Category: Innovation

NBAD: Company Description and Market Analysis

The National Bank of Abu Dhabi (NBAD) is ranked first among the largest banks in Abu Dhabi and second in the United Arab Emirates (UAE). It is located in the 1 NBAD Tower, is defined as a corporation (particularly, a joint-stock company), and is owned by the Abu Dhabi Investment Council (ADIC). Particularly, the organization is run by HH Sheikh Mohammed Bin Zayed Al Nahyan, the crown prince of Abu Dhabi (National Bank of Abu Dhabi 2017a).

NBAD was founded in 1968, when it became the first bank of Abu Dhabi and started expanding rapidly, gaining an increasingly large influence. NBAD complies with the principles of Shariah and, therefore, includes several crucial restrictions to the banking operations, riba (i.e., the collection of interest) being the key one (Abdul-Rahman 2014). The company names customer satisfaction and meeting the needs of the target population as its core mission: “Our mission is to put our customers first by motivating, educating and inspiring them to achieve their goals at each stage of their lives” (National Bank of Abu Dhabi 2017a, para. 6).

Seeing that a rather strong emphasis has been placed on the issue of education, it can be assumed that the firm pursues innovation as one of its goals. However, the said intention is implied rather than explicit since the company does not have an innovation management team. Therefore, NBAD should pay closer attention to the issue of innovation, promoting change as the foundation for success.

NBAD operates in the UAE and global financial markets (market share: 8.2% (National Bank of Abu Dhabi 2017)) and offers an array of services, including risk management, hedging, cash management, investment services, e-commerce-related options, etc. (National Bank of Abu Dhabi 2017b). NBAD employs 10,849 people (‘National Bank of Abu Dhabi’ 2017) and has reached the turnover of AED 15,455,336.70 (‘First Abu Dhabi Bank (NBAD)’ 2017).

Despite the impressive score, the firm has a range of competitors, including the Emirates NBD, the Abu Dhabi Commercial Bank, the First Gulf Bank, etc. (‘Revealed: top 10 banks in the UAE’ 2017). The company’s strategic decisions are made by the Senior Management team.

Innovation Framework, Policies, and Strategies

Although NBAD does not spell out its intention to encourage innovation in the context of its environment, it would be wrong to claim that NBAD refuses from using the subject matter as the tool for improving its services and communication. Quite on the contrary, innovation-based strategies are used actively by NBAD. For instance, the unique payment infrastructure that the company uses can be deemed as a huge step in the right direction. Particularly, the Blockchain technology utilized by NBAD allowed creating an entirely new and significantly improved channel for financial transactions carried out by the company’s customers.

The channel creates prerequisites for making the transaction process nearly transparent, with major stages becoming completely visible to the parties involved. As a result, not only does the company offer its clients financial security but it also helps create the framework in which possible errors and issues can be identified at the earliest stages of their development and, thus, prevented or managed successfully (National Bank of Abu Dhabi 2017c).

Named Ripple, the innovation used by NBAD allows attaining high levels of customer satisfaction since the transaction process is improved and simplified significantly because of it. The framework aligns with the company’s mission and corporate philosophy, which revolve around the concept of customer satisfaction and meeting the target population’s needs in a manner as efficient and expeditious as possible.

Furthermore, the focus on quality improvement, which Ripple sets for the organization, can be deemed as essential to the overall progress of the firm. The commercialization of the blockchain that Ripple provides triggers an immediate growth of the company. Furthermore, the innovative tool creates premises for the protection of customers’ rights, particularly, the security and non-disclosure of their data.

As shown on the figure below, the system removes intermediaries from the transaction process, making the latter much safer in terms of data disclosure and, understandably enough, considerably faster. Thus, settlement risks are reduced to a considerable degree.

On the one hand, the system that NBAD has deployed as its innovative practice in managing customers’ needs is rather basic. Indeed, the concept of simplifying the framework of financial transactions in the context of the banking process is hardly new (Xv & Meng 2015). However, there are several characteristics of the framework that make it stand out of the range of similar choices made by rival organizations.

First and most obvious, it performs the task of conducting transactions in the environment of the global financial market in a much safer and more efficient way than any other system currently deployed. The identified concept belongs to the disruptive innovation ilk and, therefore, aligns with the Theory of Disruptive Innovations (TDI) proposed by Clayton M. Christensen (Sultan 2014).

To be more accurate, it helps simplify the process of tending to the customers’ needs, making it more comfortable for the target population and, thus, becoming easily distinguishable from the services that competitors have to offer. Put differently, the emphasis is placed on the enhancement of the product quality rather than rebranding the services to change the target population’s perception thereof. Additionally, the approach suggests that simplicity should be preferred to complexity, which also meets the primary tenets of TDI (Gemici & Alpkan 2015).

Much to NBAD’s credit, even though the company does not make innovations its essential goal, it does its best to sustain the change and make sure that it should be supported and commercialized. It should be noted that the use of the disruptive innovation concept, which NBAD is currently adopting, does not suggest that a sustained innovation should be incorporated into the framework as well.

Indeed, by definition, the concepts of disruptive innovation and a sustained one do not necessarily go hand in hand together. Particularly, in contrast to a disruptive innovation, which is supposed to spark from the concept that is new to the market, the principles of a sustained innovation are deeply rooted in the corporate philosophy and values. Therefore, a sustained innovation implies that the innovative solutions delivered by an organization should be the product of its values. However, it could be argued that the current shift toward applying the Ripple framework to the firm’s transactions is, in fact, the effect of promoting the key corporate values actively.

Indeed, as stressed above, NBAD has been striving to produce the framework that will allow meeting customers’ needs most efficiently so that customer satisfaction levels could increase consistently. Therefore, the innovative approach to conducting financial transactions can be deemed as a result of reinforcing corporate values. Furthermore, the firm has been exploring opportunities to sustain the change by enhancing the importance of teamwork and customer satisfaction.

The focus on increasing customer loyalty levels, which can be considered the primary goal of NBAD, is also the focal point of the innovative approach that the organization has adopted by incorporating the Ripple technology into its framework. Therefore, the organization has been sustaining and developing innovation by promoting key corporate values and enhancing the significance of customer satisfaction. In other words, the approach allows for successful value capture, at the same time complying with the national innovation policies (Dentchev et al. 2016).

Moreover, the fact that fewer transactions are carried out, and fewer parties are involved helps reduce the negative environmental effects (Saad, Su, Marsh & Wu 2015). Consequently, the innovative approach used by NBAD meets the current standards for green innovation and the environmental policies of the UAE, reducing the levels of pollution and environmental damage to a considerable extent with its recent Green Bond approach (Ali, Abbas & Mazin 2017; National Bank of Abu Dhabi 2017d).

Recommendations

As stressed above, the current mission and vision of NBAD do not seem to focus on the issue of innovation extensively. One might argue that the identified characteristic of the organization is a significant flaw in its design. However, the fact that innovation remains an important part of the company’s design even though it is not mentioned directly in the mission and vision statements shows that NBAD’s operations are rooted deeply in the concept of innovation.

In other words, the phenomenon is an intrinsic element of the firm’s functioning, and the two cannot be separated from each other. The said approach toward developing innovation (i.e., incorporating it into the very design of the organization and allowing innovations to evolve and grow together with the firm) is what truly fascinates me.

Furthermore, NBAD is pushing the envelope of supporting and managing innovation since it incorporates the latest technological tools to make sure that the suggested innovative solutions should be in consistently working conditions. The use of the latest IT solutions creates a completely secure environment for the customers, therefore, addressing one of the most topical issues on the global agenda, i.e., the safety of customers’ data (e.g., the use of CyberSource (CyberSource Corporation 2017)).

Furthermore, the innovations are supported by each other; for instance, the use of the Ripple system is viewed as an integral part of the framework termed as the “Bank in a Box” and used to make the process of accessing the relevant data and carrying out the necessary transactions easy for all customers (Global Intelligence for the CIO 2017). The implementation of the innovations is carried out by promoting cooperation among the staff members and deploying the latest IT tools so that the said services could become available to all customers.

At present, NBAD has been quite successful in promoting innovations. That being said, there are several aspects of its performance that the firm may need to improve to gain even more weight in the global market. Particularly, the change in the organizational values and philosophy by placing a heavier emphasis on the importance of innovation should be viewed as a necessity. Moreover, NBAD should consider the idea of reconsidering its current approach to resources management. Particularly, the principles of sustainability and cost-efficacy should be promoted as the means of improving the firm’s performance.

By investing in the professional growth of the staff members, the company will be able to build a team of competent staff members who will contribute extensively to the further progress of the organization. As a result, the foundation for consistent development can be built. The enhancement of lifelong learning among the employees must become a necessity, and the company must support the employees’ professional growth by offering them courses for increasing the level of their competence and proficiency in the designated areas. As a result, the rapid growth of the organization is expected since NBAD will develop an impressive competitive advantage (i.e., its human resources).

The analysis of the NBAD’s performance and innovative approaches that it adopts has shown that a company needs to develop innovativeness as its essential asset. The incorporation of the latest technologies and the promotion of learning and professional growth among the staff members are some of the opportunities that a company can explore in the global market. By evaluating its assets and weaknesses, an organization will be able to identify the path for its further development and gain the weight that it needs to become valued by the target customers.

Reference List

Abdul-Rahman, Y 2014, The art of Islamic finance and banking: tools and techniques for community-based banking, John Wiley & Sons, Inc., Hoboken, NJ.

Ali, AA, Abbas, K & Mazin, M 2017, ‘Developing a comprehensive taxi strategy for Dubai based on system analysis & structured assessment’, Journal of Transportation Technologies, vol. 7, no. 3, pp. 261-278.

Alison, I 2016, ‘Seven banks kick-off Ripple’s blockchain network including Santander, UBS and UniCredit – “90 more in the pipeline”’, International Business Times. Web.

CyberSource Corporation 2017, National Bank of Abu Dhabi selects CyberSource for secure and streamlined online payment solutions for clients. Web.

Dentchev, N, Baumgartner, R, Dieleman, H, Johannsdottir, L, Jonker, J, Nyberg, T, Rauter, R, Rosano, M, Snihur, Y, Tang, X, & Hoof, BV 2016, ‘Embracing the variety of sustainable business models: social entrepreneurship, corporate intrapreneurship, creativity, innovation, and other approaches to sustainability challenges’, Journal of Cleaner Production, vol. 113, no. 1, pp. 1-4. Web.

‘First Abu Dhabi Bank (NBAD)’ 2017, Mubasher. Web.

Gemici, E & Alpkan, L 2015, ‘Disruptive innovation theory in light of practical implications’, Proceedings of the 2nd Global Conference on Engineering and Technology Management, Chicago, IL, pp. 127-131.

Global Intelligence for the CIO 2017, NBAD: the secret to rapid expansion of IT globally. Web.

National Bank of Abu Dhabi 2017a, About First Abu Dhabi Bank. Web.

National Bank of Abu Dhabi 2017b, Financial markets. Web.

‘National Bank of Abu Dhabi’ 2017, Forbes. Web.

National Bank of Abu Dhabi 2017c, NBAD becomes the 1st bank in MENA to go live on blockchain for real time cross border payments with Ripple. Web.

National Bank of Abu Dhabi 2017d, NBAD launches first Green Bond in the Middle East. Web.

National Bank of Abu Dhabi 2017e, NBAD reports 4Q / FY 2016 results. Web.

‘Revealed: top 10 banks in the UAE’, Gulf Business. Web.

Saad, A, Su, T, Marsh, P & Wu, Z 2015, ‘Investigating environmental management and quality management issues in the Libyan food industry’, British Journal of Economics, Management & Trade, vol. 9, no. 3, pp. 1-16.

Sultan, N 2014, ‘Cloud and moocs: the servitization of it and education’, Review of Enterprise and Management Studies, vol. 1, o. 2, pp. 1-15.

Xv, L & Meng, X 2015, ‘Interference in and ecological strategies to mobile financial services developed by commercial banks’, Open Journal of Social Sciences, vol. 3, no. 1, pp. 194-201.

The 21st century is turning into the age of global development and collaboration. Many businesses today are working together to exchange knowledge and expertise, as well as to establish a foundation when moving into a new market. One recent approach to collaboration involves collaborative innovation between young, relatively small businesses and large, successful companies (WEF 3). This type of collaboration can be potentially beneficial for both sides, as well as for the local economy (WEF 3). Several models may be used for collaborative innovation, which promotes economic sustainability. One recent example of collaborative innovation with an eye to economic sustainability is Campbell’s 2016 investment into organic food start-ups.

Collaborative Innovation and Sustainability

According to Yoon and Hughes, large companies have many reasons for collaborating with start-ups and smaller businesses (par. 4). For instance, economic growth in certain industries relies on start-ups, such as the food industry, where the largest 25 companies only contribute 0.1% to growth (Yoon and Hughes par. 2). Therefore, developing start-ups can contribute to a faster-growing economy, where large businesses are more likely to succeed (Furlong par. 5). However, it is hard for start-ups to grow without external support. Most of the new companies close within a couple of years, which makes their contribution to economic growth short-term.

By investing in and collaborating with start-ups, big businesses can promote long-term economic improvement, thus achieving financial sustainability. Another reason for working with start-ups is their innovativeness and ability to find and share new opportunities: Yoon and Hughes state that “Startups excel at giving birth to successful proof of concepts; larger companies are much better at successfully scaling proof of concepts” (par. 4). For instance, Campbell’s characterises collaborating with smaller firms as “the latest step in the company’s attempt to better align its portfolio with consumers’ changing tastes, which have shifted away from processed food toward fresh goods” (Kowitt par. 6).

Models for Collaborative Innovation

However, not all collaborative innovations manage to achieve their plans for developing economic sustainability. Either small firms fail to grow in spite of the larger company’s financial contribution, or their growth does not lead to any significant change in the economic stability of the industry. In his article, “How Innovative Companies Collaborate,” Davis aims to explain why some collaborations are effective, whereas others fail.

One of the main reasons he gives is that too many companies are involved in the collaboration: “Forging an alliance between two companies has its own share of obstacles, including (but certainly not limited to) corporate culture clash, divergent strategic interests, and fear of intellectual-property poaching” (Davis par. 7); thus, the introduction of a third company is likely to create far more difficulties than benefits. Second, poor exchange of information and communication interruptions also pose a threat to collaboration (Davis par. 10).

Group cycling is one of the most efficient methods of communication within the partnership, as it promotes better circulation of information, thus improving the group’s innovative power while at the same time allowing enough space for members to pursue their own growth targets (Davis par. 10-11).

Yoon and Hughes also argue that one of the most important factors for successful collaboration is having a clear mission: “A missionary mindset provides protection to a proof of concept that is being scaled or sold in an established company or as a startup” (par. 10).

A close analysis of collaboration models for sustainability was performed by Rohrbeck, Konnertz, and Knab. The authors argue that in order to achieve the end goal of sustainability, the collaboration must have a thorough development plan for the future. One way to outline future development is to use a scenario technique (Rohrbeck et al. 17). This technique takes into account the changes to the business environment and the target audience that are not dependent on the industry, thus helping in predicting the overall development of the market (Rohrbeck et al. 17).

Another technique, roadmapping, can be used to predict the growth part of the businesses that are members of the collaboration, including the requisite competencies and necessary steps to achieve further growth (Rohrbeck et al. 17). Finally, the use of CBM can be used to turn the previous analysis into a concrete strategy for development (Rohrbeck et al. 17). Most importantly, however, CBM can explain how the members of the collaboration can benefit from market development and change facilitated by collaborative innovation (Rohrbeck et al. 17).

Overall, a successful collaborative innovation model is relatively small in terms of the number of members focused on a certain goal, and it involves good communication practices. Furthermore, collaboration for the purpose of economic sustainability has to employ trustworthy planning strategies that include an overview of the external structure of the market, the impact of the collaboration and the possible directions of growth.

Campbell’s Soup Company

Ever since the firm recognised the shift of consumer’s interest to organic foods, the Campbell Soup Company has been investing into start-ups working in this area of the food industry. Furlong explains that, prior to investing $125 million into start-ups, the company made several acquisitions: “For example, in 2015, Campbell acquired salsa, hummus and dip maker Garden Fresh Gourmet for $231 million and back in 2012, agreed to buy beverage business Bolthouse Farms for $1.55 billion” (par. 4). According to the author, this was primarily driven by the company’s failure to prosper in a slow food market (Furlong par. 5).

However, the 2016 investment marked a new style of collaboration for the company. The investment was made in a joint venture with Acre, which supports multiple new and innovative organic food and snack companies. The payment has already been partly distributed between several start-ups, such as Juicero, a new business that manufactures and sells an innovative system for making cold-press juice at home (Kowitt par. 4).

As a result of investment, small companies with innovative approaches to production and distribution of food products can grow, thus increasing the economic sustainability of the organic food industry in the United States and the financial sustainability of the Campbell Soup Company. The firm’s CEO Denise Morrison believes that the investment will result in the rise of shareholder value and help the company achieve its targets of growth in organic sales (Campbell Soup Company 4).

Conclusion

Overall, collaborative innovation is a promising practice for developing slow industries with shifting consumer interests. Large companies that are struggling to grow and small businesses that do not have enough resources can collaborate to encourage the stable growth of the industry, thus promoting their financial sustainability. However, building collaborative innovation requires both effort and expertise, as not all models of cooperation are equally valid. As long as the companies have a realistic goal and a thorough strategy for reaching it, collaborative innovation will be beneficial for both sides as well as for the industry.

Works Cited

Campbell Soup Company. 2016 Annual Report. 2016. Web.

Davis, Jason P. “How Innovative Companies Collaborate.” Forbes. 2014. Web.

Furlong, Hannah. “Campbell Soup Launches $125M Venture Capital Fund for Food Startups.” Sustainable Brands. 2016. Web.

Kowitt, Beth. “Exclusive: Former Obama Nutrition Policy Advisor Is a Partner in Campbell Soup-Backed VC Fund.” Fortune. 2016. Web.

Rohrbeck, Rene, et al. “Collaborative Business Modelling for Systemic and Sustainability Innovations.” International Journal of Technology Management, vol. 63, no. 1/2, 2013, pp. 4-23.

World Economic Forum (WEF). “Collaborative Innovation: Transforming Business, Driving Growth.” Regional Agenda, 2015. Web.

Yoon, Eddie, and Steve Hughes. “Big Companies Should Collaborate with Startups.” Harvard Business Review. 2016. Web.

Executive Summary

The primary goal of this research paper was to discuss the innovation of bonds and understand the events and aspects that required modifying their features over different historical periods. The events such as high inflation rate, economic and political instability, and globalization were the major reasons for introducing these changes. Ensuring a high level of safety to the investors by increasing bonds convertibility and flexibility was vehemently important during all phases of changes.

Adding various features required a sequence of modifications while making the bonds convertible and sensitive to the economic environment in the first place. Nonetheless, the need for improving their convertibility and transferability into equity required making these tools hybrid. Despite an extended coverage of risks by the improved version of this financial tool, it did not guarantee the safety of the interactions due to the increasing importance of investors and gravity of international trade and enhancing sensitivity to changes in financial markets. These trends could be viewed as exceptional, as they did not comply with the current solution of hybrid securities.

In the end, these findings underlined that bonds and other financial instruments require continuous improvement. Changing the structure of the bonds and ensuring their compliance with globalization and the concepts of international trade would help avoid misunderstandings and ensure the safety of transactions. At the same time, choosing the most suitable equity and debt component would not only make the bonds more effective but also increase their profitability. Overall, these modifications have to be applied simultaneously since introducing these changes at the same time will have a beneficial impact on the profitability of bonds and attract more investors to the sector.

Background

The financial market has always been viewed as a place, which tended to be a reflection of technological changes and various economic trends. In the past, the bonds and other financial instruments were rather simple, and this aspect defined the fact that the choices for the external financing were rather limited (Allen, Yago, & Barth, 2012). Switching from traditional bonds to convertible ones took place in the seventies due to the rapidly growing inflation rate (Allen et al., 2012). In turn, it could be said that the subsequent phase of the bond innovation was present in the eighties and focused on the essentiality of sensitive bonds (Allen et al., 2012). This change could be explained by the understanding that the equity had a vehement correlation with the bond’s value (Allen et al., 2012). Overall, the need for these modifications was reasonable since the bonds and other financial securities continued to evolve due to their dependence on the economic and technological environment.

As for the current situation with the bonds, today, this financial instrument continues to develop in a positive direction while expanding the options for investors and increasing the number of aspects to enhance prosperity and stability of the firm. The need for the protection of the investors has driven the need for the development of hybrid bonds. This form of financial activity is rather complex, as it implies focusing on both equity and debt features simultaneously (Allen et al., 2012).

Consequently, nowadays, using new forms of bonds could be considered as challenging since having debt and equity constituents increases the number of risks for investors and companies. At the same time, a paramount importance of bonds in acquiring additional capital required for the maintenance of the company underlines the need for continuing study of these financial securities. Gaining knowledge concerning this topic and understanding its working mechanism and potential ways for future development explain the interest in this research and the necessity to study it.

Overall, a plethora of opportunities for the bonds’ optimization and innovation of the financial markets increases the interest in this theme among the financial practitioners and the executives of the firm. A combination of these factors upsurges the interest in this topic, as bonds are vital constituents of the financial market. Subsequently, based on the factors provided above, the primary goal of this research paper is to assess and describe the details about the changes in bonds and rationale for the occurrence of these innovations while referring to the economic environment. Offering these insights will assist in providing the recommendations to the existent issues and gaining a clear understanding of the connection between bonds and other aspects of the economic environment.

Remedy, Responses from Regulatory, Cautions, and Observations

Innovation of Bond: Periods and Description of Securities

In the first place, it is critical to describe each historical change related to the bond innovation separately and provide clear definitions of the novel forms of security. Before the 70s, the market was occupied by stocks, as they ensured a rapid return on investment while having a positive financial impact on both purchasers and firms (Allen et al., 2012). Nonetheless, relying only on this financial instrument was not effective, as it was dependent on the manipulation of the traders and fluctuations of economic cycles (Allen et al., 2012). A combination of historical and financial aspects led to the development of convertible bonds. In this case, this financial tool implied that the bond could be transformed into the equity (stock) during the specific periods discussed in the contracts (Zhang & Liao, 2014). These instruments were appropriate for the firms, who did not have a well-established base of financial activities. Nonetheless, the primary risks were associated with setting a suitable price for these securities during the times of economic recession and political instability (Zhang & Liao, 2014).

Subsequently, the next stage took place during the 80s, and it led to the development of the sensitive bonds. Overall, these financial securities were responsive to the inflation rate and foreign currency exchange rates (Strumeyer, 2012). In this case, making them inflation-indexed and taking into account changes in interest rates increased the safety of using these securities. Nonetheless, they were not the most effective tools in terms of profitability and still posed a threat to the financial stability of the organization.

The current economic stage generated the need for combining the features of debts and equities, as the financial practitioners understood a connection between the problems linked to the fluctuations in the prices of assets (Allen et al., 2012). One of the most common hybrid tools were contingent convertible bonds, as they used the mechanism of the traditional convertible instrument (Spiegeleer, Schoutens, & Hulle, 2014). The primary difference pertains to the fact that the investing party shows interest in changing equity for debt under the particular circumstances (Spiedgeleer et al., 2014). It could be said that this matter has a beneficial influence on the stability of the organization while assuring of debt and equity.

Reasons for Changes

Despite the clarity of the stages mentioned above, it is critical to offer a rationale for the development of these changes. In the first place, the transition between traditional bonds and convertible one pertains to the need for maximizing profits and increasing the safety of transactions. Nonetheless, introducing these changes was not effective. The 1980s were associated with the rise in inflation rates while having a critical impact on the interest rates and the monetary value of bonds (Billi & Kahn, 2010). This economic phenomenon had an adverse influence not only on the bonds’ market but also on the economy as a whole. Being extremely dependent on any fluctuations of the financial environment while questioning their profitability and return on investment. A combination underlined the need to introduce the innovation to the existent bond’s mechanism while adding inflation-indexed component.

Nonetheless, making the bonds sensitive to inflation did not resolve all the issues linked to using these operations while taking advantage of this financial instrument. In this case, the rising popularity of equity markets and their integration with the debt and other financial securities was one of the aspects, which increased the need for hybrid financial instruments (Allen et al., 2012). Simultaneously, the continuous changes in the economic environment such as economic crisis, intensifying rivalry, and changes in the slope of the supply curve defined the need to introduce another type of convertible bonds while linking them to equity. In the end, it could be said that the described bond innovation was driven by the deviations in the external environment, and these modifications were necessary to ensure the safety for investors.

Current Possibilities for the Bond Innovation

It remains evident that the financial continues to evolve since the investors and companies are required to increase the profitability of financial instruments and minimize the number of risks associated with these operations. Nowadays, the issue of the securitization continues to exist (Bloomestein, Harwood, & Holland, 2011). In this case, taking this component into account by introducing an optimal integration between debt and equity components will minimize the risks and attract more investors to the sector.

At the same time, one cannot underestimate the role of the debt issuers and investors in the modern world (Bloomestein et al., 2011). Globalization is a critical definer of the functioning of the markets and makes the presence of international flows a possibility (Bloomestein et al., 2011). In this case, any innovations concerning bonds have to pay vehement attention to this aspect, as it will ensure the safety of operations globally and help minimize risks related to the misunderstandings of the stock exchange in different countries.

Lastly, introducing structural changes to bonds will help decrease the outcomes of the economic crisis and the consequences of the recession stage. This aspect implies that the bonds have to be more flexible and consider other variables of the economic environment including changes in the market capital structure, supply and demand interdependence, and inflation rates (Bloomestein et al., 2011). A combination of these factors will have a beneficial impact on the levels of security and ensure the safety of transactions.

Conclusion

Overall, the conducted study revealed the nature of the bonds and the reasons for their innovation. In this case, in the first place, the investors were interested in using traditional bonds, but it minimized their investment opportunities and questioned the level of security. In this case, it was reasonable to optimize their working mechanism and make them convertible since it allowed maintaining connection between equities and debts. Nonetheless, high inflation rates during the 80s defined the need for making the bonds responsive to inflation by adding sensitivity as one of the most critical features of this financial instrument. Despite the positive intentions of these modifications, this matter questioned the security, as these operations still involved an extended number of risks and threats. In this case, making them hybrid while combining the concepts of debt and equity increased the levels of safety when being involved in these transactions. Simultaneously, hybrid bonds shifted the degree of attractiveness for investors and pulled additional resources to the capital markets.

Despite the existence of the vast variety of instruments, the clarity of bond’s mechanism continues to improve in a positive direction. In the first place, the policy makers have to focus on safety, as this issue continues to exist. Alternatively, paying critical attention to the structural changes and gravity of globalization in the international operations will help improve the safety of transactions associated with bonds. Considering these trends will assist in optimizing the structure of these financial securities while finding the most suitable combination of debt and equity components. Furthermore, taking into account these tendencies will not only help enhance their structure but also will contribute to avoiding adverse consequences in future when operating internationally. Overall, it is possible to theorize that focusing on these matters will attract more investors to the market while enlarging these opportunities globally.

References

Allen, F., Yago, G., & Barth, J. (2012). Financial innovation. Upper Saddle River, NJ: Financial Times Press.

Billi, R., & Kahn, G. (2010). What is the optimal inflation rate? Web.

Bloomestein, H., Harwood, A., & Holland, A. (2011). The future of debt markets. OECD Journal: Financial Market Trends, 1(2), 1-18.

Spiegeleer, J., Schoutens, W., & Hulle, S. (2014). The handbook of hybrid securities: Convertible bonds, coco bonds and bail-in. Hoboken, NJ: John Wiley & Sons.

Strumeyer, G. (2012). Investing in fixed-income securities: Understanding the bond market. Hoboken, NJ: John Wiley & Sons.

Zhang, W., & Liao, P. (2014). Pricing convertible bonds with credit risk and regime switching and numerical solutions. Mathematical Problems in Engineering, 1(1), 1-13.

Introduction

The national innovation system denotes the network of relations involving different players in discovering new technology. It involves the government, the private sector and international institutions. (Organization for Economic Co-operation and Development, 1997, pp 10). Below is a discussion of the Germans national innovation system

The national innovation system

The national innovation system in German has over the last years paid much attention in the accumulation of knowledge. According to the Organization for Economic Co-operation and Development (1997, pp 9) the flow of information and highly trained individual is a dominant characteristic of the economy. This is in response to the increasing growth in technology. As a result, the government gives support by training personnel and allocates funds to the research system.

The government provides funding for the national innovation system. Through the Deutsche Forschungsgemeinschaft (DFG) programs such as conferences, academic tour and scientific exhibitions receive financial support. Research with foreign institutions can also receive support irrespective of weather it is an individual research or partnership.

Consequently, researcher from other parts of the globe find themselves taking longer hence do an extensive research. On the other hand, it takes advantage of using the partnership in other parts of the globe to extent research associations. Expenses for researchers in other parts of the globe are catered for too. Mobility of labor in the national innovation system in German is between the research institutes and institutions of higher learning. A number of graduates are absorbed by research institutes.

However researchers based in the institutions of higher seldom move out of the universities. A few researchers move to universities mainly to do further research on specific subjects or to get insights on specific areas of research. This mobility causes a positive impact on the economy. This is as a result of the information the researcher uses when they move from private to public enterprises (Organization for Economic Co-operation and Development, 1997, pp18).

The commercialization of research institutes is highly discouraged. The national innovation system is expected to be self sustaining while maintaining public interest of industrialization (German Research Foundation, 2001, pp. 1). However economic motives are only integrated if their purpose is to bring sustainability. For instance, if innovation creates more income while at the same time it meets the demand of supplying a scarce utility.

The national innovation system is committed to support basic research. Young scientist can get grants from the DFG as individuals and as groups. However they must be eligible and show capability (Hotopp, 2005, pp12).

Mobility of labor in the national innovation system in German is between the research institutes and institutions of higher learning. A number of graduates are absorbed by research institutes. However researchers based in the institutions of higher seldom move out of the universities.

A few researchers move to universities mainly to do further research on specific subjects or to get insights on specific areas of research. This mobility causes a positive impact on the economy. This is as a result of the information the researcher uses when they move from private to public enterprises (Organization for Economic Co-operation and Development, 1997, pp18).

Conclusion

Research in private and public enterprises has led to importation of competence from private to public sector. Therefore there is increased awareness of new technology. Conclusively, the management of the national innovation system in German can be considered successful.

Reference List

German Research Foundation., 2001. Research findings. Web.

Hotopp, T., 2005. Basic research funding in Germany. Tokyo: DFG.

Organization for Economic Co-operation and Development., 1997. National innovation System. Web.

It should be known that Japan and USA are realigning themselves through various changes and this is as far as national innovation systems are concerned.

These changes have been occurring at different levels and this is set to continue as time goes by. Both countries have embraced changes to keep up with the pace of globalization for long term sustainability (Jofre 2008, p. 12). As a matter of fact, more attention has been given to the automobile industry because it is undergoing a lot of changes every now and then which means that they can not afford to be left behind.

In a broad perspective, changes in both countries national innovation systems have been inspired by their previous experiences. This is as far as failure and success are concerned. There has been an effort to merge national innovation systems in both countries and this is based on the fact that the ecosystem of the automobile industry and sector is changing.

As far as the two countries are concerned, there has been no single formula for success and this is because most interactions revolve around incidentals. National innovation systems in the two countries are still emerging and this is something that has been closely evaluated. Models of collaboration in both countries are less relevant and this has been prevalent in the automobiles industry.

As a matter of fact, a lot of flexibility and learning has made the automobiles industry to adapt well to the changing environment in both nations (Goto 2000, p. 23). There are a lot of efforts to induce synergy in the national innovation systems and this is as far as the automobiles industry in the two countries is concerned (Jofre 2008, p. 31). In a broad perspective, innovation systems in the two nation’s automobile industry can be said to be in a transition stage.

The two countries compare differently as far as national innovation systems are concerned. Japans innovation revolves around technology that will be substituted for energy. On the other hand, USA innovation has been known to revolve around IT substitution. This is mostly substituted for manufacturing technology to enhance long term sustainability. In Japan, national innovation systems in the automobile industry are aimed at increasing growth (Goto 2000, p. 45).

This is done with limited resources and energy to minimize any misuse that might be experienced. USA innovation is also aimed at increasing growth but this is done through a different direction. In this case, attention is laid on increasing functionalities as time goes by (Mowery 1996, p. 41). As far as national innovation systems in Japans automobile industry are concerned, innovation is led by all stakeholders. This is by both the government and industry.

USA has taken a different path and innovation has been left in the hands of a liberalized arrangement. This involves different innovation agents that have a stake in the automobiles industry as a whole. Japans national innovation systems are based on an in-house approach to research and development (Goto 2000, p. 31). This means that tacit knowledge is embedded in large companies for long term sustainability. On the other hand, national innovation systems in the USA have a strong reliance on foreign human resource.

This means that a lot of mobility and competitiveness are encouraged to push the industry forward. Japan as a nation has always insisted on production efficiency to make its industry unique. In this case, its national innovation system is focused on a lean production concept where it can get enough competitive advantage. USA has focused its national innovation system on new functionalities (Mowery 1996, p. 67). This has been done with an aim of coming up with a network synergy in its automobile industry.

Japans national innovation system is still undergoing some restructuring and this means that the automobile industry has been given a lot of power and autonomy. In USA, the government has always dictated the rules of the game as time goes by thereby reducing the independence of the automobile industry. Japan has come up with research and development policies that guide its innovation system while USA has a lot of regulation and deregulation that have been synonymous with the country (Jofre 2008, p. 12).

As far as Japans national innovation system is concerned, the industry and academy are encouraged to collaborate while the US government has been reviewing and enhancing its innovation environment for long term sustainability. The national innovation system in Japan has less interference from the government and this has been capitalized on to enhance social consensus as far as the automobile industry is concerned.

The USA government has established a lot of presence in its national innovation system and this has been done with an aim of setting up various national priorities in the automobiles industry.

National innovation systems in the USA have a variety of funding sources with a lot of external collaboration while in Japan, funding has mostly come from the government with a lot of internal collaborations by different companies and stakeholders. Japans innovation system encourages low mobility and this can be reflected from its low dependence on foreign skills while USA has a lot of mobility with a strong reliance on foreign skills (Jofre 2008, p. 38).

Both countries have a different approach to national innovation systems but they can still gain by collaborating together which is very good for long term sustainability.

Reference List

Goto, A., 2000. Japan’s national innovation system: current status and problems. London: Oxford University Press.

Jofre, S., 2008. Overview and analysis of Japanese and USA innovation systems. Stockholm: Technical University of Denmark.

Mowery, D., 1996. The U.S. National Innovation System: Recent Developments in Structure and Knowledge Flows. Berkeley: University of California.

The proximate causes are the immediate or the closest trigger of a phenomenon while the ultimate causes are the real reasons why a given phenomenon took place the way it did. Professor Jared Diamond believed that certain civilizations were able to dominate others economically, militarily, culturally, and politically because of the nature of the environment. He particularly noted that the harsh environmental conditions (extremely cold winters) in Europe forced the Europeans to be very innovative in order to survive in this climate.

As such, they came up with superior approaches of survival in agriculture, and military. The economic and military superiority made it possible for them to have significant influence on other countries politically and culturally. These are the ultimate reasons why they dominate the world (Gault 2010). The proximate reasons were the need to conquer the world through colonialism that made it necessary for them to use their military and economic power to influence cultural and political structure of other countries around the world.

Innovation played a very critical role in advancing the dominant civilization over others. A good example was the military sector. Professor Diamond says that Europe was able to rule the world for over 200 years because of its highly innovative weapons. The only way of subduing the subjects in their colonies was to use superior weapons. Their innovation in the transport sector also helped them in moving their military personnel from one region to another with ease.

I agree with his conclusions that environmental factors played a critical role in making Europeans more innovative than those in sub-Sahara Africa and parts of Asia. These factors made it possible for the continent to dominate the rest of the world (De 2006). The industrialization in the West can be considered an ultimate reason why the civilization spearheaded by Europeans was able to dominate the world. They had to find more raw materials for their companies hence they had to colonize other parts of the world to control these resources. Appendix 1 shows the major colonies where these countries obtained raw materials.

The proximate reason why this European powers’ culture remained influential was their spread of Christianity around the world in places where they colonized. By using religion, they were able to significantly reduce resistance among the communities they colonized. They intertwined their Christian beliefs with economic benefits. Those who believed went through school and were able to speak like the Europeans.

Innovation and Regional Development

Lee Kuan Yew, the founding father of Singapore, argued that Singapore is not as entrepreneurial as Hong Kong. His thought must have been influenced by the fact that Singapore’s rapid development was government-driven instead of being individual investment-driven economy. He felt that in Hong Kong, it was the private sector that was pushing the rapid development of the economy.

The innovative strategies used in Singapore have a number of similarities with those used in the United Arab Emirates. In both cases, the government is playing a central role in enhancing innovation and development. However, the government of the United Arab Emirates has a greater control over the country’s economy than in the case of Singapore. The greatest impediment to improvement of innovativeness in Singapore and UAE is that both countries are yet to fully equip their institutions of higher learning and promote local production of high-tech products such as machines. These countries can solve this problem by trying to invest in the local universities and promoting locally-manufactured products in the local market.

South Korea is a better choice to compare UAE with in terms of innovation because it has already overcome the hurdles and is now competing favorably with developed economies in technology.

According to Michael Porter, for a country to be innovative, it must embrace localized processes when looking for solutions to the environmental problems. Looking for external solutions to solve the local problems cannot yield fruits and it kills innovativeness. Singapore and South Korea have been identified as good examples that can be used by UAE as it tries to move the economy to the next level. In terms of Global Competitiveness Index, the three countries share a common factor in that they are currently experiencing rapid development in this measure. However, Singapore scores much better in this measure and is followed by South Korea (Marklund, Vonortas, & Wessner 2009). UAE comes last when compared to the two.

Global Innovation Index is another measure that can be used to compare United Arab Emirates with Singapore and South Korea. Using this tool, one is able to analyze how a country uses innovation to spur economic growth, productivity, and job creation. UAE, Singapore, and South Korea have been using innovation in transport and communication to spur economic development and create jobs. However, UAE has majorly focused on the transport sector while South Korea has been keen to promote its technology-based industries such as the electronic sector. Singapore on the other hand has a highly diversified economy compared to the other two countries.

The Hofstede cultural dimensions can be used to compare these three countries. The figure in appendix 2 may help in understanding this concept further. It is clear that UAE has the highest score in power distance (90) followed by Singapore (74), while South Korea has the lowest (60). UAE also has the highest score in individualism (25), followed by Singapore at 20, while South Korea has the lowest score of 18. When using masculinity as the measure, UAE has the highest score of 50, followed by Singapore at 48 while South Korea has a score of 39.

This index shows that uncertainty avoidance is very high in South Korea (85) followed by UAE (80) while Singapore has the least (8). South Korea has the best score (100) in long-term orientation, followed by Singapore (72) while UAE comes last with almost a zero score. In indulgence, Singapore comes first at 46 followed by South Korea at 29 while the score of UAE in this measure is negligible (Link 2014).

The analysis conducted in the section above shows that UAE has not achieved the level of innovativeness that may enable it to achieve economic progress at the required pace. This may have a negative implication on the country’s economy in the future. It is recommended that the government should invest a lot in the field of education, science and technology to promote innovation among the locals. Instead of the government being the leading player in most of the industries, it should allow the private sector to stimulate economic growth by creating an enabling environment.

Organizational-Level Innovation

The Juemirah Group will need to embrace a number of strategies and tactics to become more innovative. Employees-empowerment is one of the most important strategies for this diversified firm. It will involve ensuring that employees have the right skills and expertise in their respective areas that can enable them to come up with new ways of addressing the current or emerging problems, especially in the hospitality industry. They may be taken for regular trainings to enhance their skills.

The Juemirah Group’s human resource manager will be fully responsible for this task. He will ensure that employees are taken for regular trainings or sponsored for further studies if necessary. The main resource needed to achieve this will be money to hire the experts to train the employees regularly. The amount of money required will vary from time to time based on the training needs and environmental factors. Creation of an enabling work-place environment where the top managers can easily interact with the junior employees and share ideas that can help take the Juemirah Group to the next level is also important.

Having an open-door policy will make it possible for ideas to be shared within this company and enhance positive transformation (Cantwell & Molero 2003). This strategy does not need any financial resource to be implemented other than the employees and their managers. It requires the top managers to engage the junior employees when coming up with policies.

Creation of focus-groups within various departments is another tactic that the management of the Juemirah Group should consider. Employees working in the customer-service department, or any other department within the firm, will form a focus group where they can discuss issues affecting their department and come up with the possible solutions. The line managers can be the leaders of each group.

The line managers will be coordinating with the departmental heads so that if resources are needed to implement any innovative strategy then it can be availed. These teams will need regular on-job trainings and necessary equipment that will enable them to coordinate their activities instead of working from an individualistic perspective (Abbing 2010). Talent-search can also help in improving innovation within the Juemirah Group. In this context, the top management will communicate with its employees about a program that seeks to identify talents among the workforce. As such, the employees will be advised to try to come up with innovative ways of addressing common tasks as a way of demonstrating their talents.

The general manager of the Juemirah Group should be fully responsible for this program although he can delegate responsibilities to departmental heads. The Gantt chart 1 summarizes these activities and indicates their timeline.

Individual-Level Innovation Strategies

Universities play a significant role in enabling the learners to be more innovative than they would have been if they had not gone to these institutions of higher learning (Abbing 2010). Universities empower learners to conduct self-analysis to identify inner capabilities that one never realized he or she had. It provokes critical thoughts among the learners and enables them to have a new perspective towards life in general (Holmquist 2012).

It has a massive impact in terms of enabling the students to understand the challenges in everyday life and how innovation can be used to address these challenges. I believe I am a highly innovative student who often tries to find various ways of addressing academic and social problems. Before joining graduate program, I believed that innovation was only common among the experts in the field of technology hence I did not take it seriously. However, now I strongly believe that I have a role to play in developing unique solutions to the problems that my society faces. I believe that after this program, I will be an innovative individual capable of working with different people in different fields to come up with common solutions within an organizational setting or at the national level.

The metrics that I shall use in measuring my level of innovation will be life and academic skills. I will want to see a difference in the approach I used in the past to address life and academic issues and that which I will use after this program. The Gantt chart 2 shows the action plan and timeline of the activities that I believe should be implemented to make me more innovative than I was before entering the graduate school.

List of References

Abbing, E 2010, Brand-Driven Innovation: Strategies for Development and Design, AVA Academia, Lausanne.

Cantwell, J & Molero, Z 2003, Multinational Enterprises, Innovative Strategies and Systems of Innovation, Edward Elgar, Cheltenham.

De, M 2006, Innovation Strategies in Interdependent States: Essays on Smaller Nations, Regions and Cities in a Globalized World, Edward Elgar Pub, Northampton.

Gault, F 2010, Innovation Strategies for a Global Economy: Development, Implementation, Measurement and Management, Edward Elgar, Cheltenham.

Holmquist, L 2012, Grounded Innovation: Strategies for Creating Digital Products, Elsevier Science, Burlington.

Link, A 2014, Public/Private Partnerships: Innovation Strategies And Policy Alternatives, Springer, New York.

Marklund, G, Vonortas, N & Wessner, C 2009, Innovation Imperative: National Innovation Strategies in the Global Economy, Edward Elgar, Cheltenham.

Appendix 1: Major colonies where Europe obtained raw materials

Appendix 2: Hofstede cultural dimensions model

This model provides six dimensions of national culture as discussed in this paper in section 2.

Appendix 3: Gantt chart 1- How to improve innovation at the Juemirah Group

As shown in the above chart, this program will be organized to run after every three years. Each of the activities identified in the paper will be expected to take six months each. The last six months will involve re-evaluation of the entire plan to address weaknesses and to ensure that implementation is successful.

Appendix 4: Gantt chart 2

As shown in the above appendix, the personal development plan will be divided into six sections. The first four sections will be accomplished within the first year in a quarterly basis, while the last two sections will be accomplished within the second year.

Background

Appearing in the world’s renowned newspaper “The Economist”, the article “Innovation Pessimism: Has the Ideas Machine Broken Down?” sheds light on the factors that may have contributed to the stagnation of the global technological advancements and subsequent economic growth in recent decades. This paper summarizes and analyzes the article using the framework of supply and demand.

Summary

In summary, the article suggests that stagnation may have arisen due to (1) lack of intensive growth that is fuelled by the discovery of ever better ways to utilize workers and resources to allow continuous improvement in income and welfare as well as enable an economy to grow even as its population decreases, (2) lack of upcoming inventions in spite of heavy investments in education and research activities, and (3) slow pace of economic growth and progress compared with that of the early and mid-20th century (“Innovation Pessimism” 2-3).

Analysis

In using the supply-demand paradigm, it can be argued that lack of intensive growth in the developed world is caused by lack of supply of the needed technological advancements to drive growth since the demand for better ways of doing things is still there.

Alternatively, it can be argued that the supply of technology is presently there as witnessed by recent advancements in information and communication technology, but the growth effects of these advancements will be witnessed years to come.

Although America’s productivity performance since 2004 has plummeted compared to growth projections of the early and mid-20th century, chances are that recent growth in information technologies will surface in the future as research demonstrates that “the lag between investments in information-and-communication technologies and improvements in productivity is between five to 15 years” (“Innovation Pessimism” 4).

Such an orientation, however, lends credence to the fact the supply of strategies that could be used to achieve intensive growth and productivity improvements is not always informed by demand. The second line of analysis would be to explore the disengagement between the lack of upcoming innovations and heavy investments in research under the supply-demand paradigm.

The authors are clear that, in recent years in the developed world, there exist “unconvincing appeals to the number of patents filed and databases of innovations put together quite subjectively (“Innovation Pessimism” 3). This acknowledgment implies that the supply of new methods of doing things has been an ongoing exercise in the developed world, but these innovations cannot be termed as truly fundamental to fulfill the demands of the economy and spur productivity improvements, leading to growth stagnation.

Consequently, in my view, recent innovations and subsequent patents for the innovations have not automatically led to economic growth in the developed world. Extant literature demonstrates that the urge to develop innovation strategies originates “from increasing international competitive pressures, whereby it is clear that developed regions can only compete with low-wage developing world by successfully developing new, innovative products and production processes, improving quality and achieving productivity gains” (Tsipouri 3).

This view reinforces the article’s standpoint that the economic progression of developed countries has somewhat stagnated in recent years due to lack of break-through innovations compared to those that happened in the early and mid-20th century. There has been a noted upsurge of property rights as individuals come up with new innovations and patent them to prevent misuse, but the supply of these innovations is yet to fulfill the demand that is there to spur productivity gains.

It is therefore clear that patents and property rights for new innovations are good motivators for the creation of new products, but the problem lies in the fact that these innovations are in their present form unable to satisfy the demand for fundamental and break-through technological advancements to drive the economic growth agenda in the developed world (“Innovation Pessimism” 4-6). For developed countries to continue gaining continuous improvements in their economies, therefore, they must develop a balance between demand and supply.

Works Cited

“Innovation Pessimism: Has the Ideas Machine Broken Down.” The Economist 12 Jan. 2013: 1-6. Print.

Tsipouri, Lena. Innovation Strategies Articulating Supply Side and Demand Side Aspects. 2013. PDF file. Web.

Attention gather

America has established itself as a model nation in the 20^th and 21^st century. Great achievements seen today on the global stage have been credited to the country and as such making it an undisputed leader. The American culture is one that prides itself in placing a high value on quality with the country creating a global image that projects it as a one where fake products rarely see the light of day (Gilpin 33).

Introduction to the topic

The U.S. has been the greatest advocate of Capitalism from the Cold War period when wrong social, economic ideologies were being bandied around by communist states. It is imperative to realize that the burden to shape up the world is not easy and that it requires stable leadership. Democratic values together with sound economic schools of thought are the best prescription that the world needs for the long term purpose. These vital facets can be found within the stable American governance system.

Relevance statement

The American people are always keen on the quality of the products they buy. They also tend to value reputation and will promptly reject the products of a company that becomes associated with unethical practices. Such tendencies on part of the Americans explains the reason for exploring the the need to purchase American goods.

Thesis statement

Quality and timely innovation characterize the American culture and its products, offering a strong reason for one to consider American goods over most of the rest.

Credibility statement

The sources used in this speech are from credible sources that include peer reviewed journals, books and renowned websites that have built a reputation for providing reliable information.

Preview

The position of the United States of America as an economic giant has been put under threat by emerging nations like China who have eaten into America’s economic sphere. It is imperative to note that America’s greatness has been achieved through a powerful military which is backed by a strong economy. Therefore, it is right to postulate that the United States of America achieved its dominance through a strong economic backbone that was fuelled by industrialization and agriculture (Mander 72). A weakened American economy is not good for the nation and the world as a whole because it destabilizes the achieved balance on the global stage. China comes up as a great challenger to everything American while, on the other hand, American technologies and inventions remain the best.

Problem

China is coming up as the biggest rival that the United States of America has ever faced since inception with a stable GDP growth since 1960 (Trading economies par. 3). The Chinese economy is fully centralized and enjoys the benefits of economies of scale in production (Shin 248). Although China has evolved from a socialist state into a capitalist state, its values as a nation cannot be trusted to sustain the necessary world order.

The cause

The Chinese government has induced big manufacturers around the world including America’s largest manufacturers into outsourcing their work to China because of cheaper production costs (Shin 248). The move has had a counterproductive effect on the American economy because it has provided affordable products for consumers. At the same time, the move has deprived the people of employment opportunities as American manufacturers run to other countries. In basic terms, there is imminent collapse of the American production industry because of China. A stronger China in economic terms means that it might one day catch up with America and even dominate the world (Jarreau 285). The idea to buy American products is intended to empower the American working population that contributes significantly to economic growth. It is unimaginable to have a country like China overseeing the world affairs with its human rights record. As such, a strong campaign to buy American products will ensure that power remains in good hands.

Solution

There is a need to take advantage of the fact that American inventions are the best. A look at all the leading technologies in the world would trace 90% of their origin to America. The U.S. is the leader in setting technology trends used worldwide (Chakravarty 13). Apple products remain outstanding American goods that are the proof of quality and innovation that should convince anyone to buy. A comparison between Apple Inc.’s iPhone and the Samsung phone has proved that the iPhone stands out. The recent recall of Samsung note 7 phones due to battery defects has validated American products as being the best on the market because such recalls have not been heard of when it comes to Apple products.

The best alternative in accessing quality products for consumers is through insistence on getting the best value for their money, something that they can be sure of it they opt for the American goods over the others. When products fall below expectation, it is the consumer that is cheated on confidence that they had built (Mander 73). American standards do not allow such instances to happen and when they happen, adequate measures are employed to correct the situation. The need to buy American products is as such borne out of the confidence that American manufacturers have built over an extended period by basing on strong standards.

Conclusion

The “buy America” campaign is meant to remind consumers about the value that they stand to gain from the American market. Globalization has opened the market to both regulated and unregulated goods whose quality is suspect. For this reason, there is a need for consumers to understand where they can obtain goods and services with certain quality. American products and services remain uncompromised and offer the customer value for their money.

Works Cited

Chakravarty, Anindita. “Choice of Geographical Location as Governance Strategy in Outsourcing Contracts: Localized Outsourcing, Global Outsourcing, and Onshore Outsourcing.” Customer Needs and Solutions, vol. 1, no. 1, 2014, pp. 11-22.

Gilpin, Robert. The Political Economy of International Relations. Princeton University Press, 2016.

Jarreau, Joachim. “Export Sophistication and Economic Growth: Evidence from China.” Journal of development Economics, vol. 97, no. 2, 2012, pp. 281-292.

Mander, Jerry. The Case against the Global Economy: and for a Turn Towards Localization. Routledge, 2014.

Shin, Hyun-Song. “The Second Phase of Global Liquidity and its Impact on Emerging Economies.” Volatile Capital Flows in Korea. Palgrave Macmillan US, 2014, pp. 247-257.

“Trading Economics.” China GDP, 2016, Web.

The main problem raised includes that of the use of machinery and modern innovations in the production of commodities (Marx, 1906). The author strives to bring out an argument that is crucial in identify and clarifying whether the use of machinery has, in any way, helped in improving working conditions.

According to the author, the capitalist system is where the employee works for few hours while using machines in the workplace (Marx, 1906). In addition, the employees produce more when using machines and yet they receive little pay for their work (Marx, 1906).

The author’s argument focuses on the discussion that machines can be regarded as a means with which capitalists produce surplus value. Another key argument raised by the author focuses on the mode of production, both in the manufacture and the modern industry (Marx, 1906).

The author contends that the revolution in the production mode starts with labor power in the manufacture while, in modern industry, it starts with the instruments that deal with labor (Marx, 1906).

Another conclusion that the author makes in the text includes the argument that machines perform the same duties as those performed by human beings (Marx, 1906). As discussed by the author, the modern industry considers machines as the key tools to be used in the production of goods.

The modern world has developed to such an extent that machines can be used in the production of other machines (Marx, 1906). The author gives a historical account of the development of machines over the years (Marx, 1906). The author concludes that the number of implements that can be used by a human being tend to be limited to the body organs.

Thus, a human being may not be capable of operating many machines at the same time (Marx, 1906). On the invention, as well as advancement of machinery, the author states that, in Germany, there had been attempts to have two spinning wheels work with a single spinner (Marx, 1906). However, this turned out to be impossible.

The author contends that it is the discovery of a treddle spinning wheel that had two spindles and other discoveries, which had an effect on machinery development (Marx, 1906). The author discusses the various ways through which machines could be driven in industries. For example, the Arkwright throstle-spinning mill could be turned by water.

The text also explains the invention of the prime mover, which could be driven by both water and coal and whose power could be controlled by humans (Marx, 1906). The author contends that the conversion of tools from manual to mechanical implements played a crucial role in the advancement of the machines (Marx, 1906).

This is because the motive mechanism could be driven by other machines, hence allowing it to drive more machines than in the past (Marx, 1906).

The author concludes that, in a machinery system that can be regarded as real, machines of various kinds supplement each other in the production process (Marx, 1906). This enhances the division of labor in the manufacturing process, whereby various machines and various workers operate the machinery at various stages in the production of a commodity (Marx, 1906).

Another issue that the author has tackled includes how the machines supply the materials to each other in the production process (Marx, 1906). This is especially the case in commodities, which require various machines in their production. According to the author, the essence of the factory system is to increase production in the industries and ensure maximization of profits (Marx, 1906).

Reference List

Marx, K. (1906). Capital: A Critique of Political Economy. New York: Modern Library.

The article acknowledges that currently, the rates of innovativeness have increased but limited to the technological field of study (The Economist par. 1). Governments and several other research institutions are spending trillions of dollars in research and development.

This is what has given rise to the current technological advancements in computing, telecommunication and networking. In comparison to the 19^th and 20^th centuries’ innovations that were done in diverse fields, the concentration of current innovations in one field has made other fields to be ignored in terms of development. This has greatly slowed down the economic advancement of the current world.

The main challenge identified is the level of specialization that has been witnessed in the field of innovation (The Economist par. 2). The article asserts that increasing the areas of innovativeness will enhance economic growth.

Furthermore, the article appreciates that the current economic development is not as rapid as it was during the era of industrial revolution. This has been is attributed to other market forces. Such forces include government policies and the current economic crisis.

Innovativeness is currently at its highest peak. Since innovation is a key contributor to economic development, the present economic development is on a steady rise. This is largely due to the use of more efficient economic principles of development that have been advanced by technological improvements and innovativeness (The Economist par. 2). The modern world has witnessed increased technological advancements.

These innovations have positively influenced efficiency in the production sectors and therefore enhancing economic growth and development. Furthermore, there is increased connectivity around the world due the use of internet and mobile phones (The Economist par. 4).

The latter has resulted into globalization that has equally widened the market size. In addition, the current economic developments have resulted into the improvement of the overall living standards compared to the last two centuries. The modern world has elaborated and sophisticated systems of monitoring the economic processes. Consequently, the best strategies have been used for economic growth.

However, the current development has been slowed down as a result of specialization. The overconcentration of innovativeness in technological advancement has slowed down the economic growth in the 21^st century (The Economist par. 7). The sustainability of the current technological advancements is unpredictable since most sources of energy are non-renewable.

The use of petroleum as a major source of energy is also threatening the sustainability of the environment. The governments across the world are not investing enough in minimizing greenhouse gases. Increased environmental degradation has greatly affected economic development. Moreover, inadequate innovations in these fields have slowed down economic development.

Furthermore, very little is being done in the management of agriculture which is a major economic activity. This demonstrates how several other fields of economic development have been left behind in the quest for global progress.

Apart from the limited innovations, there are other economic impediments that have significantly affected economic development. For instance, the current government systems have complicated policies and regulations.

The latter is a major impediment towards the implementation of innovations that have the capability of enhancing economic development (The Economist par. 8). In addition, the current economic instability has also slowed down the economic development. There are several economies that have been weakened by the recession period.

In summing up, it is pertinent to reiterate that economic growth is dependent on myriads of factors apart from innovation and technological advancements. Currently, the slow pace of economic development can be attributed to the limited scope of innovations that have impeded economic diversification.

Works Cited

The Economist. Growth: The great innovation debate. New York, NY: The Economist Newspaper Limited, 2013. Print