The factors that affect the US business from a technological, economic, political, ecological and social perspective

Running head: THE REMOTE ENVIRONMENT 1 

The Remote Environment 

There are significant changes that have taken place recently in the United States. The changes have affected the economic, social, technological, political and ecological environment. The remote environment consists of factors that are beyond the control of an organization or those that originate beyond the scope of operation of any firm. Understanding the remote environment can be helpful to the firm as they can inform decision making and help them formulate appropriate strategies that can help the firm achieve its objectives. The following section discusses the factors that affect the business from a technological, economic, political, ecological and social perspective. 

Technological 

Automation 

The USA remains a global leader in science and technology and has been at the forefront in the adoption and application of technologies, which have often than not changed the way many things are done. There has been a transfer of many jobs and even the relocation of production facilities from the USA to other countries as a result of these technological advancements (David, Gowrea& Rahman, 2018) . Even though this has had a positive impact on reducing the cost of production, many Americans remain upset as many jobs are lost. Currently, the country faces stiff competition from countries like China, India, and South Korea 

Information overload 

Worldwide, companies have realized the great value of consumer data and its commercialization. Consumers have incorporated digital devices into their lives for their daily tasks (Forbes, 2018). Soon companies will have access to, and even use personal data to no limits for personalized ads and services. This will ultimately have many implications like reduced privacy and possibly many positive outcomes. 

Economic 

Unemployment rate 

The USA boasts of the largest economy in the world in terms of nominal GDP, with major companies like Google, Facebook, Microsoft, Apple and Coca-Cola shaping and even directing the socio-economic discussions globally. However, in the year 2009, the recession resulted in the collapse of many companies with unemployment hitting a new high. This, however, changed in 2015 when unemployment rates dropped with an improvement in income levels in 2016 (David, Gowrea& Rahman, 2018) . 

Trade Deficits 

Compared to 2013, the year 2017 had a higher trade deficit because the dollar strengthened by 28% between 2014 and 2016 resulting in expensive exports compared to imports. Recent development in the U.S has contributed to a decline in the trade deficit where an increase in the exports of industrial materials, as well as soybeans, led to the lowest trade deficit in April 2018. The trade gap was $46.2 billion which was 2.1% narrower and the smallest since December The commerce department report indicated that the country was experiencing robust growth. The economy continues to report accelerated growth and will remain on a solid footing. 

Ecological 

Climate change 

Global warming is a serious issue affecting all countries around the world. Its effects have a significant influence on the population and continue to pose serious challenges to the current and future generation. Globally, the USA has the second largest greenhouse gas per capita after China (EPA, 2018). As a result of global warming, a number of effects can be seen and felt in the USA including lake and river ice melting before spring, plants blooming before time, animals shifting their habitats and reduction in the size of glaziers (NOAA, 2018). 

Tourism 

The USA enjoys an extreme diversity in geography, climate and wildlife whose combination with other factors has been a great contribution in the high number of visitors into the country with countries like Canada, Mexico, Brazil, Japan, United Kingdom and China sending the highest number of tourists to the USA (ShareAmerica, 2015). The country, however, has faced and sustained a number of weather and climate disasters since the year 1980, with 15 of such disasters being experienced in 2017 alone attracting losses of over one billion dollars in a single case and other major disruptions in the United States(NCEI, 2017). 

Political 

Tariffs 

President Trump recently imposed a tariff on steel and aluminum imports, and this is likely to increase the cost of importing such products resulting in an increase in the price of automobiles and possible layoffs. The move is likely to cause rivalry between the USA and her business partners with countries like Mexico and the European Union pledging to retaliate with their own similar tariffs against products from America (Thebalance, 2018). 

Taxation 

The new tax reform legislation in the US came into effect January 2018 and it is likely to have far-reaching implications in the macroeconomy of the country. Cuts in income tax are likely to act as an incentive to workers who will, in turn, increase their participation in the labor market. Consequently, reduction in corporate tax will act as an incentive to attract to non-American corporations to invest in the United States because of the tax attractiveness relative to other countries (ECB, 2018). 

Social 

Age distribution 

Baby boomers, who form the bigger part of the demographics of United States have started retiring. This will ultimately increase the number of elderly persons in the coming decades pushing up the dependency levels on the family members or on the government. As of 2016, baby boomers stood at 74 million compared to 71 million millennial in the same period although the figures are likely to shift by the year 2019 and the millennial overtake the baby boomers (Cilluffo & Cohn, 2018). Currently, millennial form the larger part of the American labor force at 35% with boomers accounting for 25% of the workforce as of the year 2017 (Cilluffo & Cohn, 2018). 

Marriage and Family 

Today, more than half of the adult population are married, a number that has remained relatively stable but on a drop compared to previous decades. Most Americans are getting married later and later compared to when the majority got married at their 20s. This, however, has not stopped bearing of babies before marriage as more than half of the babies are born to single mothers. Adults living without a partner or spouse in America has been on the rising up from 39% in 2007 to 42% in 2017 (Cilluffo & Cohn, 2018). 

References 

Cilluffo, A., & Cohn, D. (2018). 7 demographic trends shaping the U.S. and the world in 2018. Retrieved from  http://www.pewresearch.org/fact-tank/2018/04/25/7-demographic-trends-shaping-the-u-s-and-the-world-in-2018/ 

David, J., Gowrea, V., & Rahman, M. (2018). PESTEL analysis of the USA |howandwhat. Retrieved from https://www.howandwhat.net/pestel-analysis-usa/ 

EPA. (2018). US EPA. Retrieved from https://www.epa.gov/ 

Forbes. (2018). Retrieved from https://www.forbes.com/sites/jaysondemers/2017/12/30/7-technology-trends-that-will-dominate-2018/#b8adaa957d76 

NOAA. (2018). National Oceanic and Atmospheric Administration. Retrieved from http://www.noaa.gov/ 

Thebalance. (2018). How the US Trade Deficit Hurts the Economy. Retrieved from https://www.thebalance.com/u-s-trade-deficit-causes-effects-trade-partners-3306276 

ShareAmerica. (2015). ShareAmerica | Connect with America. Retrieved from https://share.america.gov/ 

NCEI. (2017). National Centers for Environmental Information (NCEI). Retrieved from https://www.ncei.noaa.gov/ 

ECB. (2018). ECB Economic Bulletin, Issue 1 / 2018. Retrieved from https://www.ecb.europa.eu/pub/economic-bulletin/html/eb201801.en.html#IDofOverview_Eb1