Asia Pacific rich set to outpace US counterpart

Ateneo Professor on Entrepreneurship

Repost from South China Morning Post Economy | September 26, 2013

 



The rich and famous in the Asia Pacific region would outpace the North American counterparts. The crown was taken last year from AP after the growth of equity markets in North America. North American networth stands at $12.7 trillion vs Asia Pacific which stands at 12.0 trillion.

Asia has 3.68 million high networth individuals vs North America's 3.73 million. The growth of networth of Asian rich would grow by 9.8% surpassing the networth  of Americans.  AP networth would be $15.9 vs $15 million of North America.  This has something to do with GDP growth which is an average 6.6 for this year and 6.8 for next.   For America this only 2.5 and 3.2% next year.

Asians seek more real estate as investments.  And have different investment preferences compared to Americans

From Financial News

California raises minimum wage to $10 per hour; is this making California uncompetitive? Is California still the USA dreamland? s

Ateneo Professor on Entrepreneurship

Repost from Reuters | September 25, 2013

                           

Gov Jerry Brown signed into a law a bill that seeks to increase the minimum age of Californians to $10 per hour till 2016 up from present $8.00 per hour.  That would be increase of $16 per day or about P600.00 per day or more than our minimum age in the PHL.  This is seen as a move to help California residents keep up with the rising cost of living. The clamor for higher wages in California seems to be on the rise, as photos below would show.  The move is supported by Democrats who are pro poor and pro labor. Republicans said however that it would hurt entrepreneurs and small businessmen

However, this would make California more uncompetitive, reduce job opportunities, and cause many residents to seek employment elsewhere.  That is the law of investment and opportunity seeking.

I had advised a PHL food processor not to put up a manufacturing base in USA two years ago;  at that time, cost of doing business in California was all ready very stiff and steep.  This is not to mention the cost of litigation and regulations in California

This would help fuel more outsourcing because it is cheaper to outsource abroad.

California no longer a nice place for start ups?

Would this be helpful to California in the long run?

Would you support this bill if you were a public sector leader?

 

Eurozone on the way to recovery (or simply because Chancellor was reelected)?

Ateneo Professor on Entrepreneurship

The German Channel D W yesterday announced that Eurozone is on the way to recovery.  However, all that was featured were scenes from Germany:  the forthcoming Octoberfest and Germans in the major cities.  Of course, the face of the German Chancellor Merkel who was reelected was shown.  Maybe the reelection sent signals of stability and continued support of Germany to the Euro and the Eurozone.  That is how much leadership can send calming effect on markets and economy.

That news, although somewhat a PR news and overly positive was certainly made to put positive note on the economy and inspire the rest of Europe

Is the debt ceiling increase for US sending shock waves to the World Capital Markets?

Ateneo Professor on Entrepreneurship

Many newsrooms are flashing with declining share prices in major capital markets, supposedly on concern over the debt limit issue at the US.  This has been increased to  $16+ trillion last August 2011, and this limit will be breached soon (this October)  The US Secy of Treasury (and the Pres) has been pushing Congress to pass the law.

Many foresee the repeat of partisan politics which prevented the early passage of this law in 2011.  As a result US debt was downgraded

The current debate for the debt limit however is sending many share prices world wide on downward slide.  The US is still seen as the center for innovation, leadership, and financial strength. The US dollar is still as the currency of choice for trade and Central Bank Reserves  The US debt level, and the political uncertainty casts doubt on that perception.

I hope this issue is resolved soon.

Will this problem pose further threat on the US dollar and world capital markets?

Investors Relocating Again to the Phil in Droves - Gunigundo of BSP

Ateneo Professor on Entrepreneurship

Deputy Governor of BSP Diwa Gunigundo announced at a PTV program/interview that many investors who have relocated to China are going back to the PHL.  Many realized their mistake by relocating to China.  One such example is FEDEX.  FEDEX I heard relocated to China because of:  proximity to the market/shippers, and lower cost.  However, they had horrendous difficulties with the language barrier and work habits of Chinese workers.  I heard that they are going to the PHL but this time at Clark.

The good deputy governor said that the cost advantage of Chinese labor has been negated by now higher wages.  The PHL workers understand English;  you do not need English manuals and thus are more efficient and productive.

In so far as Thailand and Japanese manufacturers are concerned; I heard that many of them would want to relocate to the PHL because of the floods.

Is this for real?

Japan's economy in bad shape?

Ateneo Professor on Entrepreneurship

Repost from About.com | August 28, 2013

 


Despite our impression that the Japan's economic juggernaut is still on the move (what with the Toyota, Mitsubishi, National, Fuji, Nissan, JVC and more dominating their markets) Japan's economy is in bad shape even before the the 2011 tsunami disaster and Fukushima nuclear power plant problems, economic problems have hobbled Japan since 2008. I got a hint of this when IMF chief in a BBC interview said that Japan is a challenge to them.

I used to admire and absorb all things that are Japanese - management, manufacturing methods, quality etc.

Japan's debt to GDP ratio is 182% (nearly twice) which more than the US.  Unlike US which has dealt agressively with its economic woes (like the QE), Japan is not.

Some economic data on Japan:

1.  Japan's economy shrank .11% in 2011 due to decline in manufacturing output due to lesser electricity generation due to Fukushima problem;

2.  The bank of Japan bought US bonds heavily to make yen competitive, hence the high debt to GDP ratio;

3.  Japan just emerged from a 20 year period of deflation and recession;

4. It has aging population;

5. It is challenged by rising commodity prices:  it has to import much of its food and fuel resources;

Above all, Japan is behind now in entrepreneurship.

Japan as the 4th largest world economy is important to rest of Asian countries as it provides many jobs.  It establishes plants and supply chain for its manufacturing sector for the car and electronics.  And there is the competition from China.

Do you agree with the statement that Japan's economy (and finances) is in trouble?

What could the Japanese government do to reverse the situation?

Is entrepreneurship really a problem in Japan?

So Japayukis and those working for Japanese companies, this not the time to be complacent.  Japan's economy is not so sound as we think it is