The Starbucks Index

Starbucks doesn’t just make coffee. It serves as a global standard for the service economy. Much like the Big Mac index is back of the envelope (yet surprisingly accurate) reflection of the purchasing power parity (PPP) between countries, in other words what would it cost you in dollar terms to get a Big mac in country A versus Country B once exchange rate is factored in?   It’s a measure of how much a dollar can take you in those respective countries.

With my frequent travels recently the idea of a services power parity hit me. A cappuccino at Starbucks is a very much a standard committee across the world. Yet go to New York, London, Athens, Dubai and watch and measure the time it takes to make the same commodity. In my case – truth be told – I do give them a somewhat of a hard time, with my extras duper uber dry cappuccino with an extra shot. Even more so:  the speed of comprehension and execution of my customized order is a – again surprising due to its simplicity – reflection of the efficiency of the service economy in these cities. As is the baristas reaction to a customize order in the first place. This is what I’ve called ‘The Starbucks Index”.

So next time you travel, try going to a Starbucks and ordering the exact same coffee you have in your home town and watch the difference. In some countries you will quickly realize how much needs to be done to get them back to a productive state. It has happened to me that I had to wait for the barista in one city to finish a phone conversion on his mobile phone (and believe me it did not sound like a conversation with his boss!)