The Factors Affecting Business in USA.

Spread the love

Clearly, the economic growth and international competitiveness of America depend on her ability to innovate by creating the jobs and industries of the future, restoring middle class security, and lastly, investing in the creativity and imagination of the American people. However, there are diverse bottlenecks and firelighters which pose themselves as the factors affecting Business in USA.

The USA, as one of the world’s great innovation powerhouses, is very well positioned in this new competitive landscape. It ranks first overall in the world in three of the twelve pillars of development–which are business dynamism, labor markets and financial system.

Going by the current of time and culture, USA comes second in another two, that is, innovation and market size. Although the USA has been on an upward path for some years now even to the point where it had pulled itself back to second in the rankings, many of the conditions that contribute towards competitiveness cannot simply be acquired or constructed overnight.

An uncertain macroeconomic environment as a result of the financial crisis was only one of the factors holding the country back in the intervening years. This proves more reason for the question of why we must delve into checking the factors affecting business in USA.

The Factors Affecting Business in USA.

Though there seem to be numerous factors affecting the growth and sloppiness of business in America, yet we are only able to provide a summary of these factors by providing major factors into which the copious can find their spaces. Thus, the factors affecting business in USA:

  • Environmental Factor

Business is affected by natural resources available in country, including land, quality of soil, mineral wealth, water resources, vegetation, formation of surface and climate. If the natural resources are abundantly available, their utilization will result in economic development and large volume of employment. But if these are scarce then poverty, starvation, unemployment and backwardness will adversely affect the business environment also. This also one of the factors affecting business in USA.

The countries, where the infrastructural facilities are sound, economic development will be rapid and strong in those countries. America already has the infrastructural facilities ready for business.

  • Economic Factor

As economic development is the fount of this discourse and one of the focuses of businesses, inflation and unemployment are factors under the economic factor that affect business in USA. The forms of economic system also affect the economic development environment. The economic system has positive as well as negative impact. Historically, inflation and unemployment have maintained an inverse relationship. Low levels of unemployment correspond with higher inflation, while high unemployment corresponds with lower inflation and even deflation. From a logical standpoint, this relationship makes sense. This relationship by extension is one of the factors affecting business in USA.

  • Political Factor

New government comes with new legislation or policy that on the other side affects business across the states. Business is also affected by economic policies of Government. The industrial policy, licensing policy, monetary policy, fiscal policy, agricultural policy, price policy, labor policy, and Employment policy, all have impact on economic Industrial Development.

If these policies are effective, suitable, strong and progressive, development of agriculture, industries and trade is quite sure. Good policies help in increasing production, incomes, savings, investments, capital formation and bringing about rapid economic development of the country. However, the faulty polices result in creating obstacles in the way of economic development of business in USA.

  • Sociocultural Factor

The buying and consumption habits of the people in the USA, their language, beliefs, and values, customs and traditions, tastes and preferences, education are all factors that affect the business environment in the country.  Therefore for business to be successful in the country, the method of promoting the product may have to varied suit the characteristics of the different market.

Changes in taste and fashion or the increase in spending power of one group, for example, older people are daily challenges to be expected from any entrepreneurs who hope to establish businesses in the USA.

  • Technological Development Factor

Being able to sell goods online or using automation in factories is a result of the human resource available for the needs that arise with developments in technology. The fast changes in technologies in USA also create problems for businesses as they render plants and products obsolete quickly. Technology is understood as the systematic application of scientific or other organized knowledge to practical tasks. It is through a business that technology reaches people.

Technology around the world changes fast and to keep pace with it, Businessman should be ever alert to adopt change technology to their business. A firm which is unable to cope with the technological changes does not survive. The differing technological environment of USA mainly calls for product modifications. It is also one of the factors affecting business in USA.


Disclaimer: The contents on this site are intended to enhance public access to educational information and other endeavors. While every effort is made in preparing good information, no responsibility is accepted by or on behalf of this site for any errors. Although every effort is made to ensure the reliability of this site.

Copyright: Contents on this website may not be republished, reproduced, redistributed either in whole or in part without due permission or acknowledgement. All contents are protected by DMCA.
If you own this content & believe your copyright was violated or infringed, make sure you contact us via This Means to file a complaint & actions will be taken immediately.

Leave a Reply