Is Apple worth more than Poland?

Summary

More or Less – “Is Apple Worth More Than Poland?”
BBC Radio 4, March 9, 2012
Host: Tim Harford
Producer: Ruth Alexander

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Episode Overview

In this episode of More or Less, Tim Harford and his guests critically examine recent headline-grabbing statistics. The first segment debunks the widely reported claim that “Apple is worth more than Poland,” exploring what it really means to compare a corporation’s market value to a country’s GDP. The second half scrutinizes the announcement that the world has met a crucial Millennium Development Goal—halving the number of people without access to clean drinking water—ahead of the 2015 target, questioning the accuracy and nuance behind this positive-sounding achievement.

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1. Comparing Apple’s Value to Poland’s GDP

The Headline: “Apple is Worth More than Poland”

(00:28 – 02:55)

• The Claim: News outlets reported that Apple’s market capitalization of $506 billion made it “worth more than Poland,” whose GDP is approximately $470 billion—implying Apple could be seen as a top-20 world economy.
• Tim Harford’s Debunking: “It’s nonsense to compare the two like this. You might as well compare pears and apples.” (00:43)

Why the Comparison Fails

• Market Cap vs. GDP: The value of a company reflects the present value of all future profits, while GDP measures what a country produces in a single year—“apples and pears.”

• Expert Input: Professor Paul de Gros (LSE) explains a proper, like-for-like comparison would require predicting all of Poland’s future economic output and discounting it to present value.

  “We would have to make a forecast of future growth of GDP in Poland and then you have to take the present value and use an interest rate. My guess is that it would multiply the Polish number by a factor of at least 5.”
  (Paul de Gros, 01:47)

• Corrected Comparison: Discounted at a typical rate, Poland’s comparative value would soar to $2.5 trillion—way ahead of Apple.

An Alternative Approach: “Value Added”

• GDP vs. Company Value Added: GDP is the country’s added value; for Apple, that’s sales minus the value of imported components (like chips and screens from China).

• Paul de Gros’s Estimate: Correcting for “value added,” Apple’s contribution is much less—dropping Apple to rank 56 among world economies, far below Poland.

  “Apple’s relative value would shrink four or five fold... just ahead of Bangladesh, just behind Vietnam.”
  (Tim Harford, 02:55)

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2. Has the Clean Water Millennium Development Goal Really Been Achieved?

The UN’s Announcement and Its Context

(03:21 – 04:45)

• UN Claims Victory: News reports state the target to halve the number of people lacking clean water (by 2015) has been met.

• Clarifying the Goal: It’s a subset (7C) of the eight Millennium Development Goals, and not entire “goal number one” as media often claim.

  “It’s number 7 of 8, not the first goal, as the BBC reported… In fact, it’s number 7C.”
  (Ruth Alexander, 04:04)

  “So it’s a quarter of a goal.”
  (Tim Harford, 04:12)

  “Yeah. And in fact, it’s a half of a quarter of a goal.”
  (Ruth Alexander, 04:13)

  “So it’s an eighth of a goal.”
  (Tim Harford, 04:16)

• Sanitation Overlooked: Most coverage ignores that the sanitation portion of the target will not be reached by 2015.

Scrutinizing the “Clean Water” Achievement

(05:16 – 09:04)

• Doubting the Numbers: The official report itself warns that its estimates on people with access to clean water are “likely overstated”.

• Measurement Problems: After the goal was set, agencies realized it’s impossible to test every water source. They instead counted people with access to an “improved water source”—not the same as truly safe water.

  “They assume that an improved water source is safe, but the water isn’t actually tested.”
  (Ruth Alexander, 06:10)

• Evidence from Field Studies: In four out of five surveyed countries, the actual proportion of people with safe water is notably less than claimed (reductions up to 16% in some countries, e.g., Nicaragua).

  “The absolute reduction was 11% in Ethiopia, 16% in Nicaragua, 15% in Nigeria and 7% in Tajikistan.”
  (Tim Harford, 06:43)

• Behavioral Factors: Even when infrastructure exists, people may not consistently use it due to convenience or taste preferences.

  “If the distance is very far, if they're running out of time, they might end up going to the stream. And of course also the so called improved source is chlorinated. But people may not like the taste.”
  (Lila Mehta, 07:21)

The WHO’s Admission

• Ruth Alexander Presses Robert Boz: Can the World Health Organization (WHO) be sure the goal has been met, given the caveats?

  “Given all these uncertainties, I asked, can they really be sure this goal has been met?”
  (Ruth Alexander, 07:57)

• WHO’s Response:

  “No. And we did a lot of soul searching over that when we prepared this report... We wanted to make sure that on the one hand we would bring out the celebratory news that the target has been met… but it’s absolutely true that that’s not entirely true.”
  (Robert Boz, 07:59 & 08:53)

  • Boz admits they try to “bring in the honesty by building all the caveats into the report,” but most media don’t pick up on that nuance.

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Notable Quotes

• On Apple vs. Poland:

  • “It’s nonsense to compare the two like this. You might as well compare pears and apples.”
    (Tim Harford, 00:43)

  • “[Market value and GDP] are apples and pears.”
    (Tim Harford, 01:10)

• On Millennium Goal Reporting:

  • “It’s number 7C. So it’s a quarter of a goal.”
    (Tim Harford & Ruth Alexander, 04:04–04:13)

  • “They assume that an improved water source is safe, but the water isn’t actually tested.”
    (Ruth Alexander, 06:10)

  • “But all the news reports I’ve heard and seen have simply reported that the safe water target has been met. That’s not entirely true, is it?”
    (Ruth Alexander, 08:38)

  • “It’s absolutely true that that’s not entirely true.”
    (Robert Boz, 08:53)

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Key Segment Timestamps

• Debunking Apple vs. Poland: 00:28–02:55
• Millennium Development Goal Introduction & Context: 03:21–05:16
• Problems with Water Access Data: 05:16–07:37
• Interview with Robert Boz (WHO): 07:37–09:04

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Episode Tone

The episode maintains the show’s signature wry, skeptical, and mathematically literate tone. The hosts favor dry humor (“So it’s an eighth of a goal”) and are unafraid to challenge institutional narratives by digging into original data and seeking out expert voices when headline figures seem too simplistic or convenient.

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Summary:
This episode of More or Less exemplifies the show’s commitment to careful analysis and skepticism, reminding listeners to look beyond headlines. Whether it’s comparing a tech company to an entire nation, or celebrating global development milestones, the truth is almost always more complicated than the statistics make it seem.

Transcript

[Tim Harford]

Thank you for downloading from the BBC. For details of our complete range of podcasts and our terms of use, go to bbcworldserveys.com podcasts. You're listening to a download from the BBC. This is more or less the mathematical icing on the cake of life. We make an edition of the program for BBC Radio 4, but this is a download of a special edition broadcast on the World Service. Hello and welcome to More or less on the BBC World Service. We're your weekly guide to the numbers in the news and in life. And I'm Tim Harford. This week we investigate whether the global target on access to clean drinking water really has been met as has been claimed. But first, is the world's biggest company really this big? At $500 billion, Apple is worth more than Poland. CNN started this story and it was picked up by news organizations around the world. It seems like an amazing fact that Apple's stock market value, or market cap of $506 billion makes it worth more than Poland, whose gross domestic product, or GDP is around 470 billion. And that would make it one of the world's top 20 economies. The only trouble is it's not true. It's nonsense to compare the two like this. You might as well compare pears and apples. This is because the market value of a company is linked to the expected value of all future profits. Gdp, on the other hand, is a measure of the value of goods and services a country has produced in a single year. Professor Paul de Gros of the London School of Economics says this comparison can be made, but it has to be done properly.

[Paul de Gros]

We would have to make a forecast of future growth of GDP in Poland and then you have to take the present value and use an interest rate. My guess is that it would multiply the Polish number by a factor of at least 5.

[Tim Harford]

That would give Poland a comparative value of $2.5 trillion, well ahead of Apple. There's another way of comparing the two, and that's by calculating Apple's added value and comparing that to Poland's gdp. This because GDP is essentially a measure of the country's added value. It's the value of all the goods and services there. But you have to subtract everything that's been imported.

[Paul de Gros]

PAUL DE gros, We would take the sales of Apple and subtract everything that Apple has not produced itself, but that this in the iPhone, for example, some chips, or the screen, for example, that has been produced in China somewhere. And the difference then is what you could call the value added by Apple, and that we compare with gdp, which is the value added in Poland.

[Tim Harford]

Paul de Gros estimates that if you did these sums, Apple's relative value would shrink four or five fold, which, if you then put it in the list of the world's largest economies, it would place a number 56, not number 20, 36 places behind Poland and just ahead of Bangladesh, just behind Vietnam. This week we've been investigating another vital statistic reported around the world. And here on the World Service, the

[Ruth Alexander]

United nations says the first Millennium Development Goal, halving the number of people who have no access to clean water, has been reached before the target date of 2015.

[Tim Harford]

Ruth Alexander's with me. Ruth, this is a really important goal.

[Ruth Alexander]

Yes. The Millennium Development Goals were agreed by all the countries of the United nations and the big aid agencies in the year 2000. They're a way of measuring progress, poverty, education, health equality and environmental issues in the developing world.

[Tim Harford]

And we scrutinise the goal of halving the proportion of those living on less than a dollar a day in our

[Ruth Alexander]

last edition and this one, the clean water goal is considered key to the achievement of some of the other goals. It's number seven of eight, not the

[Tim Harford]

first goal, as the BBC reported.

[Ruth Alexander]

No, in fact, it's number 7C.

[Tim Harford]

7C is not a whole goal.

[Ruth Alexander]

No, there's a 7A, a 7B and a 7D. So.

[Tim Harford]

So it's a quarter of a goal.

[Ruth Alexander]

Yeah. And in fact, it's a half of a quarter of a goal.

[Tim Harford]

So it's an eighth of a goal.

[Ruth Alexander]

Yeah.

[Tim Harford]

What's the whole goal?

[Ruth Alexander]

The whole of goal 7C, which is what these reports are about, is 2 halve by 2015, the proportion of the population without sustainable access to safe drinking water and basic sanitation.

[Tim Harford]

So the whole goal is about halving the proportion of people without access to safe water and basic sanitation, like toilets, between 1990 and 2015.

[Ruth Alexander]

Yes. So all the headlines have focused on the news that the safe water target has been met. Less prominence has been given to the question of basic sanitation.

[Tim Harford]

In fact, reading more closely, it becomes clear the basic sanitation goal is not going to be met by 2015. In fact, the World Health Organization and UNICEF, which are in charge of monitoring progress towards the goal, say they are far from hitting the 75% target. I suppose if half a goal is met, and in this case the safe water half, that's still worth something.

[Ruth Alexander]

It would be if it was true, but we're not sure it is.

[Tim Harford]

We're not. If you look beyond the press reports, beyond the Press releases and you delve into the original report from the World Health Organisation and unicef, you see that they say that it is likely that the number of people using safe water supplies has been overestimated. That's some small print for you. So we've been finding out more. First, a bit of context.

[Ruth Alexander]

After the Millennium Development Goal had been set, it became clear that it wasn't possible to test all the quality of all the water in the world directly, which is brilliant.

[Tim Harford]

They set a target and then they thought about whether they could measure it.

[Ruth Alexander]

Essentially, yes. They eventually decided that they would look at how many households are drinking from what they call an improved water source. That is one that by its construction is protected from outside contamination.

[Tim Harford]

So we're talking about piped water from a well or from a borehole?

[Ruth Alexander]

Yeah. And they assume that an improved water source is safe, but the water isn't actually tested.

[Tim Harford]

They assume it's safe for the purposes of counting, but they know that in reality not all the water they say is safe is safe because holes can appear in pipes, well covers, conroe, that kind of thing. And researchers at Bristol University in the UK have tried to put a figure on how far out the numbers might be. A pilot study assessed water quality in five countries. Not all the water that was piped into homes or taken from wells was safe. The researchers took this data and used it to adjust the figures from UNICEF and the World Health Organization. Professor Stephen Gundry says that in four of the five countries, fewer people than thought had access to safe water. The absolute reduction was 11% in Ethiopia, 16% in Nicaragua, 15% in Nigeria and 7% in Tajikistan. And there's another important factor to consider. Just because you build a well or construct a toilet to go back to the basic sanitation part of this goal, it doesn't mean people are using these facilities, even if they say they are. So we spoke to Professor Lila Mehta of the Institute of Development Studies and the Norwegian University of Life Sciences.

[Lila Mehta]

If the distance is very far, if they're running out of time, they might end up going to the stream. And of course also the so called improved source is chlorinated. But people may not like the taste. People may use this improved source at some point in time, but it doesn't mean they're continuously using it.

[Ruth Alexander]

Now, I've been raising all these issues with Robert Boss from the World Health Organization. Remember, this is the body which, along with unicef, is in charge of tracking progress towards the Millennium Development Goal and which has announced the goal has been achieved. Given all these uncertainties, I asked, can they really be sure this goal has been met?

[Robert Boz]

No. And we did a lot of soul searching over that when we prepared this report. And we wanted to make sure that on the hand we would bring out the celebratory news that the target has been met. For all These years since 2000, in our biennial reports, we've reported on progress towards achieving the target. So, you know, we were not in a position where all of a sudden we could say, well, actually, all these years we've been saying this, but now that we seem to have achieved the target, we must say we actually haven't. And it's also not.

[Ruth Alexander]

But wouldn't that be more honest?

[Robert Boz]

Well, we've tried to bring in the honesty by building all the caveats that we're reporting on in the report, but

[Ruth Alexander]

the get that message because they don't read the report. And all the news reports I've heard and seen have simply reported that the safe water target has been met. That's not entirely true, is it?

[Robert Boz]

Yeah, no, it's absolutely true that that's not entirely true. But on the other hand, I think we should also be careful not to diminish the enormous effort that has gone into it.

[Tim Harford]

Robert Boz from the World Health Organization. If there's a statistic you'd like us to investigate, please email us More or [e-mail] and you can download our podcasts, past and present via our website, bbcworldservice.com more or less until next week from me and from Ruth Alexander. Goodbye. More or Less was presented by me, Tim Harford, the Financial Times undercover economist. The producer was Ruth Alexander and the editor, Richard Varden. There are dozens of different podcasts now available from the BBC, including news, documentaries, science, business, arts and sport. For details of them all, go to bbcworldservice.com podcasts.