Thought Starters: innovation, intellectual capital & circular economy

Thought Starters provides me with a chance to review and highlight the more important or interesting research and opinions that I’ve read over the last week or so. This edition looks at questions over the pace of innovation, the growing portability of intellectual capital, the American presidential nominations and the circular economy among other things, all making for great weekend reading.

David Rotman profiles the work of economist Robert J. Gordon who takes a relatively dim view of the productivity gains over the last ten years. A valuable perspective although one focusing on economic gains doesn’t necessarily encompass other benefits enabled by new technologies and innovations:

Peak innovation

An interesting complement to the Rotman’s article is Prashant Gandhi, Somesh Khanna and Sree Ramaswamy’s review of the levels of digitisation across different parts of the US economy. Information technology inevitably leads the charge but it’s more valuable to look at the laggards where we’re likely to see considerable changes and innovations in the coming years:

How Digitally Advanced is your Sector?

One area that we have seen substantial advances recently is technologies that enable remote teams to more readily collaborate (eg Slack). Samuel Hammond points to a world where intellectual capital is increasingly portable even if immigration barriers mean that this mobility is more virtual than actual:

Consistent with the premature futurism thesis, smart writers have been predicting large and looming social implications from telecommuting and remote work for decades, only to have their visions stymied by some unforeseen technical or psychological barrier. While hiring international freelancers has gotten a lot easier, for many jobs people just prefer face to face contact. Yet we seem to be finally reaching a critical point where video streaming, virtual reality, and collaboration tools are converging to make even the most complex team production viable across borders.

Uber is one of the shining stars of the startup sector with its growth and funding leading many entrepreneurs to pitch their business as ‘Uber for ____’. Farhad Manjoo points out that we should be wary of trying to draw direct parallels between Uber and other business use cases given the particular characteristics the ridesharing:

But Uber’s success was in many ways unique. For one thing, it was attacking a vulnerable market. In many cities, the taxi business was a customer-unfriendly protectionist racket that artificially inflated prices and cared little about customer service. The opportunity for Uber to become a regular part of people’s lives was huge. Many people take cars every day, so hook them once and you have repeat customers. Finally, cars are the second-most-expensive things people buy, and the most frequent thing we do with them is park. That monumental inefficiency left Uber ample room to extract a profit even after undercutting what we now pay for cars.

But how many other markets are there like that? Not many. Some services were used frequently by consumers, but weren’t that valuable — things related to food, for instance, offered low margins. Other businesses funded in low-frequency and low-value areas “were a trap,” Mr. Walk said.

Dan Lyons’ rather humourous account of joining HubSpot provides a valuable antidote to some of the overinflated hubris sometimes associated with startups:

The truth is that we’re selling software that lets companies, most of them small businesses like pool installers and flower shops, sell more stuff. The world of online marketing, where HubSpot operates, though, has a reputation for being kind of grubby. Our customers include people who make a living bombarding people with email offers, or gaming Google’s search algorithm, or figuring out which kind of misleading subject line is most likely to trick someone into opening a message. Online marketing is not quite as sleazy as Internet porn, but it’s not much better either.

A lot of noise has been made about younger consumers fleeing Facebook for the newer social media platforms but comScore data from the US points to the platform maintaining its appeal among millennials – suggest we’d  see teenage audiences telling a rather different story:

Age 18-34 Digital Audience Penetration vs Engagement of Leading Social Networks

Snapchat updated its mobile messaging platform recently providing a richer range of features for users as well as changing its privacy policy which is likely to see a broader array of targeting options for Snapchat advertisers. It’s worth reading Ben Thompson’s piece on Snapchat if you want to take a broader look at how the platform has evolved since its launch in 2011.

Virtual reality is now well and truly out in the open with Oculus Rift now available to the general public. Brian X. Chen’s review of the headset suggests that in its current state, it’s one for the early adopters:

The Rift’s graphics, sound and head tracking, which is the device’s ability to follow where the viewer looks, do feel like something out of science fiction. While the system’s setup is somewhat complex, the smoothness of the graphics and the high-quality design of the headgear make virtual reality feel ready for prime time.

And yet there may be a higher reward for those who wait to buy the Rift.

Soundcloud Go launched on the 29th of March in the US, adding to the list of streaming providers that are offering a subscription service for music consumers. Another route to monetise content might sound great for musicians but Dave Wiskus’ review of the service suggests something much more insidious:

You can slice it, package it, or spin it however you like, but the bare fact is that you’re making money off of songs you aren’t paying for. Worse, you’re doing it while perpetuating an air of exclusivity around the concept of making money. All while you’re pretending to be a friend to the little guy. There’s nothing artist-friendly about this approach.

Sven Skafisk’s overlaying of smartphone sales on top of traditional camera sales illustrates how much mobile phones have come to dominate how the majority of consumers experience photography – click through for the full length chart which really puts things in perspective:

CIPA camera production

The success of Amazon’s Alexa highlights the significant market opportunity for user friendly smart home solutions, which has even led to religious authorities offering advice on its use during Shabbos. What consumers may be less aware of is that in many cases they are buying into a service rather than a piece of hardware with the demise of Revolv leaving consumers in the lurch (although it looks like Nest may be stepping in to address some of these concerns now).

With the release of the Panama Papers, it’s worth revisiting which countries enable financial secrecy. One of the interesting insights to come out of the reports is the relatively limited number of Americans caught up in reports reflecting relatively lax controls in some states. The US falls in third place in the Tax Justice Network’s Financial Secrecy Index.

NPR’s Planet Money (well worth subscribing to their podcast) has looked at the changing structure of employment in the US where you can see changes both in terms of the number of jobs and as percent of the total. No huge surprises but it will be interesting to see how the chart changes as machine learning and artificial intelligence make inroads into white collar professions which have traditionally proven more immune to automation:

The Decline of Farming and the Rise of Everything Else

Another podcast worth recommending is Vox’s The Weeds, providing a valuable window into American politics and policy. A recent episode looks at the tax implications of Donald Trump, Ted Cruz, Hillary Clinton and Bernie Sanders’ policies (from 34:20). One of the interesting conclusions is how comparatively robust both Democratic candidates proposals are compared to the leading Republican candidates despite Clinton and Sanders taking rather different policy approaches:

One area where Bernie Sanders and Donald Trump do seem to have something in common is their relatively protectionist approach to trade. Whilst I am all for ensuring employees gets appropriate protection around the world, it could put a real dampener on emerging markets’ economies as Jordan Weissmann points out:

With those last few words, Sanders has effectively written off trade with any country that is not already rich and prosperous—which is simply inhumane.

Encouraging the circular economy is likely to be a more appropriate way of encouraging local employment. Walter R. Stahel profiles this closed loop approach to production which offers benefits in terms of reduced emissions, increasing in employment and reduction in waste:

Closing Loops

As UK fast approaches the Brexit referendum, immigration and the country’s health system lead concerns facing Briton’s – issues not unrelated given the reliance Britain’s NHS has on foreign born staff:

What do you see as the most important issues facing Britain

Potentially allaying the concerns of immigration opponents is research from Mette Foged and Giovanni Peri in Denmark which points to the benefits of immigration, even for the low skilled populations:

Instead of a small negative effect on the local native-born — as most studies in the U.S. tend to find — Foged and Peri found a positive effect. That’s right — low-skilled immigrants actually raised the wages of their less-educated native-born counterparts in the surrounding area. The data followed the native-born workers for a long time, letting the authors confirm that the change was durable.

The featured image is a Nelio mural made for the Marion gallery in Panama.

What I’m listening to…favourite podcasts and radio shows

For someone who spends a fair bit of time on his bike, podcasts provide a great opportunity to learn and be entertained whilst on the go.  The following provide a run through of the shows that regularly have me hitting the download button:

BUSINESS AND TECHNOLOGY

a16z podcast: Venture capital firm Andreessen Horowitz’s podcast uses interviews with industry leaders and commentators to shed light on a range of technology and innovation related issues from the startup sector. A case of content marketing that works.

Recent favourite: Interview with Soylent founder Rob Rhinehart.

Benchmark Podcast: Bloomberg created podcast providing a youthful look at the global economy.

Exponent: Ben Thompson and James Allworth provide thoughtful discussion on the intersection of technology, business and society.

Meanwhile in the FutureRose Eveleth puts forward scenarios of what the future might be like and in the process getting listeners to think more clearly about what kind of society they want to live in.

Planet Money: Long running NPR show looking at various stories through the lens of economics – much more entertaining than the blurb might suggest.

Recent favourite:  The tale of the onion king looks at how Vince Kosuga once cornered the market for onions in the US.

Product Hunt Radio: Podcast in which founders, makers and investors from the startup community are interviewed about their products and their own personal journey.

Radiolab: Radio showing coming out of WNYC weaving stories and science together.

Recent favourite: Birthstory looks at how far an Israeli gay couple went to have kids of their own.

Reply All: Podcast looking at the internet and its impact on the society we live in with an irreverent style.

Recent favourite: A look at the experience of students at Colgate University who were subjected to bigoted commentary from anonymous social media app Yik Yak.

StartUp: Podcast series following the ups and downs of starting your own business. The first series follows the founding of podcast network Gimlet Media and the second series profiles the efforts of online dating service Dating Ring.

What’s Tech: Podcast profiling a single technology issue on each show, starting with the basics and expanding out to explore key issues and controversies. Recent shows have covered quantified self, sex tech, biohacking, space colonisation and online advertising.

NEWS AND ANALYSIS

The Inquiry: BBC radio show focuses on one topical issue each week with recent issues covering whether ISIS can be defeated, corruption in Nigeria and Russian geopolitics.

Longform Podcast: Interviews notable journalists about their careers and the stories that have made them. Great insights into the lengths journalists get to the trust and creating a compelling narrative.

More or Less: Behind the Stats: BBC podcast taking a critical look at numbers reported in the news and in many cases pouring cold water on some pretty outlandish claims.

Rear Vision: Radio show from the Australian ABC network looking predominantly at international issues but also occasionally delving into important Australian subjects. Recent coverage has included Muslim immigration into Europe, the recent Turkish and Canadian elections and the lack of plurality in media voices in Australia.

Thinking Allowed: BBC radio show profiling new research predominately with an ethnographic slant with recent coverage including TTIP, non religious cultures, singlehood and social class in its various forms.

The Weeds: If you’re interested in the interface between politics and policy, this podcast from the Vox will provide plenty of food for thought. Pretty US centric in terms of the policy issues covered but the discussions and conclusions are equally relevant for most developed countries.

ARTS AND CULTURE 

99% Invisible: Podcast about design and architecture with recent shows including a look at the history of Monopoly, drinking fountains and the military’s quest for rations that last for ever that the troops actually want to eat.

Recent favourite: Children of the Magenta covering the perils of inflight automation

Desert Island Discs: This BBC Radio institution was something I’d avoided for many years thinking that it was a show about music (something I like to think I already know a lot about). What I found instead was a show where music is a door opener to revealing conversations about people’s lives and history.

CYCLING

The Bike Show: Jack Thurston gives a broader perspective on the world of cycling, taking a look at social, cultural and political issues in cycling and occasionally dabbling in the world of cycle sport.

Cyclingnews Podcast/ The Cycling Podcast / The Recon Ride: Shows for the cycling aficionado, providing listeners with a pre and post ride commentary on the big rides in the professional calendar.

The featured image is a mural called Home by Reka in New York City and published in StreetArtNews.