regarding player fees, it is clear that Super Bowl Sunday continues to be a massive draw for Americans nationwide - the 32 million people that will throw a Superbowl party this year are a testament to that... not to mention the 59 million that will be attending one.

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US economy grows beyond expectations | Business TV: The way to get ahead in business | Wal-Mart: The biggest company on the planet

US jobs on their way back

Wed, 03 Feb 2010 08:56:00 PST

After pretty much two years of misery for America's workforce, which saw the percentage of people out of work hitting double figures, there may finally be some light at the end of the tunnel for the US job market.

US nonfarm payrolls are set to move back into positive territory in 2010, and perhaps as early as January, with the 5 February release of the month's employment report. Hiring for the US Census is the main reason behind the uptick, but economists will be more concerned with private payroll figures when it comes to gauging the sustainability of job growth into second half of 2010.

The US cannot climb out of the economic darkness unless the current double-digit unemployment figure falls significantly. And if this recovery is to be sustained, those lucky enough to have a regular job need to have the peace of mind that their security is exactly that - secure.

Kickstart job creation

President Obama is desperate to kickstart job creation with the rollout of the Small Business Lending Fund. With $30 billion transferred from the TARP account, the president hopes to entice some 8000 banks with assets of $10 billion or less to open their loan offices and put more money in the hands of small-business owners.

The money is desperately needed to fund capital projects and to patch short-term holes in cash flow.

But before all this, it has been the Obama administration's Economic Stimulus Fund that has been largely responsible for getting the ball rolling on job creation. Even though the almost $800 billion fund has increased the nation's deficit, it was entirely necessary for the long-term well-being of the job market.

Just this week US Treasury Secretary Timothy Geithner argued that record deficit spending was essential to reviving a sluggish US labour market.

Testifying before the Senate's Finance Committee, Geithner defended the administration's $3.8 trillion dollar budget for the 2011 fiscal year, which was unveiled Monday and criticized by conservatives for not doing enough to tackle growing debt levels.

"Our deficits, as everybody says, are alarmingly high," Geithner said.

Perilous debt levels

He went on to emphasize that "our priority now though has to be to make sure this economy is growing and getting people back to work."

President Barack Obama's budget proposed about $100 billion in new stimulus measures designed to bring down the US unemployment rate from its current quarter-century high of 10 percent.

But Geithner goes on to acknowledge that the perilous debt levels would have to be brought under control in the coming years. He and other lawmakers on both sides emphasized the importance of lowering those debt levels over time, but disagreed on the pace and tactics.

"The budget illustrates the fiscal perils our country faces," Republican Senator Charles Grassley said, arguing Obama's proposals would depress economic growth by raising taxes on businesses and wealthier Americans, as reported by DPA International.

No-one can argue the fact that Obama did the right thing by focusing his budget on reviving the labour market, now let's hope the economy works hard enough to start putting right the deficit problems.

Spending freeze could hurt Obama

Tue, 26 Jan 2010 08:55:00 PST

President Barack Obama looks set to call for a three-year spending freeze aimed at reining in America's ever increasing budget deficit.

The deficit now stands at $1.4 trillion with Obama facing fierce criticism for the amount of government spending since taking office just over a year ago. Much of the spending was a result of his $800 billion economic stimulus package that was intended to heave the US out of recession, and whereas this was a bitter pill to swallow because of how much it added to the nation's deficit, many analysts feel the economic infrastructure could have totally collapsed without it.

Officials say the proposal would be a major component both of Obama's State of the Union address on Wednesday and of the budget he will send to Congress next week for the fiscal year that begins in October.

$250 billion taken off the deficit

The freeze would cover the agencies and programs for which Congress allocates specific budgets each year, including air traffic control, farm subsidies, education, nutrition and national parks.

Security and defence spending, foreign aid, social security and spending on health care for the poor and retired would be exempt.

However the Washington Post reports this will shave no more than $15 billion off next year's projected deficit of well above $1 trillion. Over the next decade however, President Obama insists the move could see a further $250 billion taken off the deficit.

There are plenty of political risks as well as potential benefits to this decision.

Obama plans to leave military spending untouched, appeasing many of those on the right and even some in the Republican camp. Yet the freeze will leave many popular domestic programs vulnerable. This will upset senior liberal Democrats in Congress who are already disillusioned by the possible collapse of the health reform bill and the recent deployment of even more troops in Afghanistan.

A family in tough times

But one administration official said it was like a family in tough times deciding on its budget.

"That's the decision-making process the president and the economic team went through," Associated Press quoted the unnamed official as saying.

"It's the very same process American families have gone through for the past several years," he added.

So in conclusion, many people are criticising the spending freeze for the programs and policies it may place in danger, but others (mostly Republicans) are critical of the cut for not being sufficient enough.

But cuts had to be made somewhere. Heavy initial outlays were highly necessary to avoid economic catastrophe in the US, but as Michael Steel, a spokesman for House Minority Leader John Boehner, puts it, "given Washington Democrats' unprecedented spending binge, this is like announcing you're going on a diet after winning a pie-eating contest."

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Are foreigners to blame for the global recession?

Wed, 20 Jan 2010 09:02:00 PST

Since the global financial crisis hit, one of the easiest things for financial analysts, market experts and industry spectators to do was to point the finger. The generic term "greedy bankers" was used to throw a blanket over those involved in the US financial sector as the collapse of Fannie and Freddie sent the rest of the world tumbling.

However new research by economist Ricardo Caballero has found that 'foreigners' may have been the driving force behind one of the worst recessions in living memory.

Time magazine reports that Caballero, the head of MIT's economics department, has deflected part of the blame away from careless American bankers and regulators, instead choosing to accuse countries like China, Saudi Arabia and Canada for pumping way too much cash into the American system.

"There is no doubt that the pressure on the US financial system [that led to the financial crisis] came from abroad," says Caballero, adding that foreign investors created a "demand for assets that was difficult for the US financial sector to produce. All they wanted were safe assets, and [their ensuing purchases] made the US unsafe."

The system is broken

Many analysts and experts look to the real estate sector and its "sub-prime mortgages" for causing the first domino to fall, encouraging very high risk mortgage applications. Most of the Banking system has repeatedly been accused of ignoring its responsibility to monitor the credit worthiness of mortgage applicants. These worthless debt instruments were then passed on to Wall Street, separating them up into billions-of-dollars worth of of highly questionable securities - Collateralized Debt Obligations.

The Bush administration has also shouldered a large chunk of the blame for its slack regulation of the banking system because, in theory, under the US system of checks and balances, if the cognizant federal agencies continued to screw up, then Congressional oversight should have kicked in to fix any problems.

But this has long been broken.

"Safe haven" for foreign investors

All of this has contributed to making the US a "safe haven" for foreign investors who bought the bonds of mortgage guarantors Fannie Mae and Freddie Mac, in turn serving to fuel the housing bubble.

Ohio State University professor René Stulz, explains, "Investors looking for safe investments in the U.S. created a demand for new products that caused our financial system to work differently from how it had worked in the past and to become more fragile in ways that were not well understood at the time."

The world had an insatiable appetite for safe debt instruments, a demand that the US felt compelled to provide lots of nice triple-A-rated securitized bonds, that when the real estate bubble finally, and spectacularly popped, mass panic ensued, and the US was left holding the bag for much of the risk.

What Caballero is saying is that US lawmakers and bankers are simply two in a whole load of contributing factors, and that fixing the US financial system in order to prevent a similar crisis happening again is only part of the answer.

Fixing the supply side of US economics

Foreign investors, he says, need to change their behavior as well. Specifically, Caballero believes the US needs to encourage foreign governments to hold a range of US investments, instead of just funneling all of their money into Treasuries or mortgage bonds.

It is quite true that attending to the supply side of American economics is the only real way to make the US financial system more resilient to shocks.

As Caballero himself puts it, "There is a crack in the US financial system, but it's important to ask where the water that caused the crack came from."

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Business TV: The way to get ahead in business

Mon, 18 Jan 2010 00:47:00 PST

Books, seminars and conferences are still valuable mediums through which to sell your business ideas. But there is now a far more effective way to reach the people that matter and make sure your ideas are not only heard, but heeded - business TV.

MeetTheBoss TV is the new way for executives to access exclusive video and audio lessons from the world's most innovative and influential business leaders. From visionary entrepreneurs to Fortune 500 CEOs, MeetTheBoss TV interviews focus on the business challenges that matter today, clearly explaining the solutions, competitive strategies, people, and thinking around them.

You only have to look at the people who have already seen the value of business TV and have shared their expertise with this new online business channel - Herbert Hainer, Chairman and CEO of Adidas, Jeff Hayzlett, Kodak's CMO and VP and CIO for Coca-Cola, Esat Sezer, to name but a few.

Thought provoking and career enhancing advice

By focusing on the business challenges that matter and identifying both the symptoms and the solutions, MeetTheBoss TV aims to provide users with the tools to become the complete executive.

"We hope to provide a resource for business professionals to access information from leading executives that they simply would not be able to access through conventional social media or anywhere else," says Adam Burns, senior editor at MeetTheBoss TV.

"Programs can be watched whole, or topic; on the desktop, laptop or Smartphone. Delivering value quickly for the time-poor exec, wherever they are," he added.

Thought provoking and career enhancing advice of such incredible quality has never been this accessible, this immediate, or this free.

MeetTheBoss TV launches today!

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Wal-Mart: The biggest company on the planet

Thu, 14 Jan 2010 08:46:00 PST

In 1951 Sam Walton opened the Walton's Five and Dime discount store in Benton, Arkansas. The small family run business enjoyed moderate success in its early years, with little hint that it would spawn the world's largest public corporation by revenue.

Even today its headquarters in the north-west of Arkansas hardly suggests that Wal-Mart is little more than a modest family-run enterprise, consisting of a collection of prefabricated buildings next to a four-lane highway hundreds of miles away from the nearest big city. But as Warren Buffett demonstrates with his minimalist approach to running Berkshire Hathaway, the most profitable businesses can be built and run from the most modest foundations.

The Wal-Mart retail empire now spans over 8000 stores in 15 countries generating annual revenue in excess of $401 billion. The next retailer that even comes close to Wal-Mart's annual sales figures is French hypermarket chain Carrefour, at $124 billion.

Spreading a global message

Far from everybody's favourite brand, Wal-Mart insist they are on the side of hard-working families who need to save every penny they can - and the company have embarked on a mission to spread this message globally - but the company has been hounded by controversy.

In the last five years Wal-Mart has been hit by a brutal onslaught of lawsuits, intense criticism and a plummeting stock price that have resulted in a re-invention of the world's biggest retailer.

In its native North America, Wal-Mart is fiercely anti-union making it understandably unpopular within the industry, but the sheer size of the company means it can afford to brush any unwelcome opposition within the ranks under the carpet. As reported by UK newspaper the Guardian, when, in a rare case in 2005, workers at a Quebecois Wal-Mart store voted in favor of collective representation the company simply closed it down arguing the location was "unprofitable".

Overseas it has proven to be more flexible as a means of necessity, working with unions in Argentina, Brazil and China.

Downward pressure on wages

Unions detest Wal-Mart not only because of its refusal to recognise them in North America, but because of the intense "downward pressure" the company puts on wages. Discrimination against female and elderly staff also account for many of the blotches on Wal-Mart's record and the company also have a reputation for putting smaller local shops out of businesses.

Spokeswoman for Wake Up Wal-Mart, a pan-union campaign group, accuses the company of exploitation. She argues that Wal-Mart have not "shared their wealth".

Much of this wealth is instead used to expand the enterprise abroad as the company spent $4.1 billion on international expansion in the year to January 2009 and expects to spend a further $4.4 billion in the current fiscal year.

The investment is paying off, and many analysts believe much of the success overseas is due to the fact that people are unaware they are shopping in an America multinational retail chain.

Squeezing every penny

But Wal-Mart's desperation to drive down store prices means the firm opts to squeeze every penny out of its suppliers. And as Michael Bride, deputy overseas director at the Food & Commercial Workers Union, explains, "If you're a Chinese supplier and Wal-Mart is pressing you down, you probably can't go and negotiate your electricity rates or your rent down. But you can cut costs when it comes to labour."

This is a real problem for Wal-Mart. Investigations by human rights groups into overseas operations, particularly in China, have found "illegal and degrading conditions", with workers required to work 24-hour shifts for less than 44 cents an hour.

Although Wal-Mart have insisted they will start an immediate internal investigation into the findings, huge numbers of people remain concerned over how the company do business.

The success of free enterprise

Looking to the future, Wal-Mart have insisted on universally higher standards of working conditions for its staff while also promising a more environmentally conscious philosophy. For example under a newly launched "sustainability index," Wal-Mart's suppliers must report to the company on their greenhouse gas emissions, waste reduction initiatives and ethical sourcing.

With a company the size of Wal-Mart's questions will always remain over the way it operates, especially as it looks to further expand around the globe. While it remains a glowing example of the success of the free enterprise system, Wal-Mart will have to work extremely hard to change the growing sentiment that it will stop at nothing to achieve even greater global domination of the retail market.

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Google vs. China

Wed, 13 Jan 2010 08:36:00 PST

On paper, when Google China opened in 2005, it made perfect sense. The world's largest internet search facility starting operations in the world's largest internet market. But there was always going to be problems.

Google's success relies heavily on the users freedom to search for whatever they like, and in turn companies pay Google millions of dollars for the privilege of having billions of eyes looking at there brand.

But in China, a communist state heavily weighed down by excessive government censorship across all communication mediums, especially the internet, Google effectively had their wings clipped. Prior to the formation of Google China, Google.com itself was accessible around 90 percent of the time, but a number of its services were not accessible due to censorship.

Since announcing that it would comply with internet censorship laws in the People's Republic of China, Google China has succumbed to the Great Firewall of China (officially known as the "Golden Shield Project") establishing self-imposed censorship that has led to much controversy and widespread criticism of the internet search giant.

Last year the firm's YouTube site was blocked by the Chinese government for at least three days after Tibet's government-in-exile released a video on March 20 that it said showed Chinese police beating protesters.

Head-to-head conflict

But now recent news suggests Google Inc. are in the midst of a head-to-head conflict with the Chinese government and are even said to be considering pulling the plug on its website in the communist state, after discovering a "highly sophisticated" attack last month aimed at gaining access to e-mail accounts of human-rights activists.

For companies like Yahoo, Microsoft and Google itself, censorship has always been conceded as the "price to pay" for doing business in China, but the latest events have provoked the California-based tech giant into drawing the line.

For Google to even contemplate taking such drastic measures the attack must have been "large in scope and very penetrating," James Mulvenon an expert on Chinese cyberwarfare capabilities told the New York Times. China's internet audience has already climbed from 10 million to nearly 340 million in the past decade, of which Google are thought to have over a 30 percent share.

China's lack of free speech

Google said the attack itself is said to have targeted at least 20 other large companies in industries such as finance, technology, media and chemicals. The company also said it plans to stop censoring results on its Google.cn site and hold talks with Chinese authorities.

Google said the sophisticated attack, which occurred in the middle of December, originated in China and resulted in intellectual property being stolen from the company.

Google said two Gmail accounts appear to have been accessed as part of the attack. The information gathered was limited to account information, such as the date the account was created, as well as the subject lines of e-mails, Google said. The contents of e-mails were not exposed.

Can Google ever return to China?

The company added that dozens of Gmail accounts owned by advocates of human rights in the US, China and Europe were also accessed through phishing scams or malware.

In a statement Google said: "We recognize that this may well mean having to shut down Google.cn, and potentially our offices in China."

Although the company are a "long way from getting out of China" according to FBR Capital Markets, it does signal that Google may be ready to follow its own "Don't be evil" motto a little more closely.

But a move out of China, although being ethically admirable, may be a significant business risk due to the fact that with Google gone, Baidu can swallow up the free business, giving it a potential 90 percent internet market share.

This will make it extremely difficult for Google ever to return to China.

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Print, phone, web, sale.

Tue, 12 Jan 2010 06:18:00 PST

With today's smartphones, shoppers can have their very own hand-held barcode reader. But they don't necessarily need to be walking from place to place checking the price of the items they desire, all you may need is a magazine.

The print medium has been experimenting for more than a decade with barcodes and icons capable of taking readers to web sites as they try to compete with the interactivity of online and mobile advertising.

As the New York Times reports the sudden ubiquity of smartphones, which have apps that can read barcodes, and camera phones, which can easily take a picture of icons (pictured), magazines like Esquire and InStyle are adding interactive graphics to their articles, while Entertainment Weekly and Star are including them in ads.

Only last month, there were reports of plans to build barcode scanning software into every single smartphone and digital camera so that a quick photo of a product can immediately take the user to a website.

Not a new idea

On 2 December 2009 NeoMedia Technologies, Inc. announced that Sony Ericsson has selected NeoMedia as its strategic 2D barcode partner, Sony Ericsson will begin shipping phones pre-loaded with NeoMedia's NeoReader barcode scanning application globally in the first half of this year and pre-installed across all Sony Ericsson platforms.

But the idea is far from new. Ten years ago a company called Digital:Convergence introduced a product called the :CueCat that could print pages with barcodes, which readers could then scan to be sent to a particular website. From there they could be connected with the specific item they were interested in.

But nowadays there is no need for such clunk, long-winded software when everyone can have a barcode scanner in their pocket. And even thought he technology has moved on the obstacles remain the same - educating users on how to use the technology correctly.

More simplified technology

ScanLife, a smartphone application widely available as a free download, allows people to easily scan barcodes, in a print magazine for example, but there is a shared sentiment within the industry that American consumers will need more than a simple link to a web page in order to use the technology regularly.

As yet the decision made by publications such as Esquire has been to use the scanning system in editorial pages rather than in ads, with David Granger, Esquire's editor in chief, explaining that he wants "editorial to lead, to show advertisers they are supporting it, because there is an educational component necessary."

Other more simplified technology requires a standard camera phone, where readers can snap photos of ringed logos next to an image, called SnapTags, then text or e-mail them to a certain address. This has a wider reach because it allows users to get to grips with similar technology to that of ScanLife even if they don't have a smartphone.

Rejuvenation in print media

"You really reduce a person's ability to engage if you force them to go to a Web site or download an app," said Nicole Skogg, chief executive of Denver-based SpyderLynk.

This camera phone technology has so far been used by publications such as Everyday Food, Entertainment Weekly and Star Magazine.

This sort of technology makes it easy for publications and advertisers to track reader interest and is therefore highly valuable, perhaps giving the print medium a new lease of life in the ever more digital world.

Image: The New York Times

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US trade deficit climbs unexpectedly

Tue, 12 Jan 2010 01:29:00 PST

It's early days but the initial signs are not looking good for the US economy. Last week it was revealed that a surprise rise in US job losses had occurred over December as employers unexpectedly cut 85,000 jobs, and now it's been announced the US trade deficit widened sharply in towards the end of 2009.

Over November the trade gap increased ironically as a result of the recovering economy as demand for imported goods was boosted to its highest in almost a year.

The BBC reports that the deficit grew to $36.4 billion, up 9.7 percent from an upwardly revised figure of $33.2 billion in October.

The November deficit was bigger than Wall Street expectations for a $34.7 billion shortfall.

Straight months of gain

While exports have registered seven straight months of gains as economic growth has returned, the rise in oil prices has brought the trade deficit back up. After a temporary dip in October, oil imports rebounded in November.

Imports totalled $174.6 billion, up by 2.6 percent from the previous month, while exports totalled $138.2 billion, up 0.9 percent.

The poor state of the US dollar helped boost exports, especially to China where the trade gap is watched extremely closely by analysts. It narrowed to $20.2 billion from $22.7 billion in October.

Increased demand for industrial material and consumer goods was responsible for the large hike in imports, a rise so steep in fact that it easily offset a fall in demand for foods and cars.

Imports and exports increased

Economists were encouraged by the fact that both imports and exports increased.

"The big news is continued and sustained growth in trade volume, signalling recovery both in the US and among major US trading partners," said Christopher Cornell, at Moody's Economy.com.

The growth in US trade deficit brings with it mixed signals as the widening gap also signifies a domestic economic recovery. But a full recovery will be extremely slow in coming, and 2010 may bring more despair before we see genuine hope.

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