Future of russia defense industry?, page 2

Demographics = Destination.

Russia has a declining population (crashing really), a lousy climate, poor living conditions, a GDP smaller than Californian and a per capita GDP (much) smaller than West Virginia. Sure Russia has lots of natural resources, but what good are they if there’s no one to make use of them or they’re just being shipped out as raw materials.

Hate America all you want, but it’s still the preferred destination for the smart and ambitious. The only way they kept smart, ambitious people in the USSR was by building a wall around it.

The following compares the US to the EU, but it will give you some idea as to how the US compares to Russia.

America will also be noticeably younger then and ethnically more varied. At the moment, its median age is roughly the same as Europe's (36 against 38). By 2050, according to Bill Frey of the Brookings Institution, a think-tank, America's median age will still be around 36, but Europe's will have risen to 53 (and China's will be 44). In the 1990s, America took in the largest number of immigrants it had ever seen in one decade: 33m people now living in the country were born outside it, and Latinos have become the largest ethnic group. “America,” says Hania Zlotnik of the United Nations Population Division, “is the world's great demographic outlier.”

Then there is the technology gap. Each year, more patents are applied for in America than in the European Union. America has almost three times as many Nobel prize-winners than the next country (Britain), and spends more on research and development than any other country. On one measure of academic performance, over 90 of the world's top 100 universities are in America.

Europe and America have also been diverging economically, though one should be cautious about that. In the seven years from 1995 to 2001, real GDP rose by 3.3% a year in America but by only 2.5% a year in the European Union. The bursting of the stockmarket bubble and the subsequent recession reversed this pattern—in 2001, GDP growth was higher in Europe than America—but the gap opened up again as the economies recovered. On current estimates and forecasts, growth in America in the three years to 2004 will average 1.3 percentage points a year more than in the 12-country euro area. Some 60% of the world's economic growth since 1995 has come from America.

These relative economic gains may be reversed. It is hard to see how the country can sustain both its huge trade and budget deficits. On the other hand, its growth in the 1990s reflected a big improvement in productivity, which rose by over 2% a year in the 1990s. The number of hours worked also rose. In 1982, Europeans and Americans put in roughly the same number of hours each year. Now, Americans work a daunting 300 hours a year more.