I listened to a great podcast yesterday and today by UVA economist Peter Rodriguez, “The New World Economy: Development Challenges in the 21st Century” (direct mp3 link.) The presentation abstract reads:
The world economy seems to be changing faster than ever. Some of the changes, such as rapid growth in China and India and growing economic freedom are surely good changes, but what about other changes? Professor Peter Rodriguez offers his insights on some of the new challenges of growth and development in the world economy.
I really enjoyed listening to the perspectives of Dr. Rodriguez, especially as they apply to the issues raised by immigration and outsourcing. Many people have read Tom Friedman’s book “The World Is Flat: A Brief History of the Twenty-first Century” — and even more people are talking about it, but I have been concerned that many of the “SKY IS FALLING” sorts of conversations and presentation references may be a bit short on perspective. Dr. Rodriguez provides a sophisticated and well-versed “take” on these issues I think is important and needed. His presentation lasts 30 minutes, the other 30 minutes of the podcast is Q&A.
I titled this post “Bakers available, Bakers employed, and Baker productivity” because those three things are used by Dr. Rodriguez as a metaphor for the three things he views as most critical for influencing average national GDP, if we think about GDP as a metaphorical process of baking pies:
- The number of people in a national workforce (available bakers – relative size of the labor force)
- The number of bakers actually employed in the national economy (bakers employed – the employment rate)
- The average productivity of each employee (baker productivity, or the average number of pies baked per baker – average worker productivity)
Dr. Rodriguez also addresses many of the tradeoffs that are involved in the international economy, and draws a picture of world GDP in 2050. Of course (like all good economists, as he acknowledges) he makes many assumptions to create that predicted picture, but the good news from the perspective of US citizens (and those listening to EdTech conference fear-mongers) is that it does not appear that the US standard of living is going to be unseated anytime soon by up and coming economies like China, India, Brazil, and Russia. His prediction is that the US economy will remain number two or three over the next four to five decades.
I found the following graph of the World Distribution of Per Capita GDP by Country from Dr. Rodriguez’s presentation very thought provoking:
Population is shown on the x-axis, meaning the widest rectangles represent the most populous countries. GDP is shown on the y-axis, so the wealthiest nations are the tallest rectangles. The statistics he shared that approximately one in five people on planet earth live in China, and approximately one in four people of working age on the planet live in China, are things I have heard before but certainly bear repeating. No wonder so many of the products we use everyday are “Made in China.”
Here are some of my bottom-line takeaways from this podcast and presentation:
- Yes, the world is flat– but the sky is not falling, so perhaps we should relax a bit.
- Demographic national changes (the numbers of bakers available) are pretty easy to track and fairly difficult to change. The workforce in countries like China and India is HUGE and will remain HUGE in upcoming decades. This is going to have a significant and fairly predictable effect on economic growth.
- Pressure for outsourcing and immigration is likely to remain high in upcoming decades, given demographic as well as economic trends.
I also think his perspectives reinforce the idea that we should be intentionally teaching and encouraging young people to become creative entrepreneurs in our economy! Worker productivity is a key factor, but productivity today in the 21st century is not defined in the same way it was during a more industrial era.
I am not an economist or an expert on these issues, but I as an educator and citizen I am very interested in them. Thanks to Dr. Rodriguez for sharing these ideas and UVA for podcasting them! I wouldn’t have been able to listen, view, and reflect on these ideas otherwise!
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