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Zakaria: Why 'Mission Impossible' premiers in India
By Fareed Zakaria, CNN
Going to the movies is a great American pastime. And whether it's Kung Fu Panda or Harry Potter, there's always some extra cache in catching the films as soon as they're released. So if you're a Mission Impossible fan, you know that the latest installment of Tom Cruise's action series is opening soon. But if you want to be there for the first day, first show, don't go to Los Angeles to watch the world premiere in Hollywood. Try New Delhi or Mumbai. You see, Ghost Protocol releases across India five days before it hits U.S. cinemas.
And it's not an isolated case. Steven Spielberg's film adaptation of the comic book series Tintin opens in Asia and the Middle East more than a month before it hits American cinemas. Now, we are all used to a world in which events, ideas and products start in the West and move East. Is this the beginning of the Great Reversal? Well, maybe.
Partly this is happening so companies can avoid piracy in Asian countries. Earlier, when movies would arrive in Chinese or Indian cinemas two months late, many fans there would have resorted to pirated DVDs. But there's also a major economic trend here that big companies are picking up on. Overall, U.S. consumer spending declined by 2% in 2010. The sector that declined the most was entertainment, by 7%. It makes sense, when times are tough, you can't cut back that much on essentials like food and housing, so you spend less on things like movies and music.
Meanwhile, Indians, for example, are moving in exactly the opposite direction. Consumer spending is up in general, but on entertainment, it is up 14% in 2010. Emerging economies, including China and India, account for half of global output, but only a third of global consumption. This is changing, and it's not just the movie companies that have figured this out.
When Dell launched its new ultra thin laptop last week, it made China its first stop. The XPS 14z is being marketed as the world's thinnest laptop, but you wouldn't be able to buy it in the U.S. yet. You have to wait. You see, China is now the world's biggest PC market, so it gets prioritized.
Look at the auto industry. The 2013 Chevy Malibu is going to launch in Korea and China before it hits dealers here in the USA, and General Motors has done that for years with a series of new Buicks.
So there is a big shift at work here - a picture of the two-speed world. Consumers in developing markets are growing in importance in the eyes of the biggest global companies. Meanwhile, here in America, consumer demand is stagnant.
Could things change? Yes, but only if we get growth going again in the West and, particularly, in America. U.S. companies are currently holding more than $2 trillion in cash reserves. I saw a chart this week that illustrated in the starkest possible way why this needs to change. Take a look at the chart in the video above. It plots corporate spending along with employment numbers. The correlation is unmistakable and tight. As corporate investment goes up, employment goes up.
So the question everyone in Washington should be asking is how do we get corporations to invest more and sooner, looking at permanent changes in tax and regulatory policy. Let's agree on five measures and pass them right away. This doesn't need to be Mission Impossible for America, and we don't even need Tom Cruise to fix our problems.
Zakaria: Why 'Mission Impossible' premieres in India – Global Public Square - CNN.com Blogs
By Fareed Zakaria, CNN
Going to the movies is a great American pastime. And whether it's Kung Fu Panda or Harry Potter, there's always some extra cache in catching the films as soon as they're released. So if you're a Mission Impossible fan, you know that the latest installment of Tom Cruise's action series is opening soon. But if you want to be there for the first day, first show, don't go to Los Angeles to watch the world premiere in Hollywood. Try New Delhi or Mumbai. You see, Ghost Protocol releases across India five days before it hits U.S. cinemas.
And it's not an isolated case. Steven Spielberg's film adaptation of the comic book series Tintin opens in Asia and the Middle East more than a month before it hits American cinemas. Now, we are all used to a world in which events, ideas and products start in the West and move East. Is this the beginning of the Great Reversal? Well, maybe.
Partly this is happening so companies can avoid piracy in Asian countries. Earlier, when movies would arrive in Chinese or Indian cinemas two months late, many fans there would have resorted to pirated DVDs. But there's also a major economic trend here that big companies are picking up on. Overall, U.S. consumer spending declined by 2% in 2010. The sector that declined the most was entertainment, by 7%. It makes sense, when times are tough, you can't cut back that much on essentials like food and housing, so you spend less on things like movies and music.
Meanwhile, Indians, for example, are moving in exactly the opposite direction. Consumer spending is up in general, but on entertainment, it is up 14% in 2010. Emerging economies, including China and India, account for half of global output, but only a third of global consumption. This is changing, and it's not just the movie companies that have figured this out.
When Dell launched its new ultra thin laptop last week, it made China its first stop. The XPS 14z is being marketed as the world's thinnest laptop, but you wouldn't be able to buy it in the U.S. yet. You have to wait. You see, China is now the world's biggest PC market, so it gets prioritized.
Look at the auto industry. The 2013 Chevy Malibu is going to launch in Korea and China before it hits dealers here in the USA, and General Motors has done that for years with a series of new Buicks.
So there is a big shift at work here - a picture of the two-speed world. Consumers in developing markets are growing in importance in the eyes of the biggest global companies. Meanwhile, here in America, consumer demand is stagnant.
Could things change? Yes, but only if we get growth going again in the West and, particularly, in America. U.S. companies are currently holding more than $2 trillion in cash reserves. I saw a chart this week that illustrated in the starkest possible way why this needs to change. Take a look at the chart in the video above. It plots corporate spending along with employment numbers. The correlation is unmistakable and tight. As corporate investment goes up, employment goes up.
So the question everyone in Washington should be asking is how do we get corporations to invest more and sooner, looking at permanent changes in tax and regulatory policy. Let's agree on five measures and pass them right away. This doesn't need to be Mission Impossible for America, and we don't even need Tom Cruise to fix our problems.
Zakaria: Why 'Mission Impossible' premieres in India – Global Public Square - CNN.com Blogs
