LOS ANGELES | BOSTON | LONDON | FRANKFURT | PARIS May 2013 The Great Restructuring: Get Involved or Get Out of the Way “The root of our problems is not that we’re in a Great Recession, or a Great Stagnation, but rather we are in the early throes of a Great Restructuring.” – Erik Brynjolfsson and Andrew Mcafee
Los Angeles | Boston | London | Frankfurt | paris. The Great Restructuring: Get Involved or Get Out of the Way. May 2013. “The root of our problems is not that we’re in a Great Recession, or a Great Stagnation, but rather we are in the early throes of a Great Restructuring .” - PowerPoint PPT Presentation
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LOS ANGELES | BOSTON | LONDON | FRANKFURT | PARIS
May 2013
The Great Restructuring: Get Involved or Get Out of the Way
“The root of our problems is not that we’re in a Great Recession, or a Great Stagnation, but rather we are in the early throes of a Great Restructuring.”
Sources: Angus Maddison, “Historical Statistics of the World Economy”; Payden Calculations, The Economist, “Quantifying History: Two Thousand Years in One Chart.”
Approximately one quarter of all the goods and services produced in recorded history have been produced in the last decade…and the vast majority of economic growth occurred in the 20th century.
Source: International Monetary Fund, World Economic Outlook April 2012
Currently, emerging markets (as a share of global GDP) are just surpassing developed markets. EM countries tend to have larger population growth and far more room for investment than DM countries, allowing them to grow at a much faster rate.
**All numbers based on Purchasing Power Parity valuation of country GDP
$46 Trillion
47%
$52 Trillion
53%$39
Trillion52%
$36 Trillion
48%
$27 Trillion
63%
$16 Trillion
37%$16
Trillion69%
$7 Trillion31%
Global GDP
Per Capita GDP $1,841/$18,623 $3,136/$27,734 $6,165/$38,112 $8,391/$44,412
Does Chinese Growth Threaten? Booming US Exports Suggest No.
Growth in US Exports to Top 10 Markets, 2000-11
China Brazil Hong Kong Netherlands Mexico Germany Canada S. Korea UK Japan Rest of
World
542%
180%150%
96%77% 67% 57% 56%
35%2%
116%
Source: US Department of Commerce
Since the recession officially ended exports have accounted for about half of the nation’s economic growth. Exports account for 14% of GDP, and,, continue to trend upwards
For some economists, the US is well positioned to continue to capture market share in emerging economies: Tyler Cowen writes, “the leading categories of American exports today—civilian aircraft, semiconductors, cars, pharmaceuticals, machinery, entertainment…—are going to be in the sweet spot of growing demand in what we now call the developing world.” (American Interest, May/June 2012)
Jobs Gained Since the Recovery Began (June 2009 to December 2012) Total Jobs Gained or Lost Since the Start of the Recession (August 2007 to December 2012)
Thousands of Jobs
Structural misalignments in the US labor market appear in the sector-by-sector breakdown. Construction and manufacturing led the job declines—and both sectors have yet to recover. However, on net, some sectors like education/health care and professional services have, on net, added to payrolls over the period.
Non Routine: Management, Art, Business Legal, Computer, Science, Architecture, Education, Health, Social, Protection, Building and Grounds, and Personal Food Preparation
Routine: Sales, Office and Administrative, Construction, Maintenance, Production, Transportation
Rest of World Increases Share of World GDP from 40% to 47% United States
18%
China19%
Japan5%
Euro Area12%
Rest of World47%
2018
Rest of world includes all countries other than US, euro area, China and JapanGross domestic product based on purchasing-power-parity (PPP) valuation of country GDP.”