In today’s fast-paced, globalized world, knowledge workers can choose to work anywhere. In fact, being an appealing place for people to locate, especially those with advanced skills, is a valuable national resource. Highly skilled workers earn high wages, spend those wages locally, pay domestic taxes, and contribute to spill-over effects that benefit everyone in the area. Most engineers will tell you that the most appealing location for tech workers is located right here in the United States. Some countries strike oil. Others find diamonds. The United States hit it rich with Silicon Valley.
However, Silicon Valley has a weakness that threatens this preeminence: the lack of enough skilled workers to promote expansion and innovation by existing firms and industries and the development of new ones. One of the chief causes of this problem is America’s growth-stymying, restrictive immigration policies toward high-skill, foreign-born talent. For example, for the first time in American history, there are fewer startups founded by immigrants than there were 10 years ago. The effect is especially apparent in Silicon Valley, where immigrant-founded startups dropped from 52.4 percent to 43.9 percent from 2005 to 2012. And unfortunately for … Read the rest
The African Growth and Opportunity Act (AGOA) is set to expire in September 2015, and last week at the United States-Africa Business Forum, President Obama pitched the idea of an early renewal, building on the growth of the Administration’s “Doing Business in Africa Campaign.” AGOA is the cornerstone of U.S. trade and investment with Africa; over its 14 year history, the program has contributed to a doubling of U.S. trade with Africa. In 2013, U.S. goods imports from sub-Saharan Africa under AGOA and the Generalized System of Preferences (GSP) program totaled $26.8 billion, more than three times the amount in 2001, the first full-year of AGOA trade.
Indeed, by providing duty-free entry into the United States for almost all African products, AGOA has helped expand and diversify African exports to the United States, while at the same time fostering an improved business environment in many African countries through streamlined eligibility requirements. These eligibility requirements remain important in the renewal process though, as part of increasing the desirability of African countries as a business destination lies in making sure that these nations have an environment that fosters growth and investment. Congress … Read the rest
A new paper from the FUCAPE Business School in Brazil, authored by Brazilian economist Bruno Funchal and Jadir Soares Junior, find that reductions of barriers to trade in the computer technology sector affected the Brazilian labor market. Specifically, they use the end of the “Informatics Law” in 1992 as the non-tariff barrier to trade of analysis. For eight years the “Informatics Law” imposed a limit on access by foreign companies to the manufacture of small computers and provided various support mechanisms for strictly nationally controlled companies.
Using data from the Annual Social Information Report and the Brazilian Occupational Classification, the authors compare the change in the demand for either “routine” or “non-routine” tasks before and after the repeal of the “Informatics Law” to the percentage of workers using computers in 2002 using a panel regression with fixed effects. The idea is that the liberalization of the technology market in Brazil led to a rise in the demand for workers doing non-routine tasks (considered complementary to computers) and a fall in the demand for workers doing routine tasks (considered a substitute to computers).
The authors find that industries and occupations intensive … Read the rest
Last week marked the fourth annual global review of the World Trade Organization’s (WTO’s) Aid for Trade (AfT) Initiative. Created in 2005 by the Sixth Ministerial Conference of the Doha Development Round, Aft targets “behind the border” constraints to trade in least developed countries (LDCs) as well as strengthens their capacity to negotiate beneficial trade agreements. Essentially, Aft focuses on trade facilitation.
The AfT Initiative shines a light on the idea that the best possible “aid” we can give LDCs is free trade. Evidenced by its theme, “Connecting to Value Chains,” the fourth annual review called for “connecting the least connected countries.” More broadly, the value chain world we live in offers many entry points for firms to connect to the global trade web. And countries don’t need to produce final goods to be a part of that global trade web—increasingly we are a world focused on trade in services and tasks. Sixty percent of global trade is now in parts and components.
Production networks stretch worldwide—Senegal assembles Indian cars, Ford has facilities in Vietnam, and Samoa produces automotive harnesses. As WTO Director-General Pascal Lamy puts it, “you do not … Read the rest
Free trade is only successful if all sides are operating on a relatively level, market-based playing field. Unfortunately, in the last few years many nations, particularly developing ones, have dramatically ramped up their mercantilist policies designed to unfairly gain advantages in global trade. The use of these mercantilist policies hurts not only the aggrieved nations, but also, in certain cases, the aggressor. One tool in the mercantilist tool box is “dumping”: the practice of selling exports below the cost of production, often by relying on steep government subsidies. However, to date the system of addressing dumping claims has not been as effective as it should be. All too often by the time cases are brought to and adjudicated by the World Trade Organization (WTO) the damage has been done and many domestic firms put out of business.
We see this with the current conflict between the European Union (EU) and the United States with China over unfair Chinese trade policies in the solar industry. The chief issue for U.S. and EU policymakers concerns China’s use of mercantilist practices, especially selling below cost through large government subsidies, to promote Chinese solar … Read the rest
On Monday at the G8 Summit, President Obama, U.K. Prime Minister Cameron, European Commission President Barroso, and European Council President Van Rompuy announced plans to launch negotiations for an ambitious trade deal between the European Union and the United States. The Transatlantic Trade and Investment Partnership (T-TIP) is an ambitious, comprehensive, and high-standard trade and investment agreement that promises to boost worldwide economic growth. During the negotiation announcement, Prime Minister Cameron said a successful deal could add £100 billion ($157 billion) to the EU economy, £80 billion ($125 billion) to the U.S. economy, and as much as £85 billion ($133 billion) to the rest of the world. While these numbers are impressive, as ITIF’s March 2013 report, Estimating the Benefits of a Transatlantic Trade Partnership found, citing data from the U.S. Chamber of Commerce, gains could be as high as $450 billion for the United States and $495 billion for the Europe Union, boosting both EU and US GDP by 3 percent. “We’re talking about what could be the biggest bilateral trade deal in history; a deal that will have a greater impact than all the other trade deals on … Read the rest
On this day in 1957, the Soviet Union deployed Sputnik. The two-foot, 180-pound orb’s beeping was the starting gun of the space race and we in the U.S. seemed to be just putting our sneakers on. Despite President Eisenhower’s initial shrug, America freaked out – but in good way.
In under a year, a Democratic Congress and the Republican President created and made operational the National Aeronautics and Space Administration (NASA). The National Defense Education Act, which not only jump started higher education in math and science here but also promoted the study of countries we realized were gaining on us, became law. The Advanced Research Projects Agency (ARPA) came into being. Later, of course, it became (Defense) DARPA, which yielded numerous technological advances, including what became the Internet.
When it came to being #1 in space, we didn’t wait for market forces to work their magic. In a speech at Rice University on September 12, 1962 President Kennedy said the tripling of the space budget in a little over two years was worth it. There were new jobs, new companies and new discoveries. We were in the race but … Read the rest
Well, we appear to have found a solution to the old Taylorist dilemma of working being efficient but boring: turn it into a video game.
I heard on the radio this morning that FoldIt players had solved a virus structure puzzle in 10 days which had eluded the best efforts of scientists thitherto. FoldIt turns macromolecule folding problems — devilish 3-d puzzles — into a videogame which can be solved in parallel by a bevy of “players”. The account of the latest solution is in Science Daily here.
How Frederick Winslow Taylor, the inventor of “scientific management” (or, more eponymously, “Taylorism”) would have rejoiced! Although his methods reduced work to rationally most-efficient segments, it is also notorious for draining work of all pleasure or meaning.
We don’t get the meaning back with video games, but we do get the pleasure.
Mechanical Turks of the world, unite! Your have nothing to lose but your boredom.… Read the rest
Summary: “Cloud computing” is much more than simply a new set of technologies and business models. It is rapidly emerging as the platform that will underpin the next generation of digital products and services. Cloud Computing is transforming how consumers, companies, and governments store information, how they process and exchange that information, and how they utilize computing power. Consequently, it opens a new set of policy discussions while at the same time underling the importance of old debates. This post was co-authored by Jonathan Murray.
Discussions of policy in an era of “cloud computing” will continue the debate about classic questions: the terms of market access for services and the rules for privacy, security, IP and more. However, the Cloud must be understood as at once a competitive service, a dynamic enhanced utility, an ICT infrastructure/platform and innovation eco-system, a marketplace, and a production environment. The pervasive, disruptive multi-role character of “cloud computing” demands that a new array of vital questions be opened.
First, though, what exactly is Cloud Computing? Firms are marketing a wide variety of services as “Cloud Solutions,” leading – often deliberately – to some confusion. If … Read the rest
The United States, international development organizations like the World Bank, and fellow developed countries continue to give China—the world’s second largest economy which holds $2.85 trillion in foreign currency reserves and which in 2011 will become the world’s largest manufacturer—billions of dollars in development assistance. In fact, China receives more than $2.5 billion a year in foreign government aid, according to the OECD. But China effectively plays all these countries and institutions for suckers, because it continues to take their billions even while it refuses to open up its markets to foreign countries’ products.
The numbers are astounding. In 2008, Japan gave China $1.2 billion in development aid and Germany gave about $600 million. Though the United States gave less, it still gave China at least $65 million for programs promoting nuclear energy, health, and human rights. Likewise, the World Bank provides China billions. In 2008, the World Bank supported seventy-five projects in China and provided the country over $2.4 billion in loans, bringing the total amount of outstanding World Bank loans and development credits in China to over $23 billion. Despite its $2.85 trillion in foreign currency reserves, China … Read the rest