Forget The Terminator: Robots of the Apocalypse Could Be Squishy

It is curious that robot designs have traditionally reflected our Frankensteinian fears and nightmares rather than our inchoate hopes and dreams.

Perhaps we have been warning ourselves about their potential or about the hubris that leads us to believe we can control whatever we create. This is especially interesting given that anyone who has ever been a parent realizes how delusional that is.

But it appears that a new generation of robots may actually reflect the nature of the economy that is nurturing it: flexible, adaptive and soft.

These robots are more human than the armored gladiators whose images have dominated what the public has come to believe is the basis for robot design. They may, therefore, be more successful precisely because they incorporate so many features of the species that designed them and is bringing them to fruition, if not exactly to life. JL

Signe Brewster reports in GigaOm:

Soft robots can be especially resilient when it comes to bad conditions. A new robot out of MIT can withstand ice, fire and being run over by a car.

We're Number Nine! The US Is Far From Exceptional in Financial Literacy

When you haven't had to worry about making money for most of your history, it's hard to change the habit.

Until fairly recently, every American generation could count on doing better financially than its predecessor. A new car every two years, a house in the burbs with a yard and a two week vacation were givens.

Which is why those who had problems were viewed with suspicion and disdain, even if it was evident that race or ethnicity or health might have played a role in their circumstances. The prevailing ethos was that if you really wanted it, you could get accomplish anything. 

So it has been instructive to see that awareness of the causes of economic success or its absence has not yet caught up with the diminution of expectations. In fact, it probably explains much of the bitterness in the economic debate, since belief systems are invariably stronger than information systems. This is especially true when cognitive dissonance comes into play, the notion that information is contrary to beliefs tending to signal that it is the information that will be disregarded rather than the beliefs. This may eventually change when the data become overwhelming and irrefutable, but then, in the long run we're also all dead.

The fact that American financial literacy does not match its financial power is probably a transitory phenomenon. Because at this rate, it looks like the power is likely to decline to the level of the literacy rather than the other way around. JL

Michelle Hackman reports in Real Time Economics:

Nations scoring higher than the U.S. place more societal emphasis on saving money.

Pics Or It Didnt Happen: Are All Those Connected Cameras Creating an Ethical Crisis?

Are we seekers or truth or a collection of sick voyeurs? Are we using transparency to make civilization better, or just getting off on cheap entertainment at others' expense?

These are questions society is beginning to debate as the ubiquity of what used to be called personal space increasingly becomes public.

The line between what is legitimate and what is merely mass titillation is no longer clear. There was a time when the release of written narratives like The Pentagon Papers set the world agog. Even Edward Snowden's revelations about the NSA continue to reverberate. But in the sense that a picture is worth a thousand words, providing the film of an ISIS militant beheading a captive or of a football star punching his wife far surpasses all those ink-filled pages in impact.

The question this raises is where to a draw a line - assuming agreement can ever be reached about whether a line should even be drawn. The Murdoch new empire's chronic hacking of newsworthy subjects' phone texts drew condemnation, but not until after millions had read about or heard them. And paid for the privilege of doing so.

There is not necessarily a 'right' answer. But, increasingly, it appears that there will be a debate about what violates norms of behavior - and what should be done about it. JL

 Robinson Meyer reports in The Atlantic:

From celebrity nudes to Ray Rice’s domestic abuse to the ISIS bombings, an unresolved debate looms behind some of our biggest ongoing news stories.

How Come Fast Food Is Getting Slower?

You've noticed, perhaps. Fast food, especially at the drive-through window, is getting a tad slower.

This, it turns out, is not entirely by accident. In fact, as the following article explains, it is to a large degree by design.

Changing consumer tastes have caused the fast food industry to offer more options. While healthier choices are part of the impetus behind metastasizing menus, many customers still want the burgers and fries, tacos, chicken wings and all of the other mouth-watering stand-bys. It's just that even the fast foodies' palates have become more sophisticated as have the rest of the population's - and they want more variety, too.

So the companies have responded, sometimes a tad too enthusiastically perhaps. Drive-thru menus have become so vast they are difficult to read, especially for an aging population which cant see quite as far or as well as they did when Big Mac vs Quarter Pounder were the only alternatives.

But the companies aren't too worried, in large measure because customers seem to eating it up, as it were. JL

Mark Wilson reports in Fast Company:

The great drive-thru slowdown is largely fast food's response to changing consumer tastes--namely, less fast, more food.

Americans' Stock Holdings At 18 Year Low

It seems a financial crisis and the perception that the capital markets have become skewed in favor of the largest investors has dampened Americans' appetite for equity investments.

The dominance of computer-driven, high speed algorithmic trading, the decline in household incomes and the still uncertain real estate values have also contributed to the cautionary data.

Those who do have sufficient wealth to embrace greater risk have been rewarded, as the following article explains. But for the vast bulk of the population, the risks and uncertainties are simply too much given the straitened circumstance they must endure - and that show no signs of abating anytime soon.

The longer term problem with this trend is that it becomes self-reinforcing. This makes growing a consumer driven economy more difficult and could eventually undermine the markets themselves as the shrinking number of investors restricts the market for securities of all types. Short termism rules for the present, but an aggregation of short terms eventually leads to the long term. JL

Robert Frank reports in CNBC:

"The stock ownership rate for Americans peaked in 2001. It's been going steadily downhill since then."

Should You Wait for the Second Generation Apple Watch?

The trade-off has less to do with what you might actually use the thing for and more to do with what sort of personality you are.

Are you desperate to be seen as the earliest of early adopters? Someone on the bleeding edge who knows how to use - and has to have - the latest and greatest?

Or are you more the tortoise than the hare: the kind of person who cares about functionality and value?

Because that is the choice you are being offered. As the following article explains, industry analysts are being polite but not exactly effusive about the new Apple watch. In effect, they are saying that it is underpowered and therefore under-delivers. The company can not or choose not to explain what this product does that a good smartphone doesn't already do. And it has offered no rationale as to why this is a great leap forward in technological performance. In short, it's a fashion accessory whose functional purpose is ill-defined, but which addresses the demand that Apple do something new and innovative rather than iterative.

There is nothing wrong or ignoble about fashion accessories. Indeed, a significant part of the iPhone's success is based on its consumer appeal. But it also happens to have changed people's lives.

So the question really comes back to whether you crave the attention you will receive as you shoot your cuffs and let everyone know you are sporting the new, new thing or whether you actually want to use it in ways that might make your life more efficient and productive. JL

Mark Sullivan reports in Venture Beat:

It’s a good bet that Apple will create thinner and more powerful watch on the second time out. But it also needs people to buy the first version.

New California Law Protects Right of Customers to Post Negative Reviews; Outlaws Business Attempts to Penalize Them

The conflict over whose rights are paramount continues.

California has just passed a law protecting the right of customers to post negative reviews of whatever services they receive and it prohibits the imposition of fines or other penalties by the enterprises who feel violated.

California is but one state out of 50, but then it is rather a special place, even if it were not the home of Google, Facebook, Amazon and much of the social media industry. That specialness resides in the strength of its economy, its history of innovation and its power as a bellwether of change. Though somewhat eroded over the years, California retains both the substance and the aura of a place where the future is distilled and repackaged for the rest of the world.

So the fact that its legislature passed legislation which its governor signed into law signifies that the rights of the consumer appear, at least in this instance, to be superior to those of the businesses which must endure the frequently unkind, often unfair and sometimes grossly untrue comments about the quality of whatever they attempt to offer. Which may or may not be a positive from an economic standpoint because of the conflict between the theory that honest feedback improves the market and the reality of how that feedback impacts their prospects. JL

Jeff Roberts reports in GigaOm:

Businesses may not impose contract terms “waiving the consumer’s right to make any statement regarding the seller or lessor or its employees or agents, or concerning the goods or services.”

The Economics of Pricelessness

In a post-industrial economy we find that traditional notions of value are sometimes inverted: the heavy, stable stuff like factories, real estate and heavy equipment is fungible, global commodities whose price is determined by market forces and not infrequently declining relative to their weight and mass.

Intangibles, on the other hand, like brand, reputation, customer satisfaction, employee commitment, management experience or simply passion are growing in value. People will pay extraordinary amounts for a view they enjoy or for an item that gives them pleasure out of scale to its actual cost of production.

The New Wealth of Nations includes not just GDP or GNP but health, education and the capacity to innovate. These are outcomes or inputs whose status and impact central banks and national statistical agencies are working to measure, but there is not yet a globally accepted comprehensive approach to this task. In fact, many shy away from it because of the financial - and therefore political - implications of whose accounting status will be damaged and whose will be enhanced.

The reality is that we are paying attention because as a civilization many more people have the knowledge and the wealth to care about these factors in their lives, as the following article explains. That we have so far been unable to agree on what to do about it is less about ability - processes and metrics are available - than about desire - and fear. Fear of upsetting the status quo and what might ensue; fear about loss of power or prestige; and, of course, fear of getting it wrong. But as the economy continues to evolve the obstacles will recede in direct relation to the growing demand for the objects of their attention. JL

Venkat comments in The Ribbonfarm blog:

“There are some things money can’t buy, for everything else, there’s Mastercard."

TV Execs Know You Are Checking a Second Screen While You Watch: And They Are Doing Something About It

The narrative story-telling tradition has come down to us over the centuries as a reflection of the cultures from which it sprang. In most cases, it is through this means of communication that values, mores, history - and aspirations - are passed on.

So it is a matter of some significance that 'the second screen' has emerged as a powerful force in visual transference of information, entertainment and emotion because if both represents and leads us as we attempt to learn and understand  the messages that those who craft them desire us to receive.

The second screen is the term used to describe the use of more than one device to watch TV. In some cases that second device, whether a phone, tablet, laptop or some other electronic communicator, is simply a distraction, a multi-tasking alternative to paying full attention. But increasingly, as the following article explains, it is being used to supplement the message being conveyed on the 'big screen.' This is changing the way stories are told, sometimes causing content to be eliminated from the main story and provided only to those interested or ambitious enough to check it out online.

This raises questions about our assumptions and may or may not add to the fears of those who believe our knowledge and intellect is being degraded by the urge to simplify in order to keep the attention of those whose minds are already overstimulated by all of the impulses being hurled their way. There are others who think this may actually increase our knowledge, inspire our curiosity and enhance our interaction with the subject matter, thereby improving our retention and connection. Whichever proves to be the dominant case, society will probably never watch passively again. JL

Sonali Kohli reports in Quartz:

It enables you to concentrate on what you can do on screen, rather than to have to provide a lot of information which would be conveyed through text

Breaking Up Is Hard To Do: Google, Amazon and Other US Tech Companies Face European Backlash Over Market Dominance

They were so cute when they were rolling out all those services which were free and helpful and innovative and easy to use. Just like a new puppy - who's suddenly grown into a huge adult and has taken over the house.

Europeans are beginning to resist the blandishments of the biggest tech companies, whose services they can not seem to live without but whose dominance of their market is raising questions about whether this is healthy - or necessary.

Google's search dominance - 90 percent market share in Europe versus approximately 65 percent in the US - is a cause for particular concern and probably did more to inspire a reevaluation of personal data usage including 'right to be forgotten' laws. But the other tech titans are receiving equally cold assessments: Amazon's strong arm tactics against publishers and authors has generated considerable resentment among Europe's book-loving - and buying - masses, as has its tax-avoidance schemes. Facebook has generated concerns about its use of private data and its manipulation of participants' emotions in order to craft better ad sell-through rates. Apple's sweetheart tax deal with Ireland also faces regulatory scrutiny.

To some degree, this is the price of success. But as many multi-national companies have learned to their discomfort, it is one thing to operate globally and another to be global. Tech has traditionally viewed its services as transcendent, not bound by traditional notions of geography and time. But it may be learning that in a competitive global economy - with apologies to Tip O'Neill - all profits and jobs are local. JL

Danny Hakim reports in the New York Times:

“They’re no longer seen as innocent geeks,”

How Is Climate Change Affecting the World's Biggest Food Company?

The inexorable pressures come from several directions: arable land is declining while demand, especially for more nutritious and safer food in climbing.

As incomes grow in developing countries, so too is their desire to eat more diverse and better quality food, though the ingredients that comprise that aspirational diet are not necessarily healthier. This is putting pressure on food budgets around the world and raising prices even in relatively wealthier societies.

Companies like Nestle, the largest in the food provider in the world by revenue, must contend with these sometimes conflicting desires. As a result, they are attempting to deflect criticism about rising costs by focusing on the benefits of improved quality. One of the problems they face, however, is that quality can be used as a cudgel in countries like China which themselves facing internecine economic battles over competing interests and their desire not to cede their market to foreigners.

The reality is that the big food companies are going to assume more of the responsibility - and blame -but necessarily realize greater profits nor greater praise. The result will probably be even further consolidation as the world tries to manage the results of a system which is reducing capacity at the same time it is raising demand. JL

Roberto Ferdman reports in the Washington Post:

Commodities have gotten more expensive as a result of climate change.

The Case for Letting Employees Pick Their Own Job Titles

Letting the inmates run the asylum? That's usually been the management response to any initiative that reduces command and control. Except that in the contemporary organization, command is ephemeral and control is delusional.

In fact, given that five year projections are so often the stuff of fantasy, that job security is a distant memory and that even satisfaction or engagement tend to be aspirational, finding ways to provide otherwise intelligent, competent and skilled people with a sense of self-worth on the job seems like a logical strategy rather than a weary surrender of responsibility.

The reality is that impermanence and insecurity dominate the workplace. Even once lordly financial Masters of the Universe are being replaced by server farms and algorithms. So a little narrative support can go a long way, as the following article explains.

This does not always work, of course, because some clients are less tolerant or more insecure than others. And their are systems that require more structure rather than less, though those are not necessarily the rule as they once were. But increasingly, jobs that provide scope for imagination and creativity - or even those that do not - require a degree of engagement that enterprises no longer believe or wish to offer. But as we learn more about what really motivates people and how small the incentives may be that make a difference, the more we can and should be willing to cede some discretion to those of whom so much is asked - and to whom so relatively little is frequently given. JL

Eric Jaffe reports in Fast Company:

Job titles provide self-verification, psychological safety, and external rapport

Wearables, Payments, Chickens, Eggs - and Apple

It's one of those days. Not a bad or good one or an anniversary of something significant, but notable nonetheless. Because it's an Apple new product launch day, which means that everyone will be paying rapt attention to the nuances of whatever revolutionary or even evolutionary new device is being introduced to a breathless public.

For many this will be a moment of great excitement as whatever innovations Apple introduces will ripple their way through the tech universe and the attendant economy.

But the broader question is why so many enterprises care. Not competitors so much as the services and derivative product makers who create the larger eco-system within which tech thrives. And the answer, as the following article points out, is that Apple's customers are better than other people's. Not morally or philosophically - or physically or intellectually (though there might be a debate about that one) but simply that they are wealthier, more powerful and frequently leaders in the art of creating opinions that matter to others.

And the really significant thing about that is that they are therefore more valuable. So the fact that they will buy whatever Apple is flogging should not be a cause for scorn (though it can be a source of amusement) but for wonder at the way the economic impact of their purchases flows downhill, as it were, to everyone else. Thereby determining design decisions, purchase priorities and related,cascading consequences.

Which is why, as the following article explains, Apple may have little or no interest in getting into finance or taking on Amazon or lots of other strategic options. Given the demographics of its customer base and the profitability that assures for the company, Apple can just wait for everyone else to come to them. JL

Ben Thompson comments in Stratechery:

Contrary to the expectations of some Apple bulls, I don’t think Apple has any interest in getting into financial services. I suspect they will be quite happy to sit on top of traditional credit cards, just as the iPhone sits on top of traditional carriers

The Reason Tech Industry Groups Are Advocating Swift Passage of NSA Curbs

The tech industry finds itself tarred by the same brush that has stained the reputation of the US National Security Agency, or NSA - and it's starting to burn.

Various tech industry groups have written to American senators and congressmen requesting that they vote to pass curbs on NSA intelligence-gathering activity. The letters are couched in the high-blown rhetoric customary for such purposes. The legislation itself is called the USA Freedom Act.

But the real impetus is that Europe is considering even more restrictive fiats on the action that really matters to these companies: the accumulation, aggregation and sale of personal data for commercial purposes.

The business of information is their base, so free access to do with it what they will has become an economic imperative. There was a point at which the consumer seemed utterly indifferent to the sources and uses of such data. It was 'free' and therefore not perceived to be of much value.

But they the scope of the NSA's spy revelations combined with the legal action taken by amateur athletes and others insisting that they be permitted to capture some of the revenue their own images and actions generated awakened the interest of mere consumers to the possibility that if someone was actively collecting and selling information about themselves, perhaps they deserved a piece of the action. This was compounded by Europe's heartfelt but theoretically utopian and morally bizarre notion that there should be a 'right to forget,' a decision which fraudsters and war criminals have warmly applauded.

So now Google, Apple, Amazon and Facebook et al are faced with the prospect of losing access to the mother lode of digital commerce: data. The strategic plan is to lessen the stain of association with the NSA and to then work diligently to keep the data flowing before valuations become merely extraordinary rather than customarily extravagant. JL

John Ribeiro reports in PCWorld:

“As a result of the surveillance program revelations, U.S. technology companies have experienced negative economic implications in overseas markets. Other countries are considering proposals that would limit data flows between countries, which would have a negative impact on the efficiencies upon which the borderless Internet relies.”

Can the Arthur Andersen Brand Rise from Enron's Ashes?

Some brands are purported to be 'teflon,' nothing bad ever sticks to them. Apple and GE come to mind.

Some brands, however, are synonymous with rotten behavior, though it is arguably the case that in the eyes of many, getting caught is the real crime.

The biggest of the big accounting firms was always Arthur Andersen. Not always in size, though that was frequently the case, but in reputation for relentless pursuit of business and ruthless dedication to its clients' interests. Clients appreciate service providers who will stop at nothing to defend them. It makes business easier - and it gives them implicit deniability if they cross any lines. But eventually - and infamously - Andersen was so fanatical in its pursuit of Enron's interests, with which it felt its own were entwined, that it ended up participating in and then revealing a fraud of such scope that it still defines the notion of unacceptable corporate performance.

Both Enron and Andersen paid the ultimate price: what is politely called 'loss of public confidence,' which means that they were both forced to shut down. And so, for the past dozen years they have remained a cautionary tale, a corporate bogey-man trotted out whenever someone wanted to make a point about what not to do.

But there were always a cadre of true believers who thought that Andersen represented what was good and great in the business of accounting and consulting. Who thought that the verdict was grossly unfair and far too harsh. So, as the following article explains, a firm of former Andersen accountants is now attempting to revive the name. They think there is still equity in that brand, that there are clients who yearn for what they believe it represented, as the following article explains. And they are quite possibly correct in that. The question is whether those are clients that any service business really wants to have. JL

Michael Rapoport reports in the Wall Street Journal:

"There's no name that better captures our values."

Online File Storage: Gigabytes and Pricing Are So Last Year

The key to strategic growth is in your mind, literally.

When it comes to online file storage, aka, The Cloud, the value creation process is similar to that for pretty much everything else related to enhancing the return from supporting the interface between technology and the rest of the human experience. First you provide power and volume, then you have to add something distinctive or you run the risk of becoming just another low margin vendor of commodity services.

Which means that gigabytes and everyday low prices will bring 'em in but won't keep 'em coming back. Because the key to successfully providing services is now adding value by helping customers identify, interpret and apply the information you are storing for them and making it both useful and profitable.

While hardly revolutionary, but then not every enterprise is equipped, staffed and oriented to providing additional services. That this almost certainly will do is differentiate the survivors from everyone else. JL

Marcus Wohlsen reports in Wired:

If companies like Box and Dropbox are trying to sell customers on what each can help them to do with their data, quibbling over how many gigabytes they’re using becomes a losing strategy.

Upstarts Prepare to Ambush the Lords of Finance

The truly disruptive competitive threat almost always comes from outside the consideration set with which those concerned are most comfortable. After all, if you are anticipating something it is unlikely to be all that surprising when it actually appears.

Financial institutions have been fending off threats to their franchise with great effect. It helps to have a lot of money and to be willing to spend it. But even as the too-big-to-fail banks and investment firms consolidate their positions, an equally well-funded and aggressive industry is preparing to take what they believe is theirs for the asking.

That industry, not surprisingly, is tech. The assault has been building for some time. Apple's recent announcement about partnerships with Visa, Mastercard and American Express merely highlights the degree to which technology and finance have become indistinguishable. What is different now is that tech no longer perceives finance to have any unique knowledge - or access to information - that it can not gain on its own.

It also has the added reputational advantage of being an industry that makes and sells products that people actually like. And despite the recent concerns about privacy, techie wealth and arrogance most of the industry leaders are popular figures compared with their financial compatriots.

Ultimately it is likely that a compromise of sorts will be engineered because a winner-take-all strategy is just too expensive and potentially destructive to pursue for long. A technologically denominated financial services industry is already mostly in place. What will change is the nature and knowledge of who is actually in charge. JL

Gillian Tett comments in the Financial Times:

Outside the circle of well-known regulated banks – and indeed shadow banks – a clutch of technology groups is quietly stepping up efforts to disrupt finance on both the retail and wholesale sides

The Technological Future Could Work - If Humans Let It

Business would be great - if it weren't for customers and employees.

That old saw captures the challenge of managing any enterprise: no matter how efficient or productive any system may appear, humans are quite capable of turning it on its head and mucking it up.

This may be especially true when it comes to the integration of technology into the human-centered workplace. Many organizations continue to make the mistake of believing that just by providing some training - or by hiring only those who have already received such training on their own -  the benefits of new technology will automatically accrue like flowers after a spring rain.

What they fail to understand - or refuse to acknowledge - is that the introduction of a revolutionary, disruptive and ultimately effective new technology frequently requires a rethinking of how the institution is organized, designed, managed and most importantly, imagined. 

The notion that tech will just make whatever we're comfortable with work faster and better is delusional. That delusion persists, however, because the alternative is messy, upsetting and often expensive. Power shifts, as do relationships, job titles, compensation formulae and employment prospects. The more far-reaching the technology, the more likely that the status quo will change. And despite a generation's worth of encouragement to embrace change, the very human instinct, based on experience, is to assume that this is probably not going to work out so well for anyone who has already been doing the job the old-fashioned way.

The problem is that accounting conventions dictate that retraining is a cost that reduces return on investment. Other resource allocation decisions may be similarly affected. Combined with a bias towards the short term, these forces militate against preparing an individual, an enterprise, an industry or a society for the probable effects of meaningful technological change, assuming of course, that it's benefits are to be realized.

Technological integration entails sacrifice. Not everyone is comfortable with that, especially if they are past the age when all of their assets can fit in the back seat of a small car. But the technological imperative is sufficiently compelling and seemingly unavoidable that far-seeing individuals and organizations can adapt and succeed if they can summon the will to do so. JL

Farhad Manjoo comments in the New York Times:

Optimists underplay the messiness of tech, including the possibility that people will reject advances for social or emotional reasons, or that they’ll use technologies in inefficient ways nobody would have ever guessed.

PC Plus: Lenovo Becomes a Force in Smartphones - and Threatens the Status Quo

Lenovo. Weren't they the ones who bought IBM's PC division and then, well, kinda dropped off the screen?

You might want to reboot that screen because Lenovo is becoming Apple and Samsung's worst nightmare: yet another Chinese company offering good quality devices at a lower price - in their home market. A market which, at the moment, is proving to be somewhat less hospitable to foreign competitors as its economy shakes out.

Lenovo is known for PCs but is actually selling more smartphones now. And it is about to acquire another American brand which has seen better days: Motorola, maker of the once iconic Razorphone. But didnt Microsoft acquire Nokia and go nowhere with it, implying that once these obsolete tech cos go down, they're done?

Well, it's always dangerous to extrapolate from a sample set of one. And if Lenovo's management of the IBM product is any indication - combined with its strategy of becoming a dominant factor in high growth developing markets like South America rather than fighting for share in mature regions like the US and Europe, it might well continue to surprise those who have written it off as another low-cost copycat. JL

Kevin Tofel reports in GigaOm:

The PC Plus market requires fast, efficient innovation as it moves quickly from premium products to mainstream ones and from mature market domination to emerging market
hyper growth

Profits Without Prosperity: From Value Creation to Value Extraction

People in the west pride themselves on having created a post-industrial economy. One based on creating value from intangibles like brand, intellectual and human capital.

But corporate behavior belies our pronouncements of faith in that progression. So many incentive structures are designed to value extraction over creation that the US and Europe look increasingly like those economies dependent on one crop or mineral.

In the western case, that crop is cash. The problem is that an economic strategy dependent upon value extraction that refuses opportunities to invest in the future is by its very nature unsustainable. So the entire edifice in constructed with an eye to impermanence; it is hard to justify building for the future if the prevailing structure is based primarily in a belief that the future is too uncertain to warrant more than a perfunctory nod towards anything beyond the scope of compensatory asset accretion.

Extractive economies almost always fall prey to their dependence on the now. The challenge for institutions in the US and Europe will be in finding a way that moderates their evident fear of the future with a renewed belief in the potential upside presented by the assumption of prudent risk in return for value. JL

William Lazonick reports in Harvard Business Review:

By increasing the demand for a company’s shares, open-market buybacks automatically lift its stock price, even if only temporarily, and can enable the company to hit quarterly earnings per share (EPS) targets.

Artificial Intelligence Comes to Your Inbox

We know that computers and the programs designed to manage them are getting smarter. The question is, to what end?

Accuracy is the short answer, but even that is incomplete. Accuracy for what purpose is the next query in the progression. And the answer to that lies in an assumption, which is that the more a company selling a product or service knows about the potential customer, the more likely it is to make a sale. The more assurance it has that its efforts will pay off, the less it has to invest in marketing, promotions, advertising and public relations which means, in turn, that margins will expand, the stock price will rise, bonuses will get bigger and everyone will live happily ever after.

Of course, the chances of that happening decrease to the degree that all of your competitors have come to the same realization and are attempting to make the same sale. Which leads, inevitably, to yet more determined efforts to assemble enough information to cross the great divide from reasonable assumption to focused prediction.

The challenge will be to manage this in such a way that fears about the intrusiveness of the process and the aggregation of data do not further inflame the resistance that has already arisen. To accomplish that tricky objective will pit the forces of moderation and prudence against the commercial imperative to sell. The latter have the upper hand, but may have to learn, the hard way, the nature and extent of their limits. JL

Christopher Mims comments in the Wall Street Journal:

Advances in the sheer power of computers will lead to AI that becomes progressively smarter. So-called deep-learning algorithms allow machines to learn unsupervised.