Blogs Driving the Debate

March 9, 2012

NCF curates a weekly list of blog posts that touch on emerging issues affecting the American business community.

Ryan Avent of The Economist looked at the latest jobs numbers and asked, “Is it morning in America?”

Fact: Streaming Netflix movies account for up to 40% of all Internet traffic at peak times.  That’s a colossal amount of bandwidth.  So, Netflix has chosen to invest in the global cloud computing infrastructure rather than a proprietary content delivery system.  The upside is that their investment will benefit every Internet user, regardless of whether they are Netflix subscribers or not.

Gail Tverberg at the The Oil Drum noted how high energy prices are hurting the European economy.  Indeed, the countries with the worst debt crises and highest trade imbalances are most dependent on pricier imported fuels.

With the death of the Space Shuttle and the rise of privatized space flight, we seem to be entering a new era in exploring the world beyond Earth’s atmosphere.  NASA is working hard to keep up, but popular support just isn’t there for large, expensive, publicly-funded space projects.  As Alexis Madrigal points out in The Atlantic, publicly funded space flight was never that popular, even in the heyday of the Apollo space program.

How the iPad could transform the construction industry.  The key point to me is that the iPad is becoming advance for computing, not just an evolutionary one.

Blogs Driving the Debate

March 2, 2012

NCF curates a weekly list of blog posts that touch on emerging issues affecting the American business community.

Richard Florida tracked the “rise of the supercommuter” in The Atlantic Cities.

The Economist’s Schumpeter columnist thinks that the “only thing we have to fear is the lack of fear itself” when it comes to Greece’s impending default.  Greece’s default is becoming increasingly inseparable from its own exit from the Eurozone, a disastrous occurrence that people seem far too complacent about.

NCF Fellow Mark Perry wrote on the stunning decline of print newspaper advertising.

Dane Stangler at Growthology takes a close look at the “nuances of job creation.”

Fast Company’s Michael Raisanen pushed back against the increasing tendency today to make strategic decisions based on data alone, arguing that it’s a sure death knell for groundbreaking innovation.

Jon Walton profiled Azerbaijan’s $100 billion city of artificial islands.

Blogs Driving the Debate

February 24, 2012

NCF curates a weekly list of blog posts that touch on emerging issues affecting the American business community.

Max Fisher outlined the “next 5 emerging economies that will change the world“:  Turkey, Indonesia, Kazakhstan, Congo, and Mexico.  Just for good measure, he added Nigeria as a “maybe.”

Justin Fox outlined the fourteen articles contributed to the Harvard Business Review by some twenty-one authors on the future of American competitiveness.  Under the “government” header, he looks at taxes, fiscal policy, immigration, trade, and entrepreneurship and innovation.  The “business” section examines how to break Washington gridlock, better educate Americans, address the financial system, build clusters of innovation, and engage with the true costs of outsourcing.

James Hamilton at EconBrowser took a close look at oil prices to try to figure out why the price at the pump is rising.  In short, the reason for rising prices comes down to one word: Iran.

Outsourcing work from the West to the East has been one of the big stories in business for the past few decades.  Today, it seems that nearly every consumer product was made in China, a place where the cost of production is appealingly low.  Alex Tabarrok of Marginal Revolution came across a news item that seems to auger a reversal in this trend.  It appears that some Chinese firms are now starting to outsource to (of all places) Europe.  Tabarrok expects that we’ll see a lot more of this East to West outsourcing in the years to come as China grows in wealth and adapts to having a more consumer-driven economy.

Felix Salmon summarized the Greece bailout package, starting with these words: “Greece is now officially a ward of the international community.”

Whether you agree with him or not, Ryan Avent at The Economist made a series of insightful comments about the contributions that manufacturing does (or does not) make to the American economy.  He’s skeptical that the manufacturing industry is worthy of any special support other than that which would be offered to any other industry, i.e., support for R&D, a simplified tax code, and the like.  Laura D’Andrea Tyson made the equally informed counter-argument in the Economix blog for the unique qualities of manufacturing to, say, the support of general innovation in the economy.

Blogs Driving the Debate

February 17, 2012

NCF curates a weekly list of blog posts that touch on emerging issues affecting the American business community.

Megan McCardle envisioned in The Atlantic a “post-campus America” after MIT announced an inexpensive online certification program called MITx.

Jordan Weissmann (also at The Atlantic) highlighted the best and worst states for high-tech businesses.  Rather than take the cit-based approach of the National Science Foundation at face value, whose research Weissmann is highlighting, I would encourage any reader to look at the overall regions that are most favorable to technology-based companies.  In that light, we see that the mid-Atlantic region is surprisingly strong.

Matt Yglesias considered “the new economics of oil” with today’s expansion of shale oil production.

The Harvard Business Review asked a panel of leading CEOs to describe the greatest threats to U.S. competitiveness.

Jonah Lehrer at Wired asks what Jeremy Lin’s recent success in the NBA teaches about the nature of talent and of identifying gifted individuals to hire.  Unfortunately, even the greatest of meritocracies can’t identify the key predictors of future success.  Even when the evidence of this failure is clear in the NBA, teams often ignore these facts rather than instill “hiring” practices that embrace uncertainty.  In the end, scouting for good players in basketball yields results that are little better than tossing a coin.

Michael Sivy of Time asked, “Are we already planting the seeds of the next financial crisis?”  In the end, his advice is one that rings true no matter the state of the market: exercise “prudence and caution.”

Blogs Driving the Debate

February 10, 2012

NCF curates a weekly list of blog posts that touch on emerging issues affecting the American business community.

Google is out with a new initiative called “Solve for X,” which is intended to bring together innovators and entrepreneurs to help address some of the world’s most pressing problems.

The Operations Room blog came out with a terrific summary of the recent writing on the state of American manufacturing.

James Surowiecki wrote in The New Yorker on the consumerization of information technology, where popular devices became unavoidable features of business life.

Democracy Lab, a joint project between Foreign Policy magazine and the Legatum Institute, featured a post on “Putinomics,” the commodity-driven state capitalism born of Vladimir Putin’s regime.  In truth, the Russian economy “is still largely a Potemkin façade that depends on the sale of raw materials and weapons to keep the lights on.”

Jessica Zuckerman wrote on The Foundry about the Department of Homeland Security’s “unrealistic” attempt to scan 100% of the cargo coming into our nation’s ports and the subsequent shift to a “risk-based” approach of scanning only those containers deemed risky.  By all appearances, this tact is proving to be far more realistic and ensures a relatively unimpeded flow of cargo.

Ryan Avent at The Economist took another look at the Euro crisis and wondered whether in his persistent pessimism he’s had it all wrong, seeing as how by all appearances the Eurozone has done spectacularly well so far at muddling through.  Avent thinks that there might be something to the notion that simply avoiding crisis is in itself a victory, and that the asset-purchases made by the European Central Bank are a crucial part of ensuring this stability.

In a similar vein as Ryan Avent, Ricardo Hausmann thinks that we’re looking at the Greece crisis in completely the wrong way.  It’s not really a crisis of debt, taxes, or spending.  It’s a question of how a stagnant country can restore fundamental economic growth, and the reality is that “Greece must export its way out of the crisis or face ruin.”  Without the ability to devalue its currency, Greece has to improve and diversify its exports in order to justify their higher price.  But Greece just doesn’t have the “productive knowledge” it needs to make it happen (or to justify the income it now enjoys).  The only real pathway to growth is by investing in “infrastructure, labour training, and research and development.”

Bryan Caplan pointed out that while (a) failing to learn something and (b) learning something but forgetting it are nearly equal in the human capital equation, they produce very different life and career outcomes because of what the latter signals about your intelligence and drive.  Yet another reason why education is so important.

Blog Posts Driving the Debate

February 3, 2012

NCF curates a weekly list of blog posts that touch on emerging issues affecting the American business community.

Ryan Avent of The Economist painted a mixed picture of the world economy.  In short, the small rays of sunshine have yet to dispel the gloom.

Francis Fukuyama wrote on The American Interest about the governance deficit facing the United States, where populist pressures lead to a negative feedback loop “in which a hobbled bureaucracy validates everyone’s view that the government can’t do anything competently.”

Alex Tabarrok (author of the excellent Launching the Innovation Renaissance) highlighted Nick Schulz’s NCF paper on the value of drawing human capital from around the world.

Tim Harford absorbed the news that the UK’s economy contracted a smidgen in the last quarter of 2011 and gave his thoughts in the form of a Q&A.  It’s all quite good, but the best parts are where he addresses what do about slowing growth in the short and long terms.  In the short term, yes, the UK may have to do what it can to boost demand, lest long-term unemployment cause growth prospects to gradually wilt for good.  Unfortunately, Britain doesn’t have that much fiscal wriggle room, so monetary solutions may be best.  Over the long term, Harford isn’t too optimistic about trying to boost traditional manufacturing as a growth solution.  After all, China has been cutting manufacturing jobs for quite some time now.  As Harford puts it, “If the Chinese can’t generate jobs through manufacturing I am not sure we should be expecting too much from that strategy.”

Exports accounted for 14% of GDP last year, according to Binyamin Applebaum, which is the highest proportion since 1929.

After Apple’s bombshell earnings report, Bret Swanson (an NCF fellow) took a hard look at the number of jobs created by the eponymous firm.  Swanson pointed especially to the knock-on effects from the creation of app markets and the like, which employ an uncounted number of souls beyond those in One Infinity Circle.

Blog Posts Driving the Debate

January 27, 2012

NCF curates a weekly list of blog posts that touch on emerging issues affecting the American business community.

The Capital Spectator posted a chart tracking long-term interest rates dating back to 1790.  Wonky?  Very.  What it shows though is that we’re at near all-time lows in interest rates.

There was a lot of discussion this week about the rise of China vis-à-vis the United States, but Kindred Winecoff thinks that the whole conversation is misguided.  Rather than looking at China’s growth on its own or solely in relation to the United States, we should all take a step back to look systemically at our current geopolitical structure.  From that vantage point we see that America retains unparalleled structural power.  Put another way, others may build lofty sand castles, but they do so in our sandbox.

Mark Perry responded to this week’s State of the Union address by President Obama, specifically to the president’s assertions about the state of manufacturing in America.  He deploys six points to argue that, in the end, “American manufacturing is doing quite well and experiencing record profits.”

The Ares blog gave the low-down on the Pentagon’s budget cuts.  There’s a lot to digest, but it’s important to begin to grasp this emerging issue.  The cuts will undoubtedly affect the private sector in numerous ways, from the service sector around bases to contracting firms here and abroad.

Reihan Salam responded to Matt Yglesias’s post on how six of the ten most productive cities on earth are found in America.  Yglesias pointed out though that the success of these cities, especially those harboring the tech industry, isn’t seeping into too many parts of America (and resulting in greater job creation than at present).  The reason is simply that the sector’s firms aren’t based in highly populated areas.  For as prosperous as Silicon Valley is, it really isn’t that populous.  Here’s where Salam injected his own commentary that perhaps the lack of people has to do with the high cost of living, which itself is a product of undue zoning and other such regulations.  Often with the best of intentions, the most prosperous cities throw up barriers to new entrants by limiting the supply of housing.  Silicon Valley’s average pay is in the six figures now, but few are flocking to an area boasting double-digit rent increases last year.  A lack of investment in infrastructure compounds the problem and discourages the lower-skilled workers from taking advantage of the opportunities for advancement to be found in more prosperous, populated areas.  Cities may then remain productive, but far from its potential.

Blog Posts Driving the Debate

January 20, 2012

NCF curates a weekly list of blog posts that touch on emerging issues affecting the American business community.

James Pethokoukis at The American outlined a Harvard Business School survey of 10,000 alumni on the state of American competitiveness.  Here’s what they found: “The big problems are macroeconomic policy (soundness of government budgetary, interest rate, and monetary policies), political system (ability of the government to pass effective laws),  legal framework (modest legal costs; swift adjudication), regulation (effective and predictable regulations without unnecessary burden on firms), K-12 education system(universal access to high-quality education; curricula that prepare students for productive work), and complexity of the national tax code.

In the view of Jordan Weissmann at The AtlanticAmerican innovation is “not dead yet.”

Wired’s Threat Level blog revealed that major cybersecurity flaws have been found in six industrial control systems across the nation.  This doesn’t sound too frightening until you realize what these systems do: they “control functions in critical infrastructure such as water, power and chemical plants; gas pipelines and nuclear facilities; as well as in manufacturing facilities such as food processing plants and automobile and aircraft assembly lines.”  Rightfully so, there’s a real debate now as to whether these flaws should have been revealed before systems manufacturers had a chance to address them.

The Geo-graphics blog at the Council on Foreign Relations released a chart on how how housing has “defriended” the Facebook generation.  ”Household balance sheets among the Facebook generation were the hardest hit: between 2007 and 2009, half of those under the age of 35 lost over 25% of their wealth.”

Is the American middle class shrinking?  Scott Winship found that most of the narrowing in this income class has had more to do with households moving to the upper middle income levels.  Economic hardship is a reality for many in America, but Winship showed economic mobility may not be quite as bad as many feared.

The Eurocrisis has quieted down in recent weeks, but that doesn’t mean it’s gone away.  Felix Salmon at Reuters showed how “Greece’s endgame looms.”

“Greece will officially default on March 20. The only question is whether the EU will continue to fund the country after that date. For the sake of the euro zone, we had better all hope the answer is yes.”

Blog Posts Driving the Debate

January 13, 2012

NCF curates a weekly list of blog posts that touch on emerging issues affecting the American business community.

Ezra Klein notes the “confused argument against immigration.”

Richard Florida at The Atlantic Cities laid out “the geography of women’s economic opportunity” in the world.

It’s a little bit wonky, granted, but there’s been a debate on the blogosphere this week about the length and severity of Japan’s 1990s recession.  Noah Smith argues that Japan’s economy was actually relatively strong during the 2000s, contrary to the popular notion that the country has suffered a stretch of two nearly unbroken decades of stagnation.  Many of the free market reforms and previously unseen initiatives (at least in Japan) that the country’s former prime minister Junichiro Koizumi brought about deserve much of the credit.

Arnaud de Borchgrave at The Atlantic Council outlined the key “threats to watch in 2012,” including those challenges both military and financial.  Speaking of risks, it looks like North Korea has far more advanced nuclear program that the public previously knew.

Gavyn Davies wrote on “America’s incredible shrinking labor force.”  After 2008, what had been a steady upward rise in the labor force came to a sudden stop and has been stagnating ever since.  The fundamental reason is short-term but worrying, having to do with a drop in the participation rate.  In other words, a large number of people have quit working or looking for work in America, which in turn puts our traditional economic dynamism at risk.

The Mafia may be the largest banking institution in Italy.  According to a recent report, “The mafia affects up to 50 businesses every hour, causing the loss of ‘tens of thousands of jobs’ and the closure of more than 1,800 businesses throughout the country each year.”  A shadow banking system acts like a cancer to a country’s economic body, much like Greece’s endemic tax avoidance.

Blog Posts Driving the Debate

January 6, 2012

NCF curates a weekly list of blog posts that touch on emerging issues affecting the American business community.

On his Foreign Policy blog, Daniel Drezner picked out the best political economy writing of last year and summarized them in this excellent post.  He awarded each piece (plus a few honorable mentions) with what he called the “Albies” (as in Albert O. Hirschman, the political economist).  Among these noted written pieces you’ll find the report on the future of manufacturing by the Boston Consulting Group as well as an article on the affects of austerity in 20th-century Europe.

Tyler Cowen on Marginal Revolution highlighted a soon-to-be released book with a very apt title: “The Coming Prosperity: How Entrepreneurs are Transforming the Global Economy.”

Mark Perry at his Carpe Diem blog  helpfully plucked out all of the key data from Friday morning’s bombshell BLS employment report.  Among other tidbits, he found that government job losses are continuing unabated, while manufacturing employment and jobs for college graduates rose at encouragingly high levels.

The brilliant Stephen Smith at Forbes picked up on a Guardian article arguing that London’s 1,017-foot tall Shard  tower is a harbinger of “skyscraper diplomacy,” where countries aim to develop goodwill in foreign countries through monumental building projects.

Journalist’s Resource looked at a study from Harvard’s Center for International Development that argues that an economy’s prosperity and growth is based on its complexity and diversity.  Where does the U.S. rank on the basis of this finding?  13th in the world, with the top spots going to Japan, Germany, and Switzerland.

The Epicenter blog wrote on the “tweeting cabbie,” showing a perfect example of how to combine old-school industries (taxi cabs) with Web 2.0 technology such as Twitter.