Innovation Spurs Economic Growth

Several would have you think that the economy is stimulated by plans created by the govt., like the Economic Stimulus Act of 2008, which was signed on February 13 by President Bush. This is often a 2-year 168-billion-dollar stimulus package. Is this what stimulates the economy? Fully not! Selling T-bills, or in other words going into national debt, or printing more money to produce the Yank individuals with "handouts" do to not stimulate the economy. The redistribution of wealth does not stimulate the economy. However, these are the sole ways that on the market to the govt. to fund a $168 billion stimulus package. If we have a tendency to cannot rely on the government to successfully stimulate the economy, on whom can we rely? On what can we have a tendency to rely? We can rely on corporations, entrepreneurs, and producers. We tend to can depend upon productivity and innovation.

Discussion
Last summer Apple released the well-known and revered iPhone. A company who is new to the telecommunications market was ready to capture more than a quarter of the whole U.S. market for smartphones by last year's fourth quarter as reported by Edwards and Einhom of Business Week. Apple has made an exclusive agreement with AT&T to provide the iPhone with service.

What will this mean for Apple's competitors? What will this mean for AT&T's competitors? They need to compete. Wireless suppliers, like Verizon Wireless and Sprint Nextel, are teaming up with cell phone manufacturers, like Nokia and Samsung Electronics, to innovate and produce new products to compete with the iPhone.

This may prove difficult for competitors. Apple incorporates a robust product which integrates flawlessly with their computers, and they are in no means "standing still." They announced at the beginning of March that they can be opening software development to third-party developers. The iPhone can be made a lot of company friendly by making company server integration doable, and by making email retrieval instantaneous.

Apple's innovation will not hamper the demand for brand new products. It's quite the other effect. It creates demand for new innovative ideas.

How will all of this stimulate the economy? To make the iPhone, Apple contracts out the building of its parts. The manufacturers order the raw materials required. Apple hires a printing company to print its manuals and packaging. The printing company orders the paper. The paper company orders the wood and alternative materials necessary to produce their product. Apple includes a manufacturing facility to put all of the items together. They hire a distributing company to send out their product. They train a technical support teams. Some teams can field phone calls. Different teams will be dedicated to the repair of defective phones. Apple hires TV studios, actors, and media broadcasting corporations to plug and advertise. The list might go on.

Hastily Apple's competitors need to hire teams of innovators to form new handhelds. They rent strategists. They produce a replacement competitive product. Their product must be manufactured, packaged, distributed, marketed, and sold. Is this not how an economy is stimulated?

As firms compete, a higher product will continue to be produced. Those product that are not any smart can not make it in a very competitive market. The merchandise will be validated by the profit it produces. Competition will drive the value of smartphones down. Thus firms can forever have an incentive to innovate and turn out better products. This cycle of innovation, production, competition, then back to innovation, is Adam Smith 101. Innovation, production, and competition are what simulate the economy. Everybody wins when a free economy is allowed to function. Customers get the best merchandise at rock bottom prices. Business house owners are rewarded for the merchandise of their mind.

Although the govt., political leaders, and presidential candidates act as if the economy can be driven by policy, it cannot. Nowadays the govt punishes successful companies with higher taxes and a lot of regulations. Failing corporations are "saved" with emergency efforts by the government. What message will this send to the marketplace? What message does this send to the American folks? Ought to the Government be in the business of economic stimulation? No matter what others could wish you to believe, productivity, if allowed, is the sole issue which will and can ever save this country from its current economic situation. Productivity is that the standard.

Action Items

1.    Do you've got an plan for a brand new product? Analysis what it'd take to patent that idea. Ideas will be sold.

2.    Write a letter to your Governor's workplace, State elected officials, Congressional Representative, or State Senator's workplace concerning companies being punished to supply and rewarded to fail. Find out if they have needs to change this trend.

3.    Scan Francisco d'Aconia's speech on cash by Ayn Rand to higher understand what cash is and the way it interacts in a very society. It can be found in Half II, Chapter 2, "The Aristocracy of Pull" close to the ultimate quarter of the chapter. (The whole book is very recommended.)

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