Los Angeles | Boston | London | Frankfurt | paris - PowerPoint PPT Presentation

Los Angeles | Boston | London | Frankfurt |
1 / 30

  • Uploaded on
  • Presentation posted in: General

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 .”

I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.

Download Presentation

Los Angeles | Boston | London | Frankfurt | paris

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.

- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -

Presentation Transcript

Los angeles boston london frankfurt paris

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.”

– Erik Brynjolfsson and Andrew Mcafee

Los angeles boston london frankfurt paris


World Economy: Get Involved

US Economy: Move Out of the Way



Los angeles boston london frankfurt paris


World Economy: Get Involved

The astounding story of world economic growth 1 ad 2008

The Astounding Story of World Economic Growth, 1 AD-2008

Percentage of Total World GDP By Time Period Since 1 A.D.

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.

Sources: Angus Maddison, “Historical Statistics of the World Economy”; Payden Calculations, The Economist, “Quantifying History: Two Thousand Years in One Chart.”

Emerging economies drive recent gains in global economy

Emerging Economies Drive Recent Gains in Global Economy

Emerging Economies

Advanced Economies

Global GDP

$98.0 Trillion (Estimated)

$43 Trillion

$75 Trillion

$23 Trillion

$16 Trillion


$27 Trillion


$16 Trillion


$52 Trillion


$7 Trillion


$36 Trillion


$39 Trillion


$46 Trillion






Per Capita GDP





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

Source: International Monetary Fund, World Economic Outlook April 2012

China producing a sweden each year

China: Producing “a Sweden” Each Year!

If China grew at a 7.6% year-over-year rate in 2013, this would increase their overall GDP in US dollars by close to 600 billion. In other words…

China 2013 GDP

Sweden 2011 GDP

China 2011 GDP



  • If China grows at a “low” rate of 7.6% per year in 2013, it will still add the equivalent of Sweden GDP in 2011!

  • As an economy gets bigger, growing at a +8.0% rate becomes infeasible, especially considering global economic headwinds.

Source: International Monetary Fund

**Based on GDP calculations in USD

For now advanced economies lead em economies in per capita gdp

For Now, Advanced Economies Lead EM Economies in Per Capita GDP

Advanced Economies

Emerging Economies

Per Capita GDP













If japan is an example plenty of upside to the china story

If Japan Is An Example, Plenty of Upside to the China “Story”



Does chinese growth threaten booming us exports suggest no

Does Chinese Growth Threaten? Booming US Exports Suggest No.

Growth in US Exports to Top 10 Markets, 2000-11

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)

From now until 2018 gdp growth in emerging regions will outpace growth in advanced regions

From Now Until 2018, GDP Growth in Emerging Regions Will Outpace Growth in Advanced Regions

Source: IMF

*MENAAP: Middle East, N. Africa, Afghanistan, and Pakistan

Los angeles boston london frankfurt paris


US Economy: Move Out of the Way

Even with unemployment rate falling those unemployed have been unemployed for a long time

Even With Unemployment Rate Falling, Those Unemployed Have Been Unemployed for a Long Time

Unprecedented in post-war era


The number of long-term unemployed has nearly tripled during the recession.

  • Long-term unemployment creates “hysteris”

  • If allowed to persist, impacts structure of economy through potential output

And lots of workers still at work part time for economic reasons

And Lots of Workers Still At Work Part-Time for “Economic Reasons”

Something we can all agree on in the us not much of a recovery yet

Something We Can All Agree On? In the US, Not Much of A Recovery…Yet

Labor force participation has shown no signs of recovery

Labor Force Participation Has Shown No Signs of Recovery

Digging into the labor market data lack of hiring accounts for current joblessness

Digging Into the Labor Market Data: Lack of Hiring Accounts for Current Joblessness

Gross job losses each quarter

Gross job gains each quarter

Source: BLS

Updated through Q2 2010

Good news layoffs near record lows quits are on the rise

Good News: Layoffs Near Record Lows, “Quits” Are On the Rise

Restructuring underway services employment rebounds as goods producing and state local declines

Restructuring Underway: Services Employment Rebounds as Goods Producing and State/Local Declines

Restructuring underway services employment rebounds as state local declines

Restructuring Underway: Services Employment Rebounds as State/Local Declines

The us still leads the world in manufactured goods output

The US Still Leads the World In Manufactured Goods Output






Source: United Nations

Long term structural trend toward services away from stuff

Long-Term Structural Trend Toward Services, Away From “Stuff”

The roomba effect

The “Roomba Effect”

Who needs a human when you have me?

The burgeoning robot population

The Burgeoning Robot Population

Five years of labor data tell us a great restructuring is underway

Five Years of Labor Data Tell Us: A Great Restructuring Is Underway

Source: Labor Department

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.

Evidence of structural problems skills mismatch as employers face structural impediments to hiring

Evidence of Structural Problems: Skills Mismatch as Employers Face Structural Impediments to Hiring

Kauffman Foundation poll of entrepreneurs, Sept. 2011

  • Others

  • Taxes 4%

  • Regulatory Uncertainty 3%

  • Ability to penetrate global markets 3%

Finding qualified people

Managing Fast Growth

Accessing Capital

Sluggish Economy

Source: BLS; Kauffman Foundation

Answer to employment problem new business formation drives employment

Answer to Employment Problem: New Business Formation Drives Employment!

Net job creation, 1985-2005

25.3% of the 28,776 engineering and technology companies founded from 1995 to 2005 had an immigrant key founder. These 7,283 companies

produced more than $52 billion dollars in 2005 sales and in 2005 had just under 450,000 employees.

Innovative, creative start-up firms are net job creators, not Fed QE

Large firms

Young Firms

Small firms

Older Firms

Source: Business Formation and Dynamics By Business Age

Start ups and innovation in action

Start-ups and Innovation in Action

Whatever the future brings it might not be part of the routine

Whatever the Future Brings, It Might Not Be Part of the Routine

Unemployment Rate By Job Type

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

Source: New York Federal Reserve

The us labor market is improving job gains continue in q2 2013

The US Labor Market Is Improving: Job Gains Continue in Q2 2013

The composition of world gdp is changing

The Composition of World GDP Is Changing



Over 26 Years….

Europe Cedes Ground from 22% of World GDP to 11%

China Grows from 4% to 19% of World GDP

Rest of World Increases Share of World GDP from 40% to 47%



Rest of world includes all countries other than US, euro area, China and Japan

Gross domestic product based on purchasing-power-parity (PPP) valuation of country GDP.”

Source: IMF

  • Login