A map of the future: high-tech exports

Building on last week’s posting, I wanted to flag up this map in which the sizes of countries reflect computer exports.

Computer exports make up almost 11 per cent of world trade. While these data will be especially relevant to the technology-focused readers of this blog, the huge scale of the computer industry means that these data also give useful picture of other export markets.

The world economy is facing high highly stressful year because of the de-synchronisation of investment and production. Investment is pouring out of the US: that is a long-term trend in manufacturing, but it now means that access to capital is limited across the board. Most new factories, new hedge funds, most new IPOs will be outside the US.

In this map, you see the impact of that evolution. Territory size shows the proportion of worldwide net exports of computers (in US$) that come from there. Net exports are exports minus imports. When imports are larger than exports the territory is not shown.

The data show three main clusters: East Asia, Japan and Western Europe. The twelve countries with the greatest computer exports, in net US dollars, are China, Finland, Ireland, Israel, Japan, Malaysia, Singapore, South Korea, Sweden, Taiwan, The Netherlands and the United Kingdom.

Where do these machines go? As with many imports, the United States imports more than any other territory. Alongside North America, the three other clusters of territories which are nett importers are Eastern Europe, South America and the Middle East.

That pattern, of the US depending on imports for finished goods as well as for raw materials, is important. Broadly speaking, the US is at the end of its productive dominance, and its current hegemony is supported by accumulated assets and by its ability to import talent and export dollars. As a result, Americans are losing their faith in globalisation.

And it’s no surprise, since the decline in US manufacturing will continue, and will have a negative impact in unemployment. However, the confusion is that some folk may think that this will leave to a world recession: it won’t. In fact, while there is clearly going to be a deceleration in the US economy, we don’t see it going into reverse. But the decline in the US isn’t caused by consumer confidence, but by investor’s choices. US investors are putting their money abroad, in recognition of the declining risk in many international markets and the declining value of the dollar. As production moves outside the US, and the dollar of the US falls continually, US consumer action has little power either way to push back these long-term trends. Indeed, the probable cuts in US interests seem unlikely to help either. Oil prices, which could easily rise, can also make a mark: the US economy is highly sensitive to oil prices (China also consumes oil, but fuel prices there are subsidised by the state).

In high-tech, this mean more internationalisation, and more mergers. Private equity firms are under increased pressure to sell, because of limited growth in equity prices, and the same trend will make corporate buyers more interested in snapping up the competition.

Duncan Chapple

Duncan Chapple is the preeminent consultant on optimising international analyst relations and the value created by analyst firms. As SageCircle research director, Chapple directs programs that assess and increase the business value of relationships with industry analysts and sourcing advisors.

There are 2 comments on this post
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