California SC Transparency Law

The California supply chain transparency law that just took effect will have a major impact on global supply chains. Businesses will have to be able to certify that no human rights abuses took place in the manufacture of their products, no matter where in the supply chain they could occur. No more blindly buying parts and products; you need to know how they were made. Given the complexity of some supply chains (see my book for a reference to AT&T), this could be a real burden.

Supply chain disasters

The recent events in Japan and Thailand have raised the question of how much should firms spend to protect themselves against disasters. A firm can spend millions with no payoff unless there is a disaster. It all boils down to one's risk aversion. Look for this to be debated in the coming years.

Exports

Exports are still just over 20 percent of U.S. GDP, much smaller than export driven economies such as Germany and Korea. We all want to export, but someone has to import--unless we just dump stuff in the ocean. We depend upon the banks to lubricate trade, and the current crisis in Europe (and around the world, for that matter) is gumming up the works.

The Greek Bailout

I have been in Germany for three weeks, and there is a lot of tension about Greece and the euro situation. Germany is doing well economically, but they worry that their progress will be derailed. My students are ambivalent about Greece leaving the euro zone, but are generally in agreement that Germany should stay in. Getting out would leave them with a strong currency which would hurt their exports. And, Germany lives on exports. The macro statistics say that the Germans don't buy much, but stores selling expensive clothing and jewelry are everywhere and are opening every day. I wonder how some of them stay in business.

Technology Generation Skipping

The WSJ of 12 September has an article on Chinese telecoms in Africa. The real story is the rapid growth of smart phones in Africa. This is the telecoms 'generation skipping' I mention in the book. From May 2010 to May 2011, smartphone growth was 1280% in Nigeria, 189% in South Africa, 97% in Kenya, and 133% overall in Africa. Smart phones free them from the maze of bureaucracy and mismanagement in state owned land systems. They are incredibly innovative with their mobile phones.

currency gyrations

The Swiss are intervening to keep the franc from getting stronger. In my book, I have a graph of market rates (euro vs. US$) and ppp rates. The ppp stays steady, while the market rate gyrates. Pity the poor purchasing or sales manager who is trying to set prices. One's whole supply chain can be disrupted by the Greeks, even if one does no business with them.

Solar Industry

Solar power company Solyndra has filed for bankruptcy despite government help. As I mention in Chapter 8, the industry depends heavily upon government help, but help does not guarantee survival. And, government help means taxpayer dollars which are in short supply these days. First Solar still looks good, but their stock continues to go up and down like a yo-yo reflecting skepticism about the industry.