6 - A Identifying Opportunities in Economic & Regulatory Trends

6-A Identifying Opportunities in Economic and Regulatory Trends

Economic Trend 1: U.S. Manufacturing

https://www.thebalance.com/u-s-manufacturing-what-it-is-statistics-and-outlook-3305575

In an attempt to grow the American economy and create new jobs nationwide, the United States is pushing for an increase in manufacturing. In recent times, manufacturing companies have moved their factories to foreign countries in order to save money in production and wages. The article points out that a unionized American autoworker makes around $58 per hour, while a Mexican autoworker only makes $8 per hour. This is an incentive for American manufacturers to move outside the U.S. and cut their labor costs.

However, there has been a new push for American-made goods. Consumers are willing to pay more (but only a little more) toward goods that were made in the U.S., as opposed to foreign countries. This helps to grow our economy as more money is circulated internally. With the demand for American goods, manufacturers are slowly bringing their factories back to the U.S., in turn creating a need for jobs. This is where the opportunity lies.

There are many people in this country that might not have a desire to attend university with aspirations for a corporate job. However, they may want more than a minimum-wage service job, which might be all that they’re qualified for. This creates an opportunity to follow in the footsteps of some European countries and create an option for students in high school (the prototypical customer). Some countries, such as Germany, give their high school aged students a choice: do they want to go on to university and pursue a career, or do they want to graduate high school and start a job right away? If they choose the latter, they move on to a training program, which allows them to become qualified for manufacturing-type work as soon as they graduate. This program would create a section of the labor force ready and qualified to work in the growing manufacturing industry. The need for jobs would be filled, as well as the demand for American-made goods. Both would benefit the economy greatly.

The opportunity would be difficult to exploit, however, seeing that a lot of systems would have to be in place for this program to exist. Laws would have to be passed to grant students this choice, training schools would have to built for specific manufacturing skills, and manufacturing firms would have to be in agreement to move back to the States and to participate in the program.

I saw this opportunity through the experience my dad had growing up. He graduated from high school at 16 and immediately went to work for the family picture framing and art gallery. Although he was able to jump right into manufacturing, many people don’t have the skills to do so nowadays. Therefore, creating this training program, where students could finish high school alongside working towards their occupation, would give more options to a lot of people.

Economic Trend 2: Virtual Reality Retailing

https://www.forbes.com/sites/currentaccounts/2016/01/28/virtual-reality-coming-soon-to-a-clothing-store-near-you/#3a8c4db8ce3e

Technology has been changing the way we do business, and with every new development we have to learn to adapt again. With virtual reality we are able to experience 360-degree views that we may not have been to witness before. It has changed the way we experience the world, and now it’s changing the way we do business. Different industries are slowly trying to incorporate virtual reality technology into their daily business in an attempt to entice more customers. The opportunity lies in retail businesses that have already taken advantage of technological advances, like online shopping. Many retail shops don’t have a physical storefront. Consumers are sometimes wary of buying clothes or shoes online in fear that the items won’t look good on once they arrive.

With virtual reality, these retailers could continue to escape the costs of a physical store, as well as provide a service to costumers who need more assurance before clicking “submit my order”. The prototypical customers would probably be women aged 18-50 who prefer to shop online. However, this technological advance would appeal to all online consumers of any age or gender.

The opportunity would be relatively difficult because it will take a lot of work and money to implement correctly. First, companies would have to create realistic avatars that come in different sizes so any customer could use the technology. The issue with this is that every company has slightly varying sizes. A certain size at one store might fit better than at another store. So, a universal size guide would have to be implemented. Second, every article of clothing would have to be documented through virtual reality, with sizes in mind, so customers could try them on their avatar. Third, it would cost a lot for companies to adapt this new technology. There are a lot of costs avoided by keeping your business online, and the costs of incorporating virtual reality might overshadow those saved. It might not be financially wise for a lot of these companies. However, if done well, I think the payoff would be great.

This opportunity appeals to me because I tend to order more clothing and shoes online than in store. It’s fast, accessible, and I avoid the crowded malls. Sometimes it’s hard to shop online without trying on first, especially when most of the images of the clothing are on models that don’t have the same body size as you. Virtual reality could help see what the clothes looks like on you before you buy it.

Regulatory Trend 1: Medical Marijuana in Florida

http://www.sun-sentinel.com/news/fl-ap-medical-marijuana-rules-20170117-story.html

The controversial Florida Amendment to legalize medical marijuana recently passed. Regardless of what side of the bill you are on, there are undoubtedly opportunities for business with it. Like other states, there will be medical marijuana dispensaries opening, which will create jobs and income for the economy.

The opportunity I see branches off from the economic trend of U.S. manufacturing. If medical marijuana (and possibly marijuana in general) slowly becomes legalized, there are opportunities to have legal growing done as well. This could become a subsection of the manufacturing industry, and could be apart of the high school training option (the prototypical customer). It would be a new field with a lot of growth opportunities and would provide legal jobs for those who are interested in the field already. Medical marijuana has many benefits for a variety of disorders, and I believe, if properly researched with laws and regulations to keep safety in check, this could become another manufacturing and agricultural industry.

Of course there is a lot of controversy surrounding legalizing marijuana, even for medical purposes, and this opportunity would be met with a lot of resist. It would be a huge struggle to allow for high school aged students who chose the training program option, instead of university, to work in the medical marijuana industry.

Although a lot of people are looking for ways to exploit the marijuana industry through enterprising, my opportunity is based off of another unique to me. By first having the idea of bringing manufacturing training programs to American high schools, I am able to see what the legal marijuana industry could bring to those programs. I understand that many people would be against this, but for many reasons (including an entrepreneurship standpoint) this is the next step in legalizing marijuana.

Regulatory Trend 2: Ontario’s Fair Housing Plan with new 15% Nonresident Speculation Tax on single-family homes

https://www.nytimes.com/2017/08/16/realestate/house-hunting-in-toronto.html

The housing market in the Greater Toronto Area has become over-inflated with foreign buyers, just like other cities including New York City. However, the city has decided to try to prevent the bubble from bursting by implementing a new tax that hinders foreign investors. They have placed a 15 percent Nonresident Speculation Tax on single-family homes in the GTA in an effort to drive the market down. Young adults in Toronto can hardly afford to buy homes for themselves because of these foreign investors driving up the market. This tax will hopefully remedy this and allow for the actual residents of Toronto to afford living in the city.

The opportunity that exists is to bring this same tax structure to other cities with overinflated housing markets, like New York City or Miami. The people who actually live in these cities (the prototypical customer) deserve to be able to afford living there. It’s not fair for the market to get so high that the residents are being pushed out of the city.

The opportunity would probably be difficult to exploit because the tax would have to be passed, and taxes in general are not easily passed. However, residents of the cities might advocate for it so their costs of living diminishes, which would help it pass.

Being born in Toronto and having friends and family living there, I am aware of the Fair Housing tax on nonresident buyers. People who have not visited Toronto would not know about the tax or how it is implemented, and would therefore not be aware of the opportunity.