Opportunity cost is what the business can earn by investing in something else, usually something less risky than what the business is doing. If the business cannot earn more than the opportunity cost, it's a losing investment.
Businesses often use an opportunity cost of around 14%, so if the business is earning only 10%, then they are losing 4%.
For example, if you start a risky venture that earns 2%, when you could invest the money safely in bonds at 5%, it doesn't make sense to do the risky venture.
It's not an "attitude", it's maximizing the use of the money.
This thinking by American business is why tariffs will never bring back whole sectors of manufacturing to US shores. It's not business American companies want to get involved with.
'if you start a ̶r̶i̶s̶k̶y̶ venture that earns 2%, when you could invest the money safely in bonds at 5%'
The US invented flat screen technology. The return on manufacturing didn't fit American business profit levels so they sold the technology off to overseas companies. Tariff's aren't going to fix that. They might artificially boost the return short term, but unless we are going permanent protected markets this sort of low return manufacturing isn't coming back, because of American management style, not 'Canada bad', not 'trade deals bad'. If anything a better cause statement would be to say 'American MBAs bad'.
The discussion way back when they interviewed executives about LCD patents/research being sold of was that they were just too low of a profit margin to bother pursuing. I believe it was a 60 Minutes piece but it may have been a nightly news piece at the time.
If business costs are lower offshore, that raises the profit margin for the busines to go there. It doesn't mean that offshore businesses accept lower margins.
Understood. But what you have described is an attitude. Another possible attitude is being happy to lose money, hand over fist. Somewhere in between, there used to be a multi-billion company that made a piffling 10% margin on revenue.
You need some diversity in a system to remain able to change. Very homogenous populations are more likely to be wiped out in a crisis. Maximal efficiency is not maximal meta-efficiency.
Businesses often use an opportunity cost of around 14%, so if the business is earning only 10%, then they are losing 4%.
For example, if you start a risky venture that earns 2%, when you could invest the money safely in bonds at 5%, it doesn't make sense to do the risky venture.
It's not an "attitude", it's maximizing the use of the money.