DEER ISLE: Insights, Flows & Investment Trends
Podcast:
Power, Population, and Productivity
What is the Winning Combination?
The United States remains the undisputed global leader in turning human capital into economic and military power. With productivity per capita at $89,000, U.S. output far exceeds that of other large economies. By comparison, China produces only ~$14,000 per capita, India ~$3,000, and the EU ~$43,000. The extraordinarily high productivity of the U.S. workforce is a testament to its innovation ecosystem, advanced education and research institutions, deep capital markets, and relatively strong institutions.
This productivity edge is reinforced by military power. The U.S. defense budget, at $977 billion, is still larger than the combined spending of the next several powers. China follows at $313 billion and the EU at $400 billion, but no single bloc yet matches America’s capacity to project force globally.
Looking ahead, however, the numbers raise difficult questions. The so-called “new power alliance” of China, India, Indonesia, Russia, and Brazil commands enormous populations, large youth cohorts, and a combined defense budget of $550–600 billion — still less than the U.S. alone but closing. Today, their productivity lags, but what happens if education and technology raise output per worker closer to U.S. or EU levels? Does rising tertiary enrollment point toward future gains in productivity? Or does persistent youth unemployment — running in double digits in nearly all these economies — suggest that human capital is not being efficiently absorbed, locking productivity in place?
For investors, the answer matters. If scale economies can convert into productivity, these markets could rival the U.S. in global economic weight. If not, the U.S. advantage in innovation, productivity, and defense will persist. Either way, these themes shape compelling investments across geographies.
| Country | Pop (M) | Tertiary Enroll (%) | GDP/ Capita ($000) | Defense ($B) 2024 | Unemp. % | Youth Unemp. % | Potential Key Investment Themes |
| United States | 347 | 79 | 89.7 | 977 | 3.6 | 9.4 | Advanced tech (AI, biotech), defense-industrial base, automation, healthcare, aging-linked housing/services |
| India | 1,460 | 33 | 2.9 | 86 | 4.2 | 16.0 | Edtech, vocational training, fintech/SME credit, infrastructure, digital platforms |
| China | 1,410 | 75 | 13.8 | 313 | 5.1 | 15.2 | Advanced manufacturing, Green tech, semiconductors, biotech, tactical R&D, supply chain diversification |
| Russia | 145 | 54 | 15.0 | 148 | 3.1 | 9.3 | Distressed/adjacent markets (Central Asia, Turkey), commodities, talent arbitrage |
| Indonesia | 283 | 45 | 5.2 | 11 | 3.3 | 13.1 | Infrastructure, consumer goods, financial services, digital employment/upskilling |
| Brazil | 203 | 60 | 10.8 | 20 | 7.9 | 17.9 | Education partnerships, digital platforms, agritech, energy transition |
| EU (27) | 448 | 80 | 43.1 | 400 | 6.0 | 15.9 | Defense tech, clean energy, automation, healthcare |
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