Most people have little idea about what it takes to create a job in any country — especially in the United States.The really good jobs and businesses are a product of education, creativity, dedication and money. All that is summed up in the term R & D — Research and Development. It is in this arena that the United States has built the dominant world economy. The early development of the automobile, the airplane, computers and, more recently, cell phones and i-Pods have set the stage for the highest GDP in the world.
Reports from the U.S. Department of Labor this week revealed a 4.7 percent unemployment rate in the last period. That is currently the lowest rate of any of the developed countries, and jobs creation has been higher than in Europe or Japan. Jobs creation for this cycle to date has come mainly from increased demand. Consumer spending has driven the rebound. Many analysts, however, say that any further progress will have to be driven by capital spending. That spending must come from the corporations. And, capital spending must be preceded by R & D. New goodies do not just happen onto the shelves of the stores — they must be developed over an extended period of time with a lot of time, sweat and money invested in them.
The cycle for something new to buy in our world starts with an idea. From there it goes through stages of research, testing, development, more testing, more development and, finally, production. In any growing company, there are always many ideas on the back burner. Managers, designers, marketing people and others always have ideas for producing something which they think people will want and use. Getting them to the market takes resources and a lot of money.
Fortunately, corporate America has a lot of money. Cash-on-hand for these companies is approaching one trillion dollars. If you are not accustomed to looking at zeroes, that is one thousand billion dollars. Finally, they are beginning to spend this money and it doesn't always go far. For example, a work station in a pharmaceutical company averages 300,000 dollars. A work station in a semiconductor lab will average 200,000 dollars. That is a lot of money to put just one more person to work.
That spending is happening now and it is the forerunner for more jobs in the future — meaningful jobs. When the production and development stages take place, the jobs come easier. Stations for technicians are only about 75,000 dollars and then production work stations can be set up for about 40,000 dollars.
L. Dean McGowan is Sr. VP Investments, UBS Financial Services, 5080 Spectrum Dr. Ste 1000W, Addison Tx 75001; Ph 972-450-4322, 1-800-288-1515 (U.S. & Canada); Toll free from Mexico 001-800-010-1323. McGowan will be in Guadalajara February 16 and 17 at the Holiday Inn Select. He will be in Ajijic at La Nueva Posada February 18-24. To make an appointment, call his office. There will be an investment workshop Monday, February 20 at La Nueva Posada Hotel at 10 a.m. The public is invited.
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