THE INDIAN INSTITUTE OF PLANNING AND MANAGEMENT

CHENNAI-600008

GOTA REPORT

GOTA REPORT SUBMITTED TO

THE INDIAN INSTITUTE OF PLANNING AND MANAGEMENT

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 RIASHEE [Link]-11

ABSTRACT

This GOTA report consist of the PEST analysis of the country TEXAS were we went for the
GOTA, which is situated in North America, USA.

And the report contains the key learning what we learnt from

JOHN N. DOGGETT

Senior Lecturer
Department of M anagement
M. B. A., Harvard University
J.D., Yale University
B. A., Claremont Men’s College

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 Table of Contents

INTRODUCTION...........................................................................................................................................4
PEST ANALYSIS.............................................................................................................................................6
REVIEW AND RESEARCH............................................................................................................................37
CONCLUSION…………………………………………………………………………………………………………………………………………49

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INTRODUCTION

TEXAS

Texas is the second-largest U.S. state in both area and population, and the largest state in the
contiguous United States. The name, meaning "friends" or "allies" in Caddo, was applied by the
Spanish to the Caddo themselves and to the region of their settlement in East Texas. Located in
the South Central United States, Texas is bordered by Mexico to the south, New Mexico to the
west, Oklahoma to

the north, Arkansas to the northeast, and Louisiana to the east. Texas has an area of
268,820 square miles (696,200 km2), and a growing population of 24.7 million residents.

Houston is the largest city in Texas and the fourth-largest in the United States, while Dallas–Fort
Worth and Houston are the fourth- and sixth-largest United States metropolitan areas,
respectively. Other major cities include San Antonio, El Paso, and Austin—the state capital.
Texas is nicknamed the Lone Star State to signify Texas as an independent republic and as a
reminder of the state's struggle for independence from Mexico. The "Lone Star" can be found on
the Texas State Flag and on the Texas State Seal today.

Due to its size and geologic features such as the Balcones Fault, Texas contains diverse
landscapes that resemble both the American South and the Southwest. Although Texas is
popularly associated with the Southwestern deserts, less than 10% of the land area is desert.
Most of the population centers are located in areas of former prairies, grasslands, forests, and the
coastline. Traveling from east to west, one can observe terrain that ranges from coastal swamps
and piney woods, to rolling plains and rugged hills, and finally the desert and mountains of the
Big Bend. Due to its long history as a center of the American cattle industry, Texas is associated
with the image of the cowboy.

The term "six flags over Texas" came from the several nations that had rule over the territory.
Spain was the first European country to claim the area of Texas. France held a short-lived colony
in Texas. Mexico controlled the territory until 1836 when Texas won its independence,
becoming an independent Republic. In 1845 it joined the United States as the 28th state. The

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state's annexation set off a chain of events that caused the Mexican–American War in 1846.
Texas declared its secession from the United States in early 1861, joining the Confederate States
of America during the American Civil War. After the war and its restoration to the Union, Texas
entered a long period of economic stagnation.

In the early 1900s, oil discoveries initiated an economic boom in the state. Texas has since
economically diversified. Today it has more Fortune 500 companies than any other U.S. state.
With a growing base of industry, the state is a leader in many, including agriculture,
petrochemicals, energy, computers and electronics, aerospace, and biomedical sciences. It leads
the nation in export revenue since 2002 and has the second-highest gross state product.

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PEST ANALYSIS

Political System

The current Texas Constitution was adopted in 1876. Like many states, it explicitly provides for
a separation of powers. The state's Bill of Rights is much larger than its federal counterpart, and
has provisions unique to Texas.

State Government

Texas has a plural executive branch system limiting the power of the Governor. Except for the
Secretary of State, voters elect executive officers independently making candidates directly
answerable to the public, not the Governor. This election system has led to some executive
branches split between parties. When Republican President George W. Bush served as Texas's
governor, the state had a Democratic Lieutenant Governor, Bob Bullock. The executive branch
positions consist of the Governor, Lieutenant Governor, Comptroller of Public Accounts, Land
Commissioner, Attorney General, Agriculture Commissioner, the three-member Texas Railroad
Commission, the State Board of Education, and the Secretary of State.

The bicameral Texas Legislature consists of the House of Representatives, with 150 members,
and a Senate, with 31 members. The Speaker of the House leads the House, and the Lieutenant
Governor, the Senate. The Legislature meets in regular session biennially, but the Governor can
call for special sessions as often as desired. The state's fiscal year spans from the previous
calendar year's September 1 to the current year's August 31. Thus, the FY 2008 dates from
September 1, 2007 through August 31, 2008.

The judicial system of Texas is one of the most complex in the United States, with many layers
and overlapping jurisdictions. Texas has two courts of last resort: the Texas Supreme Court, for
civil cases, and the Texas Court of Criminal Appeals. Except for some municipal benches,
partisan elections select judges at all levels of the judiciary; the Governor fills vacancies by

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appointment. Texas leads the nation in executions – 442 as of October 2009 (see Capital
punishment in Texas).

The Texas Ranger Division of the Texas Department of Public Safety is a law enforcement
agency with statewide jurisdiction. Over the years, the Texas Rangers have investigated crimes
ranging from murder to political corruption. They have acted as riot police and as detectives,
protected the Texas governor, tracked down fugitives, and functioned as a paramilitary force
both for the republic and the state. The Texas Rangers were unofficially created by Stephen F.
Austin in 1823 and formally constituted in 1835. The Rangers were part of several important
events of Texas history and some of the best-known criminal cases in the history of the Old
West.

Politics

As in other "Solid South" states, whites resented the Republican Party after the American Civil
War, and the Democratic Party dominated Texas politics from the end of Reconstruction until
the late 20th century. When President Lyndon Johnson signed the Civil Rights Act of 1964, he
reportedly said "We have lost the South for a generation".

The Texas political atmosphere leans towards fiscal and social conservatism. Since 1980, most
Texas voters have supported Republican presidential candidates. In 2000 and 2004, Republican
George W. Bush won Texas with 60.1% of the vote, partly due to his "favorite son" status as a
former Governor of the state. John McCain won the state in 2008, but with a smaller margin of
victory compared to Bush at 55% of the vote. Austin consistently leans Democratic in both local
and statewide elections. Houston, San Antonio and Dallas remain approximately split. Counties
along the Rio Grande generally vote for Democrats, while most rural and suburban areas of
Texas vote Republican.

The 2003 Texas redistricting of Congressional districts led by the Republican Tom Delay, was
called by the New York Times "an extreme case of partisan gerrymandering". A group of
Democratic legislators, the "Texas Eleven", fled the state in a quorum-busting effort. Despite
these efforts, the legislature passed a map heavily in favor of Republicans. Protests of the
redistricting reached the national Supreme Court in the case League of United Latin American
Citizens v. Perry, but the ruling went in the Republicans' favor.

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As of the general elections of 2008, a large majority of the members of Texas's U.S. House
delegation are Republican, along with both U.S. Senators. In the 111th United States Congress,
of the 32 Congressional districts in Texas, 20 are held by Republicans and 12 by Democrats.
Texas's Senators are Kay Bailey Hutchison and John Cornyn. Since 1994, Texans have not
elected a Democrat to a statewide office. The state's Democratic presence comes primarily from
some minority groups and urban voters, particularly in El Paso, Austin, San Antonio, Dallas, and
Houston.

Administrative Divisions

Texas has 254 counties—the most nationwide. Each county runs on Commissioners' Court
system consisting of four elected commissioners (one from each of four precincts in the county,
roughly divided according to population) and a county judge elected at large from the entire
county. County government runs similar to a "weak" mayor-council system; the county judge has
no veto authority, but votes along with the other commissioners.

Although Texas permits cities and counties to enter "interlocal agreements" to share services, the
state does not allow consolidated city-county governments, nor does it have metropolitan
governments. Counties are not granted home rule status; their powers are strictly defined by state
law. The state does not have townships— areas within a county are either incorporated or
unincorporated. Incorporated areas are part of a municipality. The county provides limited
services to unincorporated areas. Municipalities are classified either "general law" cities or
"home rule". A municipality may elect home rule status once it exceeds 5,000 population with
voter approval. Municipal elections are nonpartisan as are elections for school boards and
community college districts.

It seems that political parties just can't win in the eyes of professional commentators and the
public at large. Either they're responsible for causing divisions in society by being "too partisan"
or they don't stand for anything because they represent too many diverse interests.

These contradictory criticisms of parties are not new. Some of the founders of the United States
famously saw political parties as sources of "intolerant spirit," a view that has persisted in
contemporary times. At the same time we often criticize parties for lacking any coherent political
program. The "laundry list" of issue positions produced by party committees - a result allegedly

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caused by the need for parties to unite enough interests in order to win elections - can often seem
to be driven by pragmatism rather than principle.

Parties often do accentuate divisions in society while still uniting multiple groups within the
electorate. They can be driven by ideology, while also bowing to the practical need to build
coalitions to win elections. And their platforms often contain something for almost everyone, at
the expense of a clear and specific vision.

Despite all of the complaints about parties, they perform roles that are critical to the operation of
our democratic system and to the overall coordination and functioning of our political system.

First, they provide the means for millions of Americans, including Texans, to participate at
various levels of the political system, as many of the convention delegates interviewed in this
chapter's Getting Involved video feature illustrate. Second, in addition to providing opportunities
for citizen input and participation, parties also engage citizens in a continuing political dialogue
by helping to structure and present the issues of the day. Third, parties provide the glue that
binds government vertically among the various levels of the political system, and horizontally
across the nation.

These roles are replete with tensions - between principle and pragmatism, division and unity,
vision and mere distribution of the spoils - that endow our political parties and the party system
with a dynamism that powerfully shapes our political system. This chapter of Texas Politics
examines how parties work, how they serve as mechanisms for representing societal interests in
the political system, and how the history of parties in Texas both shaped and has been shaped by
the particular historical forces within the state.

They organize their examination of political parties in Texas by focusing on several areas:

 The legal and ideological context in which parties operate

 The roles and functions of parties

 Interaction between political parties and government institutions

 The multiple ways that individuals can participate through political parties

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  The evolution of political parties and party systems in Texas

 The prospects for change in the future

Compounding the problem of voter fatigue that results from frequent elections for a dizzying
number of offices is the historical dominance in Texas of only one or two political parties at any
one time. For more than a century after the Civil War the Democratic Party dominated Texas
politics, so much so that it was practically a necessity to be a Democrat to hold public office.
This single-party dominance tended to limit the range of political debate, in turn constraining the
evolution of the state's political culture.

The period of Democratic Party dominance in Texas - from the Civil War to the civil rights
struggles of the 1950s and 1960s - was characterized in part by the systematic exclusion of
African Americans and other minorities from political participation. This would seem to
contradict the populist and democratic values of broad popular participation and control of
government that is so central to the state's political culture. But the historic exclusion of
minorities and the poor from full participation in politics, or at least, the resistance of the
political system to make an effort to include these groups, was consistent with the strains of the
dominant political culture that disdain "activist" government and publicly funded social
programs.

Ultimately, the great gulf between the state's democratic political values and the practice of
political and economic exclusion based on race helped to make those practices unsustainable.
But changing those practices in Texas and elsewhere required a vigorous and long-term effort by
the federal government that continues today.

As this effort to end the legal exclusion of minorities got underway, the party system long
dominated by the Democrats began to unravel. The civil rights victories in the 1960s, especially
the national Civil Rights Act of 1964 and the Voting Rights Act of 1965, helped set in motion a
realignment of the two main political parties. Since, the 1970s there has been much more robust
political competition between the resurgent Republic Party and the formerly hegemonic
Democrats. During this period the Republicans steadily eroded the Democrats' hold on
government, and by the turn of the 20th century they had come to dominate virtually all of the
state's elected and appointed public institutions.

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As the Republican Party grew in prominence over this period, increasing numbers of
conservative Democrats changed their party affiliation to the Republican Party. Meanwhile,
conservative newcomers to Texas from other states also helped to swell the Republican ranks. At
the same time, the Democrats attracted more liberal sectors of Texas society and a large portion
of minority voters, particularly African Americans and Latinos. In recent years, however the
Texas Republican Party had made a focused effort to increase support from these predominantly
Democratic constituencies, as the video clips of Governor Rick Perry and Railroad
Commissioner Michael Williams on this page illustrate.

Now, in the early years of the 21st century, Republicans have solidified their hold on the
governmental institutions of Texas, at least for the time being. In some ways the Republican
dominance today represents a replay of the era of Democratic Party dominance: an emphasis on
low investment in social services, favorable policies toward business, and strong resistance to the
provision of social services.

But there are signs of stress in this new majority, as well as concerns in both parties over the
impact of the growing numbers of immigrants and first generation Americans - particularly
Latinos - on the party system. Both parties have sought to recruit the support of immigrants and
their children. But, lately there has been a backlash against immigration, particularly
undocumented immigration. This issue has caused great stress in both parties in Texas, but it
seems particularly problematic for Republicans whose popular base is much more intensely
opposed to undocumented immigration. This places the Republican Party at greater risk of
alienating minority groups (which together, now make up a majority of Texans).

The ongoing debate over immigration and its ultimate resolution has great potential to transform
the party system in Texas, our institutions of state government, public policies, and ultimately
our state's political culture. The inherent tensions within our dominant political ideology between
classical liberalism, social conservatism, and populism come to the surface on this issue.

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ECONOMY

Texas had a gross state product (GSP) of $1.09 trillion, the second highest in the U.S. Its GSP is
comparable to the GDP of India or Canada which are ranked 12th and 11th worldwide. Texas's
economy is the third largest in the world of country subdivisions behind California and Tokyo
Prefecture. Its Per Capita personal income in 2007 was $37,083, ranking 22nd in the nation.
Texas's large population, abundance of natural resources, and diverse population and geography
have led to a large and diverse economy. Since oil was discovered, the state's economy has
reflected the state of the petroleum industry. In recent times, urban centers of the state have
increased in size, containing two-thirds of the population in 2005. The state's economic growth
has led to excessive urban sprawl and its associated symptoms.

Texas has a "low taxes, low services" reputation. According to the Tax Foundation, Texans' state
and local tax burdens rank among the lowest in the nation, 7th lowest nationally; state and local
taxes cost $3,580 per capita, or 8.7% of resident incomes. Texas is one of six states that lack a
state income tax. Instead, the state collects revenue from a state sales tax, which is charged at the
rate of 6.25%.Texas is a "tax donor state"; in 2005, for every dollar Texans paid to the federal
government in federal income taxes, the state received approximately $0.94 in benefits.

In 2004, Site Selection Magazine ranked Texas as the most business-friendly state in the nation
in part because of the state's three-billion-dollar Texas Enterprise Fund. The state holds the most
Fortune 500 company headquarters in the United States

Agriculture and Mining

Texas has the most farms and the highest acreage in the United States. Texas leads the nation
livestock production. Cattle is the state's most valuable agricultural product, and the state leads
nationally in production of sheep and goat products. Texas leads the nation in production of
cotton. The state grows significant amounts of cereal crops and produce. Texas has a large
commercial fishing industry. With mineral resources, Texas leads in creating cement, crushed
stone, lime, salt, sand and gravel.

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Energy

Ever since the discovery of oil at Spindletop, energy has been a dominant force politically and
economically within the state. According to the Energy Information Administration, Texans
consume the most energy in the nation per capita and as a whole. Unlike the rest of the nation,
most of Texas is on its own alternating current power grid, the Texas Interconnection. Despite
the California electricity crisis, Texas still has a deregulated electric service.

The Railroad Commission of Texas, contrary to its name, regulates the state's oil and gas
industry, gas utilities, pipeline safety, safety in the liquefied petroleum gas industry, and surface
coal and uranium mining. Until the 1970s, the commission controlled the price of petroleum
because of its ability to regulate Texas's oil reserves. The founders of the Organization of
Petroleum Exporting Countries (OPEC) used the Texas agency as one of their models for
petroleum price control.

Texas has known petroleum deposits of about 5 billion barrels (790,000,000 m3), which makes
up approximately one-fourth of the known U.S. reserves. The state's refineries can process
4.6 million barrels (730,000 m3) of oil a day. The Baytown Refinery in the Houston area is the
largest refinery in America. Texas also leads in natural gas production, producing one-fourth of
the nation's supply. Several petroleum companies are based in Texas such as: Conoco-Phillips,
Exxon-Mobil, Halliburton, Valero, and Marathon Oil.

The state is a leader in renewable energy sources; it produces the most wind power in the nation.
The Horse Hollow Wind Energy Center in Taylor and Nolan County, Texas, is the world's
largest wind farm as of November 2008 with a 735.5 megawatt (MW) capacity. The Energy
Information Administration states that the state's large agriculture and forestry industries could
give Texas an enormous amount biomass for use in biofuels. The state also has the highest solar
power potential for development in the nation.

Commerce

Texas's affluence stimulates a strong commercial sector consisting of retail, wholesale, banking
and insurance, and construction industries. Examples of Fortune 500 companies not based on
Texas traditional industries are: AT&T, Men's Warehouse, Landry's Restaurants, Kimberly-

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Clark, Blockbuster, Whole Foods Market, and Tenet Healthcare. Nationally, the Dallas–Fort
Worth area, home to the second shopping mall in the United States, has the most shopping malls
per capita of any American metropolitan area.

North American Free Trade Agreement (NAFTA) contributes to Mexico, the state's largest
trading partner, importing a third of the state's exports. NAFTA has encouraged the formation of
controversial maquiladoras on the Texas/Mexico border.

Colleges and Universities

Texas's controversial alternative affirmative action plan, Texas House Bill 588, guarantees Texas
students who graduated in the top 10 percent of their high school class automatic admission to
state-funded universities. The bill encourages diversity while avoiding problems stemming from
the Hopwood v. Texas (1996) case.

Texas has six state university systems and four independent public universities.[224][225]
Discovery of minerals on Permanent University Fund land, particularly oil, has helped fund the
rapid growth the state's largest university systems: University of Texas and Texas A&M. The
PUF principal in fall 2005 was approximately $15 billion, second in size only to Harvard
University's endowment.[217][226] The other four university systems are the University of
Houston, University of North Texas, Texas State, and Texas Tech.

The University of Texas at Austin and Texas A&M University are flagship universities of the
state of Texas. Both were established by the Texas Constitution and hold stakes in the Permanent
University Fund. The state is trying to expand the number of flagship universities by elevating
some of its seven emerging research universities. The University of Houston, Texas Tech
University, and The University of Texas at Dallas are generally considered in the upper echelon
from which the next tier one research flagship university will emerge.[227][228][229]

Texas has many private institutions ranging from liberal arts colleges to a nationally recognized
tier one research university. Rice University in Houston is one of the leading teaching and
research universities of the United States and ranked the nation's 17th-best overall university by
U.S. News & World Report.[230] While Texas did not form public universities until its
statehood, the former republic chartered two private universities: Baylor University and

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Southwestern University.[231][232] Other private institutions include Texas Christian
University, Southern Methodist University, and Trinity University.

Universities in Texas currently host two presidential libraries: George Bush Presidential Library
at Texas A&M University and the Lyndon Baines Johnson Library and Museum at The
University of Texas at Austin. An agreement has been reached to create a third; the George W.
Bush Presidential Library at Southern Methodist University.

Education

The second president of the Republic of Texas, Mirabeau B. Lamar, is the Father of Texas
Education. During his term, the state set aside three leagues of land in each county for equipping
public schools. An additional 50 leagues of land set aside for the support of two universities
would later become the basis of the state's Permanent University Fund. Lamar's actions set the
foundation for a Texas-wide public school system. Texas ranked 26 in the American Legislative
Exchange Council's Report Card on American Education. Texas students ranked higher than
average in mathematics, but lower in reading. Between 2005–2006, Texas spent $7,584 per pupil
ranking it below the national average of $9,295. The pupil/teacher ratio was 15.0, slightly below
average. Texas paid instructors $38,130, below the national average. The state provided 89.22%
of the funding for education, the federal government 10.8%.

The Texas Education Agency (TEA) administers the state's public school systems. Texas has
over 1,000 school districts—all districts except the Stafford Municipal School District are
independent from municipal government and many cross city boundaries. School districts have
the power to tax their residents and to assert eminent domain over privately owned property. Due
to court-mandated equitable school financing for school districts, the state has a controversial tax
redistribution system called the"Robin Hood plan". This plan transfers property tax revenue from
wealthy school districts to poor ones. The TEA has no authority over private or home school
activities.

Students in Texas take the Texas Assessment of Knowledge and Skills (TAKS) in primary and
secondary school. TAKS assess students' attainment of reading, writing, mathematics, science,
and social studies skills required under Texas education standards and the No Child Left Behind

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Act. In spring 2007, Texas legislators replaced the TAKS for freshmen in the 2011–2012 school
year and onward with End of Course exams for core high school classes.

Industry

Industry is a city in Austin County, Texas, United States. The population was 304 at the 2000
census. Industry was the first permanent German settlement in Texas. Friedrich Ernst, Industry's
founder settled here in 1831, and gained Industry the title Cradle of German Settlement in Texas.

Before 1900, Texas had an agricultural economy based, in the common phrase, on "cotton, cows,
and corn." When the first US Census of Manufactures was taken in Texas in 1849, there were
only 309 industrial establishments, with 1,066 wage earners; payrolls totaled $322,368, and the
value added by manufacture was a mere $773,896. The number of establishments increased
tenfold by 1899, when the state had 38,604 wage earners and a total value added of $38,506,130.
During World War II, the value added passed the $1-billion mark, and by 1982, the total was
$53.4 billion.

In 1997, the value of all shipments by manufacturers was $302 billion, 2nd only to California.
Three of the state's leading industrial products—refined petroleum, industrial organic chemicals,
and oil-field machinery—all stem directly from the petrochemical sector. Major oil refineries are
located at Houston and other Gulf ports. Aircraft plants include those of North American
Aviation and Chance-Vought at Grand Prairie, General Dynamics near Ft. Worth, and Bell
Aircraft's helicopter division at Hurst. In 1997, Texas was the headquarters to 36 Fortune 500
companies, including Exxon, which ranked as the 3rd-largest industrial corporation.

Earnings of persons employed in Texas increased from $355.7 billion in 1997 to $388.3 billion
in 1998, an increase of 9.2%. The largest industries in 1998 were services, 26.3% of earnings;
state and local government, 10.3%; and transportation and public utilities, 9.1%. Of the
industries that accounted for at least 5% of earnings in 1998, the slowest growing from 1997 to
1998 was state and local government, which increased 5.1%; the fastest was wholesale trade
(6.7% of earnings in 1998), which increased 11.3%

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SOCIAL

A monument to the working and supporting classes along Market Street in the heart of San
Francisco's Financial District, home to tens of thousands of professional and managerial middle
class workers.

There is considerable controversy regarding social class in the United States, and it remains a
concept with many competing definitions. Many Americans believe in a simple three-class
model that includes the "rich", the "middle class", and the "poor." More complex models that
have been proposed describe as many as a dozen class levels; while still others deny the very
existence, in the strict sense, of "social class" in American society. Most definitions of class
structure group people according to wealth, income, education, type of occupation, and
membership in a specific subculture or social network.

Dennis Gilbert, William Thompson, Joseph Hickey, and James Henslin have proposed class
systems with six distinct social classes. These class models feature an upper or capitalist class
consisting of the rich and powerful, an upper middle class consisting of highly educated and
well-paid professionals, a lower middle class consisting of college-educated professional sales
and office assistants, a working class constituted by clerical and blue collar workers whose work
is highly routinized, and a lower class divided between the working poor and underclass.

Social status

Social class is sometimes presented as a description of how the society has distributed its
members among positions of varying importance, influence, and prestige. In these models,
certain occupations are considered to be desirable and influential, while others are considered to
be menial, repetitive, and unpleasant. (In some cases, non-occupational roles such as a parent or
volunteer mentor, are also considered.) Higher-class jobs require more skill and education.

Some sociologists consider the higher income and prestige of higher-class jobs to simply be
incentives to obtain the skills necessary to perform important work. This is an important

17
mechanism in the economic theory of capitalism, and is compatible with the notion that class is
mutable and determined by a combination of choices and opportunities.

In other cases, class or status is inherited. For example, being the son or daughter of a wealthy
individual, may carry a higher status and different cultural connotations than being a member of
nouveau riche ("new money"). Those taking the functionalist approach to sociology and
economics view social classes as components essential for the survival of complex societies such
as American society.

Dual income controversy

Income is one of the most commonly used attributes of a household to determine its class status.
The relationship between income, which mostly arises from the scarcity of a certain skill, may
however, prove to be more complex than initially perceived. While the idea is that income
reflects status, household income may just be the product of two or more incomes. In 2005, 42%
of American households had two income earners. The vast majority (77%) of households in the
top quintile had two or more income earners. This means that the majority of household income
in the top quintile are the result of two income earners pooling their resources, establishing a
close link between perceived affluence and the number of income earners in a given household.
This raises the question of whether or not the combination of incomes results in higher social
status. Of course, there is no definite answer as class is a vague sociological concept.

Sociologist Dennis Gilbert states that it is possible for households to out-earn other households
over higher class standing through increasing their number of income earners. He furthermore
states that household size also played an essential role, as the standard of living for two persons
living off one upper middle class personal income may very well be higher than that of a
household with four members living off two working class personal incomes. The combination
of two or more incomes, allow for households to increase their income substantially without
moving higher on the occupational ladder or attaining higher educational degrees. Thus it is
important to remember that the favorable economic position of households in the top two
quintiles is in some cases the result of combined income, rather than demand for a single worker.

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Academic models

The following are reported income-, education-, and occupation-based terms for specific classes
commonly used by sociologists.

Academic Class Models

William Thompson &

Dennis Gilbert, 2002 Leonard Beeghley, 2004
Joseph Hickey, 2005

Typical Typical
Class Class Class Typical characteristics
characteristics characteristics

Multi-millionaires
Top-level
whose incomes
Top-level executives,
commonly exceed
executives, high- celebrities, heirs; The
$350,000; includes
Capitalist rung politicians, Upper income of super-rich
celebrities and powerful
class (1%) heirs. Ivy League class 1% $500,000+ (0.9%)
executives/politicians.
education common. Ivy
Ivy League education
common. league education
common.
common.

Households with net

Upper Highly educated Upper Highly educated worth of $1 million or
middle (often with middle (often with The Rich more; largely in the
class graduate class graduate (5%) form of home equity.
(15%) degrees), most (15%) degrees) Generally have college
commonly professionals & degrees.
salaried, managers with
professionals and household Middle College educated
middle incomes varying

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 management with from the high 5-
large work figure range to
autonomy commonly above
Semi- Semi-
workers with incomes
professionals and professionals
considerably above-
craftsmen with a and craftsman class
Lower average incomes and
roughly average with some work (plurality/
middle compensation; a man
standard of autonomy; majority?;
class Lower making $57,000 and a
living. Most have household ca. 46%)
(30%) middle woman making $40,000
some college incomes
class may be typical.
education and are commonly range
(32%)
white collar. from $35,000 to
$75,000.
Working Clerical and most Typically, some
class blue collar college
(30%) workers whose education.
work is highly
routinized. Working Clerical, pink Working Blue collar workers and
Standard of class and blue collar class those whose jobs are
living varies (32%) workers with (ca. 40% - highly routinized with
depending on often low job 45%) low economic security;
number of security; a man making $40,000
income earners, common and a woman making
but is commonly household $26,000 may be typical.
just adequate. incomes range High school education.
High school from $16,000 to
education. $30,000. High

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 Service, low- school
rung clerical and education.
some blue collar
Working workers. High
poor economic
(13%) insecurity and
risk of poverty.
Some high Those who
school education. occupy poorly-
Lower paid positions or
Those with class (ca. rely on
Those living below the
limited or no 14% - government
poverty line with
participation in 20%) transfers. Some
limited to no
the labor force. high school
Underclass The poor participation in the
Reliant on education.
(12%) (ca. 12%) labor force; a household
government
income of $18,000 may
transfers. Some
be typical. Some high
high school
school education.
education.

References: Gilbert, D. (2002) The American Class Structure: In An Age of Growing

Inequality. Belmont, CA: Wadsworth; Thompson, W. & Hickey, J. (2005). Society in
Focus. Boston, MA: Pearson, Allyn & Bacon; Beeghley, L. (2004). The Structure of
Social Stratification in the United States. Boston, MA: Pearson, Allyn & Bacon.
 The upper middle class may also be referred to as "Professional class" Ehrenreich, B.
(1989). The Inner Life of the Middle Class. NY, NY: Harper-Colins.

Upper class

21
This term is applied to a wide array of elite groups existing in the United States. The term
commonly includes the so-called "blue bloods" (multi-generational wealth combined with
leadership of high society) such as the Astor or Roosevelt families. There is disagreement over
whether the "nouveau riche" should be included as members of the upper class or whether this
term should exclusively be used for established families. Twentieth century sociologist W. Lloyd
Warner divided the upper class into two sections: the "upper-upper class" (or bourgeoise) and
"lower-upper class" (or yuppies). The former includes established upper-class families while the
latter includes those with great wealth. As there is no defined lower threshold for the upper class
it is difficult, if not outright impossible, to determine the exact number or percentage of
American households that could be identified as being members of the upper-class(es).

Income and wealth statistics may serve as a helpful guideline as they can be measured in a more
objective manner. In 2005, approximately one and half percent (1.5%) of households in the
United States had incomes exceeding $250,000 with the top 5% having incomes exceeding
$157,000. Furthermore only 2.6% of household held assets (excluding home equity) of more
than one-million dollars. One could therefore fall under the assumption that less than five percent
of American society are members of rich households. The richest 1% of the American population
owns as much as the combined wealth of the bottom 90%, or perhaps even more.

Members of the upper class control and own significant portions of the corporate America and
may exercise indirect power through the investment of capital. The high salaries and the
potential for amassing great wealth through stock options have greatly increased for the power
and visibility of the "corporate elite". Many sociologists and commentators, however, make a
distinction between the upper class (in the sense of those in the families of inherited wealth) and
the corporate elite. By implication, the upper class is held in lower regard (as inheritors of idle
wealth) than the self-made millionaires in prestigious occupations.

Yet another important feature of the upper class is that of inherited privilege. While most
Americans, including those in the upper-middle class need to actively maintain their status,
upper class persons do not need to work in order to maintain their status. Status tends to be
passed on from generation to generation without each generation having to re-certify its status.

22
Overall, the upper class is the financially best compensated and one of the most influential socio-
economic classes in American society.

Corporate elite

The high salaries and, especially, the potential wealth through stock options, has supported the
term corporate elite. Top executives, including Chief Executive Officers, are among the
financially best compensated occupations in the United States. The median annual earnings for a
CEO in the United States were $140,350 (exceeding the income of more than 90% of U.S.
households). The Wall Street Journal reports the median compensation for CEOs of 350 major
corporations was $6,000,000 in 2005 with most the money coming from stock options. In New
York City in 2005, the median income (including bonuses) of a corporate "chief operating
officer" (the #2 job) was $377,000. The total compensation for a "top IT officer" in charge of
information technology in New York City was $218,000. Thus even below the CEO level of top
corporations, financial compensation will usually be sufficient to propel a households with a
mere one income earner in the top 1%. In 2005 only 1.5% of American households had incomes
above $250,000 with many reaching this level only through having two income earners.

According to US Department of Labour :

Top executives are among the highest paid workers in the U.S. economy. However, salary levels
vary substantially depending on the level of managerial responsibility; length of service; and
type, size, and location of the firm. For example, a top manager in a very large corporation can
earn significantly more than a counterpart in a small firm.

Median annual earnings of general and operations managers in May 2004 were $77,420. The
middle 50% earned between $52,420 and $118,310. Because the specific responsibilities of
general and operations managers vary significantly within industries, earnings also tend to vary
considerably...the Median annual earnings of chief executives in May 2004 were $140,350;
although chief executives in some industries earned considerably more...the median income of
chief executive officers in the nonprofit sector was $88,006 in 2005, but some of the highest paid
made more than $700,000.

23
Many politically powerful people make money before coming to office, but in general the
political power elite have official incomes in the $150,000 to $185,000 range; members of
Congress are paid $165,000, and are effectively required to have a residence in their district as
well as one in Washington.

Upper middle

This class consists of highly educated salaried professionals whose work is largely self-directed.
Many have graduate degrees with educational attainment serving as the main distinguishing
feature of this class. Household incomes commonly may exceed $100,000 (€75,403 or £67,462),
with some smaller one-income earners household having incomes in the high 5-figure range.
Salaries are commonly in the high five-figure range. Members of this class commonly hold
advanced academic degrees and are often involved with professional organizations. Due to the
nature of professional and managerial occupations, the upper middle class tends to have great
influence over the course of society. Occupations which are essential to the forming of public
opinion such as journalists, authors, commentators, professors, scientists, and advertisers are
largely upper middle class. The very well-educated, are seen as trend setters with movements
such as the anti-smoking movement, pro-fitness movement, organic food movement, and
environmentalism being largely indigenous to this particular socio-economic grouping.
Education serves as perhaps the most important value and also the most dominant entry barrier
of the upper middle class.

Sociologists such as Dennis Gilbert, Willam Thompson, and Joseph Hickey estimate the upper
middle class to constitute roughly 15% of the population (or roughly three in every twenty
persons). The main hallmark and most distinguishing feature of this class is its high educational
attainment. Using the 15% figure model may conclude that the American upper middle class
consist of professionals making more than $67,500 (€44,468 or £34,029) who often, but not
always, reside in households with a six-figure income.

Middle class

The middle class is perhaps the mostly vaguely defined of the social classes. The term can be
used either to describe a relative elite of professionals and managers – also called the upper

24
middle class – or it can be used to describe those in-between the extremes of wealth,
disregarding considerable differences in income, culture, educational attainment, influence, and
occupation. As with all social classes in the U.S., there are no definite answers as to what is and
what is not middle class. Sociologists such as Dennis Gilbert, James Henslin, William
Thompson, and Joseph Hickey have brought forth class models in which the middle class is
divided into two sections that combined constitute 47% to 49% of the population. The upper
middle or professional class constitutes the upper end of the middle class which consists of
highly educated, well-paid professionals with considerable work autonomy. The lower end of the
middle class – called either lower middle class or just middle class – consists of semi-
professionals, craftsmen ,office staff, and sales employees who often have college degrees and
are very loosely supervised.

Although income thresholds cannot be determined since social classes lack distinct boundaries
and tend to overlap, sociologists and economist have put forward certain income figures they
find indicative of middle class households. Sociologist Leonard Beeghley identifies a husband
making roughly $57,000 and a wife making roughly $40,000 with a household income of
roughly $97,000 as a typical middle class family. Sociologists William Thompson and Joseph
Hickey identify household incomes between $35,000 and $75,000 as typical for the lower middle
and $100,000 or more as typical for the upper middle class. Though it needs to be noted that
household income distribution neither reflects standard of living nor class status with complete
accuracy.

Traditional middle class

Those households more or less at the center of society may be referred to as being part of the
American middle or middle-middle class in vernacular language use. In the academic models
featured in this article, however, the middle class does not constitute a strong majority of the
population. Those in the middle of the socio-economic strata—the proverbial Average Joe—are
commonly in the area where the working and lower middle class overlap. The most prominent
academic models split the middle class into two sections. Yet, it remains common for the term
middle class to be applied for anyone in between either extreme of the socio-economic strata.
The middle class is then often sub-divided into an upper-middle, middle-middle, and lower-

25
middle class. In colloquial descriptions of the class system the middle-middle class may
described as consisting of those in the middle of the social strata. Politicians and television
personalities such as Lou Dobbs can be seen using the term middle class in this manner,
especially when discussing the middle class squeeze. The wide discrepancy between the
academic models and public opinions that lump highly educated professionals together in the
same class with secretaries, may lead to the conclusion that public opinion on the subject has
become largely ambiguous.

Lower middle class

The lower middle class is, as the name implies, generally defined as those less privileged than
the middle class. People in this class commonly work in supporting occupations. Although they
seldom hold advanced academic degrees, a college degree (usually a bachelor's degree) is almost
always required for entry into the lower middle class.

Sociologists Dennis Gilbert, William Thompson, and Joseph Hickey, however, only divide the
middle class into two groups. In their class modes the middle class only consists of an upper and
lower middle class. The upper middle class, as described above, constitutes roughly 15% of the
population with highly educated white collar professionals who commonly have salaries in the
high 5-figure range and household incomes in the low six figure range. Semi-professionals with
Bachelor's degrees and some college degrees constitute the lower middle class. Their class
models show the lower middle class positioned slightly above the middle of the socio-economic
strata. Those in blue and pink collar as well as clerical occupations are referred to as working
class in these class models.

Working class

The term working class is applies to those that work at this tier in the social hierarchy.
Definitions of this term vary greatly. While Lloyd Warner found the vast majority of the
American population to be in either the upper-lower class or lower-lower class in 1949, modern-
day experts such as Michael Zweig, an economist for SUNY–Stony Brook, argue that the
working class constitutes most of the population. Dennis Gilbert places 13% of households
among the "working poor" with 12% being in the "underclass". Thompson & Hickey place

26
roughly 17% to 20% of households in the lower classes. The lower classes constituting roughly a
fifth to a quarter of American society consists mainly of low-rung retail and service workers as
well as the frequently unemployed and those not able to work. Overall, 13% of the population
fall below the poverty threshold. Hunger and food insecurity were present in the lives of 3.9% of
American households, while roughly twenty-five million Americans (ca. 9%) participated in the
food stamp program.

Class mobility

Class ascendancy—namely that each successive generation will have a higher standard of living
than its predecessor—is a central theme in American literature and culture and plays a key role in
the American dream. While social class in the United States is thought to be largely based on
achievement, climbing the social ladder is more difficult for those born into less advantageous
positions. Occupation (perhaps the most important class component), educational attainment, and
income can be increased through a lifetime. However, factors such as wealth inheritance and
local education system—which often provides lower quality education to those in poor school
districts—may make rising out of poverty a challenge. Class mobility in the United States
decreased between the 1970s and the 1990s.

Class and politics

Income remains one of the main indicators of class, as it commonly reflects high educational
attainment as well as a prestigious occupation. Today there remains a strong correlation, if not
causation, between political activism as well as political representation and household income.
Furthermore, a discrepancy in the political attitudes can be found among individuals residing in
households with differing incomes. During the 2000 election, voter turnout among those in the
top 26% with household incomes exceeding $75,000 was 27% higher than the average. Some
rather controversial issues such as race were impacted by household income. With higher voter
turnout and affiliation with professional organizations and other popular political lobbies such as
the AARP or NAACP, those with higher incomes were more likely to be represented in the
political process with the government being more attuned to their needs.

27
Education also has an effect on voting record. Generally, the more educated a person is, the more
likely he or she is to vote with those having graduate degrees being more likely to vote
Democrat. While a rise in income generally increases the likelihood of a person voting
Republican, many upper middle class professionals with post-graduate degrees are more likely to
vote Democrat. The presence of upper middle class liberals as households with incomes
exceeding $100,000 and those with graduate degrees were the only demographics where Ralph
Nader won 1% of the vote. Even though those with post-graduate degrees only constituted 8.9%
of the general population, they constituted 16% of all voters. This means that the most highly
educated 16% of voters were expected to vote Democrat even though most of their similarly high
paid but lesser educated counterparts did not.

Class and health

Income also had a significant impact on health as those with higher incomes had better access to
health care facilities, higher life expectancy, lower infant mortality rate and increased health
consciousness. While the United States lacks socialized medicine similar to that found in many
other post-industrialized developed nations across Europe and Asia, 85% of the U.S. population
were insured in 2005. Yet, discrepancies seem to remain beyond the difference between insured
and uninsured. In 2006, Harvard researchers divided the U.S. into "eight Americas." Life
expectancy ranges from 84.9 years for the 10,400,000 Asian Americans who had an average per
capita income of $21,566. Urban African Americans with an average per capita income of a
mere $14,800 had a life expectancy of merely 71.1 years, although this does not control for
natural longevity differences among race. Furthermore, the United States like other post-
industrial nations saw increased health consciousness among persons of higher social status.
Persons of higher status are less likely to smoke, more likely to exercise regularly and be more
conscious of their diet. Additionally, poor Americans are more likely to consume lower quality,
processed foods. One can therefore conclude that low socio-economic status contributes to a
person's likelihood of being obese

28
TECHNOLOGY

The United States came into being around the Age of Enlightenment (circa 1680 to 1800), a
period in which writers and thinkers rejected the superstitions of the past. Instead, they
emphasized the powers of reason and unbiased inquiry, especially inquiry into the workings of
the natural world. Enlightenment philosophers envisioned a "republic of science," where ideas
would be exchanged freely and useful knowledge would improve the lot of all citizens.

From its emergence as an independent nation, the United States has encouraged science and
invention. It has done this by promoting a free flow of ideas, by encouraging the growth of
"useful knowledge," and by welcoming creative people from all over the world. The bulk of
Research and Development funding (64%) comes from the private sector, rather than from taxes.

The United States Constitution itself reflects the desire to encourage scientific creativity. It gives
the United States Congress the power "to promote the progress of science and useful arts, by
securing for limited times to authors and inventors the exclusive right to their respective writings
and discoveries." This clause formed the basis for the U.S. patent and copyright systems,
whereby creator of original, progressive art and technology would get a government granted
monopoly, which after a limited period would become free to all citizens, thereby enriching the
public domain.

Early North American science

In the early decades of its history, the United States was relatively isolated from Europe and also
rather poor. At this stage America's scientific infrastructure was still quite primitive compared to
the long-established societies, institutes, and universities in Europe.

Two of America's founding fathers were scientists of some repute. Benjamin Franklin conducted
a series of experiments that deepened human understanding of electricity. Among other things,
he proved what had been suspected but never before shown: that lightning is a form of
electricity. Franklin also invented such conveniences as bifocal eyeglasses. He did not invent the
Franklin stove, however, it was named after him but is a much simpler version of his original
"Pennsylvania Fireplace."

29
Thomas Jefferson was a student of agriculture who introduced various types of rice, olive trees,
and grasses into the New World. He stressed the scientific aspect of the Lewis and Clark
expedition (1804-06), which explored the Pacific Northwest, and detailed, systematic
information on the region's plants and animals was one of that expedition's legacies.

Like Franklin and Jefferson, most American scientists of the late 18th century were involved in
the struggle to win American independence and forge a new nation. These scientists included the
astronomer David Rittenhouse, the medical scientist Benjamin Rush, and the natural historian
Charles Willson Peale.

During the American Revolution, Rittenhouse helped design the defenses of Philadelphia and
built telescopes and navigation instruments for the United States' military services. After the war,
Rittenhouse designed road and canal systems for the state of Pennsylvania. He later returned to
studying the stars and planets and gained a worldwide reputation in that field.

As United States Surgeon General, Benjamin Rush saved countless lives of soldiers during the
Revolutionary War by promoting hygiene and public health practices. By introducing new
medical treatments, he made the Pennsylvania Hospital in Philadelphia an example of medical
enlightenment, and after his military service, Rush established the first free clinic in the United
States.

Charles Willson Peale is best remembered as an artist, but he also was a natural historian,
inventor, educator, and politician. He created the first major museum in the United States, the
Peale Museum in Philadelphia, which housed the young nation's only collection of North
American natural history specimens. Peale excavated the bones of an ancient mastodon near
West Point, New York; he spent three months assembling the skeleton, and then displayed it in
his museum. The Peale Museum started an American tradition of making the knowledge of
science interesting and available to the general public.

Science immigration

American political leaders' enthusiasm for knowledge also helped ensure a warm welcome for
scientists from other countries. A notable early immigrant was the British chemist Joseph

30
Priestley, who was driven from his homeland because of his dissenting politics. Priestley, who
went to the United States in 1794, was the first of thousands of talented scientists who emigrated
in search of a free, creative environment.

Other scientists had come to the United States to take part in the nation's rapid growth.
Alexander Graham Bell, who arrived from Scotland by way of Canada in 1872, developed and
patented the telephone and related inventions. Charles Steinmetz, who came from Germany in
1889, developed new alternating-current electrical systems at General Electric Company, and
Vladimir Zworykin, who left Russia in 1919 and later invented a television camera. The Serb
Nikola Tesla went to the United States in 1884, where he invented the brushless electrical motor
based on rotating magnetic fields.

Into the early 1900s Europe remained the center of science research, notably in England and
Germany. However with the rise of the Nazi party in Germany, a huge number of scientists,
many of them of Jewish descent, left the country and travelled to the US. One of the first to do so
was Albert Einstein in 1933. At his urging, and often with his support, a good percentage of
Germany's theoretical physics community, previously the best in the world, left for the US.
Enrico Fermi, came from Italy in 1938 and led the work that produced the world's first self-
sustaining nuclear chain reaction.

In the post-war era the US was left in a position of unchallenged scientific leadership, being one
of the few industrial countries not ravaged by war. Additionally, science and technology were
seen to have greatly added to the Allied war victory, and were seen as absolutely crucial in the
Cold War era. As a result, the US government became, for the first time, the largest single
supporter of basic and applied scientific research. By the mid-1950s the research facilities in the
US were second to none, and scientists were drawn to the US for this reason alone. The changing
pattern can be seen in the winners of the Nobel Prizes in physics and chemistry. During the first
half-century of Nobel Prizes – from 1901 to 1950 – American winners were in a distinct minority
in the science categories. Since 1950, Americans have won approximately half of the Nobel
Prizes awarded in the sciences.

31
American applied science

During the 19th century, Britain, France, and Germany were at the forefront of new ideas in
science and mathematics. But if the United States lagged behind in the formulation of theory, it
excelled in using theory to solve problems: applied science. This tradition had been born of
necessity. Because Americans lived so far from the well-springs of Western science and
manufacturing, they often had to figure out their own ways of doing things. When Americans
combined theoretical knowledge with "Yankee ingenuity," the result was a flow of important
inventions. The great American inventors include Robert Fulton (the steamboat); Samuel Morse
(the telegraph); Eli Whitney (the cotton gin, interchangeable parts); Cyrus McCormick (the
reaper); and Thomas Alva Edison, the most fertile of them all, with more than a thousand
inventions credited to his name.

Edison was not always the first to devise a scientific application, but he was frequently the one to
bring an idea to a practical finish. For example, the British engineer Joseph Swan built an
incandescent electric lamp in 1860, almost 20 years before Edison. But Edison's light bulbs
lasted much longer than Swan's, and they could be turned on and off individually, while Swan's
bulbs could be used only in a system where several lights were turned on or off at the same time.
Edison followed up his improvement of the light bulb with the development of electrical
generating systems. Within 30 years, his inventions had introduced electric lighting into millions
of homes.

Another landmark application of scientific ideas to practical uses was the innovation of the
brothers Wilbur and Orville Wright. In the 1890s they became fascinated with accounts of
German glider experiments and began their own investigation into the principles of flight.
Combining scientific knowledge and mechanical skills, the Wright brothers built and flew
several gliders. Then, on December 17, 1903, they successfully flew the first heavier-than-air,
mechanically propelled airplane.

An American invention that was barely noticed in 1947 went on to usher in the Information Age.
In that year John Bardeen, William Shockley, and Walter Brattain of Bell Laboratories drew
upon highly sophisticated principles of quantum physics to invent the transistor, a small

32
substitute for the bulky vacuum tube. This, and a device invented 10 years later, the integrated
circuit, made it possible to package enormous amounts of electronics into tiny containers. As a
result, book-sized computers of today can outperform room-sized computers of the 1960s, and
there has been a revolution in the way people live – in how they work, study, conduct business,
and engage in research.

The Atomic Age and "Big Science"

One of the most spectacular – and controversial – accomplishments of US technology has been
the harnessing of nuclear energy. The concepts that led to the splitting of the atom were
developed by the scientists of many countries, but the conversion of these ideas into the reality of
nuclear fission was accomplished in the United States in early 1940s, both by many Americans
but also aided tremendously by the influx of European intellectuals fleeing the growing
conflagration sparked by Adolf Hitler and Benito Mussolini in Europe.

During these crucial years, a number of the most prominent European scientists, especially
physicists, immigrated to the United States, where they would do much of their most important
work; these included Hans Bethe, Albert Einstein, Enrico Fermi, Leó Szilárd, Edward Teller,
Felix Bloch, Emilio Segrè, and Eugene Wigner, among many, many others. American academics
worked hard to find positions at laboratories and universities for their European colleagues.

After German physicists split a uranium nucleus in 1938, a number of scientists concluded that a
nuclear chain reaction was feasible and possible. In a letter to President Franklin Roosevelt,
written by Leó Szilárd and signed by Albert Einstein, warned that this breakthrough would
permit the construction of "extremely powerful bombs." This warning inspired an executive
order towards the investigation of using uranium as a weapon, which later was superseded during
World War II by the Manhattan Project the full Allied effort to be the first to build an atomic
bomb. The project bore fruit when the first such bomb was exploded in New Mexico on July 16,
1945.

The development of the bomb and its use against Japan in August 1945 initiated the Atomic Age,
a time of anxiety over weapons of mass destruction that has lasted through the Cold War and
down to the anti-proliferation efforts of today. Even so, the Atomic Age has also been

33
characterized by peaceful uses of nuclear power, as in the advances in nuclear power and nuclear
medicine.

Along with the production of the atomic bomb, World War II also saw the entrance of an era
known as "Big Science" with increased government patronage of scientific research. The
advantage of a scientifically and technologically sophisticated country became all too apparent
during wartime, and in the ideological Cold War to follow the importance of scientific strength
in even peacetime applications became too much for the government to any more leave to
philanthropy and private industry alone. This increased expenditure on scientific research and
education propelled the United States to the forefront of the international scientific community --
an amazing feat for a country which only a few decades before still had to send its most
promising students to Europe for extensive scientific education.

The first US commercial nuclear power plant started operation in Illinois in 1956. At the time,
the future for nuclear energy in the United States looked bright. But opponents criticized the
safety of power plants and questioned whether safe disposal of nuclear waste could be assured. A
1979 accident at Three Mile Island in Pennsylvania turned many Americans against nuclear
power. The cost of building a nuclear power plant escalated, and other, more economical sources
of power began to look more appealing. During the 1970s and 1980s, plans for several nuclear
plants were cancelled, and the future of nuclear power remains in a state of uncertainty in the
United States.

Meanwhile, American scientists have been experimenting with other renewable energy,
including solar power. Although solar power generation is still not economical in much of the
United States, recent developments might make it more affordable.

Telecom and technology

For the past 80 years, the United States has been integral in fundamental advances in
telecommunications and technology. For example, AT&T's Bell Laboratories spearheaded the
American technological revolution with a series of inventions including the light emitted diode
(LED), the transistor, the C programming language, and the UNIX computer operating system.

34
SRI International and Xerox PARC in Silicon Valley helped give birth to the personal computer
industry, while ARPA and NASA funded the development of the ARPANET and the Internet.

The "Space Age"

Running almost in tandem with the Atomic Age has been the Space Age. American Robert
Goddard was one of the first scientists to experiment with rocket propulsion systems. In his small
laboratory in Worcester, Massachusetts, Goddard worked with liquid oxygen and gasoline to
propel rockets into the atmosphere, and in 1926 successfully fired the world's first liquid-fuel
rocket which reached a height of 12.5 meters. Over the next 10 years, Goddard's rockets
achieved modest altitudes of nearly two kilometers, and interest in rocketry increased in the
United States, Britain, Germany, and the Soviet Union.

As Allied forces advanced during World War II, both the American and Russian forces searched
for top German scientists who could be claimed as "spoils" for their country. The American
effort to bring home German rocket technology in Operation Paperclip, and the bringing of
German rocket scientist Wernher von Braun (who would later sit at the head of NASA) stand out
in particular.

Expendable rockets provided the means for launching artificial satellites, as well as manned
spacecraft. In 1957 the Soviet Union launched the first satellite, Sputnik I, and the United States
followed with Explorer I in 1958. The first manned space flights were made in early 1961, first
by Soviet cosmonaut Yuri Gagarin and then by American astronaut Alan Shepard.

From those first tentative steps, to the 1969 Apollo program landing on the Moon, to today's
reusable Space Shuttle, the American space program has brought forth a breathtaking display of
applied science. Communications satellites transmit computer data, telephone calls, and radio
and television broadcasts. Weather satellites furnish the data necessary to provide early warnings
of severe storms. Global positioning satellites were first developed in the US starting in about
1972, and the first complete installation of 24 satellites were in place by 1994.

35
Medicine and health care

As in physics and chemistry, Americans have dominated the Nobel Prize for physiology or
medicine since World War II. The private sector has been the focal point for biomedical research
in the United States, and has played a key role in this achievement. As of 2000, for-profit
industry funded 57%, non-profit private organizations such as the Howard Hughes Medical
Institute funded 7%, and the tax-funded National Institutes of Health funded 36% of medical
research in the U.S.[2] However, by 2003, the NIH funded only 28% of medical research funding;
funding by private industry increased 102% from 1994 to 2003.

The National Institutes of Health consists of 24 separate institutes in Bethesda, Maryland. The
goal of NIH research is knowledge that helps prevent, detect, diagnose, and treat disease and
disability. At any given time, grants from the NIH support the research of about 35,000 principal
investigators Five Nobel Prize-winners have made their prize-winning discoveries in NIH
laboratories.

NIH research has helped make possible numerous medical achievements. For example, mortality
from heart disease, the number-one killer in the United States, dropped 41 percent between 1971
and 1991. The death rate for strokes decreased by 59 percent during the same period. Between
1991 and 1995, the cancer death rate fell by nearly 3 percent, the first sustained decline since
national record-keeping began in the 1930s. And today more than 70 percent of children who get
cancer are cured.

With the help of the NIH, molecular genetics and genomics research have revolutionized
biomedical science. In the 1980s and 1990s, researchers performed the first trial of gene therapy
in humans and are now able to locate, identify, and describe the function of many genes in the
human genome.

Research conducted by universities, hospitals, and corporations also contributes to improvement

in diagnosis and treatment of disease. NIH funded the basic research on Acquired Immune
Deficiency Syndrome (AIDS), for example, but many of the drugs used to treat the disease have
emerged from the laboratories of the American pharmaceutical industry; those drugs are being
tested in research centers across the country.

36
REVIEW AND RESEARCH

John N. Doggett

Senior Lecturer
Department of Management

The University of Texas at Austin McCombs School of Business

John N. Doggett is a Senior Lecturer in the Department of Management. His research and
teaching interests include international entrepreneurship, global competition and sustainability.
Professor Doggett spends part of each summer and winter teaching entrepreneurship and global
competition workshops in Austria, China, Japan, Korea, Malaysia, Mexico Singapore and
Thailand. Since the Spring of 2003, he has led MBA students on annual two-week observation
tours of the People’s Republic of China.
Doggett is co-author, with Prabhudev Konana and S. Balasubramanian, of Advantage China:
Comparing India’s and China’s Growth Strategies,” an article comparing the economic
development strategies of China and India. Frontline, India’s leading opinion magazine with
700,000 subscribers, published Advantage China as their cover story March 2005.
In August 2001, John was appointed director of the Texas Executive MBA Program that was
developed by UT and Texas Instruments (TI) in 1999 to provide an Executive MBA for TI
employees. He was asked to convert this program from a TI-specific program to a public
program for students in the Dallas-Fort Worth region and led the successful transformation of
this program.
Doggett is an investor and board member of Gnumber, Inc., whose first product is
[Link], software that allows people to bid on EBay auctions using their cell
phones. In October 2000, e-company now magazine (now Business 2.0) selected him as one of
nine people to know in Austin if you want to start a new business. John has extensive experience
consulting with companies of all sizes, including Fortune 500 firms in the United States, Europe
and Asia.

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From 1983 to 1993, Doggett was the founder and president of his own international
management-consulting firm. His firm helped businesses and governments in more than 25
countries develop and carry out strategies to become more competitive.
In 2008, 2007, 2004 and 1998, Doggett received Outstanding Professor Awards from Executive
MBA programs. In 2002 students in UT’s Executive Engineering Management Master’s
Program gave him their Outstanding Faculty Award. In 2003 Doggett received teaching awards
from the U.S. Army War College and the Texas Evening MBA Program

ENTREPRENURESHIP

Entrepreneurship is the act of being an entrepreneur, which is a French word meaning "one
who undertakes an endeavor". Entrepreneurs assemble resources including innovations, finance
and business acumen in an effort to transform innovations into economic goods. This may result
in new organizations or may be part of revitalizing mature organizations in response to a
perceived opportunity. The most obvious form of entrepreneurship is that of starting new
businesses; however, in recent years, the term has been extended to include social and political
forms of entrepreneurial activity. When entrepreneurship is describing activities within a firm or
large organization it is referred to as intra-preneurship and may include corporate venturing,
when large entities spin-off organizations.

According to Paul Reynolds, entrepreneurship scholar and creator of the Global

Entrepreneurship Monitor, "by the time they reach their retirement years, half of all working men
in the United States probably have a period of self-employment of one or more years; one in four
may have engaged in self-employoment for six or more years. Participating in a new business
creation is a common activity among U.S. workers over their course of their careers." And in
recent years has been documented by scholars such as David Audretsch to be a major driver of
economic growth in both the United States and Western Europe.

Entrepreneurial activities are substantially different depending on the type of organization that is
being started. Entrepreneurship ranges in scale from solo projects (even involving the

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entrepreneur only part-time) to major undertakings creating many job opportunities. Many "high
value" entrepreneurial ventures seek venture capital or angel funding in order to raise capital to
build the business. Angel investors generally seek returns of 20-30% and more extensive
involvement in the business. Many kinds of organizations now exist to support would-be
entrepreneurs, including specialized government agencies, business incubators, science parks,
and some NGOs. In more recent times, the term entrepreneurship has been extended to include
elements not related necessarliy to business formation activity such as conceptualizations of
entrepreneurship as a specific mindset resulting in entrepreneurial initiatives e.g. in the form of
social entrepreneurship, political entrepreneurship, or knowledge entrepreneurship have
emerged.

Entrepreneurship is often difficult and tricky, resulting in many new ventures failing. The word
entrepreneur is often synonymous with founder. Most commonly, the term entrepreneur applies
to someone who creates value by offering a product or service, by carving out a niche in the
market that may not exist currently. Entrepreneurs tend to identify a market opportunity and
exploit it by organizing their resources effectively to accomplish an outcome that changes
existing interactions within a given sector.

Observers see them as being willing to accept a high level of personal, professional or financial
risk to pursue opportunity.

Business entrepreneurs are viewed as fundamentally important in the capitalistic society. Some
distinguish business entrepreneurs as either "political entrepreneurs" or "market entrepreneurs,"
while social entrepreneurs' principal objectives include the creation of a social and/or
environmental benefit.

The concept of entrepreneurship has a wide range of meanings. On the one extreme an
entrepreneur is a person of very high aptitude who pioneers change, possessing characteristics
found in only a very small fraction of the population. On the other extreme of definitions, anyone
who wants to work for himself or herself is considered to be an entrepreneur.

The word entrepreneur originates from the French word, entreprendre, which means "to
undertake." In a business context, it means to start a business. The Merriam-Webster Dictionary

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presents the definition of an entrepreneur as one who organizes, manages, and assumes the risks
of a business or enterprise.

Schumpeter's View of Entrepreneurship

Austrian economist Joseph Schumpeter 's definition of entrepreneurship placed an emphasis on

innovation, such as:

 new products
 new production methods
 new markets
 new forms of organization

Wealth is created when such innovation results in new demand. From this viewpoint, one can
define the function of the entrepreneur as one of combining various input factors in an innovative
manner to generate value to the customer with the hope that this value will exceed the cost of the
input factors, thus generating superior returns that result in the creation of wealth.

Entrepreneurship vs. Small Business

Many people use the terms "entrepreneur" and "small business owner" synonymously. While
they may have much in common, there are significant differences between the entrepreneurial
venture and the small business. Entrepreneurial ventures differ from small businesses in these
ways:

1. Amount of wealth creation - rather than simply generating an income stream that
replaces traditional employment, a successful entrepreneurial venture creates substantial
wealth, typically in excess of several million dollars of profit.

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 2. Speed of wealth creation - while a successful small business can generate several
million dollars of profit over a lifetime, entrepreneurial wealth creation often is rapid; for
example, within 5 years.

3. Risk - the risk of an entrepreneurial venture must be high; otherwise, with the incentive
of sure profits many entrepreneurs would be pursuing the idea and the opportunity no
longer would exist.

4. Innovation - entrepreneurship often involves substantial innovation beyond what a small

business might exhibit. This innovation gives the venture the competitive advantage that
results in wealth creation. The innovation may be in the product or service itself, or in the
business processes used to deliver it.

Essentially, an entrepreneur is a person who starts a new business venture.

However, we tend to think of entrepreneurs as people who have a talent for seeing opportunities
and the abilities to develop those opportunities into profit-making businesses.

Are entrepreneurs born or made? The debate still rages, but the current consensus is that
successful entrepreneurs share a constellation of personality traits. In other words, some people
are naturally more entrepreneurial than others.

A common misperception about entrepreneurs is that entrepreneurs are wild risk-takers.

Entrepreneurs do take risks, but only calculated ones. One of the abiliities successful
entrepreneurs share is the ability to evaluate risks.

If you're wondering whether or not you have what it takes to be an entrepreneur, you'll find more
links to more information about entrepreneurial traits in the sidebar. But remember, you don't
need to have all the traits associated with entrepreneurship to be a successful entrepreneur. The
main quality you need is a determination to make your business venture succeed. The rest of the
qualities necessary to being a successful entrepreneur you can learn.

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 The early history of entrepreneurship in India reflect from the culture, customs and
tradition of the India people. The Baliyatra Festival of Cuttack, Orissa reminiscence of past glory
of International trade. To process of entrepreneurship therefore passed through the potential roots
of the society and all those who accepted entrepreneurial role had the cultural heritage of trade
and business. Occupational pursuits opted by the individual under the caste system received
different meaning of value attached to entrepreneurship. Which is based on social sanctions.
Vaishyas are considered to venture in to business pursuits. As society grew and the process of
business occupation depended and the value work tended towards change and the various
occupational role interchanged with non-role group and sub-groups. People from different castes
and status also entered into the entrepreneurial role.
The emergence of entrepreneurship in this part of the country got localized and spread
effect, took its own time. The concept of growth theory seems to be closely related in explaining
the theory of entrepreneurship development as well.
After the Second World War entrepreneurship received new meaning for attaining
economic development within the shortest possible time. But in the process they were seriously
handicapped by the rigid institutional setup, political instability, marketing imperfection and
traditional value system. Britishers for their own ulterior motive destabilized the then self
sufficient Indian economy. England flourished and India had to pay for that. In the process India
suffered heavy industrial loss.
Development of business eateries is a complex phenomenon influenced by both the
internal and external factors. Internal factor originates in policies and attitude of the entrepreneur
themselves.
In controlling the business itself. External factors are beyond the control of the business
entrepreneur. They alone account for unpredictability of returns and risks assumed by the
entrepreneur. A steady growth can be observed on the business of long cherished history of
entrepreneurial development in the country is certainly promised or the environment to be
created by the state and its agencies.
The entrepreneurial motivation is one of the most important factors which accelerates the
pace of economic development by bringing the people to undertake risk bearing activities. In
many of the developing countries a lot of attention is being paid to the development of
entrepreneurship because it is not the proprietary quality of any caste and community.

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 The entrepreneurship is usually understood with reference to individual business.
Entrepreneurship has rightly been identified with the individual, as success of enterprise depends
upon imagination, vision, innovativeness and risk taking. The production is possible due to the
cooperation of the various factors of production, popularly known as land, labour, capital,
market, management and of course entrepreneurship. The entrepreneurship is a risk-taking
factor, which is responsible for the end result in the form of profit or loss.
According to A Schumpeter “The entrepreneurship is essentially a creative activity or it
is an innovative function”.
The economic activity with a profit motive can only be generated by promoting an
attitude towards entrepreneurship. The renewed interest in the development of entrepreneurship
to take up new venture should emphasize on the integrated approach. The developments of
entrepreneurship will optimize the use of the unexploited resources, generate self-employment
and a self sufficient economy.
The young entrepreneur should be motivated to come out with determination to do
something of their own and also to contribute to the national income and wealth in the economy.
If the country wants to achieve the growth at the grass root level, through social justice and the
crimination of poverty, it will have to provide institutional support and structural changes in
organization of financial institutions to promote entrepreneurship development. Industrial
development in any region is the outcome of purposeful human activity and entrepreneurial
thrust.
David Melelland emphasized the importance of achievement motivation as the basis of
entrepreneurial personality and a cause of economic and social development through
entrepreneurship by fulfilling the following needs such as 1) Need for power 2) Need for
affiliation and 3) Need for achievement.
Another school of thought says “entrepreneurship is a function of several factors i.e.
individual socio cultural environment and support system”. Entrepreneurship is vibrant assertion
of the facts that individual can be developed, then outlook can be changed and their ideas can be
converted into action though on organized and systematic program for entrepreneurs. It was also
felt that systematic training can be given a better output and attracting people for taking up
business venture can change economic scenario.

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 Basic objective in developing entrepreneurship and multiplying them in the society has
been to enable the society to generate productive human resource, mobilize and sustain the same
in subsequent process of development. The spontaneity and continuity of the process would
depend on the kind of people that can be prompted and groomed in the entrepreneurial career.
Socilogists, Psychologists and economists have all attempted to give a clear picture of
the entrepreneur. Sociologists analyze the characteristic of entrepreneurs in terms of caste,
family, social value and migration.

Psychologists on the other hand attempt to isolate entrepreneurs from general

population on various personality trials such as need for achievement, creativity, propensity to
take risk, independence leadership etc.

Economists, lighted situational characteristics such as occupational backgrounds access

to capital business and technological experience and managerial skills with economic gains
considered as characteristic of entrepreneur.

As entrepreneur by implication is one who ventures out, who prefers change as a means
of growth and it the process is prepared to take a calculated risk while taking risks he is aware of
the possibilities, success as well as the consequence of failure.

An entrepreneurial career
Entrepreneurship plays an important role in the economic growth and development of nation. It
is a purposeful activity includes in initiation, promotion and distribution of wealth and service.
An entrepreneur is a critical factor in economic development and an integral part of the socio-
economic transformation. It is a risk taking activity and challenging tasks, needs utmost
devotion, total commitment and greater sincerity with fullest involvement for his personal
growth and personality. The entrepreneurial career is not a one day job nor it is bed of roses.
Prosperity and success never come easily. It takes time and needs hard work. Systematic
planning and business acumen to be successful entrepreneur.

Therefore, before choosing this path one should be very careful in knowing about his
own self. This introspection process helps him in knowing about himself. Every person has his
own potentiality and resource. How he looks in to this aspect. If the person cans understand or

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identify his inner traits then it help him choosing the right path for which he should look into his
beliefs, faith values etc. For an entrepreneur it is of great importance to know about himself on
the basis of above mentioned individual consideration. These consideration give him ample
scope to face his own self by asking the question “Who I am?” If he can given meaning answer
to this complex question with exemplary courage and utter personal disregard to being exposed,
then it helps him in getting a fair idea about himself. On the whole it helps him to making the
right decision in choosing the right path for getting involved for deciding the future course of
action. This is nothing but a self-identification process. After having being proper identified his
strength, weakness and ability, he can make a decision of his choice, whether he will take up
entrepreneurship as a career or not. If yes, then in which entrepreneurial area. Choosing
entrepreneurial career is like choosing a life partner. The person has to be there in the job forever
and may have to continue in that chosen line for generations to generation and grows in this
process if it is matching; if it mismatches it goes the other way round.
Considering this aspect he should always be governed by three basic qualitative instincts
to serve in the world of uncertainty. These are – (1) Will, (2) Zeal, and (3) Skill.

Who is an entrepreneur
• He is a moderate risk taker and works under uncertainty for achieving the goal.

• He is innovative

• He peruses the deviant pursuits

• Reflects strong urge to be independent.

• Persistently tries to do something better.

• Dissatisfied with routine activities.

• Prepared to withstand the hard life.

• Determined but patient

• Exhibits sense of leadership

• Also exhibits sense of competitiveness

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 • Takes personals responsibility

• Oriented towards the future.

• Tends to persist in the face to adversity

• Convert a situation into opportunity.

The characteristics of an unique entrepreneur are:

- High need for power

- Independence

- Propensity to take risk

- Personal modernity

- Support

- Business enterprise

- Leadership

Entrepreneurship is not the proprietary quality of any caste or community. Many may
possess the qualities, but are baffled with too many questions why, what and how to get about
starting new venture.

Are you prepared to accept it ?

1. Are you prepared to put in hard work for achieving your goal ?

2. Are you possess a strong will power to face and overcome the difficulties and setbacks and
make the enterprise successful ?

3. It your family environment congenial to leaving the traditional family occupation and
undertaking a new venture ?

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4. Are you prepared to wait if it take time to set the results of your efforts ?

WHAT – Information Needed

- Prospects and scope of a particular industry or business

- Technical details

- Quantum of investment etc.

- Information about different field about the particular trade

- Purpose of being the business

- Responsibilities towards customers, employees, society etc.

- For marketing of your product be aware of strength and weakness of your product.

- Factors offering market demand

- Cost and model of distribution etc.

- Manufacturing process

- Plant and machinery

- Availability of new materials

- Production costs’

- Manpower

- Fund requirement of working capital

- Assessment of profitability and repayment of term loan.

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HOW

- Implementation Plan
- Final selection of product

- Prepare project report

- Registration :

- Apply to Financial Institutions

- Provisional Registration

- Obtain Licenses

- Apply for shed, Land and Power etc.

- Arrange your capital

- Plant Layout

- Construct shed

- Obtain utilities

- Order for NOC

- Order for raw materials supply etc.

- Recruitment and training of manpower

- Arrangements of sales network

- Trail run/sales promotion technique

- Introduction of product

- Commercials production return.

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CONCLUSION

The key concept of entrepreneurship has been clearly taught to us with very good real time
examples. The role of an entrepreneurs, concept of an entrepreneur, characters on a entrepreneur,
and opportunities in entrepreneur world , has been clearly taught to us.

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