tag:blogger.com,1999:blog-25115474812465372722024-03-06T15:01:41.856-05:00Schumpeter's CenturyInnovation MattersPhilip Auerswaldhttp://www.blogger.com/profile/08509305350840745524noreply@blogger.comBlogger488125tag:blogger.com,1999:blog-2511547481246537272.post-21256577527362434602015-02-18T14:16:00.000-05:002015-02-18T14:16:58.615-05:00Depopulation: An Investor's Guide to Value in the Twenty-First CenturyThat's the title of a new short Kindle e-book by Philip Auerswald (<a href="https://twitter.com/auerswald">@auerswald</a>) and Joon Yun (<a href="https://twitter.com/drjoonyun">@DrJunYoon</a>). The book is, in part, a longer-form treatment of several of the main ideas from Auerswald's <a href="http://auerswald.org/2012/04/02/the-coming-prosperity-ii/">The Coming Prosperity</a>, particularly Chapter 2: Demographic Dividends.<br />
<br />
The book grapples seriously with Walt W. Rostow's observation that: "Up to this point, the conventional concern has been the adequacy of resources and the deterioration of the environment as new industrial countries move forward to technical maturity and beyond. These legitimate concerns give way in the next century to the quite different agenda of societies with declining or stagnant populations."
<br />
<br />
Naturally the book is strongly recommended, even if, like me, you have no intention to stop burying gold bullion in your backyard (the authors recommend real estate and health care investments as more appropriate alternatives.) You can find the book through <a href="http://smile.amazon.com/Depopulation-Investors-Guide-Twenty-First-Century-ebook/dp/B00SW9JAHU/ref=sr_1_1?ie=UTF8&qid=1424286126&sr=8-1&keywords=depopulation">Amazon</a>--you do not need a kindle to read it. <br />
<br />
Table of Contents<br />
<br />
Introduction<br />
<br />
Chapter 1: Why depopulation is all but inevitable<br />
The population explosion: A dramatic exception in human history.<br />
A unique characteristic of our historical moment: Depopulation coinciding with aging.<br />
<br />
Chapter 2: Demographics and investment from pre-history to the present<br />
The Agrarian Era (40,000 BCE-1800 CE): Riches through conquest<br />
The Mercantile Era (~1200-2000): Fortunes through arbitrage<br />
The Industrial Era (~1800-present): Wealth through economies of scale<br />
<br />
Chapter 3: The return of yield<br />
Four core trends<br />
Depopulation and aging<br />
Depopulation and urbanization<br />
Depopulation and international migration<br />
Depopulation and price volatility<br />
The return of yield<br />
<br />
Chapter 4: How and where to invest in a depopulating world<br />
Impact on Investment by Asset Class<br />
Equities<br />
Healthcare<br />
Human Resource Management<br />
Real Estate<br />
Residential real estate<br />
Commercial real estate<br />
Commodities<br />
Fixed income<br />
Alternative investments<br />
Risk <br />
Model risk<br />
Policy risk<br />
Threshold risk<br />
Asset-liability mismatch<br />
Expectational risk<br />
summary<br />
<br />
Chapter 5: "The future ain't what it used to be"<br />
Culture <br />
Politics<br />
Technology<br />
Public Policy<br />
<br />
ConclusionBrianHhttp://www.blogger.com/profile/08715417746385743468noreply@blogger.com0tag:blogger.com,1999:blog-2511547481246537272.post-72763122691741850152014-02-25T15:02:00.000-05:002014-02-25T15:19:18.784-05:00The Algorithmic FrontierIn our <a href="http://ssrn.com/abstract=2377168">recent paper</a> we introduce the idea of the algorithmic frontier to represent our current era of globalization. The
idea of a frontier has a long history in American thought, starting with
Frederick Jackson Turner’s seminal work, <i style="mso-bidi-font-style: normal;">The
Frontier in American History </i>(1892). Frederick Jackson Turner wrote of the
closing of the American frontier, but the physical closing of a land based
agricultural frontier, which he described, marked the end of only one type of
frontier. In Agwara et al. we summarize different dominant interpretations
of the frontier over the past four hundred years of U.S. history: the agricultural
frontier described by Turner (1610s-1880s), an industrial frontier typified by
the Ford Motor Company (1890s-1930s), a scientific frontier following WWII (1940s-1980s),
and the algorithmic (1990s-present).<br />
<br />
The algorithmic frontier coincides with the latest period of globalization that
began with the third wave of democracy, the reintegration of China and India
into the world trading system, and most recently the end of the Cold War.
Although the algorithmic frontier lines up neatly with the large scale
resumption of trade, the focus of this paper is not with trade flows per se,
but with the mechanisms that facilitated such activity; we are interested in
the innovations that have led to our modern system of innovation based on global
supply chains.<br />
<br />
The primary difference between the algorithmic frontier and
the earlier era of the scientific frontier is the rise of distributed networks
of production and innovation (Auerswald & Branscomb, 2008). If we view
these networks as the principal innovation demarcating the new frontier, then
the current era of globalization is really a process of interdependence and
interconnectedness (Acs & Preston 1997). The driver expanding the
algorithmic frontier is the increasing reach of collaborative networks of all
kinds—particularly production, but also research.<br />
<br />
Shared standards and business practices have been a
precondition to this process of economic integration. In contrast with the
traditional multinational assembly of subsidiaries, the global enterprise is a
flexible assembly of firms around the world, with skills and capacity that can
be drawn upon for the most efficient combination of business processes. Firms
traditionally relied on product and internal process standards but the rapid
globalization and economic integration witnessed in recent years has created
the need for standardization of management systems, which are essentially the
interface layer between production subroutines. As then-CEO of IBM Palmisano
wrote in 2006:<br />
<blockquote class="tr_bq">
[S]tarting in the early 1970s, the
revolution in information technology (it) improved the quality and cut the cost
of global communications and business operations by several orders of
magnitude. Most important, it standardized technologies and business operations
all over the world, interlinking and facilitating work both within and among
companies.This combination of shared technologies and shared business
standards, all built on top of a global IT and communications infrastructure,
changed the sorts of globalization that companies found possible.</blockquote>
Agwara, Hezekiah and Auerswald, Philip E. and Higginbotham, Brian D.,
Algorithms and the Changing Frontier (October 1, 2013). GMU School of
Public Policy Research Paper No. 2014-02. Available at SSRN: <a href="http://ssrn.com/abstract=2377168">http://ssrn.com/abstract=2377168</a> or
<a href="http://dx.doi.org/10.2139/ssrn.2377168">http://dx.doi.org/10.2139/ssrn.2377168</a>BrianHhttp://www.blogger.com/profile/08715417746385743468noreply@blogger.com0tag:blogger.com,1999:blog-2511547481246537272.post-72477301887966544432014-01-23T09:00:00.000-05:002014-01-23T10:06:10.535-05:00Algorithms and the Changing FrontierThat is the title of a new paper that we recently uploaded to <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2377168">SSRN</a>. The paper was prepared for an NBER conference on the changing frontier in science and innovation - a retrospective on the world since Vannevar Bush's seminal <a href="http://www.nsf.gov/od/lpa/nsf50/vbush1945.htm"><i>Science The Endless Frontier</i></a>. The abstract:<br />
<blockquote class="tr_bq">
We
first summarize the dominant interpretations of the "frontier" in the
United States and predecessor colonies over the past 400 years:
agricultural (1610s-1880s), industrial (1890s-1930s), scientific
(1940s-1980s), and algorithmic (1990s-present). We describe the
difference between the algorithmic frontier and the scientific frontier.
We then propose that the recent phenomenon referred to as
"globalization" is actually better understood as the progression of the
algorithmic frontier, as enabled by standards that in turn have
facilitated the interoperability of firm-level production algorithms. We
conclude by describing implications of the advance of the algorithmic
frontier for scientific discovery and technological innovation.</blockquote>
The full paper is freely available at <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2377168">SSRN</a>.BrianHhttp://www.blogger.com/profile/08715417746385743468noreply@blogger.com0tag:blogger.com,1999:blog-2511547481246537272.post-77542652480163596932014-01-17T16:03:00.002-05:002014-01-17T16:03:48.420-05:00How the Peer-to-Peer Economy Expands OpportunityTestimony by @auerswald at the House Committee on Small Business hearing on "<a href="http://smallbusiness.house.gov/calendar/eventsingle.aspx?EventID=364939">The Power of Connection: Peer-to-Peer Businesses</a>." Other speakers included Dr. Arun Sundararajan (NYU), Ms. Beth Stevens, Assistant General Counsel, Sidecar Technologies, Inc., and Mr. Alan Mond, CEO, 1000 Tools, Inc. - the latter two are examples of innovative startups shaping the "sharing" economy described so well in books like <a href="http://www.amazon.com/Mesh-Why-Future-Business-Sharing-ebook/dp/B0043RSIZU/ref=sr_1_1?ie=UTF8&qid=1389991197&sr=8-1&keywords=the+mesh">The Mesh</a>" and "<a href="http://www.amazon.com/Whats-Mine-Yours-Collaborative-Consumption-ebook/dp/B003VIWNEO/ref=pd_sim_kstore_1">What's Mine is Yours</a>." An excerpt from Auerswald's testimony:<br />
<blockquote class="tr_bq">
<strong>In more general terms, the bottom line is this: shared
prosperity requires not only innovations that scale-up to create new
wealth but also innovations that scale-out to create new opportunities.</strong></blockquote>
<blockquote class="tr_bq">
Let me be very clear on this point. Much of my own work, as well as
important research conducted over the past decade at the Kauffman
Foundation in Kansas City with which I have been affiliated, is about
the value to society of scale-up innovation—particularly via new
entrepreneurial entrants. This research has demonstrated that the small
proportion of new ventures that scale-up rapidly are responsible for a
disproportionate share of value creation in the economy.<br />
</blockquote>
<blockquote class="tr_bq">
But here’s the problem we’ve run into: while some scale-ups create a
large number of new jobs, many do not. Companies like Apple, Google,
Facebook, Instagram, and Twitter have all achieved valuations in the
tens and even hundreds of billions of dollars, but they directly employ
far fewer people per dollar of revenue than their Fortune 500
counterparts did a generation ago. This is where peer-to-peer platforms
come into play. By their very structure, peer-to-peer platforms
scale-out success to reach tens of thousands, even hundreds of
thousands, of people with opportunities to create viable livelihoods for
themselves. They create new and enticing invitations to latent
producers within the economy to employ their individual assets and
talents to create new economic value. </blockquote>
<blockquote class="tr_bq">
The significance of peer-to-peer business models thus is not
effectively measured by adding up the share of GDP they represent in
terms of monetized transactions. These innovations in work are rushing
in at the fringes of the advanced economies to fill the void left behind
as large corporations continue to “lean up”—that is, to shrink their
payrolls by employing algorithms and machines to perform routine tasks
previously performed by people. As Gansky puts it, “We’re in a period of
exploration. While we might be looking at a relatively small magnitude
of overall economic activity now in the peer-to-peer economy, it’s
happening at a time when all the tried-and-true industries are going
through significant transformations.” Steven Straus, former managing
director of the Center for Economic Transformation at the New York City
Economic Development Corporation,<a href="http://www.huffingtonpost.com/steven-strauss/welcome-to-the-sharing-economy_b_4516707.html"> looks at the same phenomenon</a>
from the standpoint of service providers: “We currently have about
three job seekers for every available job and 11 million people looking
for work—so the growth of the sharing economy isn’t surprising.” </blockquote>
<blockquote class="tr_bq">
In the coming decades, the United States and other advanced
industrialized economies will no sooner return to the routinized,
manufacturing-centric economy of the 20th century than to the agrarian
economy that preceded it. The issue is not whether new livelihoods based
on peer-to-peer business models are better or worse than the Industrial
Age jobs that are disappearing from large corporations. The real point
is that when jobs are eliminated in the process of digital disruption,
they will not be coming back in their old form. As that happens, we
humans have no choice but to fall back on our fundamental social skill
set: creating and sharing with one another. There is, however, one big
difference: unlike our isolated ancestors of millennia past, Americans
in this century are empowered by architectures of collaboration that
allow for the creation of new and diverse livelihoods at unprecedented
rates. </blockquote>
<blockquote class="tr_bq">
Therein lies the potential of today’s peer-to-peer economy.</blockquote>
BrianHhttp://www.blogger.com/profile/08715417746385743468noreply@blogger.com0tag:blogger.com,1999:blog-2511547481246537272.post-23846932123764412112013-02-14T15:57:00.000-05:002013-02-14T15:57:00.055-05:00A Call for Open AccessThe Alliance for Taxpayer Access, a nonprofit coalition of organizations that support barrier-free access to taxpayer-funded research, issued the following call to action that might be of interest to our readers.<br />
<blockquote class="tr_bq">
<h2 class="bmw_headline">
Call to action: Tell Congress you support the Bipartisan Fair Access to Science and Technology Research Act (FASTR)</h2>
<span class="bmw_pubdate">Published Feb 14, 2013</span>
<br />
Today (February 14, 2013), Senators Cornyn (R-TX) and Wyden (D-OR)
and Representatives Doyle (D-PA), Yoder (R-KS), and Lofgren (D-CA)
introduced the Fair Access to Science and Technology Research (FASTR)
Act, a bill that will accelerate scientific discovery and fuel
innovation by making articles reporting on publicly funded scientific
research freely accessible online for anyone to read and build upon.</blockquote>
<blockquote class="tr_bq">
Every year, the federal government funds over sixty billion dollars
in basic and applied research. Most of this funding is concentrated
within 11 departments/agencies (e.g., National Institutes of Health
(NIH), National Science Foundation (NSF), and Department of Energy).
This research results in a significant number of articles being
published each year – approximately 90,000 papers are published annually
as result of NIH funding alone. </blockquote>
<blockquote class="tr_bq">
Because U.S. taxpayers underwrite this research, they have a right to expect that its <i><b>dissemination</b></i> and <b>use</b>
will be maximized, and that they will have access to articles reporting
on the results. The Internet has revolutionized information sharing
and has made it possible to make the latest advances freely available to
every researcher, student, teacher, entrepreneur, business owner and
citizen so that the results can be read and built upon as efficiently as
possible. </blockquote>
<blockquote class="tr_bq">
FASTR will make these articles freely available for all potential
users to read and ensure that articles can be fully used in the digital
environment, enabling the use of new computational analysis tools that
promise to revolutionize the research process.<br />
FASTR will accelerate science, fuel innovation, and improve the lives
and welfare of Americans and those around the world. This is an
achievable goal – <b>today</b>. Now is the time to push for
this groundbreaking legislation, and let Congress know that the public
deserves access to the research that they paid for.</blockquote>
You'll find the full call to action <a href="http://www.taxpayeraccess.org/action/FASTR_calltoaction.shtml">here</a>.
BrianHhttp://www.blogger.com/profile/08715417746385743468noreply@blogger.com0tag:blogger.com,1999:blog-2511547481246537272.post-88821581739640307302013-01-31T11:56:00.002-05:002013-01-31T11:56:45.194-05:00South Africa's richest black man is giving away half his wealth In case you missed it <a href="http://www.bbc.co.uk/news/world-africa-21259399#">South Africa's richest black man, Patrice Motsepe, has announced he is giving away half his wealth to improve the lives of the poor</a>.
Jeremiah Mitokohttp://www.blogger.com/profile/05548097672893011944noreply@blogger.com0tag:blogger.com,1999:blog-2511547481246537272.post-11922177358855566072013-01-30T14:35:00.001-05:002013-01-30T14:35:24.745-05:00Collaborative ManufacturingOne of the benefits of having workers and management on the same page is that innovation is more likely to occur in this model (basically the Toyota Way.) If we are actually going to experience a resurgence in manufacturing, as so many are today claiming, we will have to find a way to transform our firms into learning organizations that value the input of line workers and who create an opportunity for them to contribute productively with shop engineers and even with supervising managers.<br />
<br />
A fascinating article in the Atlantic, "The Insourcing Boom," published earlier this month, features an incredible story about GE moving the production of water heaters in the U.S. from China. It's an inspiring story and hopefully a model for innovations to follow (<a href="http://www.theatlantic.com/magazine/archive/2012/12/the-insourcing-boom/309166/?single_page=true">The Atlantic</a>):<br />
<blockquote class="tr_bq">
So much has changed that GE executives came to believe the GeoSpring
could be made profitably at Appliance Park without increasing the price
of the water heater. “First we said, ‘Let’s just bring it back here and
build the exact same thing,’ ” says Kevin Nolan, the vice president of
technology for GE Appliances. <br />
</blockquote>
<blockquote class="tr_bq">
But a problem soon became apparent. GE hadn’t made a water heater in
the United States in decades. In all the recent years the company had
been tucking water heaters into American garages and basements, it had
lost track of how to actually make them. <br />
</blockquote>
<blockquote class="tr_bq">
The GeoSpring in particular, Nolan says, has “a lot of copper tubing in
the top.” Assembly-line workers “have to route the tubes, and they have
to braze them—weld them—to seal the joints. How that tubing is designed
really affects how hard or easy it is to solder the joints. And how
hard or easy it is to do the soldering affects the quality, of course.
And the quality of those welds is literally the quality of the hot-water
heater.” Although the GeoSpring had been conceived, designed, marketed,
and managed from Louisville, it was made in China, and, Nolan says, “We
really had zero communications into the assembly line there.” <br />
</blockquote>
<blockquote class="tr_bq">
To get ready to make the GeoSpring at Appliance Park, in January 2010
GE set up a space on the factory floor of Building 2 to design the new
assembly line. No products had been manufactured in Building 2 since
1998. An old GE range assembly line still stood there; after a feud with
union workers, that line had been shut down so abruptly that the
GeoSpring team found finished oven doors still hanging from conveyors
30 feet overhead. The GeoSpring project had a more collegial tone. The
“big room” had design engineers assigned to it, but also manufacturing
engineers, line workers, staff from marketing and sales—no
management-labor friction, just a group of people with different
perspectives, tackling a crucial problem. <br />
</blockquote>
<blockquote class="tr_bq">
“We got the water heater into the room, and the first thing [the group]
said to us was ‘This is just a mess,’ ” Nolan recalls. Not the product,
but the design. “In terms of manufacturability, it was terrible.” <br />
</blockquote>
<blockquote class="tr_bq">
The GeoSpring suffered from an advanced-technology version of “<span>IKEA</span>
Syndrome.” It was so hard to assemble that no one in the big room
wanted to make it. Instead they redesigned it. The team eliminated 1 out
of every 5 parts. It cut the cost of the materials by 25 percent. It
eliminated the tangle of tubing that couldn’t be easily welded. By
considering the workers who would have to put the water heater
together—in fact, by having those workers right at the table, looking at
the design as it was drawn—the team cut the work hours necessary to
assemble the water heater from 10 hours in China to two hours in
Louisville. <br />
</blockquote>
<blockquote class="tr_bq">
In the end, says Nolan, not one part was the same. <br />
</blockquote>
<blockquote class="tr_bq">
So a funny thing happened to the GeoSpring on the way from the cheap
Chinese factory to the expensive Kentucky factory: The material cost
went down. The labor required to make it went down. The quality went up.
Even the energy efficiency went up. <br />
</blockquote>
<blockquote class="tr_bq">
GE wasn’t just able to hold the retail sticker to the “China price.” It
beat that price by nearly 20 percent. The China-made GeoSpring retailed
for $1,599. The Louisville-made GeoSpring retails for $1,299.</blockquote>
BrianHhttp://www.blogger.com/profile/08715417746385743468noreply@blogger.com0tag:blogger.com,1999:blog-2511547481246537272.post-32653763627313100672012-05-05T22:50:00.001-04:002012-05-06T14:27:19.877-04:00Against IncumbancyOver at HBR, Philip Auerswald has a good guest post on innovation and the role of entrepreneurs as change agents. He writes (<a href="http://blogs.hbr.org/cs/2012/05/if_youre_not_pissing_someone_o.html">HBR</a>):<br />
<blockquote class="tr_bq">
As the editor of the journal <a href="http://www.mitpressjournals.org/loi/itgg"><i>Innovations</i></a>,
I'm asked with some regularity, "So, what is innovation anyhow? How
would you..."? (eyebrows usually furrow here) "... define it?" Since I
don't particularly enjoy debating definitions, I usually respond by
saying: "That's a difficult question. But one thing is for sure: If
you're not pissing someone off, it's probably not innovation."</blockquote>
<blockquote class="tr_bq">
I like this response because, if it doesn't end the conversation, it
usually shifts it from definitions to dynamics — which is what
innovation is all about, after all. But I also like it because it
captures one fundamental obstacle to innovation that all would-be
disruptors must be prepared to face: the potentially hostile response of
incumbents who don't want to see their market advantages threatened.</blockquote>
And then he ties this back to Schumpeter's writing. Here's Schumpeter, from <i>Capitalism, Socialism, and Democracy</i> (p. 132):<br />
<blockquote class="tr_bq">
To undertake such new things is difficult and constitutes a distinct
economic function, first because they lie outside the routine tasks
which everyone understands and, secondly, because the environment
resists in many ways that will vary, according to social conditions,
from simple refusal either to finance or buy a new thing, to physical
attack on the man who tries to produce it.</blockquote>
This doesn't, of course, have to apply to a lone individual working to change the world. Apple, at least in its current iteration, is clearly an innovative company. By that I am alluding to Auerswald's definition of an innovator as one who pisses people off. On the same day that Phil wrote his piece, there was a great example of the sometimes antagonistic relationship between Apple and AT&T, this despite the fact that around 60% of AT&T's phone sales in Q1 2012 were iPhones. Check out a few of the great quotes from AT&T's CEO, Randall Stephenson (i.e. the evil incumbent) at a recent conference (<a href="http://bits.blogs.nytimes.com/2012/05/04/att-randall-stephenson/">NYT</a>):<br />
<blockquote class="tr_bq">
Mr. Stephenson said he worried about services that could replace the
company’s own offerings. For example, free Internet-based messaging
services like Apple’s iMessage are eating into the company’s revenue
from text messages.<br />
<br />
“You lie awake at night worrying about what is
that which will disrupt your business model,” he said. “Apple iMessage
is a classic example. If you’re using iMessage, you’re not using one of
our messaging services, right? That’s disruptive to our messaging
revenue stream.”</blockquote>
Now, if you're a shareholder of AT&T, you'd probably be pretty happy knowing that the company is actively looking for ways to retain their core profit streams. On the other hand, if you're a consumer, you're pretty happy that Apple is doing what it can to improve its customers' experience. Along the way, innovators like Apple improve consumer surplus by challenging the status quo. The lesson is that incumbents worry about potential disruption while innovators (entrepreneurs/social entrepreneurs/change agents...) lie awake at night worrying about how they can create value and change the world.<br />
<br />
The gains to consumer surplus from increased competition are far higher than the gains to incumbents, but we spend most of our precious political capital protecting incumbents. It's time to move beyond left and right - the real debates of the 21st century revolve around how we can better enable entrepreneurs to create value and find solutions to global problems.BrianHhttp://www.blogger.com/profile/08715417746385743468noreply@blogger.com0tag:blogger.com,1999:blog-2511547481246537272.post-73906634799016885952012-04-05T11:04:00.000-04:002012-04-05T11:04:03.864-04:00An Economics and Evolutionary Biology Reading ListYou'll find it <a href="http://www.jasoncollins.org/economics-and-evolutionary-biology-reading-list/">here</a>, via MR. I find it to be a fine yet incomplete list. A few additions. In terms of popular books, one commenter added Eric Beinhocker's <a href="http://www.amazon.com/Origin-Wealth-Evolution-Complexity-Economics/dp/1422121038/ref=sr_1_1?s=books&ie=UTF8&qid=1333634697&sr=1-1">Origins of Wealth</a>. In my mind this would be the place to start. It's great and I recommend it strongly. It seems to me that evolutionary economics offers a less complete vision than complexity theory, and you get a lot of that in Beinhocker as well. Melanie Mitchell's book, <a href="http://www.amazon.com/Complexity-Guided-Tour-Melanie-Mitchell/dp/0199798109/ref=sr_1_1?s=books&ie=UTF8&qid=1333635354&sr=1-1"><i>Complexity: A Guided Tour</i></a>, is a good companion to Beinhocker, though off our current topic.<br />
<br />
If you want something on the academic side, works by Stan Metcalfe (<a href="http://folk.uio.no/ivai/ESST/Sources/Metcalfe%20Evolutionary%20Economics%20and%20Tech%20policy.pdf">1</a>, <a href="http://www.cric.ac.uk/cric/Pdfs/dp3.pdf">2</a>) should be included and the <a href="http://www.amazon.com/Evolutionary-Theory-Economic-Change-Belknap/dp/0674272285/ref=sr_1_1?s=books&ie=UTF8&qid=1333634987&sr=1-1">Nelson/Winter treatise</a> is canonical, yet missing. Really everything by <a href="http://ideas.repec.org/e/pne56.html">Nelson</a>. Start there, and then read Baumol's <i><a href="http://www.amazon.com/Microtheory-Innovative-Entrepreneurship-Foundation-Innovation/dp/0691145849/ref=sr_1_1?s=books&ie=UTF8&qid=1333634891&sr=1-1">Microtheory of Innovative Entrepreneurship</a></i>, or perhaps the gentler, <i><a href="http://www.amazon.com/The-Free-Market-Innovation-Machine-Capitalism/dp/069111630X/ref=ntt_at_ep_dpt_11">The Free-Market Innovation Machine</a></i>.<br />
<br />
I am less qualified to offer recommendations on the biology side, though I found Stuart Kauffman's work to be uniformly excellent. His <i><a href="http://www.amazon.com/At-Home-Universe-Self-Organization-Complexity/dp/0195111303/ref=sr_1_2?ie=UTF8&qid=1333635151&sr=8-2">At Home in the Universe</a></i> is an easier read than <i><a href="http://www.amazon.com/The-Origins-Order-Self-Organization-Selection/dp/0195079515/ref=sr_1_3?ie=UTF8&qid=1333635151&sr=8-3">Origin of Order</a></i>, but both are great and highly recommended. Not all of the conclusions are universally accepted, though epistasis and fitness landscapes (and Kauffman's <a href="http://www.math.iit.edu/%7Ekaul/talks/NKTalk-long.pdf">NK model</a>) should be important concepts in the social sciences. Ernst Mayr's <a href="http://www.amazon.com/What-Evolution-Is-Ernst-Mayr/dp/0465044263/ref=sr_1_1?s=books&ie=UTF8&qid=1333635913&sr=1-1">What Evolution Is</a>, is a fine introductory book written for non-specialists.<br />
<br />
This is all tip of the iceburg of course, but it's nice to see so much new work in this field. Most of this remains outside the mainstream of economics, with the partial exception of Nelson/Winter and Metcalfe. In part this reflects a general wariness of evolutionary concepts, which have been grossly misused in the past. But it also reflects a desire by economists, in particular, to maintain their focus on equilibrium and optimization analysis, their two primary tools. An evolutionary perspective can be made to fit these tools, but it does present a challenge to them as well.<br />
<br />
And it should go without saying that I'd recommend reading lots and lots of Schumpeter.BrianHhttp://www.blogger.com/profile/08715417746385743468noreply@blogger.com0tag:blogger.com,1999:blog-2511547481246537272.post-65878279958177552712012-04-02T11:23:00.000-04:002012-04-04T09:21:03.639-04:00From Reset to ProsperityThe recent financial crisis and subsequent recession have left many of us reflecting on our prospects for the future and even revived earlier debates about whether we should have come down from the trees in the first place. <br />
<br />
In “Reading About the Financial Crisis” (JEL, <a href="http://www.aeaweb.org/articles.php?doi=10.1257/jel.50.1.151">gated</a> |<a href="http://www.argentumlux.org/documents/JEL_6.pdf">ungated</a> |<a href="http://www.npr.org/blogs/money/2012/01/23/145661552/what-an-economist-learned-from-reading-21-books-about-the-crisis">NPR
story</a>), financial economist Andrew Lo attempts to make sense of the first wave of scholarship on the crisis. Unfortunately, according to Lo, academic economists,
policymakers, and journalists have been unable to even reach agreement
on the basic facts of what went wrong.<br />
<br />
While the financial crisis still resonates because of its immediacy, several scholars have begun to make the case that the downturn occurred for systematic reasons representing broader forces. Three recent books from George Mason University (GMU) faculty, and one from a former professor at the School of Public Policy (SPP), attempt to put the recent downturn in broader perspective.<br />
<br />
In Tyler Cowen’s provocative treatise, <a href="http://www.amazon.com/The-Great-Stagnation-Low-Hanging-ebook/dp/B004H0M8QS/ref=pd_sim_kstore_2?ie=UTF8&m=AG56TWVU5XWC2"><i>The Great Stagnation</i></a> (2011), written for the Kindle (and only later published in hardback), we learn that the downturn is only the latest example of a broader and more fundamental slowdown in our potential rate of growth. This slowdown arose, according to Cowen, because the costs of innovation have risen as we picked all of the low-hanging fruit. New innovations become more reliant on greater specialization and higher rates of knowledge accumulation and as a result become more difficult to produce. Since I talked at fairly great length about Cowen’s work in <a href="http://schumpeterscentury.blogspot.com/2012/03/second-economy.html">this earlier piece</a>, I’ll leave it there for now.<br />
<br />
Alex Tabarrok's <a href="http://www.amazon.com/Launching-The-Innovation-Renaissance-ebook/dp/B006C1HX24/ref=pd_sim_kstore_12?ie=UTF8&m=AG56TWVU5XWC2"><i>Launching the Innovation Renaissance</i></a> (2011) is an almost perfect companion to Cowen’s work. Tabarrok, Cowen’s co-blogger at Marginal Revolution, jumps off from the great stagnation, and then asks how we might reform our current policies to reinvigorate our innovative capacity. Tabarrok’s suggestions range from reforming our patent system, to increased reliance on prizes and other incentive mechanisms, to rethinking education and transforming our immigration system.
Taken together, these two works provide a coherent view of what’s gone wrong, and one possible set of reforms we could make that would help us get back on track. In terms of "bang for the buck" you get a lot from Cowen and Tabarrok's works. Two recent books build on these themes, but devote more space and depth to their topics.<br />
<br />
Richard Florida, a former Hirst Professor of Public Policy at SPP (and now Director of the Martin Prosperity Institute at U. Toronto) frames the recent downturn as a “great reset.” In <a href="http://www.amazon.com/The-Great-Reset-Post-Crash-Economy/dp/0062009052/ref=tmm_pap_title_0?ie=UTF8&qid=1333379867&sr=1-1"><i>The Great Reset</i></a> (2010), Florida writes that our current recession is reminiscent of earlier severe downturns in the economy, such as the Great Depression and the Long Depression of 1873. These earlier crises are notable not just for their severity, but also because they launched new ways of thinking about the world and spurred long periods of inventiveness. These resets purge what is not working and reinforce positive trends that are leading to growth. <br />
<br />
Throughout Florida’s narrative, we learn that our economy is currently moving through a such a reset, as we shift from a managerial economy, epitomized by General Motors, into a knowledge driven economy that relies on individuals in cities as the central unit of organization. In an interview for the Atlantic, Florida states (<a href="http://www.theatlantic.com/magazine/archive/2009/02/the-great-reset/7303/">The Atlantic</a>):
<br />
<blockquote class="tr_bq">
There are two tendencies in the world economy. There is a great tendency for low-cost, fairly standardized stuff to spread itself out, and that’s where people say, “Oh my God, the world is flat.” But there’s also this counter-tendency for things to concentrate—to take advantage of these forces of agglomeration and human capital. So what I tried to argue is that that second tendency is very important.
</blockquote>
<blockquote class="tr_bq">
[…] What I tried to do in this piece is say, “I don’t think this great
crisis—or great ‘reset,’ as I like to call it—will change this trend. In fact,
my hunch is that, coming out of this crisis, our geography will end up more
concentrated than it was before.”</blockquote>
One promising trend that Florida cites is the growing concentration of human capital around cities
and “mega-regions” like the Boston/New York/Washington corridor. The challenge will be for isolated cities like Pittsburgh to connect to these broader networks. Connecting people in ever-denser networks has become the fundamental challenge in the 21st century.<br />
<br />
Finally, Auerswald’s <a href="http://www.amazon.com/The-Coming-Prosperity-Entrepreneurs-ebook/dp/B0076LTEU8/ref=sr_1_1?s=digital-text&ie=UTF8&qid=1333379657&sr=1-1"><i>The Great Prosperity</i></a> (2012) ties together these disparate themes and extends the
analysis to the global economy. Auerswald sees entrepreneuers as the primary force driving the outlook and the book focuses on the remarkable actions entrepreneurs are taking to address global challenges. Like Tabarrok, Auerswald also sees incredible potential from immigration and the spread of ideas, but frames the discussion in the broader context of a growing population, which is often portrayed as a coming threat. Unlike earlier theorists like Malthus and Ehrlich, Auerswald, channeling
Michael Kramer, explains how new people create new ideas and fundamentally
reshape our approach to existing challenges. As in <i>The Great Reset</i>, we learn of the fundamental importance of creating value through connection and collaboration. <br />
<br />
In an excellent review of <a href="http://www.amazon.com/Why-Nations-Fail-Origins-Prosperity/dp/0307719219/ref=sr_1_1?s=books&ie=UTF8&qid=1333379932&sr=1-1"><i>Why Nations Fail</i></a>,
Auerswald reiterates this point (<a href="http://www.growthology.org/growthology/2012/03/the-neutron-book.html">growthology</a>,
see also <a href="http://blogs.the-american-interest.com/fukuyama/2012/03/26/acemoglu-and-robinson-on-why-nations-fail/">Fukuyama’s review</a> for a similar take). Fundamentally the story of how institutions and economies evolve is a story about people and how: “actual people, or groups of people, acted at particular points in time to push back against incumbent interests, change institutions, and in so doing move the arrow of history." <br />
<br />
Through case studies of disparate entrepreneurs, ranging from a mobile phone revolution in
Afghanistan to Victoria Hale, who has successfully utilized “orphan drugs” to address issues of global health, Auerswald demonstrates that historically intractable problems can be solved through entrepreneurial solutions. <br />
<br />
Our current myopic focus on the past decade and the two most recent recessions and "jobless recoveries" misses the broader
and fundamentally promising trends currently underway. Florida and Auerswald both provide excellent maps of our changing terrain, and Tabarrok provides one potential path for the U.S. to escape its current malaise.<br />
<br />
The contemporary works that Andrew Lo cites will be crucial to future historians as they reconstruct what went wrong and how we can learn from this experience. But if you're trying to get a sense of where we're headed, and why, you could instead read these two short monographs and two books. Even better, if you actaully want to participate in changing the future, these books serve as important blueprints.BrianHhttp://www.blogger.com/profile/08715417746385743468noreply@blogger.com0tag:blogger.com,1999:blog-2511547481246537272.post-16494502133956024312012-03-30T16:30:00.000-04:002012-03-30T16:30:58.856-04:00The Coming Prosperity - the Movie (or at least a Presentation)Those of you who have spent any time with Phil, either in class or in person, know how high-energy he can be and will enjoy seeing him stand steadfastly behind a podium for almost 30 seconds. After that he makes the camera person work for it. That's not the interesting part of course, so check out the talk to learn more about "the single most promising moment in human history."
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<embed src="http://c.brightcove.com/services/viewer/federated_f9?isVid=1" bgcolor="#FFFFFF" flashVars="videoId=1537179685001&playerID=40280745001&playerKey=AQ~~,AAAAAF1AP-k~,paP-6btd7SPcN3he8b6wgT6uI64ClnLc&domain=embed&dynamicStreaming=true" base="http://admin.brightcove.com" name="flashObj" width="580" height="375" seamlesstabbing="false" type="application/x-shockwave-flash" allowFullScreen="true" swLiveConnect="true" allowScriptAccess="always" pluginspage="http://www.macromedia.com/shockwave/download/index.cgi?P1_Prod_Version=ShockwaveFlash"></embed></object>BrianHhttp://www.blogger.com/profile/08715417746385743468noreply@blogger.com0tag:blogger.com,1999:blog-2511547481246537272.post-87313730879667571562012-03-22T11:14:00.013-04:002012-03-26T11:43:43.428-04:00The Second EconomyWe all know that the web has transformed our lives and dramatically altered how we live. We throw around words like "transformative," and "revolutionary" without a second's thought. But in <a href="http://www.amazon.com/gp/product/0525952713/ref=as_li_tf_il?ie=UTF8&tag=marginalrevol-20&linkCode=as2&camp=217145&creative=399349&creativeASIN=0525952713">The Great Stagnation (#TGS)</a>, Tyler Cowen makes the point that the internet is mostly good for so-called "infovores" and that <a href="http://marginalrevolution.com/marginalrevolution/2011/07/consumer-surplus-from-the-internet-revisited.html">consumer surplus has only modestly improved</a>.<br /><br />Nor does the web provide much in terms of employment potential. Put simply, according to TGS theories, outside of Silicon Valley, the Route 128 corridor, and a few hotspots around the country, we just don't need that many engineers and computer scientists. While these new industries do create net new jobs, they are not doing enough to close the "stagnation gap" that's arisen since the 1970s. Cowen's thesis is usually presented as somewhat of a contrarian take on the web and its impacts, but it has also become one of the more hotly debated books over the past year.<br /><br />But frankly, I don't think he pushes this idea very far. Brian Arthur, in a very thoughtful piece for McKinsey (<a href="http://www.parc.com/publication/2800/second-economy.html">The Second Economy</a>) spends far more time focusing on how deep the information revolution really goes (also see his <a href="http://www.parc.com/event/1499/how-technology-is-recreating-the-21st-century-economy.html">speech at PARC</a>). Arthur believes we are seeing the rise of a second economy, enmeshed over our own, that is built around digital processes. In Arthur's description: <blockquote>If I were to look for adjectives to describe this second economy, I’d say it is vast, silent, connected, unseen, and autonomous (meaning that human beings may design it but are not directly involved in running it). It is remotely executing and global, always on, and endlessly configurable. It is concurrent—a great computer expression—which means that everything happens in parallel. It is self-configuring, meaning it constantly reconfigures itself on the fly, and increasingly it is also self-organizing, self-architecting, and self-healing.<br /><br />These last descriptors sound biological—and they are. In fact, I’m beginning to think of this second economy, which is under the surface of the physical economy, as a huge interconnected root system, very much like the root system for aspen trees. For every acre of aspen trees above the ground, there’s about ten miles of roots underneath, all interconnected with one another, “communicating” with each other.<br /></blockquote>This broader conception of the information revolution strengthens the TGS thesis. As the second economy has expanded, productivity from digitization in business processing has displaced many human processing jobs, such as secretaries, paralegals, typists, telephone operators, draftsmen, and so on. In Arthur's telling, the reason we've seen slower recoveries following the past few recessions is that structural changes are leading to TGS outcomes. Back to Arthur:<br /><blockquote>Physical jobs are disappearing into the second economy, and I believe this effect is dwarfing the much more publicized effect of jobs disappearing to places like India and China.<br /><br />There are parallels with what has happened before. In the early 20th century, farm jobs became mechanized and there was less need for farm labor, and some decades later manufacturing jobs became mechanized and there was less need for factory labor. Now business processes—many in the service sector—are becoming “mechanized” and fewer people are needed, and this is exerting systematic downward pressure on jobs. [...] But the primary cause of all of the downsizing we’ve had since the mid-1990s is that a lot of human jobs are disappearing into the second economy. Not to reappear.</blockquote>So where does all that leave us? One <a href="http://www.bloomberg.com/news/2011-05-26/cowen-seeing-weak-growth-makes-great-stagnation-hotly-debated-bestseller.html">Bloomberg review</a> summed up Cowen's thesis as, "Cowen thinks that now that America has used up the frontier, educated all of the farm kids, and built a couple of cars for every family, we might be done growing for awhile." In more prosaic econ terms, Cowen believes that our potential rate of growth has slowed, perhaps dramatically, and is unlikely to rise in the near term (this reflects slower pop growth, fewer women entering workforce, and so on).<br /><br />In Arthur's version, technological change will proceed at a tremendous pace and the digital second economy will mirror the size of our traditional economy in 15-20 years. However, rising productivity will displace human workers and we will have trouble finding new jobs. In this, Arthur channels John Maynard Keynes, from his classic "<a href="http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&ved=0CEUQFjAC&url=http%3A%2F%2Fwww.econ.yale.edu%2Fsmith%2Fecon116a%2Fkeynes1.pdf&ei=b3drT5G9JcbnrAfP4YmpAg&usg=AFQjCNHKheMjmgpfXwB-Y7f9pilzTordqQ&sig2=5vziXq4O1vDxaIfmFpwd7Q">Economic Possibilities for our Grandchildren</a>:" <blockquote>We are being afflicted with a new disease of which some readers may not yet have heard the name, but of which they will hear a great deal in the years to come--namely, technological unemployment. This means unemployment due to our discovery of means of economising the use of labour outrunning the pace at which we can find new uses for labour.</blockquote>In one of the strongest sections of <a href="http://www.amazon.com/Coming-Prosperity-Entrepreneurs-Transforming-Economy/dp/0199795177/ref=tmm_hrd_title_0?ie=UTF8&qid=1330976658&sr=8-2"><span style="font-style: italic;">The Coming Prosperity</span></a>, Auerswald connects Arthur and Cowen's writings with earlier technology pessimists, like Norbert Weiner and Keynes. Phil points out that since their warnings we have had tremendous economic growth and the world has gotten better for almost everyone.<br /><br />More recently, even though the 2000s weren't great in the U.S., <a href="http://www.overcomingbias.com/2011/01/best-decade-ever.html">it was the best decade for the rest of the world</a>. This observation forms the basis for much of <span style="font-style: italic;">The Coming Prosperity</span>. (It's worth pointing out that Cowen is an optimist and also believes that this past decade really was the best, globally, and that future decades will only get better as well.)<br /><br />One of the primary reasons for optimism stems from the remarkable actions entrepreneurs are taking to fundamentally reshape the world. Auerswald does a commendable job of portraying these trends and how entrepreneurial solutions are being applied to global challenges. If there is a shortcoming to this approach, however, it is that he only discusses these changes and their affects in the U.S. in passing (to be fair, he spends a lot of time discussing the changing structure of the U.S. economy, which I'll address in a future post).<br /><br />There are a couple of ways of thinking about these issues. First, I think it's worth revisiting this idea of the frontier. In a recent twitter exchange, Gwendolynne Cross (<a href="https://twitter.com/#%21/brainparts">@brainparts</a>) asked me and a few other people why the word entrepreneurship always triggers the Star Trek TNG theme song in her mind. David Miller (<a href="https://twitter.com/#%21/campus_entre">@campus_entre</a>) rightly responded that entrepreneurship is all about the frontier. So what about Cowen's thesis that the frontier has essentially closed?<br /><br />The same period (post 70s) that has been identified as the era of stagnation has also been identified as the era of entrepreneurship (by Acs, Audretsch, Auerswald, Schramm...). I'll come back to this dichotomy in a future post, but for now lets just accept the resurgence of entrepreneurialism. Entrepreneurship is synonymous with the idea of the frontier.<br /><br />One reason the frontier is alive and well is that entrepreneurship, despite universities near maniacal focus on technology transfer, <a href="http://campusentrepreneurship.wordpress.com/2010/12/20/universities-making-money-from-licensing-technology-inside-higher-ed/">spans industries</a>. One example from David Miller's research, out of many cases, is Under Armour. Under Armour was started by Kevin Plank while he was a student-athlete at the University of Maryland. Plank decided to enter a tough market that was already dominated by huge companies with exclusive contracts. But success was rapid and phenomenal and Plank's achievement sparked a revolution in entrepreneurship education at UMD (read <a href="http://campusentrepreneurship.wordpress.com/">David's blog</a> for much more on this).<br /><br />But even in technology fields, new innovations are creating new needs. According to <a href="http://www.mckinsey.com/Insights/MGI/Research/Technology_and_Innovation/Big_data_The_next_frontier_for_innovation">McKinsey</a>: <blockquote>There will be a shortage of talent necessary for organizations to take advantage of big data. By 2018, the United States alone could face a shortage of 140,000 to 190,000 people with deep analytical skills as well as 1.5 million managers and analysts with the know-how to use the analysis of big data to make effective decisions.</blockquote>Thanks to the incredibly sharp <a href="http://del-fi.org/jtw">John Wilbanks</a> (<a href="https://twitter.com/#%21/wilbanks">@Wilbanks</a>) for the link to this report. John also suggested we create an initiative to train data administrators at the community college level, mirrored after Reagan's initiative to train more nurses in the 1980s. Seems like a great idea to me.<br /><br />Now, in the grand scheme of things a shortage of 140,000 to 190,000 people with "deep analytical skills" and 1.5 million data managers really doesn't amount to much. But if we could somehow add all of these workers to our economy right now, we could potentially lower our unemployment rate by a full percentage point. Obviously that's not possible, but it's something to work towards and with our dismal performance of late, it would be a welcome bit of positive news. Nor is this a lone case - without a doubt there will be many sectors of the economy that will be in dire need of smart, talented, curious, and not necessarily college educated, employees.<br /><br />More generally this mirrors Alex Tabarrok's (Tyler's co-blogger at MR) call for additional vocational training, rather than continuing to emphasize higher education as the only legitimate goal (see <a href="http://marginalrevolution.com/marginalrevolution/2011/11/college-has-been-oversold.html">here</a> and <a href="http://marginalrevolution.com/marginalrevolution/2012/03/apprenticeships-v-college.html">here</a>). We should pay more heed to this line of thought.<br /><br />I'll wrap up this exceedingly long post by saying that there are many remedies to our ills, but that our public discussions and proposed solutions are rarely helpful or productive. It's time to change the discussion to <a href="http://thecomingprosperity.blogspot.com/2011/01/time-to-be-what-matters.html">what really matters</a>.BrianHhttp://www.blogger.com/profile/08715417746385743468noreply@blogger.com0tag:blogger.com,1999:blog-2511547481246537272.post-44945852146143713212012-03-13T16:11:00.002-04:002012-03-13T16:15:39.288-04:00Masters in Social EntrepreneurshipFrom the <a href="http://www.masoninnovation.org/">GMU Center for Social Entrepreneurship</a>. Clearly I think this is a great step forward for the field:<p><strong></strong></p><blockquote><p><strong>It's Official! A Master's Degree in Social Entrepreneurship </strong></p> <p>Mason is proud to announce officially the launch of our Masters in Social Entrepreneurship. Enrollment begins immediately for the Fall 2012 semester. If you've always dreamed of traveling with sensei-like faculty on an interdisciplinary path to becoming a social enterprise black belt, your dream has come true. We welcome applicants from around the globe and from all undergraduate majors for this two-year program. Only a handful of universities in the world offer a graduate degree in Social Entrepreneurship. Interested? Complete <a href="http://images.myngp.com/LinkTracker.aspx?crypt=IVi0ax2%2b6UBSinc%2fCPYaKWCx41nK39Vne1PrwepAtovJRlyHLZPQ5KIpHh6QVJ%2fP3xxW2QsAY4U4hjyCjG0sIXfZCLTVvgMo4ao970C%2fLgsz0V64d6Clzo%2fgykIXRCzlJvJZ%2bNfKVucMkQhCIDTktzODiwp5jY7SIAMKm%2bEDZlUnGW%2fhKfuewkviLI4sFUtlMDbrZuCaNvg%3d" target="_blank">this form</a> and we'll keep the details flowing to you. </p></blockquote><p></p>BrianHhttp://www.blogger.com/profile/08715417746385743468noreply@blogger.com0tag:blogger.com,1999:blog-2511547481246537272.post-79883230041847306522012-03-05T11:21:00.005-05:002012-03-05T12:01:05.099-05:00Prizes as IncentivesWe've covered the use of prizes as an incentive mechanism several times before, but NPR has an interesting piece on this today. I like this example of competition based procurement policy (<a href="http://www.npr.org/blogs/money/2012/03/05/147751097/why-napoleon-offered-a-prize-for-inventing-canned-food?sc=tumblr&cc=npr">NPR</a>):<br /><blockquote>Napoleon offered 12,000 francs to improve upon the prevailing food preservation methods of the time. Not surprisingly, the purpose was to better feed his army "when an invaded country was not able or inclined to sell or provide food". Fifteen years later, confectioner Nicolas François Appert claimed the prize. He devised a method involving heating, boiling and sealing food in airtight glass jars — the same basic technology still used to can foods.</blockquote>Let that sink in for a minute. "Fifteen years later, confectioner Nicolas François Appert claimed the prize." 15 years! The X-prize, arguably a more complicated challenge, was initiated in 1996 and claimed in 2004 (< 10 years.) There is a persuasive argument that we are in a period of great stagnation and that it is increasing difficult to create new inventions and to bring them to market, as we have already picked the "low-hanging fruit" as Tyler Cowen says. These dark projections of the future are one possible path, but stagnation, as I'll discuss in an upcoming series of posts, is not the only trend currently shaping our economy.<br /><br />The NPR piece is based on a recent <a href="http://opinionator.blogs.nytimes.com/2012/02/29/prizes-with-an-eye-toward-the-future/?scp=1&sq=times%20opinionator&st=cse">NYT article</a>, which itself is based in part on a report by <a href="http://keionline.org/">Knowledge Ecology International</a> that catalogs historical examples of prizes. The report is <a href="http://keionline.org/misc-docs/research_notes/kei_rn_2008_1.pdf">here</a>.BrianHhttp://www.blogger.com/profile/08715417746385743468noreply@blogger.com0tag:blogger.com,1999:blog-2511547481246537272.post-66752296409033720252012-01-10T10:11:00.004-05:002012-01-10T14:50:12.174-05:00The Coming ProsperityNew book by Philip Auerswald, and the subtitle is: How Entrepreneurs are Transforming the Global Economy. You can preorder at <a href="http://www.amazon.com/Coming-Prosperity-Entrepreneurs-Transforming-Economy/dp/0199795177/ref=sr_1_1?s=books&ie=UTF8&qid=1326211383&sr=1-1">Amazon</a>. Doing so affects the publishers decision to print more or fewer copies of the book, so if you think it's interesting, order now.<br /><br />Phil has started blogging the book. <a href="http://thecomingprosperity.blogspot.com/2012/01/fear-itself.html">Here's</a> one discussion on fear (Ch. 13), from his section on what's ahead for America.<br /><br />Here's a talk he gave on the Hill, summarizing some of the main points behind his approach.<br /><br /><iframe src="http://www.youtube.com/embed/OPYzl7npf24" allowfullscreen="" frameborder="0"></iframe>BrianHhttp://www.blogger.com/profile/08715417746385743468noreply@blogger.com0tag:blogger.com,1999:blog-2511547481246537272.post-65467870862443266612011-08-05T16:49:00.002-04:002011-08-05T16:52:18.855-04:00Publication of NoVa Clean Energy Economy ReportProduced by GMU's David Hart and a small team. Some details:<br /><blockquote>The Clean Energy Report represents an effort by a small group at the George Mason University School of Public Policy to estimate the size and sketch the contours of the “clean energy economy” of northern Virginia. It is, by any definition, a rough draft. We relied on publicly available data in order to identify firms, government agencies, and other organizations that contribute to improving the region’s energy efficiency and expanding its renewable energy use. We have sought to make our methods and findings as transparent as possible.</blockquote>The report and additional info are <a href="http://gmunovacleanenergyreport.gmu.edu/">here</a>. The authors are currently seeking feedback so if you want to help out take a look and see what, if anything, they're missing.BrianHhttp://www.blogger.com/profile/08715417746385743468noreply@blogger.com0tag:blogger.com,1999:blog-2511547481246537272.post-69305956510755918522011-07-22T14:13:00.003-04:002011-07-22T14:17:31.051-04:00xkcd on standards proliferation<a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="http://imgs.xkcd.com/comics/standards.png"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 500px; height: 283px;" src="http://imgs.xkcd.com/comics/standards.png" border="0" alt="" /></a>BrianHhttp://www.blogger.com/profile/08715417746385743468noreply@blogger.com0tag:blogger.com,1999:blog-2511547481246537272.post-14007454244217787592011-06-15T11:17:00.011-04:002011-06-15T13:11:30.962-04:00Schumpeter in Africa??Few people will contest the assertion that most of the entrepreneurial growth in this century will take place in BRIC countries (actually mostly India and China). <br /><br />But Africa?? Africa, we hear, has too many little nondescript inchoate domains with a big-man at the top calling themselves nation states, while still struggling to curve a synthetic national identity out of the vestiges of a colonial past.<br /><br />I argue that all that is changing; has changed. <br /><br />Africa is democratizing, Africa is integrating. <strong>Africa is growing up</strong>. <br />The so-called “<a href="http://en.wikipedia.org/wiki/Arab_Spring">Arab Spring</a>” is in fact the tail end of a long African Summer.<br /><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjSWPQk2sda_SKkWhrhfH1P1PqOhQQX8oHCFU38NlLtYYo6IK3kQyYA8l5-uhjDt7YulSLBhwsNGyGCl85WymXYBUtMMZr0kbrlVgBEvVhDQ7W8ZeBaOWfVqaMzVpJc8IkItwR96bNxAQA/s1600/Arab+Spring.jpg"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 450px; height: 300px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjSWPQk2sda_SKkWhrhfH1P1PqOhQQX8oHCFU38NlLtYYo6IK3kQyYA8l5-uhjDt7YulSLBhwsNGyGCl85WymXYBUtMMZr0kbrlVgBEvVhDQ7W8ZeBaOWfVqaMzVpJc8IkItwR96bNxAQA/s400/Arab+Spring.jpg" border="0" alt=""id="BLOGGER_PHOTO_ID_5618466987803146386" /></a><br /><br />The newest of the regional integration programs is <a href="http://www.comesa-eac-sadc-tripartite.org/about/background">COMESA-EAC-SADC Tripartite Summit</a>. The Tripartite is an umbrella organization consisting of three of Africa’s Regional Economic Communities (REC’s), namely: the East Africa Community (EAC), the Common Market for Eastern and Southern Africa (COMESA) and the Southern African Development Community (SADC).<br /><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjfZwQwa_QoAWrZSnv6uBeCuLXw4MRf3m3I4-hGHGhe1Ql1hvREs9-0sFCk4dlvU_GPshPLIBpFtRxT90j2D35_n9LiRuNq86VTaUnbRyPwPmWtWw2FTIGqan7Q1fnw8pga1jh6I6cN8Ws/s1600/African+Tripatite.jpg"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 500px; height: 400px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjfZwQwa_QoAWrZSnv6uBeCuLXw4MRf3m3I4-hGHGhe1Ql1hvREs9-0sFCk4dlvU_GPshPLIBpFtRxT90j2D35_n9LiRuNq86VTaUnbRyPwPmWtWw2FTIGqan7Q1fnw8pga1jh6I6cN8Ws/s400/African+Tripatite.jpg" border="0" alt=""id="BLOGGER_PHOTO_ID_5618467293701391986" /></a><br /><br />COMESA-EAC-SADC Tripartite Summit will focus on expanding and integrating trade and include the establishment of Free Trade Areas (FTA’s), Custom Unions, Monetary Unions and Common Markets, as well as infrastructure development projects in transport, information and communications technology and energy.<br /> <br />With more than 527 million people and a Gross domestic product (GDP) of approximately 624 Billion US Dollars, the 26 member countries of the Tripartite make up 57% of the population of the African Union (AU) and just over 58% in terms of contribution to GDP.<br /><br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg9uspSU56eiPRwpKVU0IOWw6OgFfM2XBC6M7Vmri-kqvypPvhyphenhyphenigPM3jsWzHdQqvTf0IQ7ZPG7M3mN7olTGcxdC-gKtW_vlZlo9hOLy4wS6g6XO8GO9-R0Xm7xwilLlNAogOQBieARy9o/s1600/map.jpg"><img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 376px; height: 400px;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg9uspSU56eiPRwpKVU0IOWw6OgFfM2XBC6M7Vmri-kqvypPvhyphenhyphenigPM3jsWzHdQqvTf0IQ7ZPG7M3mN7olTGcxdC-gKtW_vlZlo9hOLy4wS6g6XO8GO9-R0Xm7xwilLlNAogOQBieARy9o/s400/map.jpg" border="0" alt=""id="BLOGGER_PHOTO_ID_5618473223241414722" /></a>Jeremiah Mitokohttp://www.blogger.com/profile/05548097672893011944noreply@blogger.com0tag:blogger.com,1999:blog-2511547481246537272.post-15897983402792605922011-06-15T09:40:00.012-04:002011-06-15T12:58:37.524-04:00Africa: 53 Countries, One Union – The New Challenges conference‘Africa: 53 Countries, One Union – The New Challenges‘ conference will take place in Washington, DC on June 15 and 16, 2011.<br /><br /><a href="http://www.fondazionepopoli.org/wp-content/uploads/2011/06/Africa53CountriesOneUnion-TheNewChallenges1.pdf">Download the preliminary Conference Program</a><br /><br /><blockquote>The main objective is to offer to senior policy makers and experts the opportunity to discuss the relevance of regional and continental integration in the solution of major African problems, including those generated by recent developments which now challenge our concepts of freedom and democracy.<br /><br />The Conference will focus on the roles of the United Nations, African Union, European Union and the United States and China governments. International organizations such as the World Bank, African Development Bank, World Trade Organization, and Economic Commission for Africa will also be involved.<br /></blockquote>Jeremiah Mitokohttp://www.blogger.com/profile/05548097672893011944noreply@blogger.com0tag:blogger.com,1999:blog-2511547481246537272.post-86329693075021131272011-06-13T11:43:00.004-04:002011-06-13T11:59:31.151-04:00Some GrowthWe're pleased to introduce the newest contributor to our blog, Jeremiah Mitoko, a PhD student at George Mason's School of Public Policy. He will be writing about entrepreneurship, development, investment, and microfinance in Kenya and Sub-Saharan Africa more broadly. We look forward to many new and exciting posts from Jeremiah.BrianHhttp://www.blogger.com/profile/08715417746385743468noreply@blogger.com0tag:blogger.com,1999:blog-2511547481246537272.post-73174086338452423732011-06-10T09:33:00.003-04:002011-06-10T09:42:18.804-04:00The Silicon Valley of the East<p>From a supplement to National Journal (<a href="http://www.nationaljournal.com/njonline/no_20100508_1960.php/entrepreneurs-from-india-power-the-high-tech-dulles-corridor-20110602?mrefid=site_search">NJ</a>), also reposted on the Atlantic's site, with a different title (<a href="http://m.theatlantic.com/business/archive/2011/06/the-silicon-valley-of-the-east-is-washington-dc/240055/">Atlantic</a>):<br /></p><p></p><blockquote><p>Fairfax County is home to a quarter of all immigrants in metropolitan Washington and to 40 percent of the area's foreign-born Indians. It's no wonder that on a recent Thursday night at Worldgate Centre, a strip mall one block north of the Dulles Toll Road, almost 20 South Asians--mostly young families or groups of young men--streamed through the glass doors in just a matter of minutes to catch a movie.</p><p>KiranTeja Chadalawada was with friends on his way to see the Telugu-language film <em>100 Percent Love</em>. A 22-year-old immigrant from southern India who is pursuing a master's degree in telecommunications at George Mason, he moved to Fairfax County in 2009 for school because a friend from India recommended it. "A senior from college was studying here and said it was a great [place] to learn and get an internship," Chadalawada said. After racking up a few years of experience in Virginia, he hopes to start a company of his own--but not in Virginia: He and his pals "are looking to go back to India," he said.</p><p>Increasingly, the members of the next generation of Indian entrepreneurs are looking to the East. They feel pulled by India's economic vigor and also pushed out by the daunting rules for U.S. visas. Advocates of immigration find it foolish to force smart, ambitious people to leave the United States simply because they were born elsewhere, especially after American taxpayers have invested so much in educating them.</p><p>"These guys create jobs," said Michael McVicker, an immigration lawyer whose Reston, Va., office is near the Dulles Toll Road. "They've created jobs for thousands of people, the vast majority of whom are Americans."</p></blockquote><p></p>It was time for immigration reform a long time ago, but now is a fine time to get started.BrianHhttp://www.blogger.com/profile/08715417746385743468noreply@blogger.com0tag:blogger.com,1999:blog-2511547481246537272.post-27232691716580928622011-05-05T14:05:00.004-04:002011-05-05T14:42:21.085-04:00Science ProgressA couple of FB friends have posted links to articles on <a href="http://www.scienceprogress.org/">Science Progress</a> in the past couple of days, so I figured they're worth passing along here.<br /><ol><li><a href="http://www.scienceprogress.org/2011/05/slow-off-the-mark/">The first article</a> covers elementary school teachers and the crisis in STEM education: <blockquote>Prospective teachers can typically obtain a license to teach elementary school without taking a rigorous college-level STEM class such as calculus, statistics, or chemistry, and without demonstrating a solid grasp of mathematics knowledge, scientific knowledge, or the nature of scientific inquiry. This is not a recipe for ensuring that students have successful early experiences with math and science, or for generating the curiosity and confidence in these topics that students need to pursue careers in STEM fields.</blockquote></li><li><a href="http://www.scienceprogress.org/2011/04/fishing-for-funding/">The second</a> covers data driven vs hypothesis driven research: <blockquote>the change in approach is this: Instead of designing an experiment to test a defined, preconceived hypothesis, researchers first amass large banks of information and then wade through them with the aid of powerful computers to unearth biologically pertinent findings.</blockquote></li><li>I'll add a third article, to make this a nicely numbered list. "<a href="http://www.scienceprogress.org/2011/05/waves-of-innovation-2/">Waves of Innovation</a>" discusses innovation cycles: <blockquote>In <em><a href="http://www.amazon.com/Time-Goes-Industrial-Revolutions-Information/dp/0199251053">As Time Goes By: From the Industrial Revolutions to the Information Revolution</a></em>, a seminal work in cliometrics—the study of economic history—Chris Freeman and Francisco Louçã use historical data on technological advances, economic structure, salaries, and political unrest to derive a clear pattern linking innovation to the performance of the economy. These generational cycles of invention, expansion, and depression are called “Kondratiev waves” in honor of Nikolai Kondratiev, the Russian economist who first postulated their existence.</blockquote></li></ol>BrianHhttp://www.blogger.com/profile/08715417746385743468noreply@blogger.com0tag:blogger.com,1999:blog-2511547481246537272.post-3929165573487680322011-04-27T13:25:00.003-04:002011-04-27T14:00:22.193-04:00Some Links<ol><li>Lessons From 175 Years of Innovation, in <a href="http://blogs.forbes.com/work-in-progress/2011/04/27/lessons-from-175-years-of-innovation/">Fortune</a> (via <a href="http://twitter.com/#%21/TheBIF/status/63244928716767232">@TheBIF</a>). A profile of Proctor & Gamble's Connect & Develop program and P&G's emphasis on open innovation. <a href="http://www.google.com/url?sa=t&source=web&cd=5&ved=0CDcQFjAE&url=http%3A%2F%2Fwww.proinno-europe.eu%2Fsites%2Fdefault%2Ffiles%2F1_1_von_Heimburg_a7986.pdf&rct=j&q=p%26g%20connect%20and%20develop%20program&ei=_0-4TfTFLOyD0QG798H4Dw&usg=AFQjCNHwTiSM5MEk4sQul7mWiePFiGU5qg&sig2=XRrSbuC97yC6SY6BpNaKWQ&cad=rja">Here</a> is an HBR study by two researchers within P&G.<br /></li><li>For academic types, SSRN's CiteReader is pretty amazing. Check out a project update <a href="http://ssrnblog.com/2011/04/26/ssrns-citereader-project-update/">here</a>.</li><li>Francis Fukuyama has been out promoting his latest book, <em><a href="http://www.amazon.com/Origins-Political-Order-Prehuman-Revolution/dp/0374227349/ref=sr_1_1?ie=UTF8&s=books&qid=1303926926&sr=8-1">The Origins of Political Order: From Prehuman Times to the French Revolution</a>.</em> He spoke at SAIS on Monday and the video is below.</li><li>Banerjee and Duflo's piece in <a href="http://www.foreignpolicy.com/articles/2011/04/25/more_than_1_billion_people_are_hungry_in_the_world">Foreign Policy</a> has been getting tons of press, befitting two scholars of their stature. Worth a read.<br /></li></ol><br /><iframe title="YouTube video player" src="http://www.youtube.com/embed/SoI21Wb9Doo" allowfullscreen="" width="480" frameborder="0" height="390"></iframe>BrianHhttp://www.blogger.com/profile/08715417746385743468noreply@blogger.com0tag:blogger.com,1999:blog-2511547481246537272.post-56746964788518906582011-04-14T09:56:00.003-04:002011-04-14T10:08:21.244-04:00Frontier EconomicsBrink Lindsay at Kauffman has a new paper titled <a href="http://www.kauffman.org/newsroom/economic-growth-hinges-on-frontier-economics-of-entrepreneurial-upstarts-and-reduced-government-intervention.aspx">Frontier Economics: Why Entrepreneurial Capitalism is Needed Now More than Ever</a> (<a href="http://www.kauffman.org/uploadedFiles/frontier_economics_4_06.pdf">pdf</a>). The gist is that, "the changing nature of economic growth means that prosperity is actually more, not less, reliant on free, competitive markets." And:<br /><blockquote>The richer nations get, the more they "rely on innovation to keep growth going – and, therefore, the more we need free-market policies that foster the creation of new businesses and the implementation of new ideas," Lindsey said in the report. "If we are to rise out of the current slump and launch a new, 21st-century boom, it is in the direction of freer, more competitive markets that our policies must turn."</blockquote><br /><object id="flashObj" classid="clsid:D27CDB6E-AE6D-11cf-96B8-444553540000" codebase="http://download.macromedia.com/pub/shockwave/cabs/flash/swflash.cab#version=9,0,47,0" width="580" height="375"><param name="movie" value="http://c.brightcove.com/services/viewer/federated_f9?isVid=1"><param name="bgcolor" value="#FFFFFF"><param name="flashVars" value="videoId=895013525001&playerID=40280745001&playerKey=AQ~~,AAAAAF1AP-k~,paP-6btd7SPcN3he8b6wgT6uI64ClnLc&domain=embed&dynamicStreaming=true"><param name="base" value="http://admin.brightcove.com"><param name="seamlesstabbing" value="false"><param name="allowFullScreen" value="true"><param name="swLiveConnect" value="true"><param name="allowScriptAccess" value="always"><embed src="http://c.brightcove.com/services/viewer/federated_f9?isVid=1" bgcolor="#FFFFFF" flashvars="videoId=895013525001&playerID=40280745001&playerKey=AQ~~,AAAAAF1AP-k~,paP-6btd7SPcN3he8b6wgT6uI64ClnLc&domain=embed&dynamicStreaming=true" base="http://admin.brightcove.com" name="flashObj" seamlesstabbing="false" type="application/x-shockwave-flash" allowfullscreen="true" swliveconnect="true" allowscriptaccess="always" pluginspage="http://www.macromedia.com/shockwave/download/index.cgi?P1_Prod_Version=ShockwaveFlash" width="580" height="375"></embed></object><br /><br />The role of the frontier has been studied by Zoltan Acs and David Miller as well, although their conception is slightly different (see <a href="http://campusentrepreneurship.wordpress.com/2009/12/07/research-update-entrepreneurship-american-exceptionalism/">here</a> for starters). Hopefully David will read the paper and offer his thoughts, although I imagine, like me, he'll mostly agree with the main ideas.BrianHhttp://www.blogger.com/profile/08715417746385743468noreply@blogger.com0