A Big Shift

I remember as a boy reading predictions that the world would run out of oil in 10 years.

That was over 30 years ago. But what's more surprising is the prospect of a huge shift in which regions of the world control the most oil:

Amy Myers Jaffe of Rice University says in the next decade, new oil in the US, Canada and South America could change the center of gravity of the entire global energy supply.

"Some are now saying, in five or 10 years' time, we're a major oil-producing region, where our production is going up," she says.

The US, Jaffe says, could have 2 trillion barrels of oil waiting to be drilled. South America could hold another 2 trillion. And Canada? 2.4 trillion. That's compared to just 1.2 trillion in the Middle East and north Africa.

Skip the article's human interest aspect. This isn't about North Dakota, it's much bigger than that. The section that starts with Jaffe's comments is the real story.

It's Time

This WSJ article on the rise of small-scale manufacturing in Africa is good news all around, and will be assigned reading in my International Management class.

Highlights:

Why Africa doesn't make more stuff has been an enduring mystery of the global economy. As wages rose in manufacturing powerhouses such as China, many economists predicted that factories would flock to cheaper pools of labor in Africa, helping to spur the same sort of rapid industrial growth that lifted living standards across Asia.

On the role China may play:

Africa's industry isn't so different from the modest roots of China's own industrial revolution. In the 1980s, Chinese farmers invested in factories to make goods for rural consumers. Multinationals arrived later to fuel an export boom, according to Zhang Chunlin, an economist at the World Bank in Pretoria who specializes on private-sector development.

China's challenge was "to develop in an imperfect environment," says Mr. Zhang, who once worked at a village brick kiln in the northern China. "That is also Africa's challenge."

Knowledge Problem

These two posts on Yergin's take on peak oil led me to a blog I'd not seen before, Knowledge Problem.

Students know how much I love to use "why we will never run out of oil" as a way to demonstrate the value of thinking like an economist. Now I'm looking though older posts. Like a kid in a candy shop...

Tiger vs. Dragon

The Freakonomics blog has an interesting comparison of China and India in terms of both past GDP growth, and current population trends.



But one thing to keep in mind about demographic projections: they seem more inevitable than they are! Often, demographic trends that seem unstoppably moving in one direction take an unexpected turn.

Still, savvy marketers can't afford to ignore demographics, especially the near-term trends.

GDP Equivalents for China's Provinces

My students know I love to drill them on GDP and GDP equivalents. This terrific Economist "country equivalents" map provides a whole new way to grasp relative sizes of economies.


It helps that many of my students come from the countries that this graphic uses to compare to Chinese provinces.

Guangdong's GDP is now larger than that of Illinois!