The Prize Economy

By | 2017-07-17T12:21:34+00:00 December 14th, 2016|Global Market Update|

There’s a prize for that. Photo: Douglas Tengdin Increasingly, organizations are using prizes to encourage innovation. Know of a way to improve smartphone voice recognition? There’s a $10,000 price for that. Design a delivery drone? $50,000. Got a solution for how to repurpose carbon emissions to reduce the potential for global warming? That’s worth over $50 million. If you can think of a persistent, society-wide problem, there’s probably a prize associated with it. McKinsey & Co. estimates that there are over 30,000 significant prizes [...]

Saving Ourselves

By | 2017-07-17T12:21:34+00:00 December 13th, 2016|Global Market Update|

How can we help people save more? Source: Economic Policy Institute Baby-boomers are the wealthiest generation in history. But they are one of the most unprepared generations ever when it comes to retirement. The median family now has about $100,000 saved up. And half of all families have no retirement savings. At a time when fixed pensions are going the way of the Edsel and People’s Express Airlines, It’s not that people don’t want to save. It’s just that after loan payments and car [...]

I-P-Woes

By | 2017-07-17T12:21:34+00:00 December 12th, 2016|Global Market Update|

Why do companies go public? Photo: Digby Dalton. Source: Wikipedia Most of the biggest companies are publicly listed on a stock exchange. Exxon Mobil, Apple, and Microsoft have hundreds of billions in sales and employ hundreds of thousands of people. But there are a lot of big, nonpublic firms: Koch Industries in energy, Cargill Corporation in food, and Dell computers, among others. Private companies can hire, fire, borrow, and build things just like big public companies. And they don’t have to disclose financial and [...]

Limits to (Financial) Growth

By | 2017-07-17T12:21:36+00:00 December 8th, 2016|Global Market Update|

Is bigger always better? Photo: Emma Degerstedt. Source: Wikipedia In America we like to think big: bigger companies have broader product lines; big cities offer more job opportunities and cultural events; bigger markets are more diversified. We brag about having the world’s biggest economy, the world’s biggest highway system, and several towns in the Midwest claim to have the world’s biggest ball of twine—over 8 feet across and 25 feet around. But in business, big companies can run into problems. Big banks have regulatory [...]

Limits to (Trade) Growth

By | 2017-07-17T12:21:36+00:00 December 7th, 2016|Global Market Update|

Why is global trade under attack? Public Domain. Source: NOAA Global trade has generated an unprecedented level of prosperity. From Foxconn-built iPhones to Novo-Nordisk-designed insulin therapies to Airbus and Boeing and Embraer competing to build and sell airliners, global companies competing in a global marketplace produce an incredibly broad range of goods at reasonable prices. Trade works because a larger market allows for more specialization, and more specialization enables people to be more productive. Workers can be more focused and more innovative. New ideas [...]

Limits to (Revenue) Growth

By | 2017-07-17T12:21:36+00:00 December 6th, 2016|Global Market Update|

Do businesses always have to grow? Business life cycle. Source: Aswath Damodoran The short answer of course is no. There’s lots of businesses that have falling revenues. In fact, one classic way to turn around an unprofitable enterprise is to shrink it to profitability. There’s a life-cycle to most companies and industries: start-up, growth, maturity, and decline. It’s happened in technology (PCs), newspapers, transportation (trains), and other areas. It may be happening to brick-and-mortar retailers today. But we don’t like to think about shrinking [...]

Sustainably Stronger

By | 2017-07-17T12:21:36+00:00 December 5th, 2016|Global Market Update|

What makes some businesses stronger than others? Photo source: Morguefile Business analysts look for “moats”—competitive advantages that one company has over another, even when they’re in the same industry. Like the way brand-loyalty supports iconic consumer companies like Coke or Colgate. But those kinds of moats are rare. Usually, a smart product or business idea gets copied and commoditized. Those won’t give you a sustainable advantage. But there are some things that the competition isn’t always willing to do. Strategies or habits that—once adopted—make [...]

Swimming Upstream

By | 2017-07-17T12:21:36+00:00 December 2nd, 2016|Global Market Update|

What are we missing? Great Barracuda. Photo: Clark Anderson/Aquaimages. Source: Wikipedia There’s a story about two young fish swimming upstream who meet an older fish heading downstream. The old fish nods at them as he goes by and says, “Morning boys. How’s the water?” The two young fish swim on a bit. Eventually one of them looks over at his friend and asks, “What’s water?” Sometimes the most obvious, important realities are the ones that are the hardest to see. Most of what we [...]

Rupee Rumble

By | 2017-07-17T12:21:36+00:00 December 1st, 2016|Global Market Update|

What’s happening in India? 500 Indian Rupee note. Source: Wikipedia Three weeks ago the Government of India declared that all of the current 500 and 1000 Rupee banknotes—the highest denominations—were no longer legal tender. At the same time, the Government issued new 500 and 2000 rupee notes. For reference, 1000 Rupees is worth about $15, and a loaf of bread costs about 25 Rupees. Prime Minister Narendra Modi announced the change in an unscheduled, live television address. In his speech, Modi said that demonetization [...]