The United States of America is the home of capitalism. It is the founding father of business degrees, starting with the Stern School of Business at New York University (the first university to offer a degree in business). Many of our fore fathers were astute businessmen. So, how is it that we seem to be in a downward spiral of bad business?
Are Shareholders Ruining Business?
Shareholder value is a trend that caught speed in the 1990s, and many credit the downfall of American business to it. But is it really all the shareholders’ fault? Well, when you look at the statistics, of course it can appear that way. The 1990s were a booming time for business in America … until 2008. That is when things came crashing down. So, to the untrained eye it can seem like the cause for the fall from glory. However, that is not necessarily the case. The issue was not the shareholders themselves but rather, the emphasis on their importance and influence in policy. And many today claim that it is the fault of businesses themselves, not shareholders. Depending on where you stand on the issue, you may or may not see shareholders are the reason for the downturn in American business.
More Businesses Are Closing
Moreover, companies and executives have reported that for the first time in 35 years, more businesses are closing than opening. The study conducted by Gallop can be quite scary, paving the way for an “underground earthquake” that could cause all of business to go into a massive downward spiral and crash at the ground. But, is it really that bad?
Better Assessing Risk
Let’s just get one thing clear, business will be just fine in the United States. If more businesses are closing, that means those same people will be putting their skills to use elsewhere. As for less companies opening, that could very well mean that we have less start ups because individuals are measuring risk more carefully. Overall, these numbers just mean that Americans are being more careful, which does not mean business is in trouble.
A Conservative Approach Could Help
In fact, a more conservative approach to risk could be very helpful for America. When people save more money, they are more likely to handle financial windfalls rather than resorting to unemployment or credit lines. Furthermore, people who save are more likely to become responsible contributors to the economy.
A Much Bigger Trend
We may have one less huge start up, but we have a much bigger trend of a more careful America. That means, we have a much lower chance of systemic market failures or economic downturns. In essence, America is on track to a more careful approach to taking risks and investing in stock markets profitably. If anything, that sounds like a much more upward trend rather than the horrible downward spiral that has been painted.
There you have it. Just by shifting our perspective, we have reversed the downward spiral of business in America. The truth is, the only downward spiral that we can allow to happen is in the mind’s of ourselves. As long as visitors like you are reading, learning and preparing to stake your claim in the American dream, we will always be ready for the next generation of business.