The U.S. Economy needs the next Apple
On this day, we mourn the loss of Steve Jobs, Apple’s co-founder and creative genius. We also mourn the loss of the innovation, perseverance and entrepreneurial spirit that Steve Jobs embodied and which once defined the U.S. economy. Apple built itself from a small start-up (i.e. 2 people) working out of a garage into a company with 300 retail stores in 11 countries and whom, at one point this summer, held the two distinctions of: 1) having more cash reserves than the U.S. Treasury and 2) surpassing Exxon Mobil as the world’s valuable company. The company used opportunities available to it within the capital markets to leverage technology to answer the everyday, yet often over looked, needs of the American consumer. In doing so, they currently employs close to 50,000 people.
Given the ongoing headwinds that the U.S. economy continues to face recovering from “The Great Recession”, it is fair to say that we could use another Apple to enter the picture (or two or three….). This is not the first time our country has been faced with high unemployment, a lackluster real estate market, weak consumer spending, sovereign debt issues and rising commodities. Yet, when faced with this adversity in the past, the U.S. response has typically been to fall back on our country’s creativity, hard work ethic and access to the capital markets to find, or build, the next catalyst to jumpstart our economy.
The U.S. economy is clearly having difficulties establishing that catalyst this time around. Part of this could be due to our belief, at Hennion & Walsh, that the United States economy is now more service oriented than manufacturing driven and service oriented economies, which thrive on technological innovation through companies such as Apple, do not tend to have the capacity to produce large numbers of new jobs. Further, it remains to be seen if any new job creations will go to existing displaced U.S. workers.
The next Apple(s) could create the type of economic expansion that the U.S. desperately searching for and start to put America back to work again. While it is difficult to ascertain which industry or sector will serve as the catalyst this time around, it would seem that, if history repeats itself, it will likely by a smaller capitalized company on the cutting edge of innovation, willing to take measured business risks and work passionately to succeed. Sounds like the original blueprint of Apple, right?