Remember Compaq? Photo: Tiziano Garuti. Source: Wikipedia The PC maker was founded in 1982. It went from start-up to $1 billion in sales in only five years. It tripled that number in four more years, becoming the third-largest PC-maker – a leading producer of a revolutionary product. Compaq made a “luggable” computer – a PC that weighed 25 pounds or so. You could “lug” it from place to place, unlike desktops, which needed a lot more time to set up. It was one of [...]
Who was William Baumol? Source: Journal of Economic Perspectives, American Economics Association William Baumol was an economist who taught for years at Princeton. He died last week at the age of 95. He had a long and productive career, writing papers and books over the course of seven decades. He is perhaps best known for his theorem on wages, Baumol’s Cost Disease, which explains why cars and computers get cheaper while haircuts and college tuition get more expensive. Essentially, areas of the economy with [...]
Do we live in a winner-take-all economy? Source: Latticeworks Increasingly, commerce seems dominated by a few big firms. We use our iPhones to search for stuff on Google; we buy it on Amazon; and we tell our friends about it on Facebook. These tech titans provide everything we need, and they’re incredible profitable. Normally, high profits would attract competitors, forcing down margins. Consumers would benefit, as companies vie for their business, either through lower prices, better service, or some other innovation. But that doesn’t [...]
Should we institute a tax on robots? Photo: Xavier Caré. Source: Wikimedia Commons That’s what Bill Gates thinks. When people fear what new technology is going to do to them, they’ll avoid it rather than try to shape it. If there’s a robot tax, that might allow countries to provide pensions and training so people can adjust to their new economies. If the robots are eating our jobs, then we need to find new jobs – like blacksmiths learning how to build and repair [...]
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 [...]
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 [...]
What do our clothes say about us? Illustration from “The Penny Magazine,” 1843, Source: Wikimedia For millenia, clothes have inspired new technology. Cotton has been spun, woven, and dyed since prehistoric times. Marco Polo pioneered the Silk Road and the Age of Exploration. Spinning mills in England and New England were at the center of the Industrial Revolution. Demand for “Basic Black” fashions stimulated the chemical industry in the 20th century. Everyone’s excited by the latest smart watch or FitBit, but clothes are the [...]
The Myth of “New” We’ve never seen this before! Meerkat. Source: Animal Photos That’s what people say when they run into a novel situation. Whether it’s Brexit or Venezuela’s economic meltdown or Puerto Rico’s default, people want to marvel at their situation’s unique status. But there’s nothing really new under the sun. The writer Malcom Muggeridge once observed that there’s no new news, just old news happening to new people. Take the immigration crisis in Europe. While millions of people coming into Europe from [...]
What do our clothes tell us about technology? James Gilray, “Following the Fashion.” Source: Library of Congress For centuries, clothes have inspired trade and technology. The silk road gave us Marco Polo and the Age of Exploration; the Industrial Revolution gave us spinning mills in England and New England; Intense, basic black fabrics in the early 20th century stimulated the chemical industry; synthetic fibers like rayon and nylon made wrinkle-free clothes possible and built the DuPont company. Everyone’s excited by smart watches and FitBits, [...]
Is the rise of private equity stifling our productivity and competitiveness? Domenichino, “The Virgin with the Unicorn. Source: Wikipedia 20 years ago entrepreneurs all wanted to go public. The stock market was a way to make yourself and your employees rich. Start a company, develop an innovative concept, grow sales and profits by enough, and the equity markets could reward you. At least, that was the dream. But now, companies want to stay private as long as possible. They don’t want the reporting requirements [...]
