political, legal & technological environment of usa

POLITICAL ,LEGAL & TECHNOLOGICAL Environment of United States of America

FLOW OF PRESENTATION

Political Environment- Osho Kharbanda

Legal Environment- Anmol Gupta & Ayush Gupta

Technological Environment- Barnaa L Dekaa & Anurag Chaturvedi

Political, Legal & Technological Environment of U.S.A.

POLITICAL ENVIRONMENT

Osho Kharbanda

POLITICAL SYSTEM•The oldest democracy in the world.

•Federal system: National government & States.

•National Government: Legislative, Executive & Judicial. Congress (they write U.S. Federal Law) Executive Branch (Headed by president) Judicial Branch (U.S. Supreme Court)

•50 States in total, 48 locked within continental united states. other two are Hawaii and Alaska.

Political Environment of U.S.A.Page 01

Strengths Challenges

Strong democratic setup Internal disagreements

Global Influence Slowdown of economy and social tension

Threat of terrorismUS presidential Election-8th

November 2016

POLITICAL SYSTEM


TAXATION•The overall system of taxation in the United States is progressive.

•Not only do those with higher incomes pay more in total taxes, they pay a higher rate of taxes.

•At the current time the highest total sales tax rate in the U.S. is 13.725 percent in Tuba City, Ariz. (6.6 %state sales tax, 1.125 % county sales tax, and 6 % local sales tax.)

•Federal corporate income tax is imposed at graduated rates from 15% to 35%.

•All income subject to tax at 34% to 35% where taxable income exceeds $335,000.

•The average American will pay 19.8% of their income in federal taxes this year according to the Tax Policy Centre.


LABOR LAWS•The Department of Labor enforces roughly 180 worker protection laws, ranging from pay requirements to parental leave benefits. Other protections are supervised by agencies such as the U.S. Equal Employment Opportunity Commission. Some of the key federal protections offered to employees.


Minimum wage Unemployment Benefits

Health Coverage Whistleblower Protections

workplace safety Family Leave

Social security Employment Based Discrimination

POLITICAL RISK INDEX•Till May 18th 2015. (Source: The PRS Group)

•Very Low Risk (80 to 100 points) to Very High Risk (zero to 49.9 points)


71.25

77.5

83.75

90

2011 2012 2013 2014 2015

68 69 68 69 70

79 80 8083 84

72 72 72 73 73

Global USA IndiaPolitical Risk Components Sno. Components Points

1* Government Stability 122* Socioeconomic 123* Investment Profile 124* Internal Conflict 125* External Conflict 126 Corruption 67 Military in Politics 68 Religious Tensions 69 Law and Order 6

10 Ethnic Tensions 611 Democratic 612 Bureaucracy Quality 4

TOTAL 100

CORRUPTION PERCEPTION INDEX•Till 2015. (Source: Transparency International)

•Very Clean Ranks 16th/168 in the world, India 76th.


0

20

40

60

80

2012 2013 2014 2015

36 36 38 38

73 73 74 76

USA India

•2015 sent a strong warning to the corrupt.

•The most powerful figures found they could no longer rely on their cash and connections to protect them.

GLOBAL TERRORISM INDEX•For the year 2015. (Source: Economics and Peace)

•0-0.01-No Impact, 0.01-2 Lowest Impact & 8-10 Highest Impact of terrorism.


2015

0

2

4

6

8

USA India

7.747

4.613•18 Deaths from 19 Attacks in 2014.

•Was only featured, 1 time in top ten countries most affected by terrorism during 2000-2014. India-14 Times, Pakistan-13 Times.

GLOBAL TERRORISM INDEX•For the year 2016. (Source: Reporters without Borders)

•Ranks 41st/180 in the world, India 113rd.


2016

0

12.5

25

37.5

50

USA India

43.17

22.49

•From 0 to 15 points: Good (white)

•From 15.01 to 25 points: Fairly good (yellow)

•From 25.01 to 35 points: Problematic (orange)

•From 35.01 to 55 points: Bad (red)

•From 55.01 to 100 points: Very bad (black)

LIKELY CHANGES IN POLITICAL ENVIRONMENT•U.S. Presidential election-2016 to be held on 8th November 2016.

•Major parties -Democrats-Hillary Clinton & Republicans-Donald Trump.


LEGAL ENVIRONMENT

Anmol Gupta & Ayush Gupta

LEGAL ENVIRONMENT The US is a highly regulated society. As such, people or

enterprises those want to do business in the US need to be aware of the many regulations, standards and guidelines that

may affect the sale of their products or services.

Legal Environment of U.S.A.Page 01

LEGAL ENVIRONMENT United States an extremely competitive marketplace that rewards efficiency, productivity, and integrity while mandating rigorous compliance with the nation’s complex rules and regulations.As the U.S. economy improves, the cost of doing business in the United States may rise. This would require a corresponding higher level of investment in order to compete with established domestic businesses. Federal, state, and local regulations require a thorough knowledge of tax,commercial, and labor laws.


PRODUCT LIABILITY•Insurance for everyone in the distribution chain is absolutely critical to many industries, such as food, cosmetics, toys and electrical equipment.

•Alternatively, it might be a requirement of your US vendor that you have product liability insurance. In these instances you will have little choice but to seek adequate coverage in order to protect yourself.


INCORPORATION•It is possible to incorporate a company online for US$100.

•There are also various locations in the US, such as Delaware, where incorporating can be done quickly, easily and cheaply through a law firm on your behalf.

•It is important, however, to remember the structure of your corporation in the US will have legal and tax implications, making proper legal and financial advice a sound investment.


BUSINESS REGULATORY BODIES•US Customs and Border Protection:for regulations affecting the importation of all articles into the US.

•Food and Drug Administration (FDA):for regulations relating to US bioterrorism laws and the labelling of food, dietary supplements, cosmetics,etc

•US Department of Agriculture (USDA):for ensuring that the US commercial food supply is safe, wholesome and correctly packaged and labelled

•Consumer Products Safety Commission (CPSC):for regulations and voluntary standards affecting consumer products that may pose a risk of injury or death, such as flammable products, toys, items containing lead and defective electronics.

•Environmental Protection Agency (EPA):for regulations affecting any product that may be considered toxic or hazardous to the environment such as pesticide, fungicide, rat poison or anti-microbial agents.


ANTI–MONEY LAUNDERING & BRIBERY LAWS•The United States has instituted tough sanctions against money laundering and bribing government officials in foreign nations.

•The USA PATRIOT Act of 2001 included provisions to help prevent and detect international money laundering and terrorism financing and prosecute those responsible.

•The act requires financial institutions to monitor clients’ accounts and report suspicious activity regarding the transfer of funds abroad, especially into countries where there has been a history of money laundering or terrorist activities.

•The Foreign Corrupt Practices Act (FCPA), enacted in 1977 and amended in 1998, prohibits corrupt payments to foreign officials for the purpose of obtaining or keeping business.


RESTRICTIONS ON FOREIGN INVESTMENT•Restrictions on Foreign Investment At present, there are no substantial restrictions imposed by the federal government on foreign investment in the United States.

•A few industries are, however, subject to restrictions— these include those involving the exploitation of certain natural resources, communications, shipping, nuclear and other power-generating facilities, and aviation.

•Some states have restricted certain foreign investments in certain cases, such as in agricultural land.

•The federal government, through the Commerce and Agriculture departments, imposes substantial reporting requirements for foreign investments in the United States.


CONSUMER PROTECTION•Federal and state laws protect consumers against a variety of unscrupulous business practices. Several federal and state agencies are involved in consumer protection.

•Also important to consider are federal agencies with regulations for specific industries.

•The pertinent areas of consumer protection in the United States include consumer product safety, food and drug safety, product labeling, product liability, motor vehicle safety, and consumer credit safeguards.


INTELLECTUAL PROPERTY•U.S. patent law remains the same regardless of the inventor’s citizenship.

•When individuals believe they have products that warrant patent protection, they can apply to the U.S. Patent office in Washington.

•Patents are issued to individual inventors who can then license their rights.

•Under the Tariff Act of 1930, the International Trade Commission investigates infringement claims in international trade (rather than federal patent litigation).

•U.S. copyright protection follows “original works of authorship,” giving the owner exclusive rights to sell or reproduce their work.


IMMIGRATION LAWS•A nonresident alien who wishes to do business in the United States must consider the nation’s immigration laws.

•The Immigration and Nationality Act contains the law relating to the entry of aliens and is administered by the Department of Homeland Security.

•An “alien” under the immigration laws is any person who is not a citizen or national of the United States.

•Immigrants are aliens who seek to enter the United States on a permanent basis, while non immigrants seek admittance on a temporary basis.


TYPES OF VISA•A Visas: For Ambassadors

•B Visa: For visitors

•E Visa: for treaty investors

•F visa : for students

•H1B Visa: For Professional jobs


TECHNOLOGICAL ENVIRONMENT

Barnaa L Dekaa & Anurag Chaturvedi

TECHNOLOGICAL ENVIRONMENT•Home to one third of the world’s scientists and engineers, and accounts for one third of global R&D expenditure.

•Technological innovation within the private and educational sector has been increasing, with each sector accounting for 70.0% and 14.0% of innovations, respectively

•The government’s R&D is focused on defence (58.3% of its R&D budget) and the trend may continue for the next couple of years

•ICT will also remain a driving force of the US initiative.

Technological Environment of U.S.A.Page 01

STRENGTHS AND CHALLENGES


Strengths Challenges

Strong Innovation System in place Low expenditure on R&D as % of GDP

Home to largest Global Players Declining level of competenceIntellectual Property Protection

Future Prospects Future Risks

Rising pharmaceutical Market Over dependence on private sector for patents

Significant development in emerging technologies Competition from other nations

CURRENT STRENGTHS•Strong Innovation in place


CURRENT STRENGTHS•Home to largest global players


CURRENT STRENGTHS•Intellectual Property Protection


CURRENT CHALLENGES•Low expenditure on R&D as a percentage of GDP compared to other developed nations.


CURRENT CHALLENGES•Declining level of competence in mathematics and science.


FUTURE PROSPECTS•Rising pharmaceutical market.


FUTURE PROSPECTS•Significant development in emerging technologies.


FUTURE RISKS Over dependence on the private sector for patents.

•More than 70% of the R&D expenditure in the US came from the private sector in 2008.

•This over-dependence on the private sector makes technological development vulnerable to the business activities of private enterprises.

•There is a need to reform the government’s R&D financing policies to curtail this dependence on large business enterprises and encourage small and medium enterprises (SMEs) to invest more in innovative activities.


FUTURE RISKS Competition from other nations

•Besides the competition from developed European nations, the US has been facing intense competition from Asian countries too.

•The US’ edge in instrumentation and other manufacturing sectors is being slowly overtaken by China. China was the third largest in terms of R&D expenditure in the world behind the US and Japan

•China has moved ahead of Germany, France and the UK in terms of R&D expenditure.

•Asian economies, including South Korea, Taiwan, and Singapore, have witnessed increases in R&D investment, leading to notable increases in the number of researchers. Similarly in IT services, India has emerged as a cost competitive center. In the high technology segment, Canada, Germany, Australia, Japan, and South Korea present formidable competition.


FUTURE RISKS


OUTLOOK•After accounting for inflation, expenditure on R&D is forecast to rise 1.7%

•Increasing R&D expenditure from the corporate sector indicates the innovativeness of the private sector, but the government's declining share is a matter of concern.

•R&D expenditure in educational institutes, though increasing, is comparatively less than that of other technologically advanced nations.

•Moreover, the US has to prepare itself for the increasing competition from emerging nations such as China, which are making successful forays in technology intensive industries.


Thank you Any Questions

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