US Entrepreneurial Scene: Ahead of EU

US-EU

When we look at the US against the backdrop of Europe, historically we see that America way surpasses Europe.  In size, economy, revenue, agriculture, and a whole variety of other industries.  How true is that today?  How far is Europe lagging behind?  In what areas is America making less progress than it should, pro-rata?  Here, we address some of these issues briefly.

A recent survey found that technologically speaking, the US (and China) is still way surpassing with Europe with the latter’s tech firms being valued at $240 billion since 2000 and America’s at $1,370 billion during the same time frame.  That is a gap of 31 percent.

But can we really blame Europe?  The region hardly has even close to the type of hedge funding rounds commonplace to Silicon Valley.  Ultimately no matter how great the startup idea for a company is, money talks.  And if that is significantly lacking then there is only so far a firm can go. Europeans also seem far more skeptical about handing over a check than their US counterparts.  They are more cautious with their money.  The US seemingly has a much easier time when it comes to investing.

It does not have to be like this though. And Europe is responding to change.  One example of this is TransferWise.  The UK-based money transfer service established in 2011 by Kristo Käärmann and Taavet Hinrikus is taking over The Tea Building in Shoreditch and has become extremely successful at fundraising.  Both co-founders are European, hailing from Estonia so one can’t put this fast movement down to US-genes. 

While this is not the only example of successful European technology startups there is reason to believe that they do have to up their game – especially their fundraising techniques if they want to remain on the map within the next few decades.

Small Business Week

Small Business Week (held from May 5-May 11 this year) is organized by the US Small Business administration.  established in 1983 as a “national recognition event”, from then until now it is a chance for every American to shop local.

But it is so much  more than that.  this year for example, everyone was invited to participate in a free virtual conference over the first two days. in conjunction with SCORE Association, the SBA gave people the opportunity to network with other business owners, connect with industry experts and be involved in a hands on conference without having to actually leave their homes. Other events included: Small Business Week Hackathon; the National Awards Ceremonies and the NSBW Twitter chat.

During this week individuals are also encouraged to give small businesses attention and respect as well as buying their services/products.  America comprises over 30 million small businesses, providing jobs for 59 million Americans.  This is over a third of the entire workforce in the country and accounts for approximately 44 percent of the US GDP.

And Trump is a big supporter also.  He said his administration is: 

“A strong ally and advocate of small businesses and their ability to help America reach its full economic potential.”

Which is supported by the provision of the Tax Cuts and Jobs Act which lets small business owners deduct 20 percent from their taxable business income. Trump also issued Executive Order 13771 (E.O. 13771): “Reducing Regulation and Controlling Regulatory Costs [requiring] For every new regulation issued, at least two prior regulations be identified for elimination. [In addition] The cost of planned regulations [must] be prudently managed and controlled through a budgeting process.” 

A Thriving US Economy

America’s economy is thriving. Or so the numbers tell us.  Here we take a look at some of the figuresthat help us feel optimistic for the future of the US economy.

  1. In Q1 2019, there was an annual growth of3.2 percent.
  2. At the start of Q2 2019, the unemployment rate fell to 3.6 percent(lowest it has been in the last five decades).  
  3. Real wagesof the average Joe in the street increased by 3.2 percent(first time in over 10 years).
  4. Inflationis lower than the 2 percent target at 1.6 percent.
  5. 5.4m+ new jobshave been added since January 2017.

According toYum Brands CEO Greg Creed:

“Obviously the US economy is in pretty good shape. But I also do think that there is some sort of bifurcation going on in the marketplace. There are certainly people making a lot of money, there are certainly people for whom value will remain incredibly important.” 

Although it should also be noted that prices are rising. In the restaurant industry – often in line with the increase in labor costs due to the law on the escalated minimum wage – the large chains are elevating their prices likewise.

More generally, prices are rising in the restaurant industry as labor costs increase with higher minimum wages and a more competitive labor market. McDonald’s, Starbucks, and Chipotle all mentioned raising prices in the most recent quarter during calls with investors.   At the same time, the middle class is becoming smaller.  The Pew Research Centerfound 50 percent of Americans to be in the middle class; quite a drop from the 61 percent figure of 1971.  

There is still of course the quite dramatic gap between top and bottom earners vis-à-vis income increase.  In 2017 the bottom fifth of the population witnessed a very minor increase (2.7 percent belowpre-recession figures) in their income whereas the top fifth enjoyed a much higher one (8.7 percent higherthan pre-recession figures).

Bolstering America’s Economy Through Technology

Technology is good for the economy

Technology is good for so many aspects of society.  One of them is preservation and growth of an economy.  In a new book written by MIT economists Jonathan Gruber and Simon Johnson entitled, ‘Jump-Starting America: How Breakthrough Science Can Revive Economic Growth and the American Dream, the two make the case for the benefits of investing in bolstering technology into the economy.

They argue that as well as strengthening growth, supplementing investment in science results in better job opportunities and higher wages.  This is especially useful now when so many Americans believe their salaries are not conducive to their everyday expenses.  Johnson said:

“Good jobs are for MIT graduates, but they’re also for people who don’t finish college. They’re for people who drop out of high school. There’s a tremendous amount of anxiety across the country.”

According to Bloomberg’s US State Innovation Index, California is America’s “most innovative economy” based on the following factors:

  1. STEM jobs
  2. R&D
  3. Firms in technology
  4. Productivity
  5. Individuals who have science/engineering degrees.

Perhaps therefore not surprisingly – supporting Johnson and Gruber’s theory – a CNBC article found that California accounted for almost ¾ of non-farm jobs created in America in February; an additional 14,600 (nonfarm) jobs were added by the state last  month; a report found that nonfarm payrolls in America increased by 20,000 jobs. Furthermore, Forbes contributor Mike Montgomery found that “technology can help prevent future California wildfires.” So there really is a lot to be said in favor of the benefits of technology for a state (and country’s) economic welfare.

Looking for a Job?

A job is so much more than a paycheck.  Obviously the monthly wage one brings home is crucial but having a place to go every day benefits one’s self-esteem; bolsters social skills and can even take one’s mind off everyday worries.  As such, the more people who are in gainful employment, the better for them, their families and society as a whole.  Here we take a brief look at which US states offer the best employment opportunities.

GoBankingRates recently conducted a study on the best places to find a job.  While nationwide the last decade has witnessed a 17+ percent growth rate, different states have varied employment growth rates.  For example, Colorado seems to offer the most employment opportunities and has a five year average annual unemployment rate of only 5. 7 percent.  Not only that but if you do live there, public transportation is good and improving. Private transportation is on the same page since there are now new vehicles in the market, powered by local electricity.  This of course is great for the environment and supplements the state’s economic development while offering customers reduced energy costs.

Over in New Hampshire – the second best place to find a  job in America right now – unemployment figures are a mere 3.2 percent and the state has added a third additional job vacancies than people seeking work.  Offering some of the lowest property taxes in the nation, with a median price of a home estimated at $244,900, economics look good for people living in the state of New Hampshire.

And then there is Utah (employment growth rates of 12.5 percent for 5 years and 17.4 percent for 10) with an unemployment average of just 3.4 percent in five years.  Minnesota also boasted a 10 year employment growth of 9.4 percent with one of the lowest unemployment rates nationwide. 

So job seekers have quite a lot to consider. If it does seem you’re just not getting the job you need/want, check out these other states for greater success.

America’s Economy 2018-19: To Grow or Not to Grow

Trump’s 2018 goal for the economy was a growth rate of 3%.  The US economy reached 2.9%, making it “the fastest gain for the economy since 2015.”  One of the biggest aids for this impressive figure was Trump’s “largest corporate tax cut in U.S. history… as well as additional government spending on military and domestic programs.”


According to head of Trump’s Council of Economic Advisors, Kevin Hassett:

“Our policies are working. We said there would be a capital spending boom and we would get 3.1 percent growth. That is what happened.”


According to many economists, growth is predicted to slow this year though – only reaching 2.3% according to the Federal Reserve.  Perhaps even lower given what is transpiring in Europe and China.  According to KPMG’s Chief Economist Constance Hunter, while consumption remains:

“strong…[his] main concern is housing investment which fell for the fourth consecutive quarter. If this continues into 2019, it will be a worrying signal for future growth.”

In addition, statistics from the White House showed that 2018 also benefited from “output rising by $560 billion over the four quarters of the year.”  In addition:

“Gross private domestic investment, just 17 percent of GDP at the start of the year, accounted for 36 percent of the growth in real GDP in 2018.  Real investment in intellectual property products, up 10.8 percent, and grew at its fastest pace since 1999.”

Indeed, America’s economy in 2018 – while there are indicators for cause for concern – did grow at a respectable pace.

US State Budgets: A Glance

State budget proposals often fluctuate.  It can be challenging for Mayors and their teams to put together just the right combination for their needs.  That changes a lot and henceforth so do their proposals.

One example of this is Minnesota.  Over in St. Paul, an announcement was made by Governor Tim Walz of some budget modifications.  Faced with a forecast of sluggish economic growth, Walz reduced some budget requests.  But none of these impacted health and education which remain high in his priority list. Walz’s first budget proposal was based on when the situation would have given him a surplus of $1.5b.  According to Myron Frans, Management and Budget Commissioner:

“The revised budget is balanced, it is fiscally sound.  Our revised budget continues to invest in education, health care, community prosperity and provides a positive balance in ’22 and ’23.”

Over on the west coast, the focus is on the homeless situation.  Mayors from LA and other California cities have approached Gov. Gavin Newsom with a request for “hundreds of millions in additional funding” for this issue.  Last year Kevin Faulconer, Sam Liccardo and others in the area fought for $500m in state grants for homelessness prevention efforts under Jerry Brown who was governor at the time.  Meanwhile, LA has anyway set aside over 50% of the $85 million it received for its homeless shelter construction proposal nationwide. 

In Alabama, proposals were released for the 2020 state budget.  These were compiled by Gov. Kay Ivey to “reflect growth in tax revenues and priorities on how to allocate the additional dollars.”  The request includes the spending of $2.15 billion for the 2020 fiscal year.  This was an extra 4 percent compared to last year (totaling an additional $91 million).

Economic Growth and Job Vacancies

At the beginning of 2019 the Bureau of Labor Statistics reported a jump to 7.6 million of job vacancies in America.  Adding 304,000 new jobs in January was actually “almost double the 158,000 the market had forecast.” There have been other organizations noting a jump in employment opportunities throughout the nation as well, in particular the Job Openings and Labor Turnover Survey (JOLTS). While this is really great news, there is of course the concern that this may open the door a bit too wide for those in current stable positions to seek better opportunities that could upset the apple cart, stressing out SME owners. There has also been a substantial decline in job layoffs.


Other good news for workers was the increase in hourly wages in February being “the fastest pace in nine years.”  As well, Kevin E. Schmidt pointed out that:

“The importance of this strength in jobs and wages is that it has driven much of the resurgence in the American economy. Jobs and wages are the cornerstone of consumer spending — the key driver of U.S. economic growth.”

Unemployment dropped to 3.8 percent in February (from 4 percent).

Automobile Industries and America

automobile industry

We often hear about US industries that choose to go abroadperhaps looking for cheaper labor, but what about the firms which are now choosing a return to American soil?  Here we take a look at ones from the automobile industry.

The Groupe PSA (French multinational automobile manufacturer of cars including Citroen, Peugeot, Vauxhall) is planning a comeback of its Peugeot brand.  Back in 2016 the firm started working on a 10-year plan to create its presence in North America.  In 2018 it offered a car-sharing service in Washington, DC.  

Within the same industry the Chinese wish to make a presence in America too.  The problem there of course is the ongoing US-China Trade war and the US’s increasing vigilance vis-à-vis Chinese technology.  Despite this, Americans are really starting to favor electric vehicles with government policy promoting eco-friendly cars.  according to GAC Motor President, Yu Jun, the firm’s “ultimate objective is to build the company into a world class brand and a global player,” which would obviously benefit from the creation of a presence in the US.  

Yun really believes that the his brand will ultimately win over the Americans despite the politically-economic issues.  Indeed, the company’s Entranze electric concept car was unveiled in Detroit at January’s North American International Auto Show held in Detroit and received well. Entering the US market in 2015, Yu pointed outat the show that the firm has since “been making steady progress” in the US market.

Then there is Volkswagen. supporting approximately 16,400 jobs in Tennessee via the Chattanooga assembly plant and other impacts, a substantial amount of revenue is being generated from the firm.  for example, in 2017 Tennessee took around $73.8m in state and local taxes.  It was good for Volkswagen too since its economic output in Tennessee was approximately $8.56 billion in 2017.  

So for automobile industry workers, the US economy is really working!

The US’s Global Power: Today and Tomorrow

Global power

We know that America is a superpower but in practical terms, what is its real contribution to the world economy? Given that the United States actually purchases over $500bn morethan it exports, the net contributionAmerica is making worldwide gives it a very impressive status within the international economy.  This also leads to an enhancement of Washington’s role as a world superpower.

This gives America heightened bargaining status vis-à-vis the coordination of global economic policy. And that is the most important assignment undertaken by G-20 summits – the address for the international economic forum. This year, come June – when America’s representatives head out to Japan for the meeting – America’s position will be stronger, especially vis-à-vis its capacity to reduce its trade deficits.

Furthermore, as soon as President Donald Trump pushed back the March 2nddeadline in the US-China trade dispute. There has been progressfrom both China and US in reaching a solution but as Oxford Economics Chief US Economist Gregory Daco cautioned:

“Popping the champagne today would be premature.  [The far-reaching disparity between the two nations] will prevent a significant de-escalation of trade tensions between the two giants.”

Indeed, if the end of year figures are anything to go by, the champagne bottle shouldn’t even be purchased yet. According to figures from last year, the fight to find a solution between the two nations “disrupt[ed] the global trading system and the cross-border production lines that businesses have built over recent decades.”  Plus, a recent National Association for Business Economics surveyfound that 75 percent of economists believe America’s economy will slump into a recession by 2021, the China-US trade war being cited as the main reason why.