Employment 28 Months Following Trough U.S. Recessions Comparison Trough Month = 100 114 112 110 108 106 104 102 100 98 5/54-9/56 2/61-6/63 3/75-7/77 11/82-3/85 11/01-3/04 10/49-2/52 3/58-8/60 11/70-3/73 7/80-11/82 3/91-7/93
Employment 36 Months Following Peak U.S. Recessions Comparison Peak Month = 100 108 106 104 102 100 98 96 7/53-7/56 4/60-4/63 11/73-11/76 7/81-7/84 3/01-3/04 11/48-11/51 8/57-8/60 12/69-12/72 1/80-1/83 7/90-7/93
Index 1980=100 140 130 United States vs. Europe Job Creation United States Europe 120 110 100 90 80 82 84 86 88 90 92 94 96 98 00 02
Percent Change, Year Ago 8 6 4 2 0-2 United States vs. Europe Job Creation United States Europe -4 80 82 84 86 88 90 92 94 96 98 00 02
Largest Employment Losses Peak of Business Cycle to Present, United States Industry* Mar-01 (Thou.) Mar-04 (Thou.) Job Losses (Thou.) Percent Decline Communications Equipment 252.9 155.0 97.9-38.7 Apparel Manufacturing 458.2 292.8 165.4-36.1 Semiconductor & Electronic Components 703.5 451.2 252.3-35.9 Textile Mills 352.2 237.2 115.0-32.7 Computer & Electronic Product Mfg 1,852.0 1,334.2 517.8-28.0 Computer & Peripheral Equip 300.7 218.9 81.8-27.2 Electrical Equip., Appliance, & Components 579.9 447.0 132.9-22.9 Primary Metal Manufacturing 596.6 460.7 135.9-22.8 ISPs, Web Search Portals, & Data Processing 515.0 402.6 112.4-21.8 Telecommunications 1,330.9 1,055.4 275.5-20.7 * Minimum 100k Jobs During March 2004
Largest Employment Gains Peak of Business Cycle to Present, United States Industry Mar-01 (Thou.) Mar-04 (Thou.) Job Gains (Thou.) Percent Increase Home Health Care Services 630.7 742.8 112.1 17.8 State Gov't Educational Services 2,061.3 2,289.2 227.9 11.1 Social Assistance Services 1,918.8 2,110.2 191.4 10.0 Wholesale Electronic Brokers 606.3 666.5 60.2 9.9 Child Day Care Services 705.0 773.1 68.1 9.7 Credit Intermediation 2,569.0 2,799.2 230.2 9.0 Outpatient Care Centers 395.3 429.6 34.3 8.7 Offices of Physicians 1,889.2 2,042.4 153.2 8.1 Building Materials Dealers 1,151.7 1,231.9 80.2 7.0 Hospitals 4,018.0 4,296.2 278.2 6.9 * Minimum 100k Jobs During March 2004
Percent Change, SAAR 10 8 6 4 2 0-2 Historical Productivity Output per Man-Hour Non-Farm Business Sector Manufacturing Sector -4 80 82 84 86 88 90 92 94 96 98 00 02
2 Cumulative Jobs Lost or Added Current vs. Previous Cycle Millions of Jobs Lost/Added 1 0 Previous Cycle July '90 - June '93-1 -2-3 Current Cycle Mar. '01 2002 2003 Mar. '04
Household vs. Establishment Surveys United States Percent Change, Year Ago 5 3 2-0 -2-4 Difference in Jobs Between Surveys 5 3 2-0 -2-4 -5-7 1996 Establishment Survey - L Household Survey - L Net Difference - R 1997 1998 1999 2000 2001 2002 2003-5 -7
Household vs. Establishment Surveys Employment Level Comparison, United States Millions 140 135 Establishment Survey Household Survey 130 125 120 115 1996 1997 1998 1999 2000 2001 2002 2003
110 105 Growth of Self-Employed Workers United States March 2001 = 100 1-34 Hours 35+ Hours 100 95 90 85 Mar. '01 2002 2003 Mar. '04
Percent Change, Year Ago 20 15 10 5 0-5 -10 Self-Employed Workers United States 1-34 Hours 35+ Hours -15 Mar. '01 2002 2003 Mar. '04
Millions 7 6 5 4 3 2 1 A Tale of Two Surveys How Many More Jobs in Household Survey? 0 1996 1997 1998 1999 2000 2001 2002 2003
Research & Development Inputs 2004 State Science & Technology Index Top Ten 2nd Tier 3rd Tier Bottom Tier
Federal Research & Development Dollars per Capita, 2004 Top Ten 2nd Tier 3rd Tier Bottom Tier
Industry Research & Development Dollars per Capita, 2004 Top Ten 2nd Tier 3rd Tier Bottom Tier
Academic Research & Development Dollars per Capita, 2004 Top Ten 2nd Tier 3rd Tier Bottom Tier
Risk Capital Infrastructure Component 2004 State Science & Technology Index Top Ten 2nd Tier 3rd Tier Bottom Tier
Number of Business Starts per 100,000 People Top Ten 2nd Tier 3rd Tier Bottom Tier
IPO Proceeds as Percent of GSP 2004 State Science & Technology Index Top Ten 2nd Tier Bottom Tier
Number of Business Incubators per 10,000 Business Establishments Top Ten 2nd Tier 3rd Tier Bottom Tier
World Knowledge Competitive Index IT & Computer Manufacturing Employment Rank Region Score 1 Austin, US 751.1 2 San Francisco, US 493.0 3 Portland-Salem, US 323.2 4 Kanagawa, Japan 302.5 5 Phoenix-Mesa, US 284.6 6 Zuid-Nederland, Netherlands 265.1 7 Boston, US 232.8 8 Sacramento-Yolo, US 203.2 9 Stockholm, Sweden 201.9 10 Ireland 199.6
World Knowledge Competitive Index Biotechnology & Chemical Sector Employment Rank Region Score 1 Hessen, Germany 322.5 2 Cincinnati-Hamilton, US 248.9 3 Philadelphia, US 242.9 4 Nordrhein-Westfalen, Germany 224.3 5 Vlaams Gewest, Belgium 220.2 6 Lombardia, Italy 216.5 7 Raleigh-Durham, US 204.4 8 Richmond-Petersburg, US 199.3 9 Grand Rapids, US 194.8 10 Indianapolis, US 176.2
World Knowledge Competitive Index High Technology Service Sector Employment Rank Region Score 1 Denver-Boulder-Greeley, US 218.5 2 Switzerland 207.9 3 San Francisco, US 198.1 4 Washington, US 191.7 5 Uusimaa, Finland 186.5 6 Kansas City, US 172.2 7 Stockholm, Sweden 169.2 8 Atlanta, US 169.1 9 Raleigh-Durham, US 168.4 10 Louisville, US 161.1
Sales of Services through Cross-Border Trade United States Trade Activity US$ Billions 300 252 Exports Imports 203 155 107 58 10 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
Sales of Services through Cross-Border Trade United States Trade Activity Percent Change, Year Ago 20 15 Exports Imports 10 5 0-5 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02
Computer Programmers Average Salaries, 2003 Country Salary Range Poland & Hungary $4,800 - $8,000 India $5,880 - $11,000 Philippines $6,564 Malaysia $7,200 Russian Federation $5,000 - $7,500 China $8,952 Canada $28,174 Ireland $23,000 - $34,000 Israel $15,000 - $38,000 USA $60,000 - $80,000
Employment by Foreign Firms in U.S. Top Ten States by Percent of Labor Force, 2004 US Subsidiary Employment (Thou.) State Labor Force (Thou.) Percent of Labor Force State Delaware 29.8 421.64 7.07 Connecticut 123.9 1795.23 6.90 South Carolina 136.7 2039.44 6.70 Hawaii 41.8 625.09 6.69 Massachusetts 220.8 3412.89 6.47 New Hampshire 45.2 726.26 6.22 New Jersey 270.8 4401.38 6.15 North Carolina 237.7 4195.19 5.67 Georgia 243.8 4395.94 5.55 Tennessee 157 2943.5 5.33 US 6326.1 147090.62 4.30
Employment by Foreign Firms in U.S. Top Ten States by Number of Employees, 2004 US Subsidiary Employment (Thou.) State Labor State Force (thou.) California 713.5 17569.87 4.06 New York 480.8 9294.09 5.17 Texas 428.1 10961.51 3.91 Illinois 320.9 6391.6 5.02 Florida 303.3 8301.49 3.65 New Jersey 270.8 4401.38 6.15 Pennsylvania 267.1 6212.74 4.30 Michigan 244.2 5071.17 4.82 Georgia 243.8 4395.94 5.55 Ohio 242.2 5871.88 4.12 % of Labor Force
Employment by Foreign Firms in U.S. by Number of Employees, 2004 Largest Number 2nd Tier 3rd Tier Lowest Number
Employment by Foreign Firms in U.S. by Percent of Labor Force, 2004 Highest % 2nd Tier 3rd Tier Lowest %
Attributes of Jobs Outsourced No Face-to-Face Customer Servicing Requirement High Information Content Work Process is Telecommutable & Internet Enabled High Wage Differential w/similar Occupation in Destination Country Low Setup Barriers Low Social Networking Requirement
Occupations at Risk to Outsourcing U.S. Employment Sectors Employment (2001)* Avg. Annual Salary, 2001 All Occupations (Total Employment) 128.0 $ 34,020 Occupations at Risk of Outsourcing Office Support 8.6 $ 29,791 Computer Operators 0.2 $ 30,780 Data Entry Keyers 0.4 $ 22,740 Business & Financial Support 2.2 $ 52,559 Computer & Math Prfessionals 2.8 $ 60,350 Paralegals & Legal Assistants 0.2 $ 39,220 Diagnostic Support Services 0.2 $ 38,860 Medical Transcriptionists 0.1 $ 27,020 Total in Outsourcing Risk Occupations 14.1 $ 39,631 Percent of all Occupations 11.0% * Employment in Millions
International Investment Patterns Foreign Direct Investment vs. U.S. Direct Investment US$ Billions 140 120 U.S. Direct Investment Abroad Foreign Direct Investment in U.S. 100 80 60 40 20 0-20 1996 1997 1998 1999 2000 2001 2002 2003
Natural Science & Engineering Degrees Yearly Graduates, 1998 Thousands 250 200 150 100 50 Russia China India Japan So. Korea Germany U.S.
Scientists & Engineers in R&D Top 10 Countries Rank Country Number Per Million Population 1 Japan 648,778 5,095 2 Finland 26,378 5,059 3 Sweden 40,534 4,511 4 Singapore 19,737 4,140 5 Norway 18,811 4,112 6 United States 1,201,233 4,099 7 Switzerland 26,762 3,592 8 Russian Federation 501,621 3,481 9 Denmark 18,816 3,476 10 Australia 66,775 3,353 50 China 705,689 545 72 India 167,414 157
Science & Technical Journal Articles Top 10 Countries Rank Country Number Per Million Population 1 Switzerland 6,993 938.55 2 Sweden 8,326 926.51 3 Israel 5,025 810.61 4 Finland 4,025 771.88 5 Denmark 4,131 763.11 6 United Kingdom 39,711 658.88 7 Netherlands 10,441 639.84 8 Australia 12,525 628.98 9 Canada 19,685 605.55 10 New Zealand 2,375 594.67 12 United States 163,526 558.06 34 Russian Federation 15,654 108.62 72 China 11,675 9.02 74 India 9,217 8.65
Expenditures for R&D Top 10 Countries Rank Country % of GDP US$ Billions 1 Sweden 3.80 11.21 2 Israel 3.62 3.96 3 Finland 3.37 5.36 4 Japan 2.98 124.88 5 United States 2.69 292.54 6 Korea, Rep. 2.68 13.81 7 Switzerland 2.64 8.22 8 Germany 2.48 59.08 9 France 2.15 37.38 10 Denmark 2.09 4.40 0.00 21 India 1.23 6.83 25 China 1.00 13.72 26 Russian Federation 1.00 4.29
High Technology Exports Top 10 Countries Rank Country US$ Millions US$ per Capita 1 United States 178,906 610.5 2 Japan 99,389 780.5 3 Germany 85,958 1,042.9 4 United Kingdom 67,416 1,118.6 5 France 67,191 1,112.0 6 Singapore 62,572 13,123.4 7 China 49,427 38.2 8 Malaysia 40,939 1,740.4 9 Korea, Rep. 40,427 831.9 10 Netherlands 38,960 2,387.5 0.0 29 Russian Federation 3,257 22.6 33 India 1,680 1.6
Patent Applications Filed Top 10 Countries Rank Country Number Per Million* Population 1 Finland 195,328 37,459 2 Denmark 197,184 36,425 3 Switzerland 194,547 26,111 4 Austria 197,915 24,210 5 Sweden 193,886 21,575 6 Sierra Leone 116,129 19,737 7 Portugal 198,574 19,623 8 Bosnia & Herzegovina 59,157 14,761 9 Norway 66,213 14,474 10 Belgium 139,931 13,522 61 United States 156,191 533 62 Russian Federation 65,771 456 69 China 96,714 75 71 India 60,852 57 *Minimum Population = 4 Million
Current and Projected New Jobs Due to IS Outsourcing, Selected Industries Net New Jobs Industry Group 2003 2008 Natural Resources & Mining 1,046 1,182 Construction 19,815 75,757 Manufacturing 3,078 25,010 Wholesale Trade 20,456 43,359 Retail Trade 12,552 30,931 Transportation & Utilities 18,895 63,513 Publishing, Software & Comm -24,860-50,043 Financial Services 5,604 32,066 Professional & Business Services 14,667 31,623 Education & Health Services 18,015 47,260 Leisure, Hospitality & Other Svcs. 4,389 12,506 Government -3,393 4,203 Total Employment 90,264 317,367
U.S. Trade in Services Business, Professional, and Technical Services US$ Billions 70 60 50 40 30 20 Receipts Payments 10 1997 1998 1999 2000 2001 2002
US$ Billions 7 6 5 4 3 2 U.S. Trade in Services Computer and Information Services Receipts Payments 1 1997 1998 1999 2000 2001 2002
U.S. Trade in Services Research and Development and Testing Services US$ Billions 7 6 5 4 3 2 Receipts Payments 1 2001 2002
U.S. Trade in Services Other Business, Professional, and Technical Services US$ Billions 45 40 35 30 25 20 Receipts Payments 15 1997 1998 1999 2000 2001 2002
IT Jobs Displaced in the U.S. Including Jobs Lost & Not Created Between 2000 and 2003 Thousands of Jobs 400 350 300 250 372,000 Total IT Jobs Lost Due to: Recession Dot-com Bubble Burst Productivity Gains Over-hiring in 1990s Offshore ITO 200 150 100 50 104,000 IT Jobs Lost or not Created Due to Offshore ITO
Purchase of ICT Equipment Offshore Service Providers Buy More ICT Equipment US$ Billions 2.0 1.5 1.0 0.5 0.0 2000 2001 2002 2003 2004 2005 2006 2007 2008
Occupations Projected to Grow Fastest Percent Change in Employment, 2000-2010 Medical Assistants Computer Systems Analysts Personal & Home-Care Aides Database Administrators Desktop Publishers Network Systems & Data Comm. Analysts Network & Computer Systems Administrators Computer Software Engineers, Systems Software Computer Support Specialists Computer Software Engineers, Applications 0 10 20 30 40 50 60 70 80 90 100
Human Capital Dislocation Mitigation Domestic Strategy New Job Policies for Displaced Workers a. Wage Insurance? Entry and Skill-upgrading Policies in a Career-ladder, Technology-related Jobs Where Human Capital Depreciates Rapidly. a. Human Capital Investment Tax Credit Through Firms? Migration/Flexibility Policies to Mitigate Adjustment Costs a. Better Job Opportunities Information? b. Pension and Health Care Portability?
US$ Billions 120 100 Communications Equipment Private Fixed Investment Investment Level - L Percent Change - R Percent Change, Year Ago 30 20 10 80 0-10 60-20 -30 40 93 94 95 96 97 98 99 00 01 02 03-40
Risk Spread, 9-11 and Iraq Basis Points 1200 1000 Congress authorized use of force in Iraq. 800 600 400 200 Sep.11, 2001 2001 Bush s Speech at the UN about Iraq 2002 Saddam statue toppled. 2003
1.30 Decline of the Dollar 9-11 and Iraq Dollar Per Euro 1.20 1.10 1.00 Sep.11, 2001 Bush s Speech at the UN about Iraq Congress authorized use of force in Iraq. 0.90 0.80 2001 2002 Saddam statue toppled. 2003
Decline of the Dollar 9-11 and Iraq Yen Per Dollar 135 130 125 Congress authorized use of force in Iraq. 120 115 110 Sep.11, 2001 105 100 2001 Bush s Speech at the UN about Iraq 2002 Saddam statue toppled. 2003
US Inflation Percent Change, Year Ago 16 14 12 Recession 10 8 6 4 2 0 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03
Relative Growth Rates Real GDP Growth 1980 1985 1990 1995 2000 2003 China 7.9 13.5 3.8 10.5 8.0 7.5 Japan 9.6 4.6 5.2 1.8 2.8 2.0 United States -0.2 3.8 1.8 2.7 3.8 2.6 European Union 1.4 2.5 3.1 2.5 3.6 0.8 Latin America 6.3 3.1 0.6 1.8 4.0 1.1
Relative Unemployment Rates 1985 1990 1995 2000 2003 China 1.8 2.5 2.9 3.1 N/A Japan 2.6 2.1 3.2 4.7 5.3 United States 7.2 5.6 5.6 4.0 6.0 European Union N/A 8.9 10.1 7.8 8.0 Latin America N/A 5.2 7.2 7.1 7.0
70 Is the World Threatened by U.S. Budget Deficits? Percent of GDP 60 50 40 30 1960 1965 1970 1975 1980 1985 1990 1995 2000
Dow Jones Industrial Average Index 2000=100 120 100 80 60 9/11 event 40 20 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Declining U.S. Labor Costs Unit Labor Costs Percent Change, Year Ago 6 4 2 0-2 -4 92 93 94 95 96 97 98 99 00 01 02 03
The Major Creditor of the Post WWII Era: US is now the world's largest debtor -- by far! Creditor to the World Debtor to the World
95% of FDI Is Merely To Acquire The Global Assets of US-Based Firms FDI to Acquire Existing US Businesses FDI to Establish New US Businesses
Worst Ever US Losses in Current Accounts US Current Account Balance: 2003 -$541,829,000,000 Daily Deficit of -$1,484,463,000 Deficit Per Minute of -$1,030,877
US Trade Balance in Advanced Tech Goods
The Explosion of US Federal Debt
US Job Growth Almost Entirely In Services Not Exposed to Import Competition Service Providing Jobs Manufacturing Jobs
Growth of Real Compensation Per Hour Has Slowed Sharply Since the 1970s
Growth of Real GDP Has Remained Within A Reduced, Narrow Range Since the 1970s
Federal Revenue Other than Social Security/Retirement: Lowest Level of GDP Since 1942
Regional Innovation Life Cycle Knowledge Creation Patents Licenses Proof of Concept Testing Incubation/ Research Parks Venture Capital Technology Transfer Universities and Research Institutions Federal R&D Regulatory Environment Industry Consortia and Partnerships Conception Maturity Formation Growth Clinical Trials/Prototype Collaborations/ Partnerships Regulatory Approval Business Planning Clusters and Networks Industry R&D M&A Activity Product Pipeline Economies of Scale Value -add Job Creation IPOs/gazelles Labor Market/ Graduates Commercialization
2002-'04: First "Recovery" With Stagnant Industrial Output Historic weakness of industrial output from March,'91 to July,'93 Stagnation of Total industrial output from Nov,'01 to March,'04 MBG Information Services
2002-'04: First "Recovery" With Stagnant Manufacturing Output Historic weakness of manufacturing output from March,'91 to July,'93 Stagnation of Total manufacturing output from Nov,'01 to March.'04 MBG Information Services