4 Events That Changed Life for Americans in 2014
Selecting four business stories that mattered in 2014 was a tricky job. The problem lay not in the newsworthiness of these stories, but in their interconnectedness and overlap with other subjects. For example, a story about declining energy prices is as much a story about the political situation in the Middle East as about the business implications of an oil glut.
That said, a couple of connected trends stood out in business news. The world economy has been on an uneven keel for quite some time now. The trend continued in 2014 with problems in Japan and Europe.
Japanese Prime Minister Shinzo Abe’s efforts to revive the Japanese economy through his own brand of Abenomics seems to have failed. Except for Germany, the European economy is struggling with sluggish demand and a bunch of other economic problems.
As if economic disruption was not enough, disruptive forces from the tech industry continued eating away into the market share of established industries. For instance, the transportation industry was disrupted by Uber and a bunch of other similar apps. Then there was the hotel industry, which was disrupted by AirBnB.
But, these hiccups came with their own set of disruptions. The number of hacker attacks on corporates (or corporate data breaches) increased by 75% in the last quarter of 2013. In 2014, that number grew as hackers became the new terrorists. All in all, we live in an increasingly interconnected and complicated world.
Here, then, are the four important stories from 2014.
1. The economy rises again
The bull run has been charging for approximately six years on Wall Street now. Critics will tell you that the economy’s improvement is a function of zero interest rates and the Fed’s bond-buying program. In fact, there were fears of dip back into recession after the Federal Reserve ended its program back in August. But, investors seem to have shrugged off news about the taper, if one goes by the performance of stocks.
Vital statistics of the US economy have been on a mend. GDP growth has been increasingly steady. After peaking at about 10% back in October 2009, the unemployment rate this October was 5.8 percent. Manufacturing’s share of the economy is rising again. Industrial capacity utilization, a measure of the industry’s utilization of its capacity, hit its highest level since February 2008 in August 2014. 3D printing is beginning to add a dimension to manufacturing and could signal a resurgence of America’s glory days. The good news, however, is tempered with cautionary tales. Economic growth came at the cost of inequality. Cities like San Francisco became symptoms of the larger debate about inequality, even as the tech elite crowded out middle class residents living in rent-controlled apartments of the city.
2. The year of the hack
For U.S. corporates, 2014 was the year of the hack. Until recently, hacking things signified a smart and adept way of simplifying complex matters. However, hacking became a dirty word in 2014 as corporate data breaches became the norm rather than an exception. Businesswise, the hackers’ timing was perfect as the data breaches occurred after Edward Snowden’s disclosure about NSA spying.
Whilst the Sony hack was the most prominent hack in 2014, there were a number of other corporates who were hacked this year as well. Retail giants were especially favorite targets. Home Depot was hacked as were restaurant chain P.F. Chang’s and eBay. The latter hack case is especially surprising, when you consider the technology precedents of the company.
Still, 233 million user passwords and physical addresses were stolen. Motives for the hacks were diverse and ranged from ideological to mercernary to purely puerile. (Lizard Squad, which claimed responsibility for last week’s hack into the Sony Playstation and XBox One, said they hacked the systems to make sure that children spent time with their families on Christmas Day, instead of wasting it in front of devices).
Surprisingly, the hacks are not really hacks. According to noted security journalist Brian Krebs, the hacks are a result of compromised and misconfigured online systems. His theory has been validated by recent reporting that claims that Sony knew about the vulnerabilities in its system.
3. Oil aboard
To say that oil prices have plummeted in 2014 would be an understatement. This summer, oil was selling at $115 per barrel. Less than six months later, you can buy a barrel of oil for approximately half that price. A number of events — the glut of oil in the market and international conflicts involving major oil-producing nations — has contributed to the price decline.
Historically, cheap oil prices are directly proportional to economic prosperity (the recent recession was preceded by a period of economic boom triggered by cheap oil). However, this time around, the economics of oil supply and demand are different. For one, the United States, the largest consumer of oil at one point in time, surpassed Saudi Arabia to become the world’s biggest producer of oil. But, most of the country’s oil is used to power the domestic economy. The popularity of alternate energy sources, such as natural gas and solar, has further complicated matters for oil-producing nations. Even then, oil is still expected to be the primary engine that runs the world economy. The good news is that good times for oil are expected to continue next year.
4. The year of technology
Technology has already taken over our lives. In 2014, the business of technology made news. The most valuable company on the planet is Apple, a technology company. Google, another tech giant, is engaged in a fierce war with Apple for control of user lives.