Visualizing The Wealth Of Nations
In the past we have explored the life-cycle of a sovereign nation, and, perhaps more importantly when allocating capital to specific idiosyncratic investment ideas, we strongly believe, as Goldman notes below, that the competitive strengths of companies often stem from the advantages of the countries they reside in. These include a combination of resource availability (food, energy, mining and others), demographics, trade positioning, infrastructure quality and above all, the presence of strong, inclusive institutions that encourage innovation. So, what follows is Goldman's attempt to map the various success drivers of the world’s countries. Of course, the components of each category aren't exhaustive (and in some cases they are they overlapping), but we hope it is a good starting point from which to understand the fundamental advantages that some countries enjoy over others. Still think the U.S. is the greatest nation in the world? Try telling the Scandinavians...
We divide the drivers into four categories:
Patents per capita, R&D as a percentage of GDP, venture capital as a percentage of GDP and the birth rate of companies.
Confidence in national institutions, days aken to enforce a contract, the cost of starting a business and the GINI co-efficient that measures income inequality.
Net crude oil exports/(imports) as a percentage of consumption, per capita food surplus/(deficit), copper + iron ore + aluminum surplus/(deficit) and retirees as a percentage of population.
Transport (airports per capita, railways per sq km), electricity production per capita and internet penetration.
All percent-rank scores are shown at the back.
The overall scorecard...
The World...(click image for huge version)
and a close up on Europe... (click image for huge version)
Source: Goldman Sachs