globalEDGE Blog Archive June 2012

As the United Nations’ Rio +20 Summit came to a close this past week there was a large disappointment in the solutions, or lack of solutions, accomplished. In 1992, when the Summit was first held, there was a sense of hope that a plan could be created to both develop and stabilize the economy while also protect the environment. This year the final document, titled “The Future We Want,” has been seen as weak because it failed to come closer to conclusions on how the world can deal with the connected problems of economy and environment. Rather than focusing on what was unsuccessful, the Summit did create more of an awareness of the issues and put out good ideas on the table. In order to really achieve the future we want, action taken by businesses is necessary.

According to Merriam Webster's Dictionary, ethics is the principles of conduct governing an individual or a group. This is an interpretive definition; it changes depending on culture, and that is why teaching ethics for a globalizing economy is rather difficult for current business schools.

One Cleveland company has had amazing global success due to the Golden Key program through the U.S. Commercial Service. Jet Incorporated is a Ohio-based company that has used technology to design an environmentally friendly water treatment system aimed at replacing septic tanks.  This product relies heavily on new home construction. When the U.S. experienced a major slump in residential construction, Jet Incorporated needed to look to new markets in order to sustain growth. Now international sales are close to 30% of their overall income.

Leaders from Somalia and Somaliland, the unrecognized sovereign region of Somalia, had their first formal conference in London to discuss the future of an internationally recognized sovereign state of Somaliland.  Since declaring independence in 1991, the northern region has been relatively peaceful with orderly civilian and political movement whereas the rest of Somalia has been overflowing with conflict.  The government of Somaliland, having sought internationally assistance for gaining a stronger legal, economic, and security base, have agreed to continue cooperations with Somalia for squashing the terrorism, violence, famine that plagues much of the region while the negotiations take place.

There is no question that Greece has had some financial struggles lately, particularly in the tourism industry. Greece has so many beautiful attractions that a large part of its economy has relied on tourism for several years. One in five jobs in Greece come from the tourism industry, so when revenue in this sector fell by 15% this past year the economic situation began to look even more grim. 

This past week, ratings agency Standards & Poor’s warned India that it risks a sovereign debt downgrade which would result in the country falling off the list of an investment grade country. Currently, India is rated at the lowest investment grade rating – BBB. Falling below this level would mean that India bonds would be considered junk bonds. Much of the blame is assigned to the Prime Minister, notes S&P, pointing out specific problems with the political system “that has more gridlock than the United States,” coupled with high inflation and a falling currency and GDP.

While the United States has made great strides to increase its exports in the last several years, there is still a lot of untapped potential for more growth abroad. There are already several ways to get government assistance when exporting. All 50 states have Export Assistance Centers that aid US companies who are new to exporting. These centers help companies get in touch with overseas suppliers as well as potential customers abroad along with walking them through the entire exporting process. Still, some argue that more needs to be done to increase US exports.

As the human population grows and environmental complexities become more widespread, social responsibility and the fight against climate change have become major issues for businesses across the globe. Many companies are beginning to implement sustainable business practices to combat climate change and mitigate harmful emissions. You may be wondering what businesses around the world are at the top of the list in developing environmentally friendly business operations. Look no further, because a United Kingdom research company has just released rankings that track how large global companies are mitigating climate change and creating clean technology solutions.

In China, the domestic economy is struggling just like the rest of the world with slow sales and declining construction. The cost of labor has also increased drastically, with wage rates increasing upwards of 15% in some cases, year over year. Compared to May of last year though, exports have increased 15.3 percent, twice as fast as economists had predicted. How are Chinese companies finding success when Europe is in a debt crisis and the United States is still recovering from rampant unemployment though? Easy – exporting and automation.

Spain’s Labor Ministry recently reported that the number of people filing for unemployment benefits fell by 0.63% since May.  While this might seem like good news, it is not.  An estimated 30,113 people have simply stopped trying to find a job.  The country’s unemployment rate of 24.3% is the highest in Europe.  A new conservative government is trying to battle the rough economic times by employing a variety of labor market reforms.  Some of the legislature has included a reduction in severance pay and the banning of increases in salary to match inflation. Spain's new measures for reducing the unemployment rate and debt levels are highly unpopular with unions.

Earlier this month in Washington D.C., Ambient Technologies was one of several companies recognized for their efforts to increase exports in the United States. They received the Presidential E Award for their efforts to export their company’s services abroad, with help from the Export Assistance Centers of the U.S. Department of Commerce.