Doing Business in China with Dan PaulsonAs a boy, my family lived and farmed in a rural community. Being part of the ag community in the seventies and eighties was quite different than today. The family farm was king. Small farms produced much of our nation’s food supply. The work was hard and the days were long. As a family member, you are also an employee of the farm so early on you learn what a work ethic truly is. I would put what I had to do to earn an allowance up against any kid today.
In the nineteen-eighties, the times began to change significantly. Interest rates were at an all-time high and revenue from milk production was low. Larger corporate farms became a stronger influence making it difficult for the family farm to survive. Because of this many small farms went out of business throughout that decade.
So did this mean an end for the small farm? Not entirely. Some farmers adapted by specializing their products. Over the years organic products have grown in popularity and many small farms embraced this consumer need bringing profits back and filling a niche. However even today the market continues to change. Now more and more organic products come from other countries ever changing the landscape of agriculture.
Although simplified, the family farm is just one example of our constantly changing world of business. I also remember that as a family farmer living in a rural community, most of the business was done locally. Food was purchased at a family grocery store. Parts were bought at the local implement or hardware store and other supplies at the cooperative. To travel to the “big city” almost an hour away was a rare and special event.
Fast forward to today. I still live in the same area I grew up. While I do shop locally, many of my needs are now handled in the “big city” that is only thirty-five minutes away via four-lane highway. Beyond that, I am now able to purchase virtually everything via the internet from almost anywhere in the world. This is why we all have to think globally. Our world is constantly getting smaller and no matter what size your business is, someone somewhere else will affect on this planet it.
Our greatest opportunity as business leaders is to understand how the global market will impact our business. Trade has become a big part of our culture. The boundaries between countries are fading and our dependence on foreign markets is increasing. For example, in 2009, the US was China’s largest trade partner with over $298 billion* in volume. The US was also China’s number one export destination at $220 billion*. By comparison, the US ranks fourth in import suppliers delivering just over $77 billion* in goods and services that same year.
Unfortunately many businesses choose to think locally even as they are being affected by commerce outside our city, state or country. In order for our nation to grow, it is very important that we all understand the impact of trade and how we can benefit from it. This will require us to stop pointing fingers and blaming others when it comes to our own shortcomings in trade. The United States has been a nation of innovators. We are capable when we are determined and those who are determined will find ways to grow and prosper.
The marketplace continues to shift. Our responsibility is to at least move with it and at best move ahead of it. Just as agriculture has changed, our buying habits have as well. Instead of looking back, we must look forward. Today many small businesses in the community I live in have found ways to compete. Some actually have no local ties. Instead they compete on a world scale. The tools are before us, we just have to use them.
*Source: PRC General Administration of Customs, China's Customs Statistics
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