The linked article above has a nice summary of recent research by Richard Florida (of Creative Class fame) on the relationships, by state, between human capital, wages, hours worked, and numbers of immigrants.

Apparently blue-collar workers are right to complain that management doesn’t work as hard as they do ;)…

Oh, and the complaints about immigrants deflating wages – FALSE! (at least on average).

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Some recent self-reflection and mentoring of soon-to-be alumni of my alma mater, St. Olaf, have caused me to think hard about those traits that make a person successful, regardless of the road they pursue.  

Reading Amar Bhide’s “The Origin and Evolution of New Businesses” has prompted me to think about what assets might allow a business to be successful, no matter what road it pursues, both initially and over time. Here is a try at three:

Human Capital – Intelligent and open-minded people are more capable of adapting to the major external changes that determine the life or death of a company, both initially and when it is well-established. Execution and process-oriented people ensure that an organization (profitably) realizes whatever vision it sets out to achieve.  Hire and retain people like this, and you’ll be well on your way.

Social Capital – This all about reputation and relationships. Build a strong brand, and do good by your customers, vendors, and employees. If you do, your ability to introduce new products and transform your business will be greatly facilitated.

Financial Capital – Money, like people and relationships, is fungible. If you can build a strong cash base and/or develop the reputation and relationships required to readily raise money, you can be much more strategic and planful in your execution.

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Strategy used to be about protecting your existing competitive advantage. Today, it’s about finding the next advantage. Strategy starts to decay the moment it’s created. That’s why corporations must develop strategies that address tomorrow’s business realities. Strategic actions that companies take belong in one of three boxes:

Box 1 = managing the present
Box 2 = selectively abandoning the past
Box 3 = creating the future

The first box is about improving your current businesses. Boxes 2 and 3 are about innovation, breakout performance, and growth. Most organizations restrict their strategic thinking to Box 1…

In some ways, to understand these three boxes is to understand Hinduism . Though the Hindu religion recognizes 330 million gods, there are only three main Hindu deities: Vishnu, the god of preservation; Shiva, the god of destruction; and Brahma, the god of creation. The correspondence between the three boxes and the three Hindu gods is clear…

According to Hindu philosophy, preservation-destruction-creation is a continuous cycle without a beginning or an end. The three gods play an equally important role in all three phases of that process.

Full post at

I found this recent HBR blog post by Vijay Govindarain wonderful and fascinating.

Over the years, much has been made of the link between religion, culture, and economic success. However, most of this has focused on the West and, specifically, the U.S.

From de Toqueville to Weber, scholars have praised the Protestant Work Ethic and Americans’ proclivity toward self-help and civic engagement. While these may in fact contribute to the U.S.’s economic success, they are far from the full list of necessary and sufficient conditions for growth.

The post above sheds light on the fact that a range of cultural factors can contribute to economic growth. Some societies will score higher on certain elements while other societies will benefit from a special advantage in other areas.

All in all, a fascinating and important idea.

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I've been furious about the shutdown since the announcement came out yesterday. 

With the many irate Facebook and Twitter postings (most of them referencing Steve Jobs) now out of my system, I have had time to reflect more thoughtfully on why the Lala shutdown has been so difficult to accept.
Perhaps like to a lot of Lala users, I took full advantage of option to purchase unlimited web streaming rights for $0.10/track. I used it to expand my library to include exciting new genres and artists that I had discovered on my favorite alternative radio station, the Current (, as well as music I was stumbling across on Pandora, Lala, and the like. 

The ease and affordability of using the $0.10 streaming option allowed me to grow my catalog in a way that was incredibly fun and enriching.

And now it's gone. 

I knew Lala disappearing was always a possibility (albeit a remote one), and I knew that buying rights to stream a track carried risks that buying the actual mp3 or CD doesn't. But that didn't stop me from attaching myself to the music in a way that made me feel as though it really was mine.

And therein lies the rub.

As more of our digital lives move to the cloud, more and more products can be delivered through a subscription model that provides you with access but not ownership in the traditional sense. 

As long as the company is around to provide the service, and as long as you're willing to pay for it, the distinction between access and ownership means very little. But as soon as either of those things cease to be true, the difference between access and ownership becomes glaring. 

Steve Jobs had every right to shut down Lala. Apple has no obligation to pay me back for all of those $0.10 acquisitions (though, in their one graceful move in all of this, I will get iTunes credit). And nobody is required to help me re-create my (yes, MY!) Lala catalog somewhere else. And that just sucks.

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I watched four hours of the Goldman Sachs Senate hearings yesterday evening. Mind-boggling to watch them continually skirt the question of fiduciary responsibility based largely on the rationale that 1) nobody knew for sure what would happen in the housing market, so they could not reasonably advise clients on related investments; and 2) as “market-makers” they just faciliate transactions.
I couldn’t get my mind off the topic even as I woke up this a.m. Inevitably, I started thinking about what I would have liked to say, especially to the Birnbaum, Sparks, Swenson, and Tourre crew. It goes something like this: 

“Gentlemen, the bottom line is that fiduciary responsibility has nothing to do with precognition.  No doctor, lawyer, board member, or financial advisor can predict the future. Yet all share a fiduciary responsibility to use their expertise to help clients make decisions that reflect their best interest.


It’s clear by your comments that none of you feel that this responsibility pertained to you in your supposed role as market-maker, despite the fact that your increasingly short positions in these deals clearly reveal that the group ultimately held an opinion on the value of the securities and underlying assets. That’s a very serious problem by itself – one that led many of your clients to lose immense amounts of money while you gained from betting on the other side. And it does not even begin to bring into consideration the potential manipulation of rating agencies and collusion with institutional clients who were helping you put together these ABS deals.”

What would you say? 

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Will be REALLY interesting to see where the market values Facebook.

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20100422 Atc 10 by Npr   (4035 KB)
Listen on posterous


A great “All Things Considered” piece today on NPR discussing the interaction between neurobiology, social capital, and trust in government with mention of a couple of academics I follow, Robert Putnam (of “Bowling Alone” fame) and Paul Zak at Claremont Graduate University.

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Relative to my previous post, the “demographic dividend” is the idea that underlies the theory that India’s economic expansion has barely begun. Looks like Sub-Saharan Africa also holds major potential, though it surely lags well behind India in terms of governance, health, education, and infrastructure.

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 I’m reading two fascinating books on India that are making me think again about the country’s economic relationship with the West.

The first is “Imagining India by Nandan Nilekani, CEO of Infosys, and the second is “India‘s Global Powerhouses” by Nirmalya Kumar at London Business School

The most powerful take-away from these books is that Indians may be the future of the global workforce

The West and also China, due to its one-child policy, are facing the reality of smaller workforces supporting aged populations. This means lower total output, less saving and investment, and slower economic growth. 

The baby boom that fueled decades of prosperity is over in the West and slowly ending in China, while India is in the thick of its own demographic boom, projected to last until about 2050. According to Nilekani’s sources, by 2020 India will have an additional 47 million workers, a number equivalent to about 1/3 of the total US labor force and roughly equal to the projected aggregate workforce shortage in the West. 

To boot, India is already graduating far more engineers and technical professionals than Western universities, and Indian-owned companies often spend far greater amounts on training than their Western counterparts, in order to keep employees’ skills updated.

If that wasn’t enough, aided by the scale advantages associated with operating within such a massive domestic economy, and because of the need to serve relatively low-income customers, many Indian companies have developed unique low-cost business and operating models that allow them to be massively profitable on a global stage. Those profits are fueling increasing numbers of large acquisitions of Western firms (see Kumar for more on this). Suddenly, more and more workforces across Europe and the US find themselves working for Indian bosses.

It’s easy to get overly bullish on India. There has been a great deal of hype surrounding the country and its economic potential, and slow change has caused many of us to become skeptical. Still, fundamental indicators continue to suggest that India’s economic transformation is slowly but surely changing the global stage. 

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Absolutely mind-blowing (and, at points, hysterical) documentary about the drastic transformation Bogota underwent in the mid- to late nineties and early 2000s. There are 5 more parts to the documentary, if you like what you see.

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