The Best of The Economist – January 2014

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Social networks: Unfriending mum and dadFears that teenagers are deserting Facebook are overblown. Not long after being snapped up by News Corporation in 2005, MySpace became a much emptier space when many teenagers who had used the social network to share music and photos of themselves in various states of undress decided it was no longer the cool place to be online. A recent blog post has sparked a debate about whether Facebook, which has 1.2 billion users, is suffering a similar exodus.

Gary Shteyngart’s memoir: A striver’s tale Gary Shteyngery, who emigrated from the Soviet Union to America in 1978, when he was seven years old, has published three award-winning, bestselling, critically acclaimed works of fiction. “The Russian Debutante’s Handbook” had all the benefits and drawbacks of a first novel: immense energy, huge ambition and a plot that more or less came off the rails in the last third of the book. Since then he has produced two other books, “Absurdistan” and “Super Sad True Love Story”. These are more controlled, but retain the author’s characteristic lunatic sense of humour.

Jewishness: Who is a Jew? This question is becoming ever more pressing for Jews around the world. It looks like a religious issue, but is bound up with history, Israeli politics and the rhythms of the diaspora. Addressing it means deciding whether assimilation is a mortal threat, as many Jews think, or a phenomenon to be accommodated. The struggle over the answer will shape Israel’s society, its relations with Jews elsewhere, and the size and complexion of the global Jewish community.

 Technology and jobs: Coming to an office near youThe effect of today’s technology on tomorrow’s jobs will be immense—and no country is ready for it. Innovation, the elixir of progress, has always cost people their jobs. In the Industrial Revolution artisan weavers were swept aside by the mechanical loom. Over the past 30 years the digital revolution has displaced many of the mid-skill jobs that underpinned 20th-century middle-class life. Typists, ticket agents, bank tellers and many production-line jobs have been dispensed with, just as the weavers were.

Google: The new GE: Google, everywhereWith a string of deals the internet giant has positioned itself to become a big inventor, and reinventor, of hardware. At Google they call it the toothbrush test. Shortly after returning to being the firm’s chief executive in 2011, Larry Page said he wanted it to develop more services that everyone would use at least twice a day, like a toothbrush. Its search engine and its Android operating system for mobile devices pass that test. Now, with a string of recent acquisitions, Google seems to be planning to become as big in hardware as it is in software, developing “toothbrush” products in a variety of areas from robots to cars to domestic-heating controls.

Shares in emerging markets: ScarceInvestors love the promise of high returns from emerging-market equities, but there are not many of them to buy. Especially if you exclude stakes held by governments, the market capitalisation of bourses beyond the rich world is tiny. Just how tiny is apparent from the map below: in many emerging markets, the value of all the freely traded shares of firms that feature in the the local MSCI share index (which typically tracks 85% of local listings) is equivalent to a single Western firm. Thus all the shares available in India are worth roughly the same as Nestlé; Egypt’s are equal to Burger King. This suggests that emerging economies need deeper, more liquid markets—and investors need more perspective.

Lionsgate: Fighting the systemHollywood has a new star studio with a different approach to the film business. When some of Hollywood’s biggest studios were pitched a film based on a book series in which young people fight to the death at the behest of a totalitarian government, they passed on it. Bad call. Lionsgate, a fast-growing independent studio, grabbed it, and five years later “The Hunger Games” is one of the most successful film franchises in cinema history.


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