Tuesday, September 26, 2006

Shorts and Longs (Cont'd)

Several months ago, I wrote my initial "shorts and longs" blog entry covering a few things I'd bet against (shorts) and a few things I like (longs). Here's a new entry in the longs column: the US economy relative to the rest of the world.

There has been a lot of talk about the US losing its leadership position to China and/or India over the next few decades. I think it's going to take a lot longer than that. Here are some interesting facts I read in a David Brooks column in the New York Times.
  • The US economy accounted for 30.52% of the world's GDP in 1971. Today it accounts for 30.74%.
  • The US accounts for 40% of the world's R&D spending.
  • The US produces more engineers per capita than China or India.
  • US unemployment rates for scientists and engineers are no lower than the rates for other professions, which implies the US has no real shortage of these talents despite countless press references to the contrary.
  • At least 22 out of the top 30 universities in the world are American, and more foreign students come to American universities now than before 9/11/01.
There are plenty of problems with the US, and the country's culture of unrelenting consumption will certainly come back to bite the economy at some point. But the US is so far ahead of every other nation on so many dimensions, it's way too early to start even thinking about a global economy led by any other nation.