A Blog by Jonathan Low

 

Jul 28, 2014

The Economics of Fake Degrees

It's the knowledge era. We eat what we know. Smart is cool. The most attractive companies to work for, especially in tech, are the most elitist when it comes to validating the quality of one's intellectual attainments.

So the incentives to demonstrating those achievements have never been more worth the effort - or the risk.

Yes, as the following article explains, as many as half of the Ph.D.s granted in any given year may be fake. Which is not to say they weren't properly acquired - after all, most aren't stolen or forged - no, most of them were purchased fair and square. It's just that the institutions doing the granting dont really have courses - or professors - or the charters permitting them to issue such credentials. But the benefits of the fees charged to grant diplomas appear to exceed the fines or approbrium heaped on the offender. Which is an interesting commentary on the socio-economic need for an intermediary to guarantee one's competency. There ought to be an app for that. JL

Scott McLemee reports in Slate:

“More than half of all people claiming a new Ph.D. have a fake degree.”

Made in the USA, Sort Of: The Hard Truth of Rebuilding Manufacturing Capability

There was a time when a 'Made in the USA' label had to meet so-called domestic content requirements. Clinton era Secretary of Labor Robert Reich used to joke that after his hip replacement he no longer met that standard for cabinet secretaries.

But the pressures of global competition loosened whatever definitions or  requirements remained and they were soon rendered irrelevant by the wholesale offshoring of the US manufacturing base as corporate leaders responded to the demands of a financialized economy and impatient shareholders.

So here we are a decade or two down that long lonesome road and suddenly the benefits of domestic production are starting to look better. Wages in Asia are rising while quality can be uncertain. Energy prices have affected the cost of transportation. And in a flash of insight that must have Henry Ford chortling from the beyond, US and European corporations are suddenly realizing that consumers without jobs in a consumer-driven economy tend not to have the wherewithal to consume.

Companies like Walmart, which spurred the offshore manufacturing trend to begin with, are faced with declining domestic sales, a problem most often attributed to the inability of their customers to afford their products. They are addressing this by trying to sell more locally produced materiel, but are finding, as the following article explains, that rebuilding that capability is more complicated, more time consuming and more expensive than they had imagined.

A part of that equation is that they were exporting production to countries whose governments were willing to help underwrite the cost in order to build their economies. Having fought to get the US and European governments to adapt austerity programs that eliminate such subsidization so that their products would be more competitive in western export markets, it would be ironic indeed if an outcome of the reshoring initiative were a rebirth of those self-same subsidy programs. JL

Tim Aeppel reports in the Wall Street Journal:

"What we're learning as we partner with these companies is that the supply chain often doesn't exist the way it used to," especially for more complicated products like TV sets, says Michelle Gloeckler, an executive vice president at Wal-Mart in charge of buy-American program.

The End of Genius?

For an economy so committed to collaboration, cooperation and partnership, we demonstrate a persistent fascination with the myth of the lone genius.

Particularly in fields where innovation and creativity are so often successfully translated into cash, the 'my way or the highway' ethos prevails despite ample evidence that it takes, if not a village, than at least a couple of buddies.

Even in tech, where Steve had Woz, Larry had Sergey and Bill had, well, he really did have a village, maybe even a city, the believers cling to the revealed truth. 'We invest in people, not in companies' huff the venture capitalists. Not systems, not processes, not teams, not intellectual capital, but 'people,' however that may be defined, the implication being that the Alpha Dog controls the biological survival imperative.

But even as the strains of Frank Sinatra singing 'I Did It My Way,' continue to waft from entrepreneurs' ear buds, the reality is that the world is becoming too complex for this belief to endure. Apple's fruitless legal battle with Samsung over who thought what first and that dispute's countless spawn suggest that real value now lies more in apportioning credit as it is due rather than attempting to claim a pride of place whose relative worth will have significantly diminished, if not evaporated, by the time the judicial process has run its course.

There is neither time nor funds sufficient to indulge this luxury any longer. Sustainable competitive advantage is a chimera. Innovation is iterative, evolutionary, revolutionary and very, very fast. Success is harder than ever to come by. But to the extent it is attainable, the odds increasingly are that it is the result of many fine, sharp (and sometimes even sublimely twisted) minds bending to a common cause. JL

Joshua Shenk comments in the New York Times:

Why does interpersonal conflict so often coincide with innovation?

Jul 27, 2014

The Secret to Tech's Enduring Popularity

Sure, you can get annoyed at the endless wait on phone trees, or the unhelpful answers in FAQs. And despite all the talk about relative cost, prices dont for those devices you really need never seem to go down.

But by and large, humanity's love affair with technology continues, unaffected by Google buses, sexist brogrammers and a growing wealth disparity, even within the industry itself.

There is a teflon edge to tech, based primarily on the central role it plays in our lives (many people hate their government, for instance, but belief their elected representative is an exception to the rule) and the fact that that role is overwhelmingly positive and helpful.

The element of glamor and magic is also a factor: we are connected to the world in any way we want to be, which means we can shape that set of inputs in just the manner we like. We can exclude anything annoying or threatening or disputatious, and embrace whatever gauzy vision suits our fancy.

In short, as a very social species, tech has enabled our most cherished traits. And for this we remain thankful. For now. JL

 Alex Mayyasi reports in Price Economics:

Most people’s awareness of the tech sector involves downloading Lyft and buying a new phone -- not hearing about Google bus protests and sexist jokes at TechCrunch Disrupt.

1 Out of 21 New Yorkers Is a Millionaire: Which Makes It Number 4 in the Global Ranking

Start spreading the news...DA da da da DA...

You might have thought New York would be Number One in millionaires per square foot - per person, actually - but no, for all the shaking of heads, weary sighs and profound regrets, if you are looking to hang around with the truly wealthy, then Europe is the place to go.

Thirteen of the top twenty cities in terms of wealthiest percentage of the population are in sad, old Europe, as it were. And not just in the obvious places like Monaco or Zurich, but in Oslo, Amsterdam, Brussels and....Dublin. Yeah, enough crying in your beer, lads.

Not surprisingly, the correlation between wealth concentration and centers of finance is high. PS, even former New York Mayor Mike Bloomberg (pictured above with native New Yorker, Lady Gaga) has a house in London. Just saying...JL

Walter Hamilton reports in the Los Angeles Times:

Monaco, Zurich and Geneva claimed the first three spots.

The Rules That Apple Stores Purposely Violate

It's design is iconic: tourists frequently take pictures of themselves in front of one of them. It's sales per square foot are the highest in the industry: $4,551 - more money than other storeof any kind, period.

And it does this by breaking many of the established rules of the retail trade - just as Apple has always done.

Surprisingly, perhaps, for a company so focused on its products, the first rule the store design breaks is that the product is not the most important thing.

While this may seem counterintuitive - isnt the whole point of having a store to sell products? - it reflects a reality of the post- industrial era. Anyone can sell computers and their add-ons or affiliated electronic cousins, but it is a tough business. Just ask Best Buy or Crazy Eddie or CompUSA or anyone of a hundred other merchants who thought they could do this at scale.

What Apple realized was that the services wrapped around the products may be the most profitable, therefore, the store should reflect the ethos that the customer experience is what will make the store unique - and will keep them coming back and buying more.

Ironically, the fact that Apple has been awarded a trademark for the design and layout for its stores is causing concern to some inside and outside the company. The fear is that even as it acknowledges the primacy of that design, it is enshrining the past rather than looking to the future, which is definitely not a reflection of the original intent or the evolutionary process that led to where it is today. JL

 Belinda Lanks reports in Business Week:


The product is not the most important thing.

Jul 26, 2014

Downswing? Dick's Sporting Goods, America's Largest Employer of Golf Pros, Lays Off All Due To Declining Consumer Interest and Sales

More golf courses closed than opened in 2013 - for the eighth straight year. But lest you think this is part of nature's rejuvenating cycle, 14 opened - while 157 closed.

This appears to symptomatic of a larger, broader malaise engendered by expense of the game in a time of declining household income, 24-7 work pressures, disinterest on the part of Gen Xers andYers who, in interviews, consider it too time consuming, unhealthy compared to alternatives and, frankly, boring. And as if all that weren't enough, the game's one true star, Tiger Woods, has never regained his championship form following a series of incidents highlighted by his ex-wife's demonstration of a powerful foreswing aimed at his SUV's windshield.

Dick's Sporting Goods, one of America's largest sports retailers had hired hundreds of golf pros to staff its 500 stores, thinking this would provide a distinct competitive advantage. Alas, it was not to be. Expertise could not overcome a lack of interest - a lesson for any business. Generally in such situations one would expect a cutback, not an elimination of the category. However the retailer's CEO was quoted as saying 'we dont feel we've found the bottom yet.' Fore! JL

Michael Sanserino reports in the Pittsburgh Post-Gazette:

Golf sales are dragging nationwide as fewer people are taking interest in the sport.