How does the international economy measure up for designers? Taking the Big Mac Index as an example, this mini-report evaluates the difference in price around the world for the smallest MacBook Pro. The results shed some light on exchange rates, purchasing price parity, and the rise of Apple.
Last month while scanning the front page of The Atlantic Monthly for some news to share on Twitter, I came across a title that caught my eye: Big Macs, Happiness, and Economic Development. Some pretty basic concepts, right? Well I have to admit that my first thought when I read it had nothing to do with Ronald McDonald. Instead, I thought immediately of my MacBook, design bliss, and Apple’s role in the economy. What?!
As it turns out, the subject of the article was this year’s release of the Big Mac Index, a comparison, published by The Economist, of Big Mac burger prices across 120 countries. So, I got to thinking: how does the price of a Mac (the one made by Apple) vary around the world? What does it say about design in an international economy?
Here are the results of my query, organized in a chart that simulates the original:
Design and the global economy: Brazil’s where it’s at!
In this infographic, the most impressive bar on the chart shows how overvalued the Brazilian real is in comparison to the US dollar. In the original Big Mac Index, it was named one of few emerging-market currencies to trade above its Big Mac benchmark. A Brazilian MacBook Pro costs almost twice as much as one sold in the US. Ouch! Perhaps that difference is part of the reason why the country has taken economic measures this year to battle inflation. In April, the Monetary Policy Committee (COPOM) raised interest rates by 75 points.
A country with one of the fastest growing GDPs in the world, Brazil has long held its reputation for being the nation of the future and a haven for investors. As the winner of two enormously important sporting events: the World Cup of 2014 and the Summer Olympics of 2016, it appears as though the predictions might not be too far off target. Subsequently, all eyes are on design in Brazil, as we ask, Is Brazil Design’s Next Superpower?. … and look to its designers and artists for inspiration:
- Alvorada: An Exploration of Brazilian Design
- Showcase of Beautiful Design Right from Brazil
- Graffiti Brazil: CRANIO (from Abduzeedo)
- Graffiti Brazil: Nomies (from Abduzeedo)
Hong Kong: On the up and up, but down on the Index
According to recent reports, economic growth in Hong Kong is also high enough to warrant serious concern about inflation. Ever since the Hong Kong Handover, the economy has remained true to capitalist enterprise and confronted the open connection to mainland China with a boosted interest in a service-dominated economy, particularly through the high-tech and information technology (IT) industries. Nevertheless, in terms of design, Hong Kong has yet to receive a lot of buzz. Design Taxi does a nice job of contextualizing the current state of Hong Kong design. It remains the only country outside of North America to actually beat the US price of a MacBook Pro.
Is Apple the new McDonald’s?
Right now you might be asking yourself, “Why bother replacing the Big Mac with a MacBook in the Index?” McDonald’s has long basked in the light of global ubiquity, but the truth is that in today’s mobile world, Apple Inc. has arguably surpassed that fame. Since the release of the iPhone4, it boasts a spot at the top of the American economy, second only to Exxon-Mobil in terms of market capital. It’s spread is not bound by American frontiers, however. Even before the release of the iPad in April, Apple announced that its sales had increased by 49 percent. Almost half of that revenue stems from international sales.
In 2007, the Australian bank Commonwealth Securities came up with an iPod Index that replaced the Big Mac with the iPod. Since the Big Mac Index basically tracks exchange rates and their progression towards a fair-value benchmark (when the price of a commodity is the same across all currencies), any commodity could be used to make a comparison. The MacBook, apart from creating a great play on words, is a product with clout in the design community. What better way to start talking about the role of design in global economics than to make your Mac the center of conversation?
Further Resources
Here are a few links that deal with design and the international economy:
- Design as a Strategy for a Developing Economy (Google Docs) (PDF)
- Design in the Creative Economy – A Netherlands Case Study (Google Docs) (PDF)
- How are designers doing in the new economy?
- A comparative analysis of strategies for design in Finland and Brazil (Google Docs) (PDF)
Methodology
I work on a 13” MacBook Pro, so it became the default “Big Mac.” The countries that appear in the chart are the ones where official Apple Stores exist online. Eleven of them use the euro as currency, so the Euro area on the chart represents an average of their different MacBook prices. The source of the currency exchange rate is the OANDA currency converter, which I consulted just after consulting all of the official Apple Stores online on July 21, 2010. The formula I used to come up with the percentage values compares purchasing power parity (PPP) – the price of a commodity in US dollars divided by the price of a commodity in currency X – with the actual exchange rate between US dollars and 1 unit of currency X. It looks like this:
[(PPP-Exchange Rate)/Exchange Rate]*100 = Percentage of under/over valuation against the US dollar
If the percentage value is negative, it means that currency X is overvalued against the dollar. If the percentage is positive, currency X is undervalued.
What’s your design economy like?
I’d love to hear about where you’re from and what design means to your local economy. Any truth in this infographic?
Hi Ewen. Thanks for the info. I didn’t include South Africa in the MacBook Index because the online store there is independently operated (a silly reason, I guess, but that was my methodology…). They say money makes the world go round, but your comment just proves how fast information gets around the world. And for free. Awesome!
In South Africa we are nearly at the same level as Brazil with the 13″ Mac Book Pro going for R12500 or about $1786.
Greed is the main reason.