Business and Economics
Since the 1920s, the US economy has been the largest in the world. In 2015, the country’s GDP accounted for 24.2 percent of the world’s total income from goods and services, and it was more than twice the size of the subsequent country, China, and almost as large as the entire EU. The country also has the largest foreign trade, despite the large domestic market. The United States is a world leader in research and development in most areas, and in the United States new trends in the economy and business, consumption and lifestyle are at the earliest. But in several important industrial sectors, the United States is no longer a world leader, and a large deficit in foreign trade and a very large foreign debt continue to grow. In manufacturing and service, computerization and automation have resulted in high unemployment among low-skilled.
Already in the mid-1900s, half of the employed were in the service industry and the United States was a leader in the development towards a service society. In 2012, less than 10 percent worked on commodity production, just under 4 percent on construction and some percent on commodity extraction and agriculture. All other employment is found in the service industries.
The United States has a market economy where the interaction between producers and consumers determines what is to be manufactured and on what scale it takes place. More than 90 percent of employment in the country is in the private sector. But the state plays an active role in strategically important industrial sectors such as the defense industry, and so does agriculture. With increased awareness of sustainable development and of the negative environmental consequences of raw material extraction and “dirty” industry, more regulation and other state and state interference also follow.
Since the 1990s, China has become an increasingly prominent place on the world market and has now crossed the US in several important industrial sectors. But the United States is still a world leader in high-tech industries such as the aerospace, defense, and pharmaceutical industries. Extremely large, private companies play a prominent role, as before, also globally. In 2010, more than a quarter of the world’s 500 largest companies had headquarters in the United States, and US foreign investment was almost twice that of any other country.
A number of conditions have worked together to give the United States such a special economic position. It is a vast country with large assets of good arable land and most of the minerals and energy needed for food supply and industrialization. Long coasts and inland waterways have enabled cheap transportation of heavy raw materials and finished products, and not least facilitated contacts and relocations. Immigrants from the 16th century onwards came with a willingness to work and entrepreneurial spirit, and gradually venture capital was invested in construction and industrialization. Already in the early 1900s there was a large domestic market, and growing demand propelled an increasingly large-scale business and new forms of production such as conveyor belts. Even then, there were very large companies with operations in various branches of business. Foreign trade was small, because both commodities and markets existed within the country and the United States pursued an isolationist foreign policy that protected its own business. Domestic policy involved private business with free competition in most respects, which promoted innovation and technological development.
Business expansion and differentiation became prominent in the northeastern United States and the Midwest. The area from Pittsburgh to the east via Cleveland and Detroit and west to Chicago was, until the 1970s, the world’s most important center for the iron, steel, machinery and transportation industry, among others. The Center for Financial Life and Research was located east of it from the beginning, in the stretch from Boston to the north and south to Philadelphia.
The United States’ position as the world’s dominant economy was most prominent immediately after World War II and up to the 1960s. Business was widened, mainly in the south and west, where economic growth became noticeable during the remainder of the 20th century and then continued after 2000. More and more of the investments went to the Sun Belt. The trend was reinforced by the emerging computer industry that was headquartered in California and by other high-tech manufacturing, such as the aerospace and pharmaceutical industries, closely related to universities and research institutes on the Pacific coast, in Texas, and on the Atlantic coast from Massachusetts to North Carolina.
The recession of 2008–09 turned out to be the deepest and longest economic crisis in the United States since the Great Depression in the early 1930s. It began as a real estate crisis. rising oil prices and deepened into a banking and financial crisis that spread to most countries with which the US had economic relations. The US economy shrank by nearly 4 percent in 2009 and unemployment rose to close to 10 percent. The federal government decided on a number of measures to stimulate business such as tax relief and infrastructure expansion. Initially, the recovery slowed, but in the mid-2010s it picked up. In 2015, GDP increased by 2.4 percent and unemployment was 5.3 percent.
|Year||Change in GDP (%)||Government debt share of GDP (%)||Budget deficit’s share of GDP (%)||Inflation (%)||Unemployment of total workforce (%)|
Source: IMF, OECD and World Bank
US agriculture and livestock production account for just over 1 percent of employment and GDP. Despite this, agriculture produces enough basic food for the entire population and the country is also the world’s largest exporter of agricultural products.
US agriculture underwent a major structural transformation during the 1950s-1970s, when the area cultivated declined significantly. At the same time, production nearly tripled between 1950 and 2005. An employed person in agriculture in 1950 was estimated to feed 15 people, while the corresponding number in 2005 was 103. The agricultural export value more than five-fold during the period, and there was also a significant overproduction periodically. This meant low producer prices and thus problems for mainly smallholders, which became even more difficult to cope with rising production costs.
About 2/5 of the US land is agricultural land. Of this, 44 percent go and an equal share of pasture. Of the approximately 2.2 million farms, the vast majority are smaller family farms. Almost half of the farmers have agriculture as their main employment and many farmer households need supplementary income.
The natural conditions for different crops differ considerably between different parts of the United States. The country encompasses both temperate and subtropical areas (Florida and the areas west along the Gulf of Mexico as well as Southern California) and tropical areas (Hawaii). Cultivation also varies as a result of transport conditions and proximity to the metropolitan areas’ huge demand for fresh food.
The United States is by far the world’s largest producer of corn and soybeans, mainly used as animal feed. The crops are primarily grown in the so-called corn belt, which has its center in Iowa, Illinois and Indiana. Further west, where the climate is drier (from North Dakota to Kansas), wheat cultivation dominates instead. The US comes in third in the world in terms of wheat cultivation. The same goes for cotton. It is still an important crop in the Southern States; the largest production is in Texas. After a downturn, cotton cultivation has increased since the 1990s, as consumers are now increasingly choosing cotton over artificial fiber.
Tobacco cultivation, on the other hand, has greatly reduced in recent decades and is mainly found in Kentucky and North Carolina. In the arid and mountainous states of the west, agriculture is mainly conducted in the valleys as irrigation is required. In the United States as a whole, however, only 1/8 of the agricultural area is irrigated.
Fresh fruits and vegetables come from Florida, especially during the winter months and 2/3 of the citrus fruits. The remainder is grown in California and from there also comes more and more wine every year. The United States is one of the two largest producers in the world of most kinds of berries, fruits and vegetables and is a world leader in fresh milk and beef and poultry meat.
The Great Lakes region and neighboring part of the northeastern United States have the best conditions for raising dairy cows and are the center for the production of milk and dairy products. In the “corn belt” south of this, pig breeding is extensive. In the drier states to the west and southwest, carnivores are kept on the vast pastures. The high standard of living in the country means high consumption of animal products, and it increases every year. But increased awareness of dangerous cholesterol levels has led to a fall in demand for some animal foods.
Since the beginning of the 1980s, the use of artificial fertilizers has remained at about the same level, partly as a result of better knowledge of farming methods and the consequences of eutrophication. The use of chemical pesticides decreased during the 00s. The use of gene-refined seed has increased; In 2010, such was used for almost all cultivation of soybeans and cotton and for most of the maize cultivation.
The capital contribution per unit area continues to increase, but now relates mainly to advanced aids, e.g. computers and robots. Through contract cultivation and contract breeding for large food groups at predetermined retail prices, the financial risks to the farmer decrease when there are strong fluctuations in commodity prices on the world market. It is estimated that 1/3 of the total production value comes from such contracted operations.
US agriculture is subject to widespread federal influence. However, direct price support and government purchases have been used only exceptionally and since the 1970s, agricultural policy has been clearly market oriented. Export of surplus has been stimulated, as has contract cultivation, which means that the market has a greater impact on the farmers’ choice of crops. Since 2002, farmers have been paid to use methods that conserve soil, water and natural plant and animal life. Growers also receive compensation for removing less profitable areas from production.
Agricultural products account for only about 1/10 of the US total export value, but exports still play an important role in the US agricultural industry. The most important export goods therefrom are soybeans, maize, wheat, chicken meat, cotton and pork. The high productivity and wide breadth of what is grown mean that agricultural imports are small and most include quite special branded products such as wine and other alcoholic beverages, cheeses, cakes and special meat products as well as things that, after all, cannot be grown in the country such as natural rubber, coffee beans and bananas.
The United States is the world’s largest producer and consumer of forest products. When Europeans first came to the area that is today’s United States, the forest area covered about 400 million hectares. Their colonization meant extensive forest clearing in the east, and especially in the 19th century, forests disappeared when the land was cultivated. In the 1900s, forest harvesting continued, but large forest areas were also planted in the southern United States and elsewhere, for example, on less profitable agricultural land in the Northeast. Overall, the size of the forest land hardly changed during the last century. In recent decades, forest area has decreased and now amounts to approximately 300 million hectares, which corresponds to 1/3 of the land area. Warmer climates with more drought have made the forests more susceptible to diseases and pest infestation.
One third of the forest land is owned by the federal government, and most of it is native coniferous forest in the states farthest west. They are referred to as National Forests and are used both for commercial forestry and for recreation as well as to ensure water supply and rich wildlife. Conflicts of interest are not uncommon, mainly between nature conservation and commercial forestry. Länder and local administrative units also own forests.
More than half of the area covered by commercial forestry is owned by private individuals. These are usually relatively small, deciduous forests, most in the northeastern part of the United States. The small states of Maine, Vermont and New Hampshire have a nature reminiscent of Central Sweden, and there are more than 3/4 of the area covered by forests.
A third wooded area is found in the southeastern United States, partly deciduous forests in the southern Appalachians, and coniferous forests near the coasts and in the states of lower Mississippi. Large forest companies own extensive areas that have been planted for commercial use. From there, 1/3 of the annual timber production in the US comes.
The timber industry has a strong emphasis in the state of Washington at the far northwest and is also found in the large forest areas of Oregon and northern California as well as of North Carolina in the southeast. The pulp and paper industry is headquartered in the Southeast and the world’s largest paper and pulp company, International Paper, is headquartered in Memphis, Tennessee. In 2010, the United States was the world’s second largest producer of paper and paperboard in China.
The large American forest companies have to a large extent globalized. Their commitment and investments are increasing in more equatorial countries such as Australia and Brazil, where trees grow faster than in the United States. More and more timber for the American forest industry is imported from “tree plantations”, ie. monocultures with eucalyptus trees or Douglas fir.
The United States accounts for just over 3 percent of all seafood catches, ranking fourth in the world after China, Peru and Indonesia. Nearly 2/5 of the value comes from catches along the beaches and consists mainly of seafood, close to 3/5 from catches in the country’s economic zone out to 200 nautical miles and only 6 percent from fishing in international waters, ie. deep sea. The economic zone includes various marine ecosystems from arctic waters off Alaska to tropical waters around Hawaii and the Caribbean. This gives a very wide range in the direction and content of the fishery.
Traditionally, the United States’ most important fishing waters have been in the Atlantic off New England, where fishing increased sharply until the 1970s. Thereafter, an increasingly severe overfishing, especially cod and flatfish, was noticed. During the first half of the 1990s, catches were low there. Various measures have succeeded in restoring some threatened species, but not the stock of cod. However, the assets have increased on lobster, mussels and other seafood. Their catches are of great value in terms of value.
On the Atlantic coast, menhaden are fished on a large scale. Menhaden is a group of species in the herring fish family that is mainly used for industrial production of fish oil and fish meal. On the southern Atlantic coast and in the Gulf of Mexico, seafood and mackerel, both with shrinking stocks, are caught, as well as fish coming in from the deep sea, such as tuna, swordfish and various shark species. Several of these species are overfished, and acutely threatened, for example, bluefin tuna. The major fishing ports are located in the Mississippi Delta. A capital-rich recreational fishing is found on Florida’s coasts.
While overfishing has resulted in less catches along the east coast of the United States, fishing has increased along the Pacific coast. The largest fish stocks are outside Alaska, where some species of flatfish can now be caught to a much greater extent than before. Among other things, catches of seaweed have doubled. The cod fish pollock still yields the largest catches, even if halved during the 00s. Salmon is the second most important fish. Dutch Harbor on the Aleutian coast outside Alaska is the port that handles the largest catches in the entire country. Among other things, it is the center for catching king crab. In addition to salmon, south along the Pacific coast, fish are mainly fished for sardines, mackerel and anchovies, and halibut. Some species are there on the verge of overfishing.
The trapped volume of fish and seafood has stagnated during the 1990s, and over the last decade production has decreased by “wild” fish. Control is now meticulous for the United States to achieve ecologically sustainable fishing. Responsibility for preventing overfishing and restoring damaged ecosystems lies with the states in terms of shoreline fishing and shellfish catching, and with federal agencies regarding fishing in the economic zone further out. For endangered species there are restoration plans, and for a number of important species, the measures have resulted in a negative change in increasing fish stocks, such as outside New England and California.
Lake fishing is insignificant and occurs mainly in the Great Lakes and in the Mississippi water system. Fish farming is also of little importance. All in all, fishing can to a lesser extent meet a growing demand for seafood in the United States. Imports are increasing every year and the US is now the world’s third largest fish importer, after EU countries and Japan. Imports come mainly from China, Vietnam and Thailand and from Canada.
Mineral and mining industry
The United States has deposits of many metals and other minerals that have had a major impact on the country’s economic development. Large-scale ore mining has been going on for a long time, and many deposits have fallen. Low mining costs and cheap ship transports have meant that since the 1960s it has been cheaper for the United States to import the raw materials than to continue to break low-cost domestic occurrences at high costs. At the same time, major American mining companies have invested in mining in many other countries.
Extraction of both metals and other raw materials used in, for example, the construction and chemical industries is closely dependent on the business cycle. Operations therefore shrunk during the economic recession of 2008–09 but then showed some upturn. In addition, there has been a large increase in demand in China, which has resulted in sharply rising world market prices for most base metals. This has meant that closed mines have once again become profitable and therefore reopened. At the same time, stricter environmental regulations have affected mining operations in some cases, mainly in the case of open pit mining. Rising energy costs also limit the domestic mining industry.
Of the value of the entire US metal extraction in 2011, 30 percent came from gold, 27 percent from copper, 16 percent from molybdenum and 5 percent from zinc. The largest deposits of various metals are found in the Rocky Mountains. As for the country’s entire mineral production, Nevada accounted for 14 percent of the value, followed by Arizona (11 percent), Minnesota (7 percent), Utah (6 percent) and Alaska (5 percent).
The United States is a net exporter of a few metals. To meet the domestic need, imports of several important metals are required, and it comes mainly from Canada and countries in South America. The United States is completely dependent on imports of both bauxite for aluminum production and important alloys for the steel industry as well as a number of more rare metals required in modern high-tech industry. Dependence on imports has increased significantly over the last 30 years, as it has done in other industrialized countries, and competition for such raw materials from third world countries is intensifying.
In 2011, the United States was the world’s third largest producer of gold, after China and Australia, with 9 percent of world production. At that time, the annual production had been around 230 tonnes for a number of years. Gold is mined in 13 states, but 80% comes from Nevada. Another 10% comes from Alaska, where it is mainly found in sand deposits (“sink gold”) and is extracted on a large scale in several places. The US is a net exporter of gold.
In 2011, the United States accounted for 7% of the world’s copper ore mining. Recovery had then been at about the same level for a five-year period, while increasing in the world as a whole. The producers were then in fourth place, after Chile, Peru and China. Occurrences are found in the Rocky Mountains, mainly in the southern part, and Arizona, Utah and New Mexico account for virtually all production. Large copper smelters are adjacent to this. The domestic quarry covers 2/3 of the country’s need for refined copper. The remainder is imported mainly from Chile, Canada and Peru.
Domestic deposits of iron ore played a major role in US industrialization. Iron was mined to a great extent until the mid-1900s, both in New England and the southern Appalachians as well as the Upper Lake. But the high-quality iron ore was drained and the extraction of low-grade iron ore became increasingly uneconomical. For the United States it was cheaper to import iron ore then. Iron ore is now mainly mined in Minnesota and Michigan. The largest occurrence is in the Mesabi Range in northeastern Minnesota. In 2011, the United States accounted for 2 percent of world iron ore production and ranked seventh among the world’s countries in mining. The US imports a large proportion of the steel to the engineering industry.
The alloy metal molybdenum is mined in the states of Colorado, Idaho and New Mexico. The United States has the largest extraction (26 percent of global production in 2011) after China, and is the net exporter thereof. Furthermore, the United States ranks fourth in the world in the production of aluminum, despite the fact that the country lacks domestic extraction of the bauxite raw material. The raw material for the aluminum smelters consists partly of bauxite from mainly Jamaica and Guinea, and partly of aluminum scrap.
When it comes to raw materials for the chemical industry, there are the world’s largest deposits of soda (sodium carbonate) in Wyoming. In addition, the United States has large deposits of salt. For the production of artificial fertilizers, the country must import just over 4/5 of the potassium needed and 1/8 of phosphate. Phosphate is mainly extracted in Florida and North Carolina.
The United States produces almost all the cement used in the country. The raw material limestone is found in many of the states, and so is the cement industry. The United States ranks third in the world with 2 percent of world production, after China (54 percent) and India. (For uranium and coal, see Energy).
The United States was the world’s largest energy consumer for many decades, but was passed by China in 2009. However, per capita energy consumption is five times higher in the US than in China and twice as high as in the EU. The United States has significant assets of various energy resources, but imports of oil and natural gas have been cheap for many years. The country therefore became increasingly import-dependent, especially from the late 1990s and mainly in the case of crude oil. In 2011, however, imports of both crude oil and natural gas were lower than 12 years.
Since the mid-00s, there has been an upheaval of energy supply in the United States. Technical breakthroughs in the extraction of natural gas in oil shale have now made it possible to exploit domestic natural gas assets to a completely different extent than before. Natural gas has thus become cheaper in relation to oil and is being used more and more. The use of renewable energy sources such as biomass, wind and hydropower is also slowly increasing. In 2010, these accounted for just over 8 percent of primary energy, while slightly more was nuclear power and just over 83 percent came from fossil fuels.
Coalaccounts for just over 20% of all US energy use. The country has almost 30 percent of the world’s coal reserves, significantly more than the Russian Federation and twice as much as China. They are found especially in Alaska. Both production and consumption have increased steadily since the 1960s, except for 2008–09. The United States was the world’s leading coal producer until 1984. Now China produces three times more than the United States, and these two countries account for more than half of the world’s coal mining. The United States is the world’s sixth largest coal exporter. Coal is mainly mined in large mines in northeastern Wyoming, but also in small, deep mines in the northern Appalachians and south of the Great Lakes as well as in Texas. More than 90 percent of the coal remaining in the country is used for electricity generation (see below), while the remainder is used in the steel, paper and chemical industries.
Oil’s share of US energy consumption was between 39 and 46 percent in 1950–2005, but then declined to 37 percent in 2010. In 2006, approximately 60 percent of crude oil and oil products came from other countries, primarily from Canada but also from Mexico, Venezuela, Saudi Arabia and Nigeria. Subsequently, domestic oil production has increased. In addition, natural gas has increasingly replaced oil and oil consumption no longer increases at the same rate as before. However, the United States is still by far the world’s largest consumer of crude oil and oil products.
The United States is the world’s third largest crude oil producer. Crude oil is extracted in 31 states and offshore offshore in Alaska, California, Louisiana and Texas. About 1/4 of all crude oil is extracted offshore in the Gulf of Mexico, but after an oil disaster in the spring of 2010, production has decreased there. Leading oil states are Texas and Alaska.
Natural gas’s share of energy consumption has increased and it accounts for 25% of it. The increase in production is a result of the development of new technology to extract the methane gas contained in extensive oil shale stocks. Extraction takes place in deep shafts and requires a lot of water and also chemicals, but the use of natural gas, on the other hand, gives less environmental impact than oil does. Since 2009, the United States is the largest natural gas producer in the world. More than half of the housing in the United States and other buildings are heated by natural gas. Natural gas is extracted in 33 states, a long time ago especially in Texas, Wyoming and New Mexico. Calculations of total gas reserves show higher figures for each year, as new occurrences are found and technology is developed.
In the US, electric power has always been mainly generated in coal-fired power plants. However, since the turn of the century 2000, the role of coal has gradually decreased, but it still accounts for 42 percent of electric power. At the same time, natural gas has increased in importance, and its share is 25 percent. This is a positive shift, as natural gas produces less carbon dioxide emissions than carbon. Only just over 1% of electricity comes from oil-fired power plants. Nuclear power has long accounted for about 20 percent. Renewable energy sources are slowly gaining importance, and their share in electricity generation is 13 percent. The majority of it consists of hydropower.
The United States is the world’s largest producer of commercial nuclear energy, and most of the country’s more than 100 reactors are located in the states along the east coast and south of the Great Lakes. The power plant wreck at Three Mile Island in Pennsylvania in 1979, together with low natural gas prices, led to a further expansion of planned facilities in the future. It was not until the beginning of the 2010 century that a new reactor was being completed and possibly a few additional reactors could be completed during this decade. The existing reactors are now being utilized to almost their entire capacity. An opinion poll following the Fukushima disaster in Japan in 2011 showed that the majority of Americans were still positive about maintaining nuclear power plants but negative to nuclear energy expansion.
The United States has large assets of uranium ore, but it is low-grade, and a number of small mines have been closed over the past decade. There are harsh environmental requirements for the extraction and a growing negative opinion highlights the ecological and social conditions of the mining. The uranium is mainly extracted in Wyoming, Nebraska, Utah and Arizona as well as in Texas. Reduced domestic mining has been replaced by increased imports, mainly from Australia, Canada and the Russian Federation.
Among the renewable energy types, it is primarily hydropower that has increased in recent years and accounts for close to 8 percent of the entire US energy supply. The greatest hydropower potential is found in the Sierra Nevada and the Cascade Mountains in the west, and only about one-seventh of the entire country’s assets are expanded. The Grand Coulee in the Colorado River in Washington state is the United States’ largest dam and hydroelectric power plant and the fifth largest in the world in 2011. Wind and solar power and biofuel (ethanol) receive major contributions and guarantees from the state and are slowly increasing in importance.
For more than a hundred years, the United States has been the world’s leading industrialized country. The manufacturing industry is still the largest in the world and the United States accounts for about one fifth of global commodity production. Industry, including construction and mining, accounts for 19 percent of GDP.
With the exception of temporary declines, industrial production increased steadily throughout the latter half of the 20th century. Growth was particularly rapid during the latter part of the 1990s. However, a new decline came in 2000–01 and it was followed by a slowed growth rate up to and including 2007. The recession 2008–09 meant a sharp decline for most industries. The recovery thereafter has been slow; the only industries that have fully recovered are the aerospace and aerospace industries, biotechnology and to some extent the food industry.
Employment has changed radically. In 2000, more than 17 million worked in the manufacturing industry, in 2012 only 12 million. This corresponds to approximately 8.5 percent of total employment in the United States. In particular, the number of industrial jobs for the low-skilled has been significantly reduced, since a large part of the production in large series has been automated or placed in low-wage countries (see also Social conditions, Education). Fewer than 40 percent of those working in the manufacturing industry are engaged in manufacturing goods “on the floor”. The majority work with administration, finance, marketing, transport and also product development within the companies.
In the mid-1900s, the US steel industry was completely dominant in the world, and US Steel was one of the world’s largest companies. Steel production reached its maximum in 1969, but by then strong competitors had already emerged. In Western Europe and Japan, a modern and efficient steel industry had grown up after the war, while many American companies in the Midwest (the “rust belt”) had old facilities and high production costs. From the mid-1970s there was a sharp decline for the US steel companies.
Following a number of bankruptcies during the years around 2000, the US steel industry has been restructured and streamlined. New steel mills have been established in the southern United States, and the South now accounts for as much of the steel production as the Midwest. But in 2011, the United States came in third in the world in terms of the production of crude steel. From there, less than 6 percent came, while China accounted for 46 percent. In the US, special steel is mainly manufactured.
The heavy machinery industry, which manufactures machines and other equipment for extraction and processing of raw materials and for construction work and construction, has also traditionally had its center in the industrial region of the Midwest. The US comes here in third place in the world, after the EU and Japan, and the industry is prominent in US foreign trade. Much of the manufacturing is based on highly developed technology and the companies have a large proportion of well-trained workers. In recent years, the industry has also grown in other parts of the country, primarily in California and Texas.
Throughout the 20th century, the United States automotive industry was a world leader. In 2003, the largest production was reached, just over 12 million vehicles, but in 2006 the US was passed by Japan and 2008 also by China. Subsequently, the economic crisis led to a sharp decline in both production and demand for cars in the most affected countries. In 2011, the United States was the second largest manufacturer with 8.65 million vehicles. In terms of employment, the automotive industry is one of the most important industries in the United States. In 2010, approximately 675,000 people worked in the assembly plants and another 3 million worked on the manufacture of vehicle components.
General Motors (GM) was for a long time the world’s largest car manufacturer and one of the world’s largest companies, and in addition there were many other former large American car companies. The automotive industry had its dominant focus in eastern Michigan and northern Ohio. Over the past 30 years, the industry has been globalized and the structure has changed. As early as the 1980s and 1990s, Japanese and German companies began producing cars in the southern United States, during the 1990s three Japanese and two South Korean car companies built assembly plants in various southern states and in 2011, German Volkswagen opened a plant in Tennessee. The United States has thus become a second center for the automotive industry with modern factories, and from the South now comes more than a third of the cars manufactured in the United States. In 2012, GM was still one of the three largest car groups in the world and Ford was in fourth place.
The federal government only intervenes in extreme distress and provides support to an industrial sector. The exceptions are the aerospace industry and, to a greater extent, the defense industry, industries that are closely interconnected and show several common features. The United States has always had a clear policy in order to maintain the global superiority of these industries and therefore they receive every conceivable stimulus. There are several of the world’s largest companies of their kind with highly trained workforce and exceptionally high levels of research and development. The Boeing Company is dominant in the production of large civil aircraft and also world leaders. Of the company’s close to 170,000 employees, nearly half work in a assembly plant near Seattle. The company Lockheed Martin Corporation has a similar role in military plan. It is the country’s largest defense industry and primarily produces fighter aircraft, missiles, satellites and strategic defense systems. The company’s largest workplaces are located in California, Texas and states in the southeast as well as in Pennsylvania. The slowing growth of recent years in the US defense budget has led to some cuts in the defense industry, but at the same time production in civil aviation and electronic systems is developing, mainly in terms of information, surveillance and security.
In the electrical and electrotechnical industry, a small number of large companies account for most of the production. The largest is the multinational conglomerate GE (General Electric Company), which has operations in several industrial sectors as well as in energy, transport, finance and entertainment.
The second largest industry in terms of employment is the electronics industry, which has just over 1.1 million employees. It first grew in California, primarily in the Silicon Valley south of San Francisco, close to Stanford University. The United States became a world leader in the development of computers and IT, which has been accentuated since Apple started personal computer manufacturing there in 1976. A multitude of multinational IT companies grew in California and also in other parts of the country, focusing on other electronic communications and also advanced audio, video – and navigation equipment. More and more of the simpler component manufacturing was placed in low-wage countries, another Mexico band. Since the beginning of the 1990s, companies have also put a growing portion of their research and development in these countries, and in the United States employment has decreased significantly in this industry.
The chemical industry, including pharmaceutical manufacturing, accounts for 12 percent of the manufacturing value of the manufacturing industry and is the industry that contributes most to US exports. The largest companies are multinational and operate in a number of countries, but about a quarter of all chemical production in the world takes place in the United States. The most important branch is the petrochemical industry, which is a major consumer of crude oil and natural gas, which is required both as raw material and for energy in the manufacturing processes.
One of the world’s largest chemical companies is the Dow Chemical Company, which mainly produces plastics of various kinds and synthetic rubber, but also detergents and pesticides. The world’s largest privately owned oil company outside the OPEC countries is ExxonMobil, headquartered in Houston, Texas.
Pharmaceutical manufacturing is the segment in the chemical industry that is growing the most. It is the most profitable industry in the United States and the least affected by the recession in 2008–09. US pharmaceutical companies carry out 80 percent of all research and development in medicine and biotechnology in the world and hold patents on most new drugs. In the US there is also almost half the global market for pharmaceuticals.
The food industry is now the industry that has the largest share of those employed, and the share has also increased, from just over 9 percent in 2001 to just over 12 percent in 2012. It was not affected by any major decline in demand during the recession. The United States has long been a world leader in the production of soft drinks. The Coca-Cola Company, headquartered in Atlanta, and PepsiCo, headquartered in the state of New York, are the world’s largest soft drink manufacturer.
The textile and clothing industry was the first industry to experience emerging competition in the early post-war period. Most of that manufacturing has since disappeared from the United States. During the period 2000–11, textile production decreased by almost a quarter and the clothing industry by almost half. Several large clothing companies manufacture the garments in low-wage countries. Nearly 50 percent of all clothing sold in 2011 in the United States was made in China. The textile industry is now found mainly in North Carolina and South Carolina. The companies that perform best are those who focus on producing technologically advanced materials for health, hygiene and safety, for example for defense, fire protection, healthcare and space travel.
More than 150 years of rapid population growth and economic growth have put increasing pressure on the environment in the United States, especially over the past 60 years. Both industrial production and average household consumption are the highest in the world, and continued growth poses increasing problems with both declining assets of finite resources and with ever-increasing waste disposal. The high use of chemicals in agriculture and also in households’ everyday lives leads to harmful discharges into watercourses and groundwater. High-tech production means creating products whose long-term environmental impact is unknown. The most serious environmental problems have their roots in the extensive motoring and in that more than two-fifths of electricity is generated in coal-fired power plants. This results in gigantic emissions of air pollution
The overall environmental laws are established at federal level. The United States does not have an environment ministry, but environmental issues belong to several ministries. The most important unit is the Environmental Protection Agency (EPA), which can be designated as the United States Environmental Protection Agency. It prepares federal environmental laws and monitors state compliance with them. The states enact their own laws that specify and regulate within the framework of federal laws, authorize commodity extraction, monitor compliance with laws and regulations, and prosecute violations. States can enact stricter laws and stricter standards, for example in California in some respects. On the other hand, it is not uncommon for states not to comply with federal guidelines. The state of the environment and environmental policy therefore vary considerably between the states; and general information about the country as a whole hides large variations. A variety of citizen groups are active at various levels to monitor the environment, address maladministration and influence decisions on environmental issues.
Environmental interest and commitment to environmental problems emerged in the 1960s and 1970s, and at federal level, laws regulating emissions into the air (Clean Air Act, 1970), sewage and emissions into water (Clean Water Act, 1972) and waste management (Resource) were established. Conservation and Recovery Act, 1976); these later received a number of additions.
The Clean Air Act focuses on six types of emissions: ozone, solid particles, carbon monoxide, nitric oxide, sulfur dioxide and lead. Overall, these have decreased by 63 percent during the period 1980–2011. This is largely due to technological developments in vehicles and fuels, as well as measures to capture sulfur emissions in the smoke from coal-fired power plants and other factories. They also now use more imported coal that has less pollution. It has proven more difficult to limit carbon dioxide emissions. In 2011, the US accounted for 16 percent of its global emissions, the highest proportion after China. The gap between the law’s standards and the actual conditions is large: in 2011, 40 percent of the US population was estimated to live in areas with illegal air quality.
The Clean Water Act is primarily aimed at protecting the groundwater and other fresh water and ensuring access to drinking water. It provides general guidelines for sewage management and water treatment. In 2010, all urban residents had access to clean water, as did 94 percent of rural residents. The EPA monitors the quality of the watercourses according to a list of several thousand chemical substances but, for economic and political reasons, is given too little resources to follow the pace of the chemicalization of agriculture and industry. The levels of most pollutants are higher in the US than in the EU.
Household waste increased sharply for each year between 1960 and 2005. During the following recession, a slight decline occurred and in 2010 the waste amounted to 2 kg per person per day. Nearly a third of them were recycled, of which just over 70 percent of the newspapers and almost the same proportion of canning jars. However, more than half of solid waste still ends up in landfills. In addition, there is already very old, environmentally hazardous waste. Monitoring of how hazardous waste from industries and healthcare is handled is still neglected. In 2009, only 25 percent of the scrap was recycled; most were sent to other countries, mainly China.
Extraction of minerals and energy raw materials (for example from shale and oil sands) is now taking place with ever more technologically advanced methods, which means increased environmental risks. More remote areas are used, which are allocated for indigenous people or for the protection of nature, and conflicts of interest increase.
It has proved impossible at federal level to create climate legislation. This is reflected in US action at global climate conferences, where the country has been one of the major barriers to global agreements. The US line is that standards should be the same for rich and poor countries, while the EU and most other countries have signed agreements that imply less stringent commitments for developing countries. The United States also claims the freedom of individual countries to choose how and to what extent environmental impact should be addressed. Voluntary commitments are the guideline for the United States, both domestically and internationally.
More than four out of five gainfully employed in the US are employed in the service industries. Already in the 1960s, service accounted for half the employment and people started talking about a post-industrial or service society. In 1990, the proportion was up to about 75 percent and the increase has continued to just over 83 percent in 2012. More than four fifths of those who have service jobs are in the private sector.
Over the past two decades, most of the service industries have undergone major changes. Information technology now permeates every part of society, and new forms of services for individuals, households, companies and organizations have replaced traditional types of service work (secretarial work, work in banking and post offices). Many services have become less distance dependent, such as purchases of various kinds. The world’s largest online bookstore, Amazon, is a notable competitor to booksellers not only in all parts of the United States but worldwide. Many service providers in the southern and western US have their customers in completely different parts of the country. Since the mid-00s, it has also become common for companies in the US to employ services abroad, especially in India.
The range of services has changed as wealth has risen and the lifestyle has changed. The proportion of residents over the age of 65 is increasing every year, and for well-off and moving elderly there are more and more forms of housing, travel, recreation and health care.
The service sectors where employment has increased the most in the last decade are computer services, private healthcare and elderly care. More than 20 million work in private education, health care (see further Education, Social conditions) and just as many are in the wholesale and retail trade. The retail chain Walmart is the world’s third largest private company, in terms of both sales and the number of employees (just over 2 million globally).
Trade of all kinds had major problems during the recession 2008–09. Business was closed down and employment declined, and the industry still has not returned more than halfway to the level it was in 2002. However, the hotel and restaurant industry has enjoyed steady growth for almost the entire ten-year period and the employed 11.7 million. persons 2010. For a number of years, several hamburger chains have been the largest restaurant companies. In 2011, McDonald’s was still the largest, followed closely by the Subway sandwich chain and the Starbucks coffee chain.
Some service sectors show a clear downward trend. New social media has resulted in the traditional activities of book, music and film companies facing stiff competition and many large companies have shrunk their staff. In the financial, insurance and brokerage sectors, there has been a decline that can be directly related to the economic crisis 2008–09.
Over the past 60 years, US foreign trade has been increasingly liberalized, especially in the case of most industrial goods. However, for agriculture and several strategic industrial sectors, such as steelmaking, liberalization has been slower. Imports have increased more than exports and, above all, the United States has become dependent on imports of oil and oil products and some minerals needed in the modern high-tech industry. Therefore, in US trade policy, it is still important to get other countries to reduce their import restrictions in order to increase exports and achieve a balance in foreign trade. The most important way then is to establish free trade agreements and agreements on preferential treatment with groups of countries.
During the first decades after World War II, the United States was by far the most important trading partner in Western Europe, but quite soon came a large import of cheap industrial goods from Japan. Gradually, trade also increased with the new industrial states in East and Southeast Asia, and in recent years, trade in China in particular has grown substantially. Trade shares for the various countries within the EU have decreased, but the EU as a whole is still the most important trading partner.
According to Countryaah, trade with Canada has always been extensive. The United States has imported raw materials from there and exported industrial products such as motor vehicles and heavy machinery, and the two countries have greatly complemented each other. Since the entry into force of the NAFTA North American Free Trade Agreement in 1994, trade has increased significantly between the three members USA, Canada and Mexico.
For many countries, access to the large US market has become significant, perhaps especially for the countries of South America and Central America, and in 2011 the US was the most important export market for close to 60 countries. Since 2004, there is CAFTA-DR, a free trade area that, in addition to the United States, includes the five Central American states of Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua, and the Dominican Republic of the Caribbean. It is an example of how a free trade agreement means increased collaboration in many areas of society, not just increased trade.
In 2017, US exports went primarily to Canada (18 percent), Mexico (16 percent), China (8 percent) and Japan (4 percent), while imports came mainly from China (22 percent), Mexico (13 percent).), Mexico (13 percent), Japan (6 percent) and Germany (6 percent).
Exports account for almost 50 percent of technically advanced capital goods such as aircraft, computers, motor vehicle components and telecommunications equipment, and that commodity group also accounts for just over 30 percent of imports. Raw materials and semi-finished products to industries account for close to 27 percent of exports and 33 percent of imports. Household consumer goods, ranging from cars to toys and pharmaceuticals, account for 15 percent of exports and 32 percent of imports, while agricultural products accounted for just over 9 percent of exports and close to 5 percent of imports in 2011. A large proportion of imports are crude oil.
The United States is the world’s largest importing country and the third largest exporting country. Despite this, foreign trade still plays a relatively small role in the country’s economy. In 2011, exports represented only 10 percent of GDP and imports 15 percent. The deficit in foreign trade in goods has grown since the early 1970s. A clear decline in foreign trade came during the recession in 2008–09 when demand for consumer goods declined, but it was followed by an upturn the following year. In 2017, exports amounted to just over US $ 1,500 billion, while imports were just under ISK 2,400 billion. Foreign trade in services shows a rising surplus, but it is not enough to get a balance; the balance of payments has been negative for decades and continues to be so.
The United States has in many respects a magnificent nature with great contrasts between different parts of the country, and domestic tourism is extensive. It appears in tourist streams from the cold states of winter in the north to the heat of the south and west, from densely populated areas to the east to national parks and recreation areas in the Rocky Mountains and from the contiguous United States to wildernesses in Alaska and beaches in Hawaii. At least as much domestic tourism is generated by historical monuments in New England and Washington DC and by modern meeting places such as Disney’s theme parks in California and Florida. Long-distance leisure travel has a long tradition in the United States and has grown as car ownership has become exceptionally high. For many years, tourism has also been promoted by relatively cheap and well-developed air services.
About 42 million foreign tourists visited the United States in 2012. International tourism then accounted for 2.7 percent of the country’s GDP and is estimated to provide employment for 7.5 million people. Direct revenues from travel and overnight stays were $ 814 billion, and another $ 555 billion came from other tourism-related businesses. Since 2004, tourism has accounted for about 5 percent of all US goods and services exports, and their revenues have increased each year, with the exception of 2009.
In 2011, just over a third (21.3 million) of tourists came from Canada and nearly a fifth (13.5 million) came from Mexico. Next, the UK followed with Northern Ireland (3.8 million), Japan (3.3 million) and Germany, Brazil, France, South Korea and Australia, all with over 1 million visitors. In 2010-11, the tourist flow increased most strongly from China and Brazil.
The United States was the target of 6.4 percent of all international tourist travel in 2011, and in that regard, the country was ranked second in the world, after France. In terms of tourist income, the United States is a world leader: just over 11 percent of the money tourists spend abroad is paid in the United States.
The US government is investing more in foreign tourism than before. The tourists’ money reduces the current account deficit, and more visitors also mean more jobs in many remote regions where the business sector’s structural transformation has led to high unemployment. For a more detailed description of tourism see Tourism and gastronomy for each state.