Quotulatiousness

April 4, 2013

Canadian public sector workers earn between 9% and 12% more than private sector workers

Filed under: Bureaucracy, Business, Cancon, Government — Tags: , , , — Nicholas @ 09:12

Once upon a time, back in the far-distant past, public sector workers got lower wages but better job security, benefits, and pensions than their private sector counterparts. Over the last few decades, the public sector wages caught up and surpassed the private sector, and if anything the benefits and pensions got better. The Fraser Institute calculates that currently there is between a 9% and a 12% premium paid to public sector workers for similar jobs (and that understates the overall differential):

Comparing Public and Private Sector Compensation in Canada examines wage and non-wage benefits for government employees (federal, provincial, and local) and private-sector workers nationwide. It calculates the wage premium for public-sector workers using Statistics Canada’s Labour Force Survey from April 2011, after adjusting for personal characteristics such as gender, age, marital status, education, tenure, size of establishment, type of job, and industry. When unionization is included in the analysis, the national public-sector “wage premium” (i.e., the degree to which public-sector wages exceed private-sector wages) declines to 9.0 per cent from 12.0 per cent.

Aside from higher wages, the study also found strong indications that Canada’s government workers enjoy more generous non-wage benefits than those in the private sector, including:

  • Pensions: 88.2 per cent of Canadian government workers were covered by a registered pension plan in 2011 compared to 26.4 per cent of private-sector employees.
  • Early retirement: Government employees retired 2.5 years earlier, on average, than private-sector workers between 2007 and 2011.
  • Job security: In 2011, 0.6 per cent of government employees lost their jobs — less than one sixth the job-loss rate in the private sector (3.8 per cent).

To ensure public-sector compensation is fair to both taxpayers and government workers, the report argues that better data collection is needed and suggests that Statistics Canada should gather data on wages and non-wage benefits more regularly and systemically than it does now. In addition, comparisons between the public and private sectors should focus on total compensation, not just wages or specific benefits such as pensions.

About one in five Canadian workers is in the federal, provincial, or local government civil service or related organizations, and only 15% of Canadians are self-employed. The vast majority of government workers are unionized, while the reverse is true in the private sector.

March 30, 2013

All those manufacturing jobs are never coming back

Filed under: Britain, Business, China, Economics, USA — Tags: , — Nicholas @ 08:37

Tim Worstall explains why this is at the Adam Smith Institute blog:

I’m always rather puzzled by those who shout that we’ve got to bring manufacturing back to the UK. Apparently this will solve all our problems over what to do with dim Northern lads or something. Once they’re all hammering out whippet flanges then we just won’t have a problem with unemployment ever again. The problem with this idea is that modern manufacturing simply doesn’t provide many jobs. And if it were to provide mass employment it would be very badly paid employment too:

    Americans working to produce traded goods and services earn, roughly, according to their productivity. If low-skill workers in America aren’t much more productive in manufacture of traded goods and services than low-skill workers in China, then they can’t earn much more than workers in China while being employed in manufacture of traded goods and services. They can earn a rich-world wage in production of non-traded goods and services, like sandwiches and haircuts, so long as there is sufficient local demand. In other words, the only way to get less-skilled Americans a good wage in a manufacturing industry is to significantly raise their skill and productivity level. If that can’t be accomplished, they can only hope to find good wages in non-traded industries. At least, that is, until wages of less-skilled workers across the developing world come much closer to converging with those in America.

Of course, that’s all about America but the same logic pertains here as well. Chinese manufacturing wages are around $6,000 a year at present. Meaning that if we had mass employment in manufacturing, as they do, then wages would need to be around that level. Or, alternatively, UK based manufacturing would have to be much more productive to support higher wages. And “more productive” is the same as saying “uses less labour”. Thus you can have few well paid jobs (in the Rolls Royces etc of this world) or you can have many badly paid jobs (Shenzen). It isn’t actually possible to mix and match between the two.

Looking at crowdfunding as a replacement for venture capital

Filed under: Business, Economics, Technology — Tags: , , , — Nicholas @ 07:43

ESR looks at where crowdfunding fits in the traditional tech start-up food chain:

In How crowdfunding and the JOBS Act will shape open source companies, Fred Trotter proposes that crowdfunding a la Kickstarter and IndieGoGo is going to displace venture capitalists as the normal engine of funding for open-source tech startups, and that this development will be a tremendous enabler. Trotter paints a rosy picture of idealistic geeks enabled to do fully open-source projects because they’ll no longer feel as pressed to offer a lucrative early exit to VCs on the promise of rent capture from proprietary technology.

Some of the early evidence from crowdfunding successes does seem to point at this kind of outcome, especially near 3D printing and consumer electronics with a lot of geek buy-in. And I’d love to believe all of Trotter’s optimism. But there’s a nagging problem of scale here that makes me think the actual consequences will be more mixed and messy than he suggests.

In general, VCs don’t want to talk to you at all unless they can see a good case for ploughing in at least $2 million, and they don’t get really interested below a scale of about $15M. This is because the amount of time required for them to babysit an investment (sit on the company’s board, assist job searches, etc.) doesn’t scale down for smaller investments — small plays are just as much work for much less money. This is why there’s a second class of investors, often called “angels”, who trade early financing on the $100K order of magnitude for equity. The normal trajectory of a startup goes from friends & family money through angels up to VCs. Each successive stage in this pipeline is generally placing a larger bet and accordingly has less risk tolerance and a higher time discount than the previous; VCs, in particular, will be looking for a fast cash-out via initial public offering.

The problem is this: it’s quite rare for crowdfunding to raise money even equivalent to the low-end threshold of a VC, let alone the volume they lay down when they’re willing to bet heavily. Unless crowdfunding becomes an order of magnitude more effective than it is now (which seems to me possible but unlikely) the financing source it will displace isn’t VCs but angels.

March 29, 2013

If cable company ads were honest, we’d see something very similar to this

Filed under: Business, Cancon, Media — Tags: , , , , — Nicholas @ 10:10

H/T to Joey “Accordion Guy” deVilla for the link.

If North American cable-and-internet providers were honest, they’d produce an ad that went like this. Note that there’s some swearing involved, as is often the case with cable-and-internet providers.

March 23, 2013

“Having it all” versus “being happy”

Filed under: Business, Media — Tags: , , , , — Nicholas @ 09:32

In the Globe and Mail, Margaret Wente talks about the tension many women feel in trying to lead full lives, both professionally and personally:

Sheryl Sandberg, the billionaire COO of Facebook, is everywhere these days. Her new book, Lean In, is a smart, strategic guide for women who want to succeed. Be more assertive, conquer your fear, manage your guilt, don’t sabotage yourself.

All good advice, in my view. But these days, a lot of smart, highly educated thirtysomething women are having an entirely different conversation. They’re not talking about leaning in. They’re talking about leaning back.

[. . .]

Given the realities of the modern workplace, the mystery isn’t why there aren’t more women at the top but why so many want to get there. “To reject a high-flying career … is not to reject aspiration,” Judith Shulevitz writes in The New Republic. “It is to refuse to succumb to a kind of madness.”

Most women, if they have the choice, are happy to trade long hours and money for flexibility and control. This explains why nearly a quarter of women who have MBAs and children have dropped out of the work force 15 years after graduation, according to a U.S. study. When these findings were released, they produced much hand-wringing about the failed promise of feminism and lingering discrimination in the workplace. But what they really reflect is women’s stronger preference for a balanced life.

High-achieving younger women don’t think this is going to happen to them. It takes them by surprise. They get an MBA or law degree, a demanding job and an equal-opportunity husband. And then they have a baby and – wham. As one young mother in her early 30s puts it, “I had no idea I’d be so crazy about my child.”

I suspect a lot of the frustration young women encounter is that they’ve been lead to expect that they can cope with both a full-time, active, fulfilling career and raising a child simultaneously. The reality is that for most women, it’s a binary choice: you get either the job or the family, but not both. When this realization hits home, it can feel like a betrayal.

March 20, 2013

QotD: The mad, mad, mad world of author royalty calculation

Filed under: Books, Business, Media, Quotations — Tags: — Nicholas @ 00:01

Author/publisher contracts specify royalty rates in the craziest way imaginable. This is because they consist of archaeological strata of legal boilerplate, accumulated over decades and haggled over by publishers’ lawyers and authors’ agents. Contract law is essentially a defensive scorched-earth battleground where the constant question is, “if my business partner was possessed by a brain-eating monster from beyond spacetime tomorrow, what is the worst thing they could do to me?”

And so we have constant re-use of legal boilerplate that’s decades old. “For sales under 10,000 copies, a royalty of 10% will be assigned based on the undiscounted suggested retail price. From 10,001 to 15,000 copies, a royalty of 12% will be allocated … from 15,001 up, a royalty of 15% will be allocated … for copies sold at less than 40% discount off SRP, the full royalty will be paid; for copies sold at discount of 41-50% 80% of royalties due will be paid: from 51%-65% 50% of royalties will be paid: above 65% 40% of royalties will be paid.” You can think of it as a stack of IF () THEN () ELSE () statements switched off the number of copies sold and the discount the wholesaler extorted for taking them off the publisher’s hands.

Charles Stross, “Things publishers can’t do (yet)”, Charlie’s Diary, 2013-03-19

March 16, 2013

More on the Cyprus banking situation

Filed under: Business, Economics, Europe — Tags: , , , , — Nicholas @ 11:44

At Forbes, Tim Worstall explains why the mandatory levy on bank accounts is an epic facepalm:

There’s nothing particularly bad about making depositors carry some of the load of a bank failure. Indeed, it has something to recommend it: if it happens occasionally then people will take more care over where they put their money and what the banks do with it.

However, there’s a very great difference between allowing depositors without government insurance to take losses and actually reneging on the previously promised government insurance. And it’s that second that they’re actually doing here. [. . .]

Under the system until yesterday all depositors in Cypriot banks were insured up to the value of €100,000 with any one bank. Today that solemn and governmental promise has been shown to be false. And not even the European Union nor the European Central Bank are going to make them stick to it. Indeed, very much the other way around. The EU and ECB are insisting that the Cyprus authorities breach this deposit insurance provision.

As I say, there’s nothing wrong with making uninsured depositors take some of the pain. Certainly nothing at all wrong with making those with large deposits take a haircut. The problem is when government has said “we’ll insure this” and when push comes to shove they say “err, no, we won’t”. And the problem with this is that it makes all future EU deposit insurance worth that much less.

March 15, 2013

Will the death of Google Reader also be the death of RSS?

Filed under: Business, Media, Technology — Tags: , , , — Nicholas @ 10:14

Felix Salmon on the knock-on ramifications of Google’s announcement that it is killing Google Reader:

But whether or not Reader was ever going to be a good business for Google, it was from day one a fantastic public service for its users. Google started as a public service — a way to find what you were looking for on the internet — and didn’t stop there. Google would also do things like buy the entire Usenet archives, or scan millions of out-of-print books, or put thousands of people to work making maps, all in order to be able to get all sorts of information to anybody who wants it. [. . .]

The problem with the death of Reader is that it was the architecture underpinning lots of other services — the connective tissue of just about all RSS readers and services, from Summify to Reeder to Flipboard. You didn’t even need to use Google Reader; it was just the master central repository of your master OPML list, all the different feeds that you were subscribed to. Google spent real money to provide that public service, and it’s going to be sorely missed. As Marco Arment says, “every major iOS RSS client is still dependent on Google Reader for feed crawling and sync.”

Arment sees a silver lining in the cloud, saying that with Google gone, “we’re finally likely to see substantial innovation and competition in RSS desktop apps and sync platforms for the first time in almost a decade.” I’m less sanguine. Building an RSS sync platform is a hard and pretty thankless task, it costs real money, and it might not work at all — especially in a world where less and less content is actually available in RSS format. (You can subscribe to my Tumblr feed in RSS format, but there’s no such feed for my posts on Twitter or Facebook or Instagram or Path or even Google+.)

RSS has been dying for years — that’s why Google killed Reader. It was a lovely open format; it has sadly been replaced with proprietary feeds like the ones we get from Twitter and Facebook. That’s not an improvement, but it is reality. Google, with Reader, was really providing the life-support mechanism for RSS. Once Reader is gone, I fear that RSS won’t last much longer.

Is Lockheed’s C-130 Hercules the all-time champion in US pork barrel politics?

Filed under: Business, Military, Politics, USA — Tags: , , , , — Nicholas @ 00:02

Ian Geldard linked to this rather interesting history lesson on the Lockheed C-130 transport aircraft (the RCAF is also a user of this type of plane, along with a large number of other air forces):

USAF Lockheed Hercules C-130 at Yokota Air Base in Tokyo (Photo from Wikimedia)

USAF Lockheed Hercules C-130 at Yokota Air Base in Tokyo (Photo from Wikimedia)

Here’s where the story starts to get interesting. After 25 years, the Pentagon decided that it was well stocked with C-130s, so President Jimmy Carter’s administration stopped asking Congress for more of them.

Lockheed was in trouble. A few years earlier, the Air Force had started looking into replacing the Hercules with a new medium-sized transport plane that could handle really short runways, and Lockheed wasn’t selected as one of the finalists. Facing bankruptcy due to cost overruns and cancellations of programs, the company squeezed Uncle Sam for a bailout of around $1 billion in loan guarantees and other relief (which was unusual back then, as William Hartung points out his magisterial Prophets of War: Lockheed Martin and the Making of the Military-Industrial Complex).

[. . .]

So what did Lockheed do about the fate of the C-130? It bypassed the Pentagon and went straight to Congress. Using a procedure known as a congressional “add-on” — that is, an earmark — Lockheed was able to sell the military another fleet of C-130s that it didn’t want.

To be fair, the Air Force did request some C-130s. Thanks to Senator John McCain, the Government Accountability Office (GAO) did a study of how many more C-130s the Air Force requested between 1978 and 1998. The answer: Five.

How many did Congress add on? Two hundred and fifty-six.

[. . .]

The Air Force’s approach of passing unwanted Herks off to the Air Guard and Reserves worked out nicely for Lockheed. The company allied with Air Guard and reservist advocacy groups to lobby Congress further. In an era of base closures, heavily lobbied governors would use the arrival of new planes to argue for the continuing life of bases in their states. In turn, states and their congressional delegations would fight to get new planes or hang onto existing ones. It was a veritable Lockheed feedback loop. Washington Post reporter Walter Pincus quoted a Pentagon official as seeing C-130 politics as a twist on the old military-industrial complex: “a triangle of the Guard, Lockheed, and politicians.”

The result: the military was often prevented from retiring the oldest Herks, the ones that really needed to be put out to pasture. For example, as Pincus reported, the Joint Chiefs and the Air Force concluded in 1996 that they had 50 more C-130s than they needed, but Congress stymied efforts to retire any of them. One tactic used was to hold nominees hostage: a Kentucky senator repeatedly held up Air Force promotions until four Kentucky Air Guard C-130s were taken off the chopping block.

March 14, 2013

The scare stories about increasing antibiotic resistance

Filed under: Bureaucracy, Business, Health, Science — Tags: , , , , — Nicholas @ 09:36

In sp!ked, Robin Walsh debunks some of the scare factor from recent reports about antibiotic resistant diseases and the looming pandemic:

The UK’s chief medical officer (CMO), Professor Dame Sally Davies, made a splash in the media this week with her warning that antibiotic resistance is the new climate change. There is a ‘catastrophic threat’ of ‘untreatable’ diseases, she said, which promise to return us to a ‘nineteenth century’ state of affairs. The CMO has form: she warned the House of Commons health select committee about the same problem in similarly stringent terms back in January — a case not so much of apocalypse now, as apocalypse again.

As with all such stories, reading the actual CMO’s report leavens some of the hysterical excesses of the press, which were stoked up by the CMO’s excitable media appearances. Setting out the epidemiology of infectious diseases in the UK, the report highlights that while some drug-resistant infections, such as the well-known Clostridium difficile (C diff) and MRSA, are becoming less widespread, there is an increasing occurence of harder to treat multi-drug resistant bacterial infections, which, although still only in the hundreds of cases per year, are on the rise. The report states that only five antibiotics to fight such infections are currently in phase II or III trials, so the cupboard seems worryingly bare of new, necessary drugs.

So if we’re running short on drugs, how can we make more? A sensible article in the British Medical Journal from 2010 clearly set out the challenges facing the development of new antibiotics. Firstly, there are many regulatory hurdles that make running clinical trials in this area difficult. More importantly, there is a major financial disincentive for drug companies to develop antibiotics. Currently, drugs which are profitable are those for chronic conditions that are prescribed lifelong: painkillers for arthritis, diabetes drugs, and the like. A drug that you take once to cure you is unprofitable; doubly so if it is likely to be husbanded to prevent resistance developing until the patent runs out. A change in government payments to incentivise new antibiotics, like that which already applies to so-called ‘orphan’ drugs for rare diseases, would be an easy and rational step towards producing more drugs that meet our needs.

March 12, 2013

A stunning technical achievement

Filed under: Business, Media, Technology — Tags: , , , — Nicholas @ 13:22

No, not the tablet — the stunning ability to condescend to half of the human race:

The ePad Femme: for women everywhere who have no interests except their own bodies and having babies, which is apparently all of them.

The ePad Femme: for women everywhere who have no interests except their own bodies and having babies, which is apparently all of them.

At long last, a company has designed a tablet fit for the use of an entire gender that has, thus far, apparently gone unserved. The ePad Femme, designed and distributed by the Eurostar Group, is an eight-inch tablet that comes pre-loaded with apps concerning yoga, grocery shopping, and cooking. Thank the heavens, ladies may never trouble their pretty heads with such difficulties as finding and downloading their own apps ever again.

The tablet was first announced back in October but received a marketing push in February as “the perfect Valentine’s Day gift,” noted one site. The tablet runs Android 4.0 Ice Cream Sandwich, or as a woman might call it, “the Android screensaver.” Eurostar calls the ePad Femme “the first tablet specifically for ladies.”

Several sites highlight that the tablet “comes in light pink.” Despite our best efforts, we’ve failed to find an image verifying that the actual body of the tablet is pink, so we assume this is in reference to the home screen wallpaper. Just as well, since what woman is going to figure out how to configure that, am I right? Settings, right? What even are they?

Speaking to the Jerusalem Post, Eurostar associate vice president of marketing Mani Nair said that the tablet comes with the preloaded womanly applications so the user can “just turn it on and log in to cooking recipes or yoga.” He went on to state that the ePad Femme “makes a perfect gadget for a woman who might find difficulties in terms of downloading these applications and it is a quick reference.”

March 11, 2013

Chris Kluwe on the PR disaster that was the SimCity 5 launch

Filed under: Business, Gaming — Tags: , , , , — Nicholas @ 11:13

In addition to his “day job” as the punter for the Minnesota Vikings, and his public advocacy role in pushing for same-sex marriage, Chris Kluwe is also a gamer. In this latter persona, he was invited to review the new SimCity 5 release from EA games on behalf of PC Gamer. Business Insider had to bleep out a fair bit of raw Kluwe-ism in the aftermath:

Hi. I’m Chris. I’ve been playing SimCity ever since the Super Nintendo version, and I’ve always been a huge fan of the franchise (SimCity 3000 is my favorite). Thus, when PC Gamer came to me and said “Hey Chris! We want you to play the new SimCity 5 with us in our Celebrity SimCity region,” I wasted no time in responding with a resounding “Hell yeah!”

I mean, what could go wrong?

(Other than the inevitable giant lizards, meteor showers, and poor sewage planning that happen in every SimCity game)

[. . .]

At the time of writing this piece, SimCity 5 has been active for almost 62 hours. Of those 62 hours, I’ve been able to log in for around ten. Of those ten, four consisted of massive latency issues and corrupted games, so (quick calculation here), I’ve had access to the actual game for maybe 10 percent of the time I’ve had it. EA’s servers are, to put it bluntly, utterly bug[redacted], and there’s no option to play the game offline.

Therein lies the heart of my problem. SimCity is, at its heart, a single player game. Having access to other players’ cities is cool, but I want to build MY city, and I don’t want some [redacted], totally unnecessary “always on” DRM to keep me from playing the game (full disclosure: PC Gamer was kind enough to provide me with a download code for the game, so you can only imagine my rage levels if I had actually put money into EA’s pockets for this “experience”).

And now the math:

Sadly, EA seems to have failed to do some very simple math. Let’s look at an example. We’ll assume that for an amazingly successful game like SimCity, about 20,000 people will end up pirating it (those who have the technical knowhow and Internet savvy to find a working crack). I have 160,000 Twitter followers, of whom around 50,000 follow me for gaming. I just told those 50,000 people NOT to buy SimCity because EA cannot handle its s***, and the game is unplayable. We’ll say half those people listen to me and haven’t bought the game already. Soooo, carrying the pi, we see that EA is already out 5,000 more sales than if they had just created a normal, single player offline capable game with multiplayer components.

(Don’t forget, “always on” DRM also screws over people who don’t have access to Internet for large periods of time, like rural areas and travelers. More lost sales!)

In addition to the bad PR of a terrible launch experience, EA is also reportedly refusing to process refunds to purchasers despite having made this an explicit promise in their pre-release information package.

Science fiction’s blindspot on the looming corporate menace of the future

Filed under: Books, Business, Media — Tags: , , , — Nicholas @ 10:36

Kevin Williamson wonders why the dystopic corporate giant of so many science fiction books and movies doesn’t seem to be getting any closer to reality:

That the future will be dominated by amoral international (or interstellar) corporations is a constant theme of science fiction and, not unrelatedly, of progressive political thought. The rogues’ gallery includes Cyberdyne Systems (Terminator), Weyland-Yutani (Alien), Omni Consumer Products (Robocop), and Charlton Heston’s friends at Soylent Inc. The gold standard of the genre is the Tyrel Corporation, from Ridley Scott’s 1982 film Blade Runner, an adaptation of Philip K. Dick’s 1968 novel, Do Androids Dream of Electric Sheep?. The film, which is indisputably a visual masterpiece, is much heavier on the theme of corporate dominance than the novel is, which is strange: The corporation of 1982 was a smaller and weaker thing than the corporation of 1968.

At its best, science fiction imagines a future that illuminates the present, but on the subject of the social role of the corporation, science fiction has long been backward-looking, out of touch with the reality it would analyze. The cultural imagination at large shares this error, though it is difficult to say how much this defect in science fiction is a result of the cultural error and how much it is the cause. But it would be difficult to overstate how deeply the specter of the villainous corporation shapes American political thought. The influence is more visible the farther to the left one moves along the political spectrum. Occupy Wall Street was probably at least as much influenced by science-fiction visions of corporate dystopias as it was by any kind of organized political thought. There were unmistakably Maoist elements to Occupy, but the sinister connotations of the very word “corporation” are by no means heard by only those ears attached to the addled heads of committed leftists.

Do Androids Dream of Electric Sheep? was set in 1992, Blade Runner in 2019, yet here we are, well into the 21st century, and there is still no colossal Tyrel Corporation bestriding the globe, and nothing like the corporate sovereignties of Jennifer Government. As myth, the corporate dystopia remains undiminished in its power. But the function of myths is to illuminate reality, and the reality is that there is no Tyrel Corporation today, and none on the horizon. If you want to know what the corporation of tomorrow looks like, don’t think Cyberdyne — think Groupon.

You would not know it from reading fiction, speaking with Occupy types, or listening to the speeches at the Democratic National Convention, but the corporation as we know it is in decline: The average size of a corporation as measured by personnel has been diminishing since 1975. In 1955 the largest U.S. company, General Motors, employed 576,000 people out of a U.S. population of 166 million; today Exxon Mobil, the largest U.S. company, employs only 82,000 people. Microsoft employs fewer than 100,000 people worldwide; Google employs about 54,000, and Facebook fewer than 6,000.

March 7, 2013

This is why I recently stopped linking to the National Post

Filed under: Business, Cancon, Media, Quotations — Tags: , , — Nicholas @ 15:18

Michael Geist explains:

… if someone wants to post a quote from Selley or anything else written by the National Post, they are now presented with pop-up box seeking a licence that starts at $150 for the Internet posting of 100 words with an extra fee of 50 cents for each additional word (the price is cut in half for non-profits).

[. . .]

None of this requires a licence or payment. In fact, the amount of copying is often so insubstantial that a fair dealing analysis is not even needed. Last year, the Federal Court of Canada ruled that several paragraphs from a National Post column by Jonathan Kay posted to an Internet chat site did not constitute copying a substantial part of the work. If there was a fair dealing analysis, there is no doubt that copying a hundred words out of an article would easily meet the fair dealing standard. In fact, the Supreme Court of Canada has indicated that copying full articles in some circumstances may be permitted.

I make no money from my blogging … in fact I pay money to maintain the web site. The idea of spending $150 per quotation from any source is pretty much a guarantee that I won’t be linking to that source very much at all. At about the same time the National Post brought in their pay-to-quote policy, they also launched a reader rewards program. The idea seemed to be that you log in to their site, it tracks everything you read and then you get a pony at the end of the day, or week, or month, or Baktun, or something. Or maybe not … I really didn’t pay too much attention.

March 5, 2013

China claims the shipbuilding title

Filed under: Business, China — Tags: , , , — Nicholas @ 09:02

Strategy Page talks about the success of Chinese shipyards:

Last year South Korea lost its decade long battle with China to retain its lead in ship building. Because of a five year depression in the world market for shipping, South Korean ship exports fell 30 percent last year, to $37.8 billion. China, helped by government subsidies, saw ship exports fall only 10.3 percent, leaving China with $39.2 billion in export sales. The Chinese government has also been giving its ship builders lots of new orders for warships, which made its yards more profitable and better able to beat South Korea on price. The Chinese government also provides its ship builders with more loans, allowing the builders to offer better credit terms to customers. South Korea is still ahead of China in total orders for ships. As of last year South Korea had 35 percent of these orders versus 33.3 percent for China.

China has been helping its shipyards for over a decade and that has enabled Chinese ship builders to gradually catch up to South Korea and Japan. It was only four years ago, sooner than anyone expected, that China surpassed South Korea as the world’s largest shipbuilder in terms of tonnage. In late 2009, Chinese yards had orders for 54.96 million CGT of ships, compared to 53.63 million CGT for South Korea. Thus China had 34.7 percent of the world market. In 2000, South Korea took the lead from Japan by having the largest share of the world shipbuilding market.

CGT stands for Compensated Gross Tons. This is a new standard for measuring shipyard effort. Gross tons has long been used as a measure of the volume within a ship. CGT expands on this by adding adjustments for the complexity of the ship design. Thus a chemical tanker would end up with a value four times that of a container ship. China is producing far more ships, in terms of tonnage of steel and internal volume, than South Korea, mainly because a much larger portion of Chinese ships are simple designs. South Korea has, over the years, pioneered the design, and construction, of more complex ships (chemical, and Liquid Natural gas carriers.)

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