Patriotism plays a role in keeping American owned businesses in the US
SDSU Professor studies off-shoring practices of 22 regional businesses
SDSU-Tax incentives are enticing, but a local researcher says other factors also play into a businesses decision to stay in the US.
Martina Musteen, SDSU professor of entrepreneurship & business research, studied businesses in our region and found some surprising results. Each of the companies Professor Musteen studied had at least considered off-shoring. She found those that stayed put did so, at least in part, because of good ole’ American pride.
The study included the business models of 22 small and medium companies and start-ups. All are located in Southern California and employ 500 people or less. 75% currently or at one time off-shored work. The businesses that stayed put on American soil did it because of personal bias, to stay close to family, or because the owner was compelled by patriotism. “An interesting example; one the companies, all of their competitors off-shored. The owner of 30 years was running a family business. He said no, I’m not going to do that. It worked out very well for him. He was the last one standing in a sense providing the highest quality product.”, explains Dr. Martina Musteen.
Professor Musteen says companies often off-shore because they can’t find an American manufacturer or for reduced costs. But; Musteen says some of those businesses have come back to the US because production costs were higher than they expected. Poor quality control also played a role. The Professor says she was surprised by the number of owners who just assumed China was cheaper. Musteen says she found many cases where that saving didn’t add up for small and medium sized businesses