Posts tagged economic development

Evidence that China’s development is for real. 
From theatlantic:

China Takes Aim at the Profitable Heart of U.S. Manufacturing

For a long time, Americans have channeled their fear about China’s factories into an exasperated, four-word refrain: They’re stealing our jobs! By offering low-wage competition to U.S. workers, the Chinese picked off low-end manufacturing work for multinational corporations, whether it was stitching shoes for Nike or assembling iPads for Apple.
In the last few years, though, the anxiety has shifted a bit. Instead of worrying we’ll be undercut on the price of manual labor, the concern is we could actually be out-competed in higher-end markets. You hear it when Democrats like President Obama talk about China winning the race on green jobs. And it came to my mind this week, thanks to a piece in Bloomberg Businessweek on China’s growing prowess in heavy industry.
While China transformed itself into the world’s top exporter by building light goods and electronics, the biggest chunk of its exports are now large, high-margin goods such as ships, locomotives, and construction equipment, as illustrated in the Businessweek graph above.
Not only are China’s capitalists moving in this direction, but they’re getting a hand from the government. As Businessweek reports, “Equipment manufacturing, shipbuilding, and cars are among the industries slated to receive $2.5 billion from the government this year to improve technology and product quality.”  
This should be of some concern to U.S. policy makers. Heavy machinery and transportation equipment are at the heart of the U.S. industrial base. They’re part of our Big Six manufacturing sectors, along with food, chemicals, electronics, and metal products. These are businesses where labor is a relatively small part of the overall cost of making the product, and where America’s technologically advanced factories have traditionally given us an edge. If they founder, there’s not much left to replace them. 
Read more. [Image: Bloomberg Businessweek]

Evidence that China’s development is for real. 

From theatlantic:

China Takes Aim at the Profitable Heart of U.S. Manufacturing

For a long time, Americans have channeled their fear about China’s factories into an exasperated, four-word refrain: They’re stealing our jobs! By offering low-wage competition to U.S. workers, the Chinese picked off low-end manufacturing work for multinational corporations, whether it was stitching shoes for Nike or assembling iPads for Apple.

In the last few years, though, the anxiety has shifted a bit. Instead of worrying we’ll be undercut on the price of manual labor, the concern is we could actually be out-competed in higher-end markets. You hear it when Democrats like President Obama talk about China winning the race on green jobs. And it came to my mind this week, thanks to a piece in Bloomberg Businessweek on China’s growing prowess in heavy industry.

While China transformed itself into the world’s top exporter by building light goods and electronics, the biggest chunk of its exports are now large, high-margin goods such as ships, locomotives, and construction equipment, as illustrated in the Businessweek graph above.

Not only are China’s capitalists moving in this direction, but they’re getting a hand from the government. As Businessweek reports, “Equipment manufacturing, shipbuilding, and cars are among the industries slated to receive $2.5 billion from the government this year to improve technology and product quality.”  

This should be of some concern to U.S. policy makers. Heavy machinery and transportation equipment are at the heart of the U.S. industrial base. They’re part of our Big Six manufacturing sectors, along with food, chemicals, electronics, and metal products. These are businesses where labor is a relatively small part of the overall cost of making the product, and where America’s technologically advanced factories have traditionally given us an edge. If they founder, there’s not much left to replace them. 

Read more. [Image: Bloomberg Businessweek]

I’m going to have to pay more attention to Tunisia. Could it become another South Korea or Brazil (authoritarian regime that transitioned to democracy and boomed economically)? If so, then it’s following the Turkish model.
From theatlantic:

Can Tunisia Become the Silicon Valley of the Arab World?

TUNIS — Last November, dozens of young Arabs lined up for the chance to meet him. When he spoke of his struggles and triumphs, they hung on his every word. And when only one of the 50 attendees was chosen for training, some of the young Arabs grew frustrated and complained of being excluded.
A jihadist back from battling Americans in Afghanistan? A recruiter for al Qaeda’s North African affiliate? A Hamas member looking for volunteers to attack Israel?
No, the visitor was a Tunisian-American eBay executive who has worked for Apple and Oracle, and founded two Silicon Valley startups. His audience? Young Tunisian entrepreneurs and programmers who dream of turning this city into the Arab world’s Silicon Valley.
“There is a lot of potential,” Sami Ben Romdhane, the eBay executive, told me in a telephone interview this week. “I don’t see any difference between students who are graduating there and students who are graduating here and in Europe.”
Read more. [Image: Reuters]

I’m going to have to pay more attention to Tunisia. Could it become another South Korea or Brazil (authoritarian regime that transitioned to democracy and boomed economically)? If so, then it’s following the Turkish model.

From theatlantic:

Can Tunisia Become the Silicon Valley of the Arab World?

TUNIS — Last November, dozens of young Arabs lined up for the chance to meet him. When he spoke of his struggles and triumphs, they hung on his every word. And when only one of the 50 attendees was chosen for training, some of the young Arabs grew frustrated and complained of being excluded.

A jihadist back from battling Americans in Afghanistan? A recruiter for al Qaeda’s North African affiliate? A Hamas member looking for volunteers to attack Israel?

No, the visitor was a Tunisian-American eBay executive who has worked for Apple and Oracle, and founded two Silicon Valley startups. His audience? Young Tunisian entrepreneurs and programmers who dream of turning this city into the Arab world’s Silicon Valley.

“There is a lot of potential,” Sami Ben Romdhane, the eBay executive, told me in a telephone interview this week. “I don’t see any difference between students who are graduating there and students who are graduating here and in Europe.”

Read more. [Image: Reuters]

The Danish welfare state

If you’d like to tag along with my POL 102 class this semester, here’s your chance. 

This week we’re discussing political economy, and our additional “text” is a pair of NPR Planet Money podcasts about Denmark:

Both podcasts aired in 2010, but they’re still relevant. In addition to a great deal of information about Danish political economy (and its extensive social welfare system), the podcasts also debate the costs/benefits of the Danish system. 

For those of you familiar with the rhetoric about “European socialism,” Denmark is the poster child. The Danish state has one of the highest tax rates in the world, as well as one of the most extensive social safety nets in the world. Remarkably, it also has a dynamic economy and a (historically) low unemployment rate (though it has recently crept up to 7.8%—it was 4.2% in 2010 when the podcasts were produced, and had reached a low of 1.9% in 2008; by comparison US unemployment was 9.6% in 2010 and is currently 8.3%).

If you want to go a step further, here’s a module I created (with support from a grant from my university’s Center for Teaching and Learning) about welfare states called, not surprisingly, "The Welfare State" (hosted on Rice University’s Connexions open source learning platform). Beyond a short description of welfare state (as a concept), it provides data tables and discussion questions using economic indicators from Sweden, Japan, the US, Britain, France, Germany, and Denmark.


The 23 Best Countries for Work-Life Balance (We Are Number 23) | The Atlantic
A comparative look at how well the various developed countries do, in terms of “work-life balance” indicators. 

The 23 Best Countries for Work-Life Balance (We Are Number 23) | The Atlantic

A comparative look at how well the various developed countries do, in terms of “work-life balance” indicators. 

Economist Daily chart: fastest growing nations. Global economic growth is originating almost exclusively from the emerging world, according to a new forecast from the International Monetary Fund.

Economist Daily chart: fastest growing nations. Global economic growth is originating almost exclusively from the emerging world, according to a new forecast from the International Monetary Fund.

"200 countries, 200 years, 4 minutes"

Hans Rosling, a Swedish social health researcher, gives a visual demonstration of the relationship between economic and social health development across time. 

Definitely worth a read.
From theatlantic:

Why the iPhone Isn’t Building a New U.S. Middle Class

Short answer: it’s not just wages. The vastly different wages paid to American workers, compared to contemporaries in Taiwan or China, is a significant factor in the shift of massive supply chain operations in the tech industry over to Asia, The New York Times says in its in-depth examination of Apple and its suppliers.
Takeaway factoid someone will repeat in your earshot this week: manufacturing the iPhone in the United States would add about $65 to the cost of each unit. Is that worth it?
But it’s not just about the wages. The biggest shocks of the paper’s examination of Foxconn, one of Apple’s major suppliers for the iPhone, are about physical scale, not payscale. The plant known as Foxconn City employes some 230,000 workers, with more than one quarter of them living on-site in company-built dormitories, The Times reports. The kitchens that feed the workers churn out 13 tons of rice per day, and guards work the hallways to prevent workers from trampling one another.
And the most chilling assessments of the U.S. labor market’s inability to share in some of this new manufacturing activity speak to simple inability to compete. Read more.

Definitely worth a read.

From theatlantic:

Why the iPhone Isn’t Building a New U.S. Middle Class

Short answer: it’s not just wages. The vastly different wages paid to American workers, compared to contemporaries in Taiwan or China, is a significant factor in the shift of massive supply chain operations in the tech industry over to Asia, The New York Times says in its in-depth examination of Apple and its suppliers.

Takeaway factoid someone will repeat in your earshot this week: manufacturing the iPhone in the United States would add about $65 to the cost of each unit. Is that worth it?

But it’s not just about the wages. The biggest shocks of the paper’s examination of Foxconn, one of Apple’s major suppliers for the iPhone, are about physical scale, not payscale. The plant known as Foxconn City employes some 230,000 workers, with more than one quarter of them living on-site in company-built dormitories, The Times reports. The kitchens that feed the workers churn out 13 tons of rice per day, and guards work the hallways to prevent workers from trampling one another.

And the most chilling assessments of the U.S. labor market’s inability to share in some of this new manufacturing activity speak to simple inability to compete. Read more.

"India's Challenge" | The Christian Science Monitor

I’m always surprised that India—the world’s second most populous country & the most populous democracy—never gets much coverage in introductory comparative politics textbooks/courses. That’s a real shame.

From csmonitor:

Ben Arnoldy writes this week cover story, encapsulating India’s tough challenge - building 50,000 schools in the next 10 years to educate up to 100 million students.

Schools are already springing up across the landscape – from big campuses in suburban fields to one-room boutiques in teeming malls. As they do, Americans who feel inadequate about their education system can take solace in at least one fact: Indians are looking at US institutions as models. In the five-star hotels of New Delhi, delegations of presidents and deans from various American universities meet regularly with teams of Indian officials and administrators to set up partnerships, faculty mentoring, and study-abroad programs.

And yet – as in other sectors of rapidly developing countries – India isn’t looking just to mimic the West in education. It is hoping to leapfrog it. In some ways, the country has no choice. “The way education is today in the global market is not scalable,” says Sam Pitroda, an education adviser to the government. “The cost of education has really increased substantially, mainly because IT has not been used effectively the world over in education.”

This means that India is not just trying to build thousands of American-style campuses with neat quads. Many of its new schools will be virtual, for-profit, and integrated closely with workplaces. It may, in fact, end up pushing the concept of online education further than any other country. As a result, what India comes up with will not only affect its economic competitiveness in the 21st century. It may become a petri dish for how to build an educational system in the Information Age.

Yet questions loom. Is India on the verge of a new renaissance or is this effort an overreaching bound to fall of its own ambition? How do you maintain any kind of quality control in such a massive scale-up of schools? Will the legendary bureaucracy of India stifle its quest to be the world’s new cerebellum?

We pay a lot of attention to China’s economic success story—and we should. But we don’t pay enough attention to how democracies have achieved similar successes—or the particular challenges that doing so in a democratic society implies.

From beenthinking:



AMERICANS MAKE UP HALF OF THE WORLD’S RICHEST 1%

By Annalyn Censky @CNNMoney January 4, 2012
It only takes $34,000 a year, after taxes, per person, to be among the richest 1% in the world….
(the rest of the story here)



Interesting side note: There are only 29 “Americans” (the blue people) in that graphic. If each person represents one million people, the the info graphic suggests that only 29 million Americans earn more than $34,000 a year after taxes. There are 313 million Americans.

From beenthinking:

AMERICANS MAKE UP HALF OF THE WORLD’S RICHEST 1%

By Annalyn Censky @CNNMoney January 4, 2012

It only takes $34,000 a year, after taxes, per person, to be among the richest 1% in the world….

(the rest of the story here)

Interesting side note: There are only 29 “Americans” (the blue people) in that graphic. If each person represents one million people, the the info graphic suggests that only 29 million Americans earn more than $34,000 a year after taxes. There are 313 million Americans.

America spends five times as much on defence as China does, and even though China’s defence budget is expanding faster, on recent growth rates America will remain top gun until 2025.
While America still tops a few league tables, the year when the Chinese economy will truly eclipse America’s is in sight. It would be a mistake for American leaders to try to block China’s rise—it is better to be number two in a fast-growing world than top dog in a stagnant one. (via theeconomist)