April 05, 2004 | Graham

It’s official – the dotcom boom is really over

The ABC carried a news report today that Bill Gates is no longer the richest man in the world. He has been overtaken by Ingvar Kamprad, the founder of Ikea. Kamprad is worth $70 Billion Australian and Gates only $62.
Remember when Abba was the biggest export earner for Sweden? Volvo was always rated up there too. Well, times change, and so do fortunes. Now it is the turn of Mr Kamprad to impress the world with the Swedish ability to make world-beating products.
At 77 he has waited long enough, (which makes you wonder what Gates will be worth in 18 years time when he turns 77). Perhaps there is need for a new metric here. It hardly seems fair to Gens X, Y and Z not to mention us baby boomers that these old guys can just sit back on compound interest and fry the rest of the competition. Perhaps a tiered approach to competition – those under 50 and those over? Or an index that combines internal rate of return with size of fortune?
I always thought that Ikea products were basically cheap, but I’ve had to think again. Mr Kamprad has made his fortune from just 180 stores worldwide. I’d also always thought that the Swedish system, pin-up of the social democrats, was much more egalitarian than our own, but maybe not. Sweden has average GDP per head of $26,000 US while Australians have $26,900, so we’re very comparable on average. Our richest Australian is Kerry Packer with an estimated $5.5 Billion, which is enough to get the left frothing at the mouth about vertical equity, but there’s a hell of a lot more verticality in Mr Kamprad’s $70 Bill. Kerry has wealth equal to the annual per capita GDP of 156,208 of us, while Kamprad’s wealth is equal to the annual average per capita GDP of 2,038,462 Swedes, or about one-quarter the population.
The Swedish television station SVT2 puts the increase in Kamprad’s wealth down to a mere currency effect – the US dollar goes down, the Swedish Kroner goes up, and hey presto a fortune is made. Very modest of them, and illustrative of the inferiority complex that many in the world have to the US. It’s more likely that the US dollar has been over valued for quite some time and that Kamprad should have overtaken Gates some years ago.
Where does all this lead? I’m not sure. Perhaps to computers that you buy at the store in pieces and take home along with an allen key and assemble with the help of your family and an A4 page of instructions?

Posted by Graham at 3:27 pm | Comments Off on It’s official – the dotcom boom is really over |
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