Yet the tide may be beginning to turn. The 21st Century Cures Act, a new bill that would restore funding to the NIH and streamline drug approvals, just passed the House Energy and Commerce Committee by a unanimous vote of 51-0. It’s about time. After over a decade of neglect, we desperately need to renew our commitment to science and competitiveness.
It’s easy to laugh off an academic squabble. When overeducated combattants square off in an arena that most people don’t even know exists, few take notice. Yet some reverberate outside the academic world and I suspect that Paul Romer’s assault on mathiness, ably summarized by Justin Fox at Bloomberg View, will be one of them.
The issue at hand is the tendency of economists to cloak ideology in obscure equations to give their views a false appearance of rigor. Well, you might say, that’s what overeducated eggheads do, but seemingly practically minded business people have their own version of “mathiness.”
When managers say they are data driven and ROI focused they are usually more intent on professing a belief than delivering results. They are, essentially, accidental theorists, putting their faith in an abstract idea rather than engaging in any true analysis of cause and effect. Despite what many will tell you, numbers can lie and only fools follow them blindly.
For a long time, TV was a fairly sleepy business. You had three major networks in the US—less elsewhere—acting as gatekeepers. They chose their programming lineup each year, which attracted a certain amount of audience that could be transformed into a certain amount of money.
Cable clouded the picture somewhat, adding subscription revenues to the mix, fragmenting audiences and giving rise to pay channels like HBO and Showtime, yet the change wasn’t drastic. You still had those who developed programs and those who distributed them, along with a few players that could do both.
Yet as I wrote two years ago, we’re entering a new age of TV where distribution is being devalued and completely new models for programming are beginning to evolve. Now, we’re approaching a tipping point where what we used to call “TV” is morphing into something else entirely. Cable providers, if they are to survive, will have to innovate their business models.
Most of the year is pretty hectic. We spend our time huddled inside, running to meetings and putting out fires. Summer, however, offers the opportunity for some relaxation. Even a few hours on the beach or by the pool can give us some much needed time to reflect on the big ideas.
But not that much time. Even in the summer, we still have responsibilities that demand our time and attention. It’s not like we’re back in college and can spend all night pushing through some massive tome, or discussing the finer points with a group of friends.
Luckily, there are some books that explain big ideas in simple, everyday language. They’re not dumbed down versions of other books, but are original, insightful and get right to the heart of the matter. So if you want to expand your mind this summer, it doesn’t have to be painful. Theses books are about powerful ideas, but are also a joy to read.
These days, the future comes at us faster than ever before. We live in an age of accelerating returns, in which technological advancement moves at an exponential rate. In ten years, no industry will look like it does now. In twenty years many, if not most, of today’s jobs will be completely obsolete.
Yet the future is about more than just technology. Health and economic trends, population growth and climate change, just to name a few, will also create massive challenges—and massive opportunities. The time to prepare for the future is always the present.
On September 17, 2011, Occupy Wall Street took over Zuccotti Park, in the heart of the financial district in Lower Manhattan. Declaring, “We are the 99%,” they captured the attention of the nation. Within a few months, however, the park was cleared and the protesters went home, achieving little, if anything.
In 1998, a similar movement, Otpor, began in Serbia. Yet where Occupy failed, Otpor succeeded marvelously. In just two years they overthrew the reviled Milošević government. Soon after came the Color Revolutions in Eastern Europe and the Arab Spring in the Middle East.
While Occupy certainly did not lack passion or appeal—indeed its core message about inequality continues to resonate—it was unable to translate that fervor into effective action. Otpor, on the other hand, created a movement of enormous impact. The contrast is sharp and it is no accident. Successful movements do things that failed ones don’t.
Steve Jobs didn’t want to build an app store. As Walter Isaacson describes in his biography of Apple’s founder, the famously controlling Jobs was wary of the “bandwidth” needed to police a veritable army of third party developers. At first, he wouldn’t even discuss it.
Yet eventually, even Jobs had to relent and the App store has become an enormous success. Last year, developers reaped $10 billion on the platform. In fact, third party apps have become so central to the iPhone, it’s hard to imagine it without them. Increasingly, products are becoming platforms.
It’s become kind of a Joy’s Law for the networked era—the best resources and capabilities always lie somewhere else. So unless you can pull in people outside your company to improve your product, you’re going to be at a distinct disadvantage. Yet for all the talk about platforms, there’s little guidance about what makes them tick. Here’s what you need to know.
Business runs on certainty. Investors want predictable profits and will punish companies that vacillate up and down. Managers want accountable employees who they can trust to get things done. Customers want to deal with firms that they can be sure will be around next week.
When things are uncertain, penalties are imposed. Valuations tumble, people get fired, customers flee. That’s why managers learn to eliminate complexity from the system and keep it simple. They strive to remain within their realm of expertise and not stray too far into the unknown.
Yet to manage complexity we must do more than just ignore it. We can, of course, limit uncertainty by sticking with what we know and avoiding what we don’t. Still, uncertainty is not a bug, but a feature of any system that is exposed to the real world. Sooner or later, no matter what we do, it’s going to catch up with us. So, in the end, we need to meet it head on.
Self-interest has always been a primary tenet of capitalism. As Adam Smith famously wrote, “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest.” Private interest, in the aggregate, is often a public good.
Yet in an article inHarvard Business Review, William Lazonick argued just the opposite. In particular, he accused greedy CEO’s of advocating for public research, while at the same time pumping money into share buybacks in order to gin up their stock based compensation, enriching themselves while impoverishing the rest of us.
His argument, while sensational and superficially persuasive, is ultimately flawed. First, he cynically selects his facts to suit his argument (more on that below). Second, he seems to fundamentally misunderstand the relationship between public and private investment. The reality is that stock buybacks are often positive and healthy for the economy and the country.
In his novel The Castle, Franz Kafka tells the story of a man named “K” who is summoned by mysterious authorities for unknown reasons. He finds himself at the mercy of their bureaucracy and endless paperwork, which is carried out for a purpose that nobody can fathom but everyone seems to accept.
Most people can relate to the story. 20th century era bureaucracies often seem as if they were designed by Kafka himself. From governments to corporations to international institutions like the IMF, we are often at the mercy of a monolithic central authority we don’t really understand, but must submit to.
Yet although we’ve mostly come to accept the realities of central authority, digital technology is creating a titanic shift toward distributed models. Rather than assets managed by centralized institutions, we have ecosystems managed by platforms. While most welcome this change, it does create new challenges. We’re all going to have to learn to adapt.