[Paleopsych] Progressive Policy Institute: Trade Is an Increasing Share of the New Economy

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Trade Is an Increasing Share of the New Economy

    WHY IS THIS IMPORTANT? The dramatic expansion of trade means more
    robust competition, which makes constant innovation more critical to
    success. For that reason, globalization has accelerated industrial and
    occupational restructuring, leading to the decline of some industries
    and jobs, and the growth of others. One indicator of the extent of the
    trend toward globalization is the growing value of exports and imports
    as a share of the economy.

    THE TREND: Trade has become an integral part of the United States' and
    world economies. U.S. exports and imports have increased from 11
    percent of GDP in 1970 to 25 percent in 1997. Moreover, the United
    States is increasingly specializing in more complex, higher
    value-added goods and services, as reflected in the fact that the
    average weight of a dollar's worth of American exports is less than
    half of what it was in 1970.

    World exports increased from $1.3 trillion in 1970 to $4.3 trillion in
    1995, in constant dollars. And globalization may be about to move up
    to a new level. Jane Fraser and Jeremy Oppenheim, of the consulting
    firm McKinsey & Company, have estimated that the value of the world
    economy that is "globally contestable," which is to say open to global
    competitors in product, service, or asset ownership markets, will rise
    from about $4 trillion in 1995 (approximately a seventh of the world's
    output) to more than $21 trillion by 2000 (about half of world
    output). According to Fraser and Oppenheim, "We are on the brink of a
    major long-term transformation of the world economy from a series of
    local industries locked in closed national economies to a system of
    integrated global markets contested by global players."^[28]11 This
    growth will be driven by global capital markets, reduced economic and
    trade barriers, and perhaps most importantly, technological change,
    which makes it easier to locate enterprises and sell products and
    services almost anywhere. For example, online brokerages like E-Trade
    or Charles Schwab are just as accessible from Singapore or New Zealand
    as they are from the United States.
    THE DATA:^[29]12


   28. http://www.neweconomyindex.org/endnotes.html#11
   29. http://www.neweconomyindex.org/endnotes.html#12

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