Market Your Way to Growth: 8 Ways to Win

8 Grow by Partnering with Government and NGOs

Time spent on reconnaissance is seldom wasted.

—Sun Tzu

Every nation's gross domestic product is made up of three components: consumer, business, and government spending. The percentage that the government spends as a ratio to GDP varies considerably among nations, from those where government plays a small role, like Guatemala (13.7 percent) and Cambodia (13.9 percent) to those where government plays a major role. European countries like France, Sweden, and Belgium are in the 50 to 53 percent range. China, Russia, India, and the United States are below 40 percent. At the extreme high end of the government spending scale are Zimbabwe, which spends 97.8 percent, and Cuba, which spends 78 percent of GDP!

We can highlight and better understand the issues and opportunities connected with government spending by examining our own government's spending. In 2010, total U.S. government spending was about 40 percent of GDP. Of this 40 percent, the federal government spends 20 percent, the states spend 10 percent, and local government spends another 10 percent. The money goes towards defense, education, health care, welfare, transportation, pensions, government salaries, and interest on the debt. Different levels of government spend varying amounts in each of these areas; for example, defense is primarily a federal government expenditure, while education is more of a local government expenditure. Many state and local expenditures are financed by ...