Note: INTN is gone next Thursday, July 21. We’ll be back Thursday, July 28 with everything international you need to know.
Yesterday I had the opportunity to speak with a group of aspiring young entrepreneurs from Mexico. When asked why they want to be entrepreneurs, some answered money, others said they wanted control while several expressed the desire to be creators. But nearly all also said they want to improve Mexico and the world. Much recent news has focused on doom and despair but if this talented group is any indication, the future is in good hands. But even as we get caught up in our own entrepreneurial dreams (an artisanal bialy shop in Seattle), we mind Britain’s productivity gap, welcome China bulls and wonder at the educational prowess of Vietnam. It’s this week’s International Need to Know, which although next week will be distracted and unpublished due to a trip to NYC, this week is loyal like a cat at Ten Downing Street shedding key data about our world you’ll need to vacuum up.
Without further ado, here’s what you need to know.
Mind the Gap: Britain’s Lousy Workers
Those good for nothing Europeans that just over 50% of British voters recently elected to flee–they may want to say good riddance to the unproductive workers of Britain. Via the always intriguingMarginal Revolution, we learn that British worker productivity lags far behind the rest of the G-7 countries and behind many other EU countries as well. Britain is not even in the same soccer, er, football stadium as Germany and France and is even behind Italy. It’s also behind Spain, Belgium, the Netherlands and Ireland. There are some positive results, however, when looking at subsectors. In manufacturing, “UK output per hour is estimated to be above that of Italy, and UK output per worker is a little higher than equivalent estimates for Germany and France.” But overall, and including Britain’s vaunted finance sector, the country’s productivity lags far behind. Even as the EU needs to make changes to its structure and policies, the UK might want to gaze into the reform mirror itself. It could use a good comb and wash.
China’s bears bullied their way into this space a few weeks ago but it’s time for the bulls to have their time in our China shop, as we delicately examine new numbers on the size of China’s middle class, wealthy cities and online shoppers. China’s middle class is large as in over 100 million people large. Much of this middle class is huddled in China’s big cities. We’ve noted in the past that China’s demographics are aging at a rate faster than America’s, but its urbanites are relatively young with half the population of China’s big cities under the age of 35. If we look at the wealthiest cities, our old friend Shenzhen comes in first, as you see in the chart below. Shanghai surprisingly is far down the list. Shenzhen, of course, is where Tencent is headquartered which createdWeChat a sort of combination of texting, Facebook and Netflix. Tencent and other online companies are profiting from Chinese online spending. From Next Big Future, we learn that “online shopping in China accounts for 16 percent, or $672 billion, of all spending — and about half of that takes place on mobile.” In the U.S., by comparison, online sales account for about 8% of retail spending. China’s got problems (which we’ll return to soon) but absent a crash, its consumers will continue to beckon companies who want to sell to a large number of hungry buyers.
Vietnam is Good at Tests
As we discussed earlier this year, Vietnam is young, dynamic, larger than you think and embraces trade. They also, it turns out, are good test takers. According to the international education organization, RISE, “Vietnam school children score over 100 points better on comparable tests than the average for low-income countries.” In the chart below, you see Vietnam in all its outlier glory hovering very near high income countries like the United States and Canada and well above low income countries from Peru to India to the Philippines. Vietnam’s children score better on tests than other low income countries from a young age and with each resulting year in school, the gap grows. RISE wanted to know why this was the case. What are Vietnam’s schools doing that is creating such great educational productivity results? A World Bank study, that should have been titled, “We’re Not Sure,” found that part, but not all of Vietnam’s achievement is a result of higher level of access to pre-school and investment in school infrastructure. The study also claims there are cultural factors involved, including students skipping fewer classes and “teachers appear to benefit from closer supervision of their work by the school principal.” Don’t ever mess with a Vietnamese principal. Do keep an eye on an economy with young demographics and a strong educational system.
Reminder: There will be no International Need to Know next Thursday, July 21,due to a trip to the Big Apple, but we’ll be back July 28th bringing wit and wisdom from the four boroughs of NYC and beyond.