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Visualizing the Composition of the World Economy by GDP (PPP)

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The Composition of the World Economy by GDP (PPP)

The Composition of the World Economy by GDP (PPP)

Earlier this month, we showed you the world’s $86 trillion economy broken down by country, using nominal GDP calculations.

While this is one useful way to view the global economic picture, it’s not the only way.

Today’s visualization, which comes to us from HowMuch.net, is similar in that it also uses a Voronoi diagram to display the composition of the world economy by GDP. However, by adjusting data for purchasing power parity (PPP), it produces a very different view of how global productivity breaks down.

What is PPP?

Purchasing power parity, or PPP, is an economic theory that can be applied to adjust the prices of goods in a given market.

In essence, instead of using current market rates for prices (such as in nominal data), PPP tries to more accurately account for differences in the cost of living between countries – especially in places where labor and goods are far cheaper.

When applied to GDP measurements, PPP can help provide a more accurate picture of actual productivity. For example, a taxi ride in Bolivia may be far cheaper than one in New York City, even though it is the same service provided over the same distance.

Applying PPP to GDP figures can help correct for these types of differences.

Ranked: Economies by GDP (PPP)

After adjusting for PPP, how does the composition of the global economy change from the nominal numbers?

Below are the 15 largest economies by GDP (PPP), as well as how their ranking changed from the previous chart, which used nominal data.

RankCountryGDP (2018, PPP)Share of World TotalChange (vs. nominal rank)
#1๐Ÿ‡จ๐Ÿ‡ณ China$25.4 trillion18.6%+1
#2๐Ÿ‡บ๐Ÿ‡ธ United States$20.5 trillion15.0%-1
#3๐Ÿ‡ฎ๐Ÿ‡ณ India$10.5 trillion7.7%+4
#4๐Ÿ‡ฏ๐Ÿ‡ต Japan$5.5 trillion4.0%-1
#5๐Ÿ‡ฉ๐Ÿ‡ช Germany$4.5 trillion3.3%-1
#6๐Ÿ‡ท๐Ÿ‡บ Russia$4.0 trillion2.9%+5
#7๐Ÿ‡ฎ๐Ÿ‡ฉ Indonesia$3.5 trillion2.6%+9
#8๐Ÿ‡ง๐Ÿ‡ท Brazil$3.4 trillion2.5%+1
#9๐Ÿ‡ฌ๐Ÿ‡ง United Kingdom$3.1 trillion2.3%-4
#10๐Ÿ‡ซ๐Ÿ‡ท France$3.1 trillion2.3%-4
#11๐Ÿ‡ฎ๐Ÿ‡น Italy$2.5 trillion1.9%-3
#12๐Ÿ‡ฒ๐Ÿ‡ฝ Mexico$2.5 trillion1.9%+3
#13๐Ÿ‡น๐Ÿ‡ท Turkey$2.4 trillion1.7%+6
#14๐Ÿ‡ฐ๐Ÿ‡ท Korea, Rep.$2.1 trillion1.5%-2
#15๐Ÿ‡ช๐Ÿ‡ธ Spain$1.9 trillion1.4%-1

Using GDP (PPP), the world economy is worth $136.5 trillion in current international U.S. dollars.

What changed the most from the nominal ranking?

With PPP, you can see Indonesia ($3.5 trillion) jumps up the ranking by nine spots to become the #7 ranked economy. Likewise, Turkey ($2.4 trillion) and India ($10.5 trillion) both climb the ranking by six and four spots respectively. China also switches with the U.S., to become the world’s largest economy.

On the flipside, it is often the more developed economies with strong currencies that see a drop in their rankings. After adjusting for PPP, the United States, Japan, Germany, France, Italy, South Korea, Spain, and the U.K. all slip from their previous positions.

For more on GDP (PPP), see the projections for the world’s largest 10 economies in 2030 that we published earlier this year.

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Economy

The Impact of International Students on the U.S. Economy

The U.S. has benefited from being the top destination for the world’s international students, but new enrollments have begun to show signs of weakness.

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The Economic Impact of Americaโ€™s International Students

For decades, the U.S. has been the top destination for students looking to study abroad.

Itโ€™s easy to see why. Not only does the country provide access to world-class economic hubs like Silicon Valley, but the U.S. is also home to 14 of the top 20 universities in the world, many of which are famed for their research and alumni networks.

Yet, there is cause for concern.

International enrollments in the U.S. have slowed, while other countries are attracting a larger share of the global talent pool. To help us understand whatโ€™s at stake if enrollments continue to decline, todayโ€™s infographic shows the impact of international students on the U.S. economy.

Driving American Innovation and Growth

International students and scholars are a vital economic asset, and Americaโ€™s ability to attract them puts the country in an enviable position.

First, there are the direct economic benefits which result from tuition fees and living expenses. Throughout the 2018/2019 school year, these benefits totaled $41 billion, a comparable value to many other American exports:

ExportValue (2018)
Automobiles$158B
Commercial Aircraft$131B
Pharmaceuticals$51B
Education Exports$41B
Telecommunications Equipment$36B
Soybeans$17B

Source: NAFSA, Evans, WorldCity

Even after graduation, however, international students and scholars continue to make significant contributions to the U.S. economy.

For example, attracting the worldโ€™s brightest minds helps to grow the knowledge economy in the United States, and 40% of American Nobel Prizes won in chemistry, medicine, and physics since 2000 have been awarded to immigrants. Furthermore, students who return home often do so with a network of connections and an appreciation for American culture, thus promoting U.S. international leadership.

Finally, these individuals can also go on to become successful entrepreneurs and business leaders in the U.S. economy. The list is long, but here are two noteworthy examples:

  • Elon Musk, known for founding Paypal, Tesla, and SpaceX, was born in South Africa. He received two Bachelorโ€™s degrees from the University of Pennsylvania before founding his first business.
  • Satya Nadella, CEO of Microsoft, was an international student from India. He received an M.S. from the University of Wisconsin and an MBA from the University of Chicago before helping Microsoft develop its cloud computing capabilities.

Cause for Concern

In recent years, however, the number of new international students enrolling at U.S. institutions has been on the decline:

School YearNew International Student Enrollments in the U.S.Percent Changeย 
2013/14270,128--
2014/15293,7668.8%
2015/16300,7432.4%
2016/17290,836-3.3%
2017/18271,738-6.6%
2018/19269,383-0.9%

Source: Institute of International Education

With so many opportunities and success stories, why have international enrollments slowed? A survey of 509 higher education institutions in the U.S. revealed the top reasons for declining international enrollments:

Cited Reason for Decline in Enrollment% of Institutions
(Fall 2016)
% of Institutions
(Fall 2017)
% of Institutions
(Fall 2018)
Visa Application Process (delays/denials)34%68%83%
Social and Political Environment15%57%60%
Enroll in Another Countryโ€™s Institutions19%54%59%
Cost of Tuition51%55%57%
Feeling Unwelcome-49%50%
Securing a Job-ย 41%44%
Physical Safety12%33%44%

Source: NAFSA

Critically, the two most common reasons for declining enrollmentโ€”visa applications and the social and political environmentโ€”suggest that the quality of an American education is not the issue. Rather, it would appear that students are being discouraged from coming to the United States.

When we discourage or turn away international students, we lose much more than the students themselvesโ€ฆ We lose their inventions and innovation, their collaborative input and their contributions to our communities.

โ€“ Dr. Martha E. Pollack, President, Cornell University

At the same time, other countries are taking proactive measures to attract global talent.

Australia

Australia allows its international students to work for up to 18 months after graduation. This limit can increase to 4 years for graduates of high-demand occupations. In 2018, the country saw a 15% increase in international enrollments.

Canada

Canada, a country distinguished for its multiculturalism, is quickly becoming an attractive destination for international students. The country offers expedited visa processing for qualified individuals, as well as a 3-year work visa for graduates. In 2017, international enrollments in Canada grew by an impressive 20%.

Potential Consequences

The worldโ€™s brightest minds are an important asset for continued innovation and growth, and today, there is a mass of countries welcoming them with open arms.

While the U.S. is still the preferred destination for international students and scholars, the country’s leadership in this space is at risk. In fact, since 2001, the share of international students in America has fallen from 28% to 21%.

Will the U.S be able to maintain global competitiveness if the number of new international students enrolling continues to fall? Can the country work to cultivate a more welcoming and barrier-free route to higher education?

These are potent questions that will need to be answered, especially with a sizable economic impact on the line.

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Business

Flying High: The Top Ten Airline Routes by Revenue

This visualization tracks the high-value routes that generate the most revenue for airlines โ€“ primarily links between the world’s financial centers

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Flying High: The Top 10 Airline Routes by Revenue

The airline industry is a tough business. Profit margins are narrow, airplanes are expensive to run and maintain, and government regulation and taxation can be onerous and unpredictable.

In addition, demand can stall by the outbreak of disease, recession, war, or terrorism. So when a company has a winning airline route, it makes all the difference to a company’s bottom line.

Todayโ€™s visualization uses data from OAG Aviation Worldwide, which tracked the airline routes that generated the most revenue from April 2018 to March 2019.

Top 10 Highest Revenue Routes by Airline

North American routes dominate the global rankings. However, it is the connections from the U.S Northeast and Europe that generate the most revenue and often the most delays.

Only one route breaks the billion dollar barrier: British Airways’ service between London Heathrow Airport (LHR) and New York’s John F. Kennedy Airport (JFK).

AirlineAirport PairCountriesTotal Revenue US$ 2018/19
British AirwaysJFK-LHR๐Ÿ‡บ๐Ÿ‡ธ๐Ÿ‡ฌ๐Ÿ‡ง$1,159,126,794
Qantas AirlinesMEL-SYD๐Ÿ‡ฆ๐Ÿ‡บ$849,260,322
EmiratesLHR-DXB๐Ÿ‡ฌ๐Ÿ‡ง๐Ÿ‡ฆ๐Ÿ‡ช$796,201,645
Singapore AirlinesLHR-SIN๐Ÿ‡ฌ๐Ÿ‡ง๐Ÿ‡ธ๐Ÿ‡ฌ$735,597,614
United AirlinesSFO-EWR๐Ÿ‡บ๐Ÿ‡ธ$689,371,368
American AirlinesLAX-JFK๐Ÿ‡บ๐Ÿ‡ธ$661,739,368
Qatar AirwaysLHR-DOH๐Ÿ‡ฌ๐Ÿ‡ง๐Ÿ‡ถ๐Ÿ‡ฆ$639,122,609
Cathay Pacific AirwaysHKG-LHR๐Ÿ‡ญ๐Ÿ‡ฐ๐Ÿ‡ฌ๐Ÿ‡ง$604,595,063
Singapore AirlinesSYD-SIN๐Ÿ‡ฆ๐Ÿ‡บ๐Ÿ‡ธ๐Ÿ‡ฌ$549,711,946
Air CanadaYVR-YYZ๐Ÿ‡จ๐Ÿ‡ฆ$541,122,509

Air Canadaโ€™s route between Vancouver and Toronto bottoms out the list with $541 million of revenue in 2019. Low population density, high infrastructure costs, and an aviation industry that is essentially an oligopoly, are all factors driving up ticket costs in Canada.

North America, Top 10 Highest Revenue Routes by Airline

Here’s a look at only the top-grossing routes connected to North America, including the prior ones that made the global list.

AirlineAirport PairCountriesTotal Revenue US$ 2018/19
British AirwaysJFK-LHR๐Ÿ‡บ๐Ÿ‡ธ๐Ÿ‡ฌ๐Ÿ‡ง$1,159,126,794
United AirlinesSFO-EWR๐Ÿ‡บ๐Ÿ‡ธ$689,371,368
American AirlinesLAX-JFK๐Ÿ‡บ๐Ÿ‡ธ$661,739,788
Air CanadaYVR-YYZ๐Ÿ‡จ๐Ÿ‡ฆ$541,122,509
British AirwaysBOS-LHR๐Ÿ‡บ๐Ÿ‡ธ๐Ÿ‡ฌ๐Ÿ‡ง$523,527,241
Air FranceJFK-CDG๐Ÿ‡บ๐Ÿ‡ธ๐Ÿ‡ซ๐Ÿ‡ท$486,378,698
United AirlinesLAX-EWR๐Ÿ‡บ๐Ÿ‡ธ$479,908,312
Cathay Pacific AirwaysJFK-HKG๐Ÿ‡บ๐Ÿ‡ธ๐Ÿ‡ญ๐Ÿ‡ฐ$475,514,451
Delta Air LinesLAX-JFK๐Ÿ‡บ๐Ÿ‡ธ$465,130,366
British AirwaysLAX-LHR๐Ÿ‡บ๐Ÿ‡ธ๐Ÿ‡ฌ๐Ÿ‡ง$452,136,502

Transcontinental routes dominate the domestic market with LAXโ€“JFK appearing twice in the ranking for both American and Delta Air Lines.

Asia, Top 10 Highest Revenue Routes by Airline

Despite Asiaโ€™s rise as an economic superpower, there are no routes that break the billion dollar barrier. Singapore Airlinesโ€™ Singapore (SIN) to Londonโ€™s Heathrow (LHR) tops the list, generating $736 million in 2019.

AirlineAirport PairCountriesTotal Revenue US$ 2018/19
Singapore AirlinesSIN-LHR๐Ÿ‡ธ๐Ÿ‡ฌ๐Ÿ‡ฌ๐Ÿ‡ง$735,597,614
Cathay Pacific AirlinesHKG-LHR๐Ÿ‡ญ๐Ÿ‡ฐ๐Ÿ‡ฌ๐Ÿ‡ง$604,595,063
Singapore AirlinesSIN-SYD๐Ÿ‡ธ๐Ÿ‡ฌ๐Ÿ‡ฆ๐Ÿ‡บ$549,711,946
Vietnam AirlinesSGN-HAN๐Ÿ‡ป๐Ÿ‡ณ$488,487,259
Cathay Pacific AirlinesHKG-JFK๐Ÿ‡ญ๐Ÿ‡ฐ๐Ÿ‡บ๐Ÿ‡ธ$475,514,451
Japan AirlinesOKA-HND๐Ÿ‡ฏ๐Ÿ‡ต$447,224,346
Singapore AirlinesCGK-SIN๐Ÿ‡ฎ๐Ÿ‡ฉ๐Ÿ‡ธ๐Ÿ‡ฌ$436,905,694
Japan AirlinesFUK-HND๐Ÿ‡ฏ๐Ÿ‡ต$431,457,469
Singapore AirlinesSIN-MEL๐Ÿ‡ธ๐Ÿ‡ฌ๐Ÿ‡ฆ๐Ÿ‡บ$414,276,407
Cathay Pacific AirlinesHKG-SIN๐Ÿ‡ญ๐Ÿ‡ฐ๐Ÿ‡ธ๐Ÿ‡ฌ$389,910,239

The routes that dominate Asia connect the financial hubs of London, New York, Singapore, and Hong Kong. There are also two domestic routes in Japan, connecting both Fukuoka (FUK) and Okinawa (OKA) to Tokyoโ€™s Haneda (HND) airport.

Africa, Top 10 Highest Revenue Routes by Airline

At the top of the ranking in Africa is Johannesburg (JNB) to Dubai International Airport (DXB) with revenues of $315 million. Dubai has become an important hub for high value flights arriving and departing Africa, a position that may prove profitable as air traffic on the continent increases in coming years.

AirlineAirport PairCountriesTotal Revenue US$ 2018/19
EmiratesJNB-DXB๐Ÿ‡ฟ๐Ÿ‡ฆ๐Ÿ‡ฆ๐Ÿ‡ช$315,678,326
British AirwaysJNB-LHR๐Ÿ‡ฟ๐Ÿ‡ฆ๐Ÿ‡ฌ๐Ÿ‡ง$295,167,492
Saudi Arabian AirlinesCAI-JED๐Ÿ‡ช๐Ÿ‡ฌ๐Ÿ‡ธ๐Ÿ‡ฆ$242,155,949
TAAG Angola AirlinesLAD-LIS๐Ÿ‡ฆ๐Ÿ‡ด๐Ÿ‡ต๐Ÿ‡น$231,155,949
South African AirlinesJNB-CPT๐Ÿ‡ฟ๐Ÿ‡ฆ$184,944,128
EmiratesCAI-DXB๐Ÿ‡ช๐Ÿ‡ฌ๐Ÿ‡ฆ๐Ÿ‡ช$181,392,011
EmiratesCPT-DXB๐Ÿ‡ฟ๐Ÿ‡ฆ๐Ÿ‡ฆ๐Ÿ‡ช$176,743,498
Air FranceABJ-CDG๐Ÿ‡จ๐Ÿ‡ฎ๐Ÿ‡ซ๐Ÿ‡ท$174,986,272
British AirwaysCPT-LHR๐Ÿ‡ฟ๐Ÿ‡ฆ๐Ÿ‡ฌ๐Ÿ‡ง$174,605,201
EmiratesMRU-DXB๐Ÿ‡ฒ๐Ÿ‡บ๐Ÿ‡ฆ๐Ÿ‡ช$163,952,609

Despite the smaller earnings compared to larger markets, some airline companies see the potential for growth in Africa. Virgin Atlantic will fly a route between Londonโ€™s Heathrow and Cape Town in South Africa, while Qatar Airlines acquired a stake in RwandAir.

Financial Hubs

The cities that appear in the top revenue ranking are revealing. Since business and first class travelers are such an important revenue driver, it makes sense that connections between the worldโ€™s financial hubs are delivering big value to airlines.

As Asian and African economies continue to evolve, what route could be the next billion dollar route for airlines?

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