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Sunday, July 3, 2016

Why it is Important to Diversify an Economy?

Economic diversity is important for keeping cities, states, and nations adaptable and capable of competing. There is a balance between focusing on what the country does best based on its personal competencies and what is needed to keep enough variability to ensure the country can change and adapt when crisis occurs. Building stronger platforms creates a more adaptable and viable economy.

Small countries have a hard time diversifying their economies because they have a limited amount of resources and capabilities. Larger countries like the U.S. and China have greater access to resources and can create competencies in multiple areas. They can be masters of a number of different markets.

The problem we face through our political structure is that large corporations often influence economic decisions. They encourage politicians to decide on courses of actions that are advantageous to their positions. As more government resources and legislative action mobilizes in the direction of campaign contributions opportunities for diversification become limited.

It is important for governments to encourage the general platforms that lead to greater business growth without curbing political action to specific industries. It isn't that the needs of large corporations should be ignored but that the needs of the entire economy should be encouraged so that industry diversifies based on market forces.

When the platform is right where small and large businesses can compete a truer form of Capitalism exists. This system, when not manipulated, can provide great benefits and advantages to their people. Diversifying the economy is about protecting our current and long-term economic viability as the country moves into an era where globalizing forces will put pressure on American's ability to adapt.

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