While free trade is never supposed to be a zero-sum game, in a globalized world, there will always be winners and losers. Those who have the most to lose are the advanced countries that cannot keep pace with the changes in fundamental productivity seen by their leaner and hungrier developing-world counterparts.
Shervin Pishevar is one of the most accomplished entrepreneurs and venture capitalists in Silicon Valley. In a recent 21-hour tweet storm, he expounded on a number of pressing issues that are currently confronting the United States. One of the topics on which he held forth was the problems that an uncompetitive America will soon be facing in a globalized world.
Shervin Pishevar believes that the globalization of most industries is inevitable. This means that the United States will eventually be forced to trim the layers of fat that its clunky and corrupt political system has wrought throughout the land. As an example, Shervin Pishevar points to a train station that was built recently in China. The station serves a medium-sized city and will be able to handle hundreds of arrivals and departures each day. The entire train station, according to Shervin Pishevar, was completed in just nine days.
Such an incredible rate of construction is completely unthinkable in the United States. Projects like Boston’s Big Dig have made the U.S. notorious as a place where cost overruns and deadline misses are just a part of the public infrastructure landscape. But Pishevar warns that simply identifying that the problem exists will soon prove to be insufficient. That’s because train stations and other public works projects continue to bring China closer to and, in some cases, exceeding the productivity of the U.S. When China can produce steel at half the cost of American steel mills, hundreds of thousands of jobs and billions of dollars are in peril of being lost.
Pishevar believes that the United States will soon be facing a crisis of its political system. It will need to refine and reconstruct the systems that govern how it does business. Pishevar believes that many regulations will become untenable and government agencies may have to radically downsize.
Louis Chenevert had been preparing to be a success his entire life. His dream as a young child was to become the chief executive officer one day and run a prestigious business. That is exactly what he did.
He would begin attending the HEC Montréal business school where he would obtain a bachelors degree in production management. Since this is an affiliate school of the University of Montréal its prestige carried him far.
His first job after graduating was as a production general manager. Working for General Motors he would oversee the production of the Pontiac line and ensure quality control and cost-effectiveness.
In 1993 he would be hired by the aerospace engine manufacturer Pratt & Whitney. He worked as the chairman and vice President for nearly six years before he was offered the role of president of the company.
The United Technologies Corporation would pick him up there and it was in 2006 with his eight year run as chief executive officer that he would become a legend in the business world. He was able to take the stock up to $117 which was a 200% increase from the measly $37 a share it had before his arrival. During his run, the United Technologies Corporation would raise the dividend payment by 10%. They had not failed to pay dividends once in 77 years. To put icing on the cake, the United Technologies Corporation would generate twice as much shareholder return as any of the S&P 500 companies or the Dow Jones industrial.
This all occurred because he focused on diversifying the United Technologies Corporation. He continued to research and create jet engines for both commercial airlines in the military. This is why his Sikorsky unit became the largest producer of the United States Army helicopters in the world. However, he also opened up other avenues of profit.
He would acquire the escalator company Otis and use that to grow the corporate infrastructure contracts he had. He would also dedicate one of his Connecticut-based factories to produce heating and air-conditioning and refrigeration. This climate and control factory stabilized their profit.