globalEDGE Blog Archive April 2013

No matter where you are in the world, the sustainability of almost every economy depends on one critical idea. Young and highly educated workers must be able to fill the void created by an aging population leaving the workforce. In the competitive global economic landscape of today, even highly developed countries cannot afford to slide into downward educational trends. One can obtain great foresight into the future outlook of the global economy by simply comparing international education across industrialized economies. This analysis leads to the discovery of many surprising revelations about the future setting of the global economy.

While the unemployment rate of Spain and Greece roaring extremely high these days and economies in the European Union rest down in the trough, good news has finally arrived from the Office of National Statistics. Recent statistics showed that the United Kingdom's economy grew 0.3% during the first quarter of 2013, which relieves the fear of the British economy falling into a triple-dip recession. Is this a sign that United Kingdom is getting itself out of the European Financial Crisis?

“Trade creates wealth”: an age-old saying oft used to break international boundaries for the free exchange of goods, services, currency, and capital. But this age-old saying does not hold true when it comes to the underground economy of old-age empires’ wealth.  Trafficking antiquities not only creates sinkholes in the public goods marketplace, but it also depreciates cultural heritage sights.  Furthermore, these black market deals are exponentially increasing the rate of cultural homogenization by privatizing potential world-heritage commodities.  Why be entrepreneurial with a public good like history?  It is far more meaningful for archeologists, history enthusiasts, and the inquisitive society.  Due to its unauthorized, undisclosed, unregulated, and highly informal, the black market for antiques can only be scratched at surface level but three distinctive vacuums emerge: currency, knowledge, culture.

This year the spring slowdown in manufacturing may slow down more than anticipated. Following disappointing results in the manufacturing activity and industrial production worldwide, analysts are saying that with the already weak economies in China, Germany, and the United States, the slowdown could impact more than just spring. Germany has had a trend in weaker manufacturing activity, and the U.S. has been introduced to sequestration due to its weak trend in the industry. If China, Germany and the United States can’t find a way to power their manufacturing activity this slowdown could have global effects.  

A few months ago, Zheng wrote a blog post about a possible Trans-Atlantic trade agreement. Recently, talks have been heating up between the United States and the European Union with negotiations on a trade deal likely to begin by the end of June. The free trade agreement, if passed, would remove tariffs and reduce other barriers to trade, spurring economic growth, exports and job creation for both parties. Given the stagnant state of the global economy, there is much excitement over a potential deal and optimism is high that an accord will be reached.

By 2030, demand for food, water, and energy is estimated to increase by approximately 50%.  Because of this, businesses that are currently implementing energy saving strategies will be far better off in the future than those who are not.  Fossil fuels are finite resources and as reserves of coal, gas, and oil run out, prices will climb rapidly.  The uncertainty of future supplies of fossil fuels and the growing popularity of “green energy” should incentivize businesses to adopt sustainable strategies. 

For the most part, my pennies spend most of their time collecting dust in either the bottom of my wallet or in the cup holders in my car. Apparently Canada, among other countries like Australia, Brazil and Sweden, has had enough with the cumbersome coins as well. As of February of 2013, Canada officially ceased distributing pennies, considering the cost of manufacturing them is even more than the worth of the penny. Should the United States and the U.K. follow in Canada’s footsteps and eliminate the penny?

On April 4th, the Bank of Japan shocked the world by unveiling a stimulus package that plans to inject $1.4 trillion into the Japan economy over the next two years. This large stimulus package is designed to help Japan out of a deflationary cycle and end two years of stagnation.

Identifying intercontinental and cross-cultural opportunities and weaving them into unique profit-building innovations can be a daunting task for a small start-up, especially when a high cost-risk ratio is factored.  Michigan State University offers a multitude of resources for global entrepreneurs for understanding how to tackle the most common roadblocks: market commonality/divergence recognition, foreign economy entrance, and network access for concrete business-services platform.

How to encourage entrepreneurship? This is a question many universities, cities, states and nations ask themselves on an almost daily basis. The notion of entrepreneurship is a romantic one. Those who begin ventures in a dorm room or garage and achieve success are universally beloved – look no further than Bill Gates or Steve Jobs. The secret formula to release and cultivate the entrepreneurial spirit has long been debated. Could failure actually be a cause?

Understanding the short-term and long-term economic fluctuations is important for businesses all around the world. The global economy influences all businesses regardless of their location. To better understand these trends within the global economy, there are numerous ways to expand your knowledge base. One of these ways is the 2013 Coface Country Risk Meeting taking place on Thursday, May 2nd in New York City. This conference includes a panel of economists and business leaders that will discuss the short-term economic outlook for 2013. During the conference, there was also be an in-depth analysis on today’s rapidly growing regions and the world’s economic power bases. To register for this year’s event or to obtain more details, please visit the 2013 Coface Country Risk Meeting registration site!

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.

Starting a business is not an easy task. It’s one that takes hard work, dedication, and an entrepreneurial spirit that is willing to take on challenges. Despite the many challenges faced by entrepreneurs, starting a business has become easier in certain parts of the world as policymakers begin to recognize the importance of entrepreneurship. Entrepreneurial activities are extremely crucial for the economic well-being of almost every country. As the driving force of innovation and job creation, entrepreneurship has taken on a new level of significance in the global economy. However, certain countries lag behind others in terms of entrepreneurial activities. Differences in culture and business climate are the major factors affecting the level of entrepreneurship within a country.

Entrepreneurship is an important facet of every economy across the globe due to the fact that many times, these new businesses find success when going abroad. The most obvious form of entrepreneurship is starting a new business. Other forms exist as well including revitalizing a mature organization in response to a new opportunity or when large organizations spin off a part of their company, making a new company.

As political season in China begins between the National People’s Congress and the Chinese People’s Political Consultative Conference, there have been concerns with the consumption of luxury goods. China has gone to extremes measures to prevent the issue of inequality by banning politicians to speak publicly about spending on luxury goods. With increases in social media, people have been able to show how wealthy they are by posting to websites such as Tumbler, Instagram, Twitter, and Facebook. Recently, there was an online argument between a Chinese socialite and a member of a sports car club over who has more money. As Asian countries begin to crack down on the over the top display of wealth, could luxury goods retailers be affected?

Often times, raising capital is a stumbling point for entrepreneurs starting a business.  Sometimes personal funds just aren’t enough and venture capital can be tough to come by.  Because of this, entrepreneurs often turn to angel investors.  Angel investors are generally similar in practice; that is, most of them look for specific traits in the founder and business model that indicate whether the new firm has the potential to be successful.

As China becomes the world’s second-largest economy behind the United States, more investors are becoming interested in its stock market to seek profits. However, things are not that easy in the stock market, China’s stock market has just experienced a deep dive recently due to government intervention in the property market.

The World Trade Organization is investigating an Indian governmental program that requires solar energy producers to use Indian manufactured solar cells instead of imported products. Several U.S. environmental groups are pressing the WTO to not pursue action against India, saying that ending the program would threaten the ability of India to cut greenhouse gas emissions. The irony is that India’s green energy industry would be harmed if no action were to be taken, a blow to the environmentalists goal of increasing alternative energy use throughout the globe.

When looking at the composition of the world over the past years, it is not hard to see that the world is becoming increasingly interconnected. If you look at a basic product, it is more than likely that the product you are looking at is made from components in various parts of the world. This increasing economic integration called globalization is having profound effects on many countries. Advances in transportation and telecommunications, including the rise of the Internet, are major factors contributing to globalization that have generated further economic interdependence and universal cultural activities. However, these are certainly not the only factors contributing to globalization. Today, I will show you how the entertainment industry has been a major driver of globalization.

For some, eating insects may seem unappetizing and unappealing, but it is estimated that 2.5 billion people worldwide eat insects on a regular basis.  Students from McGill University in Montreal, Canada believe they have come up with a solution to cut down on global poverty and hunger.  It involves distributing cricket-producing kits to impoverished populations around the world that will give these people a source of protein and potentially a source of income as well.  Simply, families could eat what they want and then sell the rest.

With underdevelopment and currency volatility in the emerging markets, the biggest players have set out to fix those problems. The BRICS leaders met in late March in South Africa to plan out objectives for a new bank that would help fund infrastructure expansion, which is set to reach $4.5 trillion in the next five years. Talks also included discussing pooling foreign currency reserves to resolve currency volatility.

Controversies surrounding the Keystone XL pipeline have arisen yet again due to the pipeline rupture that occurred in Arkansas suburbs just last week. Over 12 thousand barrels of heavy crude oil flowed into a residential neighborhood, rendering about 24 families homeless during the evacuation. Even though an around-the-clock cleanup began last Saturday, what will this mean for Pegasus pipeline, run by Exxon Mobil? And also, how will the leak affect public opinion regarding the implementation of the Keystone XL pipeline?

The Easter holiday has passed, and as always, with its passing comes a lot of chocolate. The holidays are a great time for candy products to increase sales by offering limited edition holiday goodies. Most candy companies incorporate Easter into their products around this time of year, with the most prevalent being the bunny. What if a company could take the idea of the chocolate bunny and restrict other companies from selling it to increase their sales? For over twelve years, Swiss premium chocolate maker Lindt & Spruengli has been trying to trademark these gold-wrapped chocolate bunnies with many court cases involving different European Union members.

While Cyprus is experiencing economic woes and Turkey is finding its way out of a huge European debt crisis, the energy relationship between Cyprus and Turkey regarding gas and oil is causing stress for both countries. On Wednesday, Turkey announced the suspension of energy projects with Italian giant ENI because the company expanded the exploration for oil and gas to Cyprus. ENI’s decision on the project expansion in Cyprus has created hope of economic recovery Cyprus but it infuriated Turkey since the project would cut down the energy plan in Turkey.