Zero Profits Era for Businesses Possible

Taiwan's problems might just become world problems. Taiwan is in the belief that their businesses might enter the 0-profit era where most businesses are simply breaking even. They are citing lack of strong business models, government ineptitude, globalization and lack of talented employees. Sounds a little bit like what is going on in the United States.

104 Job Bank conducted a study of 1048 companies of business representatives and found that most businesses were pessimistic about their future and where taking steps to increase their business competitiveness. They believe that an era of 0-profits is likely to happen by the year 2015 (World Business Connection, 2007).

80% of the respondents indicated that they will have entered into the 0-profit stage by 2015. They expected that their businesses will simple earn enough money to keep going but not enough to actually make improvements, grow or take much to the bank.

The problem with 0% profits is that investors aren't likely to put their money where they aren't going to get a return. If you had a choice of putting your money into your money into your bank account or investing in a business where you are lucky to break even there isn't much incentive. New businesses and products may never make it to market and existing businesses that rely on foreign investment may end up going into bankruptcy.

The hardest hit businesses have between 20-100 employees. These are the medium-size business that doesn't believe that they can compete on the global market. They will be swallowed by the deep pockets of larger companies who can produce products and offer services at a much cheaper rate. 89% of representatives with businesses of this size believe that they will suffer deeply.

These businesses believe there are definite reasons why this is happening. 58.1% percent of respondents believe government efficiency is at fault, 54.1% named globalization as the problem and 54.6% believe that it is the county's economic strength that will be the problem. According to them the country isn't strong enough to handle the global changes.

To cope with these problems the Taiwanese companies are taking action. 54.4% they are going to recruit better talent, 42.5% will try and tap further into the global market and 33% believe that they will develop a better business model. To them talent, globalization and better models are the key to success.

Much of the problems in the Taiwan may actually become problems in the United States. Since the world is becoming global smaller businesses can expect to also have similar declines in their profits. Even large companies under the current era are losing money and moving overseas to save costs. The global influences affect the United States as much as Taiwan. Is it possible that the world will enter a 0-profit era?