Since I'm new around here, I thought I'd introduce myself.
For the last decade, I've studied technology and economics, applying any lessons learned both to investing and to public policy. I spent eight years working with George Gilder at the Gilder Technology Report, a monthly investment strategy letter and online community focused on semiconductors, fiber optics, and wired and wireless communications. Simultaneously I was a fellow at the Discovery Institute, where I researched and wrote about the Internet, telecom policy, China, and the global economy.
All the while, I'd closely followed the work here at PFF. Jeff Eisenach, Adam Thierer, Jay Keyworth, and others were always key resources I turned to on digital economy and telecom policy matters. Now, I've joined PFF to launch a new program to study the global economy.
In 2007, world GDP topped $50 trillion. China and India are on the move. Many U.S. companies find that ROW -- rest of world -- sales now top the domestic U.S. market. Capital, labor, and ideas now circle the globe at the speed of light. Financial markets and supply-lines are more integrated than ever. Some three billion people are connecting to the modern economy for the first time. New players are creating new ideas and new enterprises in new places.
As globalization allows entrepreneurs and companies to reach across or obliterate national boundaries, offering unprecedented opportunities to corporations (new markets and talent), the middle class (cheap products and rising living standards), and the poor (new technology and wealth) alike, it also creates a whole new set of challenges.
• Globalization also empowers governments to reach across the world and touch firms previously outside their jurisdiction.
• Nations outsource not only their factories but also their monetary policies, leading to charges of “currency manipulation,†proposed tariffs, and the threat of a trade war.
• The intangible nature of intellectual property, which makes up an ever larger portion of the world’s output and wealth, adds a new layer of complexity to global governance.
• Rising global wealth leads many to warn of impending energy shortages, zero-sum oil wars, and global warming. Proposals to limit energy usage continue to gain traction.
• As inequality between the world’s rich and poor begins to decline, many assert that rising inequality in the U.S. is leaving millions of Americans behind.
• With so many large changes coming so fast, populist sentiment is on the rise. Many urge the closing of borders to people, capital, and trade.
Can America accept a world with new capitalist power centers, or will we engage in a protectionist backlash? Do we view foreign investment (aka the trade deficit) as a curse, or a blessing? Can we convince other regions that intrusive regulation of "foreign" competitors is not the path to prosperity? Can we provide a stable platform for world commerce through stable monetary arrangements? Can we agree on ways to protect often intangible intellectual property and thus encourage global innovation? Or will the globe regress into protectionist battles wielding the self-destructive weapons of tariffs, subsidies, and devaluations, or the mercantilist phantoms of energy hoarding, IP theft, and aggressive "antitrust."
These are the topics we will study. We think they will be at or near the center of the debate for the next few decades. In addition, we all know the global Internet is changing the economy, education, politics, and media in profound ways, and we will continue our intense study of Internet phenomena as well. In the coming weeks, for example, I'll release a new paper estimating the growth of Internet traffic and documenting the technologies and applications that are driving this "exaflood."
I'm eager, with my new colleagues, to go exploring these fascinating frontiers.
--Bret Swanson