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One of the more unique ways of fostering entrepreneurship that has really caught on in the last few years is microfinance. Initially started in 1976 by Muhammad Yunus in India, microfinance is where a financial institution gives a small loan (usually in the $5-50 range) to an impoverished family that otherwise wouldn’t have access to credit.

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In 2002, Daniel Kahneman won the Nobel Prize in Economics, which isn’t all that unusual until one realizes that Kahneman isn’t an economist at all, but rather a psychologist. The reason that Kahneman won the Nobel is because he has dedicated his life (along with his partner Amos Tversky) to attempting to disprove the rational agent model that is a major underlying assumption of modern economics. The rational agent assumption assumes that all people are entirely rational and make the decisions that maximize utility for them (the people in this case are popularly called Homo Economis). Kahnemen thinks this isn’t true due to innate biases inside people and lays out why in Thinking Fast and Slow, which is an overview of his life’s work.

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As the U.S. has just released that its GDP has grown only 0.1% in the 4th quarter of 2012 and that trend of low growth is persistent in every economic headline for seemingly every country, the question of whether this is a temporary phenomenon or the new reality is very relevant. Personally, I am of the opinion that this zero growth environment may be unavoidable.

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While we at globalEDGE have been talking about how the globalization of the media industry has difficulties for many involved in the industry, there is another way that this new trend impacts the industry: it is changing the business model of these companies forever.

Since many of these companies work with the internet and are focused primarily on providing their services that way, they are much smaller, more nimble, and entrepreneurial than their traditional counterparts. One simple way to confirm this is to look at the employees used by each firm.  Pandora and Netflix have around 500 and 2,000 employees respectively. That is far less than 126,000 employees that Comcast uses. To prove this isn’t a size issue, Google only has around 50,000 employees!

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While economists have many different ways of observing trade trends (think about looking at GDP changes), one of the best ways is to isolate a specific area and observe that to gain a good picture of it. One such area is the Port of Los Angeles and the clues that it provides about American international trade as a whole.

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Policy makers around the globe have all consistently attempted to solve the answer to one riddle: what makes a country wealthy? Every national policy maker in the world is attempting to advance the economic wellbeing of their country. Often, the question is posed as “what makes a country poor” in order to try to find some possible remedies. For instance, why haven’t Canada or Mexico reached the same level of GDP as the US? Why is Egypt much more developed than its neighbors of Libya and Sudan? The answers to these questions have varied from the degree of market freedom (Adam Smith) to overpopulation (Thomas Malthus) to a country’s natural resources (Jeffrey Sachs).

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globalEDGE is very excited to announce that we have completed our latest feature: regulatory agencies! We have compiled a listing of over 600 regulatory agencies across all globalEDGE industries and most countries. The regulatory agency links appear in both the industry and country specific pages- allowing for easy use for globalEDGE users. Users of globalEDGE will find these useful in that they will now be able to easily be able to research the specific regulations of countries that they may want to do business in. Also, many of the Business Services Regulatory Agencies are involved with the import/export regulations of those countries.  No matter what industry one is involved in, I’m sure these resources will be useful to you! Go check them out on gloablEDGE!

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The last few blogs here on globalEDGE have not been too optimistic and may make one think that the world may indeed end in December (as the Mayans allegedly predict). This blog will not be much more optimistic. However, instead of just talking about recessions, this will explore some of repercussions or causes that are being observed right now. Specifically, this will explore the potential permanent change in the financial services industry.

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As a current college student, I always find myself interested in the huge investment that many students are making in college. This is especially more interesting to me as many nations are experiencing rising unemployment rates and many college students are returning home to live with mom and dad according to a Pew study. Further, the Federal Reserve of the United States just released new data on the debt levels that college students and graduates have accumulated. While this is a problem that is mostly unique to the United States, the European Union and many Asian countries currently subsidize higher education. Therefore all countries should pay attention to this as the subsidies may run out in the near future.

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As many of you news readers may know, China and Japan have been involved in a territorial dispute over a small chain of islands in the East China Sea. They can’t agree on a name—Japan calls them the Senkaku Islands and China calls them the Dioyu Islands, but both countries view those islands as part of their territory. They are technically controlled by Japan now due to war treaties, but China has had claims on them in the past so both countries have a case to make for ownership. However, as the islands do not really have much of significance on them, they are viewed as an important symbol of dominance in the often tumultuous relationship between China and Japan. While war or other extreme actions have not been taken yet, the dispute has impacted businesses in the area which could easily impact the world’s economy.

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The Dreamforce Expo kicked off this week with a rumored 90,000 attendees from 150 countries there. Sponsored by Salesforce.com, the purpose of this expo is to help businesses around the world realize the power of cloud computing. Cloud computing uses the internet to host data and provide information and services effortlessly to consumers.  While cloud computing is not a new idea, the big revelation from Dreamforce is how important social media is going forward.

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Quite frankly, one involved in business would have to be living in a cave in the middle of nowhere to not be aware of Europe’s debt problems of late. There are numerous theories for how to solve this problem ranging from European Fiscal Unions and bail-out funds to thousands of different austerity measures and the fabled Grexit. Sadly, none of these theoretically viable plans have come to fruition. However, Greece has an idea that is rather unusual but could possibly solve their own debt problems (by far the worse in the EU): unpaid World War II reparations.

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As we are wrapping up this globalEDGE blog series of “top trends,” we thought there’d be no better way to finish then with a custom-made list talking about top global business trends as seen by us here at globalEDGE. The list is in no particular order (i.e. trend number 1 is no more prevalent then trend number 5), but we feel that all of these trends are making themselves known in the international marketplace now. Here’s the list!

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With articles starting to surface saying that the recent Japanese earthquake could cost the Japanese people over $300 billion in economic damage, I thought it would be pretty interesting to try to put that number into focus. In other words, while $300 billion is a lot of money no matter how you put it, is it really that much damage if a typical hurricane does about $350 billion in damage? Thankfully, the people at The Economist have created this graph that shows the world’s costliest natural disasters so we can put the Japanese earthquake into perspective. What the graph shows is very intriguing.

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It is no secret that the entertainment industry is undergoing massive changes (just like any other industry) with the rise of the internet and new technology. In part 2 of our blog series, we talked about how the industry has had a huge increase in pirating. I think there’s no doubt that increase is largely due to the internet making pirating much easier. While that’s one way that increased technology has negatively harmed the industry, there are many positive ways that technology is helping the entertainment industry.

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A recent report by the U.S. Census Bureau highlights the U.S. Trade deficit for 2010. This report is very straight-forward and shows the change in the trade balance throughout the years. As most everybody knows, the U.S. has been running a large trade deficit (i.e. they have been importing more then they export) for several years now. The report gives us a good starting point to understand where the deficit is coming from and some of the reasons behind it.

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The protests in Egypt have taken over the media for the past few weeks. People have been treated with viewings of thousands in Tahrir Square calling for the resignation of President Hosni Mubarak. With Mr. Mubarak announcing that he is stepping down today, I’m not going to spend too much time talking about the implications of that particular uprising. Instead, I’d rather talk about the reasons behind the uprisings and some of the consequences that it may have in the Middle East.

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Are you or your boss scared of starting to export products internationally? Are you afraid of dealing with culture barriers (especially in client meetings)? Do you want to expand your business globally to reach the 95% of consumers who live outside the U.S., but are just not sure how? If these questions sound pertinent to your business, then the U.S. Commercial Service is here to help you.

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The Wall Street Journal had a very interesting piece for their “The Saturday Essay” this past week. It reflected on the cultural differences in parenting styles; written from the perspective of Amy Chua – a Chinese mother who is also a professor at Yale Law School. While it is written to contrast mostly American parents, I believe (and so does the author) that the article can be viewed from a completely global perspective.

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As we kick off our International Flower Market blog series at globalEDGE this week, I thought I should do a brief article talking about the history of flowers, specifically from an economic perspective. This is pretty intriguing because as a commodity flowers have no intrinsic, economic value. They just have value as decoration and whatever other cultural values are placed on them. That being said, the flower market is currently a $32.5 billion industry. Looks like flowers are much more than just a hobby for retirees.

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While just about everyone in the world knows that in aggregate the world has been going through a so-called “Great Recession,” not nearly as many people understand how it has impacted the different regions in the world. Now, thanks to a new study called the Global MetroMonitor produced by The Brookings Institute and the London School of Economics, they can.

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Remember several years ago when microfinance was all the rage? People believed that by loaning small amounts of money to the poor in hard-to-reach rural areas they could potentially stimulate the economic development of those areas. globalEDGE even wrote a few blog posts about it here and there. It seems like microfinance would be a win-win for a financier who wants to give back to the world: they can help out the poor while making profits for themselves. However, looking at it retrospectively, is that how microfinance has worked out so far? It almost seems too good to be true…

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I have been following the currency markets quite heavily in the past few weeks trying to gage the effects of the much discussed QE2 that the U.S. Federal Reserve implemented. Personally, I was expecting that to lead to more inflation in the U.S. dollar and depreciate its value relative to other currencies, including the Euro. Imagine my surprise when I found that I was correct in inflation being expected by the market (due to high treasury yields) but that the Euro was actually the one depreciating versus the dollar! How could this be?

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With the Americas Competitiveness Forum in full swing now, and globalEDGE dedicating an entire blog series towards international competitiveness, there is definitely a lot of attention on the subject here. But what exactly is “competitiveness” and how can a country change how “competitive” their economy is in the global market place? That is where this particular blog comes in play: to give a brief answer to both of these questions.

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Just recently, on November 8, 2010, gold reached its non-inflation adjusted high of $1,400 per ounce. As shown in this chart by Kitco, gold has been increasing at a very rapid pace in the past year. This has prompted many investors to say that gold could potentially be the next “bubble,” or a security that has a huge increase in price only to suddenly “pop” and decrease rapidly in price. However, there is evidence to contradict these fears, especially in the U.S. bond markets.

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Doug Barry, of the U.S. Commercial Services, recently sat down with Jim Blasingame on “The Small Business Advocate Show” to discuss potential ways to make a small business more competitive in an increasingly global marketplace. The first suggestion that both Mr. Barry and Mr. Blasingame had was to go to one of the 108 offices for the United States Commercial Services to get advice, which is usually free. However, Mr. Barry quickly brought up another alternative that he feels is better: attending trade shows.

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Recently, France has been experiencing protests of epic proportions that have disrupted public transit systems, educational systems, and shortages in necessary commodities such as petroleum. There must be a good reason for an entire country to deal with strikes that are so disruptive, and there is: French President Nicolas Sarkozy has called for the government to raise the legal retirement age from 60 to 62. Who wants to work for two more years before their pension kicks in? That question explains the reason for the strikes, but I feel that it is worth exploring the reasons why the minimum retirement age should be raised.

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With all of the talk about how frontier markets are growing so rapidly and returning investors very handsomely, it can be easy to forget about the negative side of these markets. When people hear that they can make a 159% return on their money in 12 months (as Sri Lanka is estimated to do according to Thompson Reuters: Frontier Markets), they tend to overlook the risks that must be taken in order to invest in such a country. This blog post is here to gently remind readers why frontier markets are not yet a standard investing destination yet, and why they are considered a step below emerging markets.

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If you watched the news recently, you would have probably noticed a huge event happening in Chile. In case you haven’t heard, 33 miners went to work in the San Jose Mine (used for the mining of raw copper) for what was supposed to be a ten hour shift. The roof of the mine ended up collapsing on them. Fortunately, after spending 69 days underground, all of the miners have been rescued from their earthen prison safe and sound. Now that this saga has finished its final chapter, perhaps the greatest impact experts in the Mining, Minerals, and Metals industry hope it has was best summed up by Alonso Contreras (a cousin of one of the trapped miners): “Hopefully no one ever again has to do anything like this.”

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The United States has long been known as a global powerhouse when it comes to innovation – especially when it comes to manufacturing. These innovations may not necessarily be products (although some certainly were) but, rather, just tweaks to the manufacturing process that greatly improved efficiency (think of interchangeable parts or the assembly line, both developed by Americans). However, in today’s global economy, the United States is losing jobs in the industrial manufacturing sector, despite still being on the forefront of innovation. Many claim that this is simply because of the lower wages required in other countries, but is that the only reason why?

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Following the recent financial crisis, many people are blaming the large banks almost solely for the collapse. Many feel that the banks must split their commercial banking divisions from their investment banking ones. People think that the banks should not be allowed to use the money they hold for customers in speculative investments for the bank's potential profit. Do these concerns sound familiar?