Government's Non-Regulatory Influence on Business

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  • 0:25 Non-Regulatory Influence
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Lesson Transcript
Instructor: Jennifer Lombardo
The government's non-regulatory influence on business can be just as effective as regulatory methods. In this lesson, you will learn numerous ways government can impact companies' productivity and profitability.

Non-Regulatory

You would assume correctly that the government wields a strong regulatory fist over business in the U.S. What might surprise you is that government influences business through non-regulatory ways that do not include government regulations. In this lesson, you will learn how the technology company, Pear Products, is affected by government non-regulatory means through a case study.

Non-Regulatory Influence

1. Provide employment

Pear Products can thank the U.S. government for employing the high technology company to provide all technology and communications consulting throughout the different government agencies. The government influences businesses by providing employment by hiring many companies to support internal processes.

2. Purchase products and services

In addition, Pear Products sells over 5,000 tablets and 10,000 laptops a year directly to the government and considers them a purchaser or the best customer ever!

3. Be a major influencer

The government is a major influencer towards Pear Products' product development process and cycle. For example, the government has pushed Pear Products to create cell phones that can be easily read by government software to spy on potential criminals.

4. Provide subsidies

Subsidies, or monetary amounts issued by the government to help offset price increases and keep a service competitive, are also ways to influence business. Pear Products received a government subsidy for producing and selling green technology products, such as a solar-powered charger and electric-powered cars.

5. Provide competition

The government can also provide competition to businesses, which can create a powerful competitive environment that stimulates new ideas. Pear Products wants a piece of the space technology market. Their biggest competitor is NASA. This has caused Pear Products to develop revolutionary new space vehicles and satellites in order to win private contracts.

6. Act as a lender

Another way the government can drastically influence the business industry is by acting as a lender. Pear Products would not be as successful as they are without the lending power of the government. In just the last five years, they have borrowed low-interest loans to build a new laptop-inspired headquarters.

7. Impose taxation

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