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Wednesday, May 15, 2002 |
 Stanley Tools, is trying to move offshore to reduce its tax burden. The quest for profits is driving all sorts of corporate misbehavior.
6:24:26 PM 
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Where is the corporate world headed? Here is a little fun speculation.
It seems that globalization and Internet have combined to create a hyper-competive environment that has commoditized many goods/services. Check out the chart below on corporate profitability -- it proves the point. Those corporations that have relied on excessively long-lived copyrights and patents to charge premium prices are starting to find clones of their products copied/sold/distributed to a willing population at an ever greater pace. Further, labor mobility is at an all time high, forcing corporations to pay more for the talent than they would have previously (the Monster.com effect). Finally, better information flow is hurting brands/advertising.
Corporations are increasingly faced with the need to continue massive investments in computer automation to increase productivity. The faster productivity increases, the faster they need to invest. The greater the investment, the more they need to keep current employees and hire qualified talent (training costs and the rate of the ramp in competition dictate this).
Its a virtuous circle from a consumer's/employee's perspective. It's vicious from an investor's perspective. In this new hyper-competitive environment that is rife with consumer resistance to premium pricing, the toll takers and gatekeepers of the world get slammed, wealth evens out, and individuals win. Wow.
6:00:02 PM
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Reuters. You gotta love this guy. Here is a farmer that is growing his own crops on his own land. Genetically modified genetic material from other farms infected his crops via multiple vectors. Monsanto sued him for patent infringement. The company won, and he has mortgaged his farm to appeal. More corporate misbehavior. Sure, based on my earlier posting about corporate profits and productivity, companies are under the gun to make money. This is not how to do it.
5:33:04 PM
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News.com IBM intent on helping nanotechnology start-ups work through manufacturing hurdles. "Passive" nanotechnology the focus. I have been reading up on nanotech recently (again). There have been lots of big gains in this area recently (led by the computing industry, again -- it needs to find another substrate for the next generation of computing and needs to cut fab costs by a factor of a 1,000 or more). This is technology that could radically change the nature of production by changing matter into information. There is reason to believe that in a highly competitive nanotech economy, we could potentially reverse inflation due to rapidly declining prices for goods that self-assemble on-site or in nearby fabs. A sustained 2-5% decline in costs would provide a double accelerator to personal wealth -- higher salaries due to rapid productivity gains and increased spending power due to price declines.
12:53:05 PM
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The Economist Deep analysis of the acceleration of productivity growth in the US. Take a look at this chart from HSBC. Notice the trend line in year over year productivity growth since 1993, its up and to the right. Even the last recession didn't dent it much (most previous recessions put productivity in negative territory -- a two step forward, one step back situation). Granted, nothing lies like a trend line, but if this continues and is based on a fundamental shift in production due to computer automation, we will have 6% average productivity by 2010 and 9% by 2020. 9% productivity growth would double wealth every ~ 8 years! A long boom.
IT spending drove the acceleration. Alignment (deep integration of business processes with IT) with Moore's law will provide the longer term benefits. I think the latest blip in the productivity numbers without much IT spending shows that companies are aligning. >>>Perhaps two-fifths of the acceleration in productivity growth between the first and second halves of the 1990s is explained by companies' increased spending on IT equipment rather than by higher total factor productivity (the efficiency with which both capital and labour are used). Spending on IT has since fallen sharply from a peak in 2000. If it fails to return to its earlier, clipping pace—because firms can see no pay-off—this could dampen future productivity growth. The good news is that companies still have plenty of scope to boost productivity by reorganising their businesses to use information technology more efficiently, which could yet boost growth in total factor productivity. That theory might soon be put to the test. <<<
Competition. Increased competition forces companies to keep prices low, which in effect passes gains on to consumers. It also means that companies will be forced to continue to spend on information technology: >>>Mr King argues that workers (who are, naturally, also consumers) were virtually the sole beneficiaries of the new economy, in the shape of faster real wage growth. This was partly thanks to a fall in the prices of IT goods that they bought. More important, the same IT that spurred productivity also increased competition more widely across industries, from airlines and banking to insurance and cars, squeezing prices and profits. Information technologyreduces barriers to entry, and makes it easier for consumers to compare prices. What is more, globalisation, itself spurred by information technology, has further trimmed the pricing power of firms. HSBC finds that, in most economies, the correlation between domestic inflation and domestic unit-labour costs has declined over the past 40 years; the correlation between domestic inflation and average OECD inflation has risen. In most countries in the 1990s domestic inflation was more closely correlated with OECD inflation than it was with domestic costs. <<<
12:37:23 PM
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Fortune. Hollywood vs. SV. Content lite article. However, the "broadcast flag" is a new item I hadn't seen before.
What I don't get is how they think they are going to distribute this: >>>Digital movies broadcast over the air will be given a "flag," a kind of digital stamp that PCs will recognize as a prohibition against uploading to the Internet.<<< Will anyone buy a computer that restricts access to the Internet?? Which tech companies are working on this? Must be Microsoft.
12:06:21 PM
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Keith Teare, the former CEO of RealNames, is on a roll with his new Radio weblog. He answered some questions for me about his experience:
>>>The biggest unexpected outcome was how many people linked to me and how
quickly. Also how the traffic just exploded - 100,000 people in 2 days, with 20,000 document downloads.
Also the press seem to be reading my posts.
Overall incredibly effective if you are in a war situation against a bigger player. I think my PR ($40) was a lot more effective than theirs ($????????).<<<
11:47:29 AM
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Boston Globe. MIT breakthrough in digital video editing.
>>>In one demonstration, the researchers taped a woman speaking into a camera, and then reprocessed the footage into a new video that showed her speaking entirely new sentences, and even mouthing words to a song in Japanese, a language she does not speak. The results were enough to fool viewers consistently, the researchers report.<<<
>>>''This is really groundbreaking work,'' said Demetri Terzopoulos, a leading specialist in facial animation who is a professor of computer science and mathematics at New York University. But ''we are on a collision course with ethics. If you can make people say things they didn't say, then potentially all hell breaks loose.''<<<
>>>MIT's Ezzat said that he would like to develop a more complex model that would teach the computer to simulate basic emotions.<<<
There is also a quicktime video of the technique in action.
9:58:37 AM
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Dave. A very telling interview that explains why the big pubs are missing the real webservices story.
9:45:04 AM
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Data dyspepsia blights the workforce. One of the biggest challenges facing an organisation today is filtering the good from the bad information. It's the classic signal/noise equation. We all like to get the right signals--and all hate the noise. But for each and every employee these are highly debatable categories. Gartner found, quite surprisingly, that the most useful information employees receive comes from personal networks, contact with friends and colleagues, and emails--rather than the finely tuned information source that is supposed to be the Intranet. But how do you manage that? The other option is some kind of sophisticated knowledge management solution--but no one has even figured out what this is yet so don't expect that one to solve your woes. [The Register] The solution isn't a sophisticated KM solution, it is K-Logs. A well authored K-Log provides a filtered knowledge stream based on the Intranet. It is simple, elegant, and leverages the Intranet -- the perfect way to improve the signal to noise ratio.
9:36:59 AM
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Doc. A gathering of the "copyrightous."
9:28:07 AM
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Washington Post. New "Super Squad" for terror proposed. This sounds very much like the super secret black ops programs that Reagan launched in the early eighties. From personal experience, these programs/squads are extremely hard to manage.
9:25:57 AM
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CNN Asia. Weblogging in China.
9:12:21 AM
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WSJ. More problems with the corporate world. The DoJ is investigating 7 of the world's largest banks for anti-competitive behavior in foreign currency markets.
8:42:40 AM
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NYT. Details on the Napster wind down. Two interesting facts:
>>>While Napster fruitlessly negotiated for licenses, its finances dwindled, leading to a series of layoffs in the last six months at the company, based in Redwood City, Calif. About 70 employees are left.... While Napster contemplated the offer last week, Bertelsmann was paying Napster $50,000 a day — money that let Napster keep going. On Monday, Bertelsmann stopped paying. <<< What were they doing with 70 employees? Talk about shooting yourself in the foot. The most I could justify with a back of the envelope calculation is 12-15 people.
7:10:37 AM
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© Copyright 2004 John Robb.
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