As we know, the iPhone is ‘designed in California, made in China,’ but maybe it needs a new label: ‘Made in China—and a few other places.’ Indeed, traditional ways of measuring global trade indicate a trade deficit for the US, but fail to reflect the complexities of global commerce where the design, manufacturing and assembly of products often involve several countries: something known as ‘cross-country production fragmentation.’ Yuqing Xing and Neal Detert of the Asian Development Bank Institute revealed in 2010, in a widely-circulated research paper, the breakdown of iPhone manufacturing (who makes what parts and for how much). Japan accounts for 34% (flash memory, display module, touch screen) of the product’s creation. Germany takes another 17% (baseband, camera module, GPS receiver), Korea and a couple American manufacturers pitch in before China takes over at the end, assembling and shipping the phones for a modest 3.6% of the manufacturing process (or about $6.50 of the $180 [USD] base cost of the device).
The broader issue, that applies to not only trade but other sectors of economic life, is that we know less than our numbers would have us believe. Research professor Andrew Reamer of George Washington University likens the federal data system to “a large black box in a dark shadow.” He says: “We know a few high-profile stats shed light on how we’re doing economically, such as GDP and unemployment, but most everything else is opaque. We don’t quite understand what else the system contributes to economic policy or, to be honest, how it works.”
Peter Marber, author of Seeing the Elephant: Understanding Globalization from Trunk to Tail, calls the system that produces much of the key numbers ‘antiquated,’ says it operates with ‘pre-globalization methodologies’ and is by and large insufficiently funded. He concludes: “In a country that has produced some of the greatest icons of the Information Age—Microsoft, IBM, Apple, Google, Bloomberg—it’s a shame we can’t better capture what’s going on in the world and our own economy.”
The promise (or threat) of ‘big data’ (that is, the phenomenal and ever-growing data sets accumulating as a result of our connectivity) may never live up to its potential, may never translate to any sort of wisdom or understanding, if we do not balance information quantity with quality.