Unit 3 Micro: Patent Wars might Stifle Innovation
In this six minute piece, Rory Cellan-Jones from the BBC looks at the surge in legal actions concerning alleged patent infringements. Intellectual property lawyers are making huge sums from the trend but small and medium sized enterprises especially in technology spaces might have less scope, freedom and resources to innovate as a result.
Jim O’Neill - The Growth Map: Economic Opportunity in the BRICs and Beyond
Jim O’Neill the Chairman of Goldman Sachs Asset Management has a new book published early next week and it looks like being a tremendous resource for teachers and students wanting to deepen their understanding of crucial changes in the global economy. The Telegraph has been publishing extracts from the book - to have a view please click on the links below:
read more...»Unit 4 Macro: China and India - Notes from Martin Wolf
Pete Davies from Greenhead College attended a superb talk by Martin Wolf CBE (Financial Times) at Leeds Business School last week. The focus was on the Great Convergence between developed and emerging economies, and Peter kindly took some excellent notes from the talk which will be of great use to teachers and students covering this key globalisation / development topics. They can be downloaded below as a word file - many thanks to Peter for making them available through the blog!
Martin_Wolf_Lecture_Oct_2011.docx
Unit 4 Macro: Richard Florida on the Great Reset
What changes are produced by great economic upheavals? The financial and economic crisis prompts a rethinking of the assumptions about how businesses succeed and how economies operate. In a recent edition of the Global Business programme on BBC radio 4, Peter Day met Richard Florida, a renowned economic geographer who has written a new book The Great Reset. Here are some of the notes I jotted down from the programme:
read more...»Unit 3 Micro: Time of Use Pricing for Energy
When is electricity demand highest in the UK? The answer comes at the end of the blog!
The UK government is committed to the rolling out of smart energy meters between now and the end of 2020. Millions of homes will have smart meters installed which track how much electricity you use and when you use it - the installation cost is approximately £350 per unit although this may come down with the utilisation of economies of scale. Smart meters will give consumers and the utility businesses minute-by-minute information about energy consumption and this could fast-forward the launch of time of use pricing tariffs for us all in the years ahead. It will mark a move away from flat-rate tariffs towards fully-fledged peak and off-peak pricing.
At the moment around one in ten households are on Economy 7 tariffs which offers lower prices for electricity used during off-peaking times in the late evenings and early mornings. Economy 7 seems to have been around for as long as CEEFAX and if you understand that you are giving your age away!
read more...»The World Economy: how did we get here and where are we going?
On Wednesday 26 October 2011, I attended a fascinating lecture at the LSE by Nemat Shafik, Deputy Managing Director of the IMF.
She started with outlining the role of the IMF as a cooperative of 188 countries (the newest member being South Sudan), who poor their resources and finances in order to support each in times of difficulty. She then went on to talk about the current slowdown, its causes, the risks involved if the slowdown was to continue and the potential policies needed to aid a recovery.
read more...»Unit 3 Micro: Economies of Scale and the Kinect
Here is an example of economies of scale in production. Microsoft’s motion-sensing camera the Kinect was one of the fastest-selling consumer electronics device in history when it was launched in November 2010. In a report on the FT’s technology blog, Dennis Durkin, Xbox chief financial officer, is quoted as saying that economies of scale have been the major factor driving down the unit price of Kinect from $30,000-$40,000 when it was under development two years ago to $150 now.
read more...»Unit 1 Micro: Google Maps to Charge for Usage
Google has announced that heavy users of the Google maps application will now be charged - it will be interesting to see if this move from a zero price targeted at websites that make extensive use of the Google Maps coding will affect demand for the program.
read more...»Unit 1 Micro: Economists attack food price speculation
Food prices are now rising by up to 10% a year in Britain and Europe and a new forecast from the United Nations predicts that prices can be expected to rise at least 40% in the next decade. Whilst conventional theories of changes in supply and demand conditions can be used to explain some of the increase in food prices, many economists are concerned that speculation by hedge funds and other investors has amplified the natural volatility of prices driving food prices away from fair values and contributing to a huge rise in global food poverty and hunger. These days, cocoa, fruit juices, sugar, staples, meat and coffee are all now global commodities, along with oil, gold and metals.
Is this the moment to legislate to limit the scope for speculative activity in food markets? The video below provides an excellent introduction to speculation in food markets - it features Neil Kellard, Professor in Finance at the University of Essex
read more...»Unit 3 Micro: Drop Box and Freemium
For many students and teachers DropBox is the cloud file synching application of choice, I share study files with colleagues and pupils as my courses develop and evolve during the year. The statis revealing the expansion of the business are impressive.
The You Tube video (below) is from Forbes as they interview founder Drew Houston and here is a link to the full Forbes article.
Drop Box growth statistics are impressive. DropBox is zooming in on 50-million-users, a forecast revenue of $240 million in 2011 even with 96% of users paying nothing - a classic example of the freemium model in action!
read more...»Keynes Prize: The Economics of Cities (3)
In the third extract of the winning essay for the 2011 Keynes Prize in Economics, Ross van der Watt asks “What should be done to revitalise cities in decline?”
read more...»Can the “invisible hand” solve Africa’s poverty?
At last night’s Senior Economics Society at Oundle we had a riveting talk by Hywel Rees-Jones, Managing Director of CDC, which covered so many areas of the issues of development economics. The talk was entitled “Can the invisible hand solve poverty in Africa?” Whilst conceding that some of the statements were broad generalisations across a variegated continent, Hywel discussed some of the key issues facing Africa.
read more...»Keynes Prize: The Economics of Cities (2)
In this second extract from his prize-winning essay, Ross van der Watt focuses on the question “Should Rapid Urbanisation in Developing Countries be encouraged or resisted?”
read more...»Keynes Prize: The Economics of Cities (1)
In this first extract of the winning essay in the 2011 Keynes Prize for Economics, Ross van der Watt asks “How important are Cities to Economic Growth?”
read more...»Unit 2 Macro: UK suffers a weak recovery
AS macro students will be studying the economic cycle and following the struggles of many countries to sustain a recovery in demand, output and jobs after the 2008-09 recession. The well respected independent forecasting body, the National Institute (NIESR) has produced new data suggesting that the UK recovery is on course to be “the weakest of any since the end of the First World War”, with gross domestic product still 4pc below its pre-recession peak. The risks of a second recession (a double dip) look to be rising week by week especially when one looks at the consumer and business confidence data.
Here is a link to the NIESR report and also to BBC news coverage of their findings.
Unit 3 Micro: Amazon launches the Kindle Fire
In the increasingly competitive and contestable market for tablet devices, leading online retailer Amazon has launched the Kindle Fire.
read more...»
Unit 3 Micro: Science Cities and External Economies of Scale
This feature article from the BBC web site is essentially about the vital importance of high-knowledge industries in sustaining competitiveness and growth in a globalising world. Europe lags behind many emerging countries in terms of the resources devoted to science and technology, research and development and creative industries in particular.
But the article makes reference to the expansion of science cities - knowledge clusters that bring together higher education expertise and entrepreneurial zeal - their number continues to grow from California and Boston in the USA, Cambridge in the UK, Education City in Qatar, Science City in Zurich and Digital Media City in Seoul. All good examples to use of the commercial leverage from external economies of scale in high-tech industries.
Unit 3 Micro: You Sue, I Sue - Patent Wars Explode!
The scale of the legal battles between different businesses in the mobile industry might just be unprecedented. This nifty graphic from the iDownload blog provides an overview of the complex web of litigation - a lawyer’s dream! But if Samsung succeed in delaying the release of the iPhone5 then what might become of their reputation with millions of consumers worldwide? An Indian Summer hat tip to Graham Carter for flagging up this visual.
Unit 4 Macro: Bangladesh and Comparative Advantage in Textiles
Many thanks to Pete Davies from Greenhead College, Huddersfield for pointing out a stunningly good article on the shift of manufacturing for garments towards the low-labour cost Bangladeshi economy. Read: Bangladeshi apparel gains from China’s rising costs - there is so much in this article about the relative cost differences and the importance of trade in garments for the Bangladesh economy, especially now that the European Union (EU) has allowed duty-free access to Bangladeshi clothes into the single market since the start of 2011.
Unit 2 Macro: Economic Growth and Inequality
Not all of the benefits of growth are evenly distributed. A rise in real GDP can often be accompanied by widening income and wealth inequality in society that is reflected in an increase in relative poverty.
“Although economic growth in China has created vast wealth for some, it has amplified the disparities between rich and poor. Although the average wealth per Chinese citizen was $17,126 - almost double that of other high growth economies such as India - median wealth was just $6,327. In 2010, China’s Gini-coefficient stood at 0.47. Inequality in China has now surpassed that in the United States.” Source: Dr Damian Tobin School of Oriental and African Studies
read more...»Unit 4 Macro: Progress towards Millennium Goals
The Centre for Global Development has just released fresh research on the extent of progress towards the Millennium Goals. This is the link to a set of inter-active charts and data available to download in excel format. An ideal site for student-centred research on this key topic.
read more...»Unit 4 Macro: Inequality and Development
The September 2011 edition of the IMF’s Finance & Development magazine focuses on developments in inequality and the impact of the widening gap between rich and poor on development programmes and growth. The headline article is by Branko Milanovic who looks at changes in income inequality over the last twenty-five years. A rich resource for students and teachers wanting updates on this key aspect of globalisation.
Slicing up the Apple - globalisation graphic
This lovely graphic from the Economist gives a visual picture of some of the forces of globalisation at play in the manufacture of the iPhone. I was particularly surprised by the contribution to components by Samsung, which is also one of Apple’s main competitors in the Smart Phone market. There are also some useful stats underneath the graphic which would be great in a lesson where concentration ratios and market structures are being introduced.
Slicing up the Apple - globalisation graphic
This lovely graphic from the Economist gives a visual picture of some of the forces of globalisation at play in the manufacture of the iPhone. I was particularly surprised by the contribution to components by Samsung, which is also one of Apple’s main competitors in the Smart Phone market. There are also some useful stats underneath the graphic which would be great in a lesson where concentration ratios and market structures are being introduced.
Unit 4 Macro: GDP per person since the credit crunch
The Economist has a tremendous charts available here showing what has happened to GDP per person employed since the Global Financial Crisis hit in 2007. The range of outcomes is huge with countries such as China, India, Indonesia and Poland achieving solid gains (indeed Poland was one of the few EU countries to avoid recession) whilst the PIIGS including Greece, Ireland and Italy have suffered badly. The UK is not immune too as the chart makes clear.
The chart would make for a terrific discussion among students starting their Unit 4 course and could also be used as a teaching resource for students new to macroeconomics - not least in prompting discussion of the meaning and measurement of GDP and the concept of the economic cycle.
Unit 3 Micro: Motorsport Valley and External Economies of Scale
The occasion of the 2011 British Grand Prix at Silverstone in Northamptonshire is an opportunity to showcase the extraordinary growth and success of the motorsport industry in the UK. It is a classic example of the benefits that can flow from external economies of scale, and also of the way in which genuine competitive advantage in the global economy can be built and nurtured.
read more...»Unit 3 Micro: New Business Models in a Digital Age
Here is a link is to an article from the Wall Street Journal Blog - written by Don Tapscott, author of Wikinomics. He provides five examples of industries facing structural challenges in the digital age and how a revamped business model based around collaboaration might pay dividends - he is an interesting guy to follow for potential E&M and Economics students
China: The End of Cheap Labour
China’s unit labour cost advantage in high-volume manufacturing is being eroded at a faster rate according to this feature piece from Time Magazine. “The average manufacturing wage in China is still only about $3.10 an hour, (compared with $22.30 in the U.S.), though in the eastern part of the country, it’s up to 50% more than that.” There are strong economic, social and political pressures for wages to rise and as they do this will have hugely significant demand and supply-side effects on their economy, for example accelerating the pressure for China to invest more in new technologies and product and process innovation to move higher up the value chain and become less dependent on supplying cheaper products to the rest of the world. My recent China Economics Revision Note focuses on some of these issues.
Development Economics - Emerging Africa
Emerging Africa: This new briefing document from the Center for Global Development looks at how 17 African economies are leading the way towards stronger and more durable development. A hat tip to John Wilson from New Zealand for flagging up the resource via his Twitter account. John can be found here: @mixedeconomies
The Future of Food Retailing? Tesco in South Korea
Here is a fascinating short video on the techniques and tactics adopted by Tesco as they sought to become South Korea’s number one offline and online food retail store.
