Posts Tagged ‘economy’

How Fast can You Change?

May 12, 2013

A friend asked me, “Brian, why has the economy seemingly stalled?” My spontaneous answer was, “Well, I don’t think that people can change their behavior fast enough to take advantage of the changes happening all around them. I think that people are overwhelmed today by the chaos. The consumer has been left behind.”

The puzzled look on my friend’s face told me immediately that he did not see the connection I was making at all. Rather than taking a step backward, or taking a second step forward hoping to see indications of understanding, I let the conversation take a different course. Let me peel the onion that I did not peel that afternoon – let me make a few observations…

1) Product innovation that is too rapid leaves the consumer behind. Have you ever stopped upgrading software because the new features were not obviously of any use to you? Still using Windows XP? Well, the product innovation left you behind.

Perhaps the new features were not well thought out, and they were in fact duplicative or of no practical use to you. Phewy – why spend money for something you can’t use and don’t need for anything? That’s not a problem with you – blame the product designer for the ridiculous.

Perhaps, though, those new features are so different from what is familiar that you don’t see how they are useful. Even if someone points out how the new features are significant improvements on what was – significantly better tools, you might reason that if you don’t need those new features for what you do today, then why learn how to use them – nope, pass the upgrade by. Maybe that IS a problem with you. But you, my friend, are not alone if you fall in this second camp of consumer.

In the case of Windows, product innovation has left the consumer behind for a combination of both of the above reasons. If you discount Windows OS sales associated with new computers purchase, consumer upgrades from XP to Vista to 7 to 8 has been lethargic and reluctant and even painful – and getting more so with each successive release of the OS – and terribly disappointing for Microsoft financial results. Windows OS product innovation has left the consumer behind. And the Windows economy has stalled.

2) Product innovation that suddenly presents too many alternative products to the consumer leaves less room for a runner-up to succeed, and a bubble may emerge. Or a monopoly may emerge. How many consumers do you imagine shop for a large screen TV because of the 3D feature? In the near term, a crowded market quickly turns into a price-competitive market that squeezes new entrants out of the marketplace before a product sells a threshold amount that justifies the next cycle of innovation. Truly good products can disappear from a crowded market for no rational reason visible to the consumer. Companies fail. Innovators lose confidence and backers. In the near term, the good products in a crowded market don’t always win unless one product in particular is a true standout (Apple’s iPod). In the near term, this kind of market may become a bubble that bursts.

In the long term, mediocre products may be the only survivors simply as a result of deeper pockets of cash with their manufacturer, and being perceived as the least risk choice for the consumer. Monopolies of lackluster products may develop, and monopolies are inefficient markets over time. Inefficient markets full of ineffective products are not “vibrant” by any measure, and those markets will eventually stall or become declining markets. Monopoly markets are incredibly hard to upset with exciting competing products – after all, how fast can the consumer actually change?

Back to the question: How fast can you change?

I am a technology product manager. Once I launch a new product – a challenge in itself, I immediately plan for the innovation path. The problem for me in a nutshell is to innovate fast enough to challenge and out do the community of competitors, but slowly enough for the consumer to be able to appreciate the coming innovation, desire the coming innovation, and be able to change their behavior to utilize the coming innovation.

Apple succeeds in no small measure through evangelists. Apple recruits evangelists from their consumer population by engaging the consumer. Apple hosts developers conferences, hosts user forums, offers training in their stores, offers personalized shopping experiences, offers one-on-one services, etc. Apple has “genius” evangelists at every store to explain product features by way of solving customer problems. At every turn, Apple is working to propel the consumer forward through evangelism faster than if the consumer was left to their own devices.

Apple succeeds in no small measure by taking small incremental steps with their software. How different is MacOSX 10.8 from 10.7? 10.7 from 10,6? If you look at the release notes for the OS releases, Apple consistently touts more than 200 or 250 new features, but only several are significant, and the rest are nuances and polish. Apple sells the value of so many new features, but genuinely challenges the consumer to change their behavior on just a few. And how much is that new OS? Just $30 most recently… Heck, why not! Apple takes small steps with their current products.

Apple succeeds in no small measure by selling entire ecosystems that are smoothly integrated and virtually flawless. MacOSX / IOS / App Store / iTunes Store / iTunes Match / AppleTV / AirPlay / Photoflow / Bonjour is just one ecosystem. Apple has a communicator ecosystem (the iPhone is part), a developer ecosystem, an office productivity ecosystem, a hobbyist AV ecosystem, a pro AV ecosystem, an enterprise ecosystem. Apple sells a range of outstanding hardware platforms to suit these ecosystems. Apple ecosystems are all almost flawless – “and it all just works.”

Microsoft, on the other hand fails on all these strategies. Transitioning from Windows 7 to Windows 8 has compatibility headaches, fractured ecosystems, radical user interface changes (and challenges), steep pricing, and there is no one to sell the “goodness” or pull the consumer gently forward.

When I look around me, I see market after market filled with “Microsofts”, and not “Apples”. The consumer sees what I see, though they may nor comprehend what they see in the same way I do. The consumer sees a dizzying range of confusing products and services they don’t understand, fail to appreciate, and can’t really afford, and they are keeping their money in their pockets. How much money will YOU spend on a “flash in the pan” gimmick (if that’s how you perceive it)?

And by the way, more and more consumers over the past decade in particular are keeping more and more money in their pockets for essentials like food, shelter, medical care and transportation that combined are more and more often exceeding their incomes… You can’t understate this factor.

So, in summary, my friend, the economy is stalling because the vast middle class faces shrinking disposable incomes and mind-numbing, confounding choices in the market. There are exceptions, of course: the 1% is doing quite well, and there are in fact some excellent products and services in the market. But the 99% is largely keeping what little disposable income they have in their pockets (and not expanding their consumption of credit) because there is not much that is compelling to purchase.

Well, that’s my view when I wear my product manager hat!

Update – a follow-up question: “What do you think about Windows 8?”

I think Windows 8 is the most innovative Windows release in many, many years. The ability to flip from app to app with a swipe and the constant updating of the summary display with notifications are all terrific innovations I wish my iPhone had. This user interface is not quite ready for the desktop; however. And this user interface is a huge leap that brings too many changes too fast for the majority of consumers. I like it!

How fast can you change? Most consumers want to change rather slowly…

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Recovery from a Looming “Implosion”

June 3, 2011

What? What is Brian talking about today? Implosion? My story relates to my best friend who is intellectually brilliant, remarkably astute, hard working, produces work of the highest quality, who is ambitious, caring, philanthropic – someone who I think is destined for greatness. He is currently overcommitted in his job, and he is exhausted, and it is taking a toll on his health. He sees cracks forming around him, and he does not know how to navigate out of these difficult circumstances. In terms of his time, his plight is not unlike our economy’s fiscal overextension. I have been in the same place years ago in my own job, too – it is painful, and it seems that there is no obvious way to get to the “other side”. But there is a way to the “other side” – there is always a way…

Here is what I did – Ten steps. Looking back, it is so obvious, but at the time, it was not so obvious at all:

  1. Take Inventory. Restate your mission – where do you want to be in your career  this year, in five years, in twenty years? What do you want for yourself and your family? Identify your commitments – all of them. Account for your use of time – all of it.
  2. Unload Freeloaders – identify parties that take time from you for their own gain with no intention of giving anything back to anyone – if they take your time and retain all the benefit for themselves alone, CUT THEM OFF! Just say “NO”.
  3. Put Underperformers on Notice – identify parties that take time from you with the promise of giving back who are late and haven’t yet – demand a payback – even just a token return – even to someone else – before you commit any more of your time. Cut them off until they begin to pay back something to someone. Say “No, not until you do this…” and tell them your new bargain, boundaries and conditions. You have that power.
  4. Prioritize for an Optimal “Cost – Benefit” – prioritize your standing commitments in order of total value to all parties involved including the value to you – be certain that the benefits outweigh the costs. If the benefits from a commitment do not justify the cost (your time), adjust it’s priority downward… Keep this in mind for every new commitment you make going forward.
  5. Embrace your Mission – make every second count toward deliverables that are meaningful to your mission, whatever that may be. If a commitment does not satisfy your mission, adjust it’s priority downward… Keep this in mind for every new commitment you make going forward.
  6. Abandon Fruitless Efforts – don’t invest in a failure – make every second count toward deliverables that will be complete enough and timely enough to meet your commitments.
  7. Make Today Count – deliver today what you promised for today.
  8. Make Tomorrow a Different Day – seek adjustments on scope and extensions on deadlines in the near term beginning with what is promised for tomorrow.
  9. Do Damage Control – Prepare for the lowest priority commitments to simply go unfulfilled – warn the potentially impacted parties in advance – tell them your circumstance and the uncertainty of meeting your commitment as early on as possible – tell them several times – be frank and honest – tell them when it is apparent you won’t deliver and apologize.
  10. Ask for help! Delegate! Relinquish some control to others. People will come out of the woodwork to help push things forward with you – they will – you just have to ask them.

I had trouble at every step. I was so disappointed in myself when I failed to meet a commitment. A lot of commitments were not negotiable – absolutely rigid scopes of work and cast-in-stone deadlines – I was powerless for some of my commitments that had no potential to be relaxed. I liked to be highly visible, and I had to step “out of the limelight” when I said “No” to someone. I didn’t like to say “No” – I still don’t. I had to be more realistic about my ambitions and my abilities. I angered some people and disappointed others, but at the end of the day, those people didn’t impact my future. Gradually, things got better!

I am trying to help my friend get to the “other side”. He will get there – with some help. If I try too hard, he will push me away, so I am “nudging” just a little. I may have to nudge harder if his health declines any further.

Regarding the economy, I am pushing the politicians along this same 10-step recovery process. If every constituent nudges their representatives in Government accordingly, it will get our economy to the “other side”, too. Send your Senators and your Congressperson an e-mail – remind them of their “mission” – tell them what you think is fruitless – tell them what your priorities are, and NUDGE them to the “other side”.

So, please help me – nudge with me, won’t you?

Rescuing the Economy – Proposal #3

December 26, 2010

My friend PN remarked, “Brian, what do astronomers get paid to do? I mean, what is the value of astronomy?” PN takes his Celeston with him when he leaves the light pollution of the “big city”. I remember wondering in the moment why he didn’t see the value of astronomy. He did in fact, but he was making a point that astronomy, and many fields of science had no immediate payoff, and therefore little allure for public funders and philanthropists. Look at the gloomy future for NASA to see that this concern is real.

I am afraid that many fields of science may lose significant funding and attention in the future, whether I like it or not – probably including astronomy. But not all fields of science are threatened like astronomy might be. Science that contributes to medical advances will flourish in the future. I think that with significant investment in lieu of the relatively more modest investment today, certain fields of science can be propelled so far forward so fast that they will radically reshape national economies such as our own and potentially improve the lives of everyone on the planet in a matter of a couple of years. But it’s a long shot.

I have been blogging on rescuing the US economy:

  • My Proposal #1 that predicts future medical consumption will be what saves the future US economy;
  • My Proposal #2 for more Federal investment in engineering projects by the SBIR;
  • A “China Playbook” of Seven Eco-Pillars that all require redefinition for the future.

The repair and modernization of the US economy is a difficult road for Congress to navigate. When was the last time your community added a stoplight before the tragic car wreck? Well, stand by for us all to trip and fall on the global stage tragically before Congress will act correctly.

So, what is the “long shot” that might overcome the tragic “trip and fall”? There must be a long shot with a high risk of failure, but potentially enormous returns. Scientific discovery changes the way we see the world, the problems in the world, and the solutions to those problems. My friend wasn’t looking at it from quite that perspective, but I was beginning to. My proposal – my long shot:

Invest $250 Billion in scientific research for a cure for cancer – all cancers – in five years.

My previous post that proposed a sharp increase in SBIR investment in engineering solutions to practical problems noted a structural error in public policy that has spurred a misapplication of talent in this country: Scientists in the US are “stooping” to a mission of invention and innovation in lieu of discovery. They do this today because invention and innovation or applied science receives significant funding from multiple sources, and because discovery or pure science receives far less funding, and because their Ph.D. credential beats out the credentials of most engineers who might do better invention and innovation. Where the previous proposal made a case for funding more invention and innovation by engineers instead of scientists, this post expands on the value of scientific discovery and the need to fund it and the essential role for scientists to pursue it.

Discovery is the “long shot”. Remember Rumsfeld’s muttering about “things you know you know”? Well, Discovery is all about the things you don’t know. There is undeniable value in things you don’t know. But this value is undeterminable, and therefore its cost is unjustifiable when things get tough. Scientists do discovery best – this is their big potential value contribution in our economy, and public policy today no longer encourages it very well. A little bit of Discovery spurs a disproportionately larger wave of invention and innovation – always.

The mission to the moon was a mission of discovery – it gave birth to the computer chip – and to a host of other commercializable inventions and innovations that have contributed remarkably to our economy.

The decoding of the human genome was a mission of discovery – it gave birth to the hard disk drive – and to a host of other commercializable inventions and innovations that have contributed remarkably to our economy. The hard disk drive? Yes – the problem was, “How do you store the human genome once you know it?” The answer was the hard disk drive – with microminiature magnetic molecules that store a one or zero – or “fairy dust” as coined by an IBM physicist…  And now, many of us have our offices littered by used disk drives mechanisms and boxes full of portable hard drives.

What is the next big discovery?  See this previous post on The Next Big Thing – but these things are really inventions and innovations, and not discoveries. So, what is the next big discovery that will drive large portions of our future economy? My own guess is a pico-machine that defeats or destroys cancer cells – or any other specific cell they are built for – by seeking them out in the body, attaching to them and rendering them harmless. Maybe this pico-machine is really a virus or a gene, but the point is that for all intents and purposes it is a molecule-sized machine that has a physical structure and a physical mechanism and a programmable behavior to accomplish its task.

These pico-machines will be the brain-children of scientists, and not engineers. Who will fund this pure science? Who will fund a $250 Billion cure for all cancers and potentially many other diseases – and other unimaginable applications? Congress? On the present course, I doubt it… It’s the “long shot”, and who in Congress is brave enough to invest large amounts of public funds today when times are tough in something their constituents might call science fiction?

Today, the US government tends to toss token amounts of money at quantifiable, low-risk problems. This is a sure bet strung out over as long a period of time as possible. I think that this strategy today yields relatively small returns. I have heard more than one scientific researcher remark in frustration, “I invest so many hours preparing so many proposals for such small amounts of money for such limited scopes of work…”

My proposal – one more time:

Invest $250 Billion in scientific research for a cure for cancer – all cancers – in five years.

And then, how about curing Alzheimer’s Disease… Or regrowing the retina of the eye to cure macular degeneration and blindness, or regenerating a failed pancreas to cure diabetes, or – well, there is a long list of discoveries waiting, and waiting, and waiting…

In case you aren’t looking at the cost of the wars in Iraq and Afghanistan, $250 Billion amounts to about two years of the cost of those wars… I would rather bet some of my tax dollars on the “long shot”, wouldn’t you?

Further Thoughts on the Economy

November 19, 2010

THE CHINA PLAYBOOK

– A Ten-Year Agenda for a Basis to Compete Head-On

How is the US going to compete with China and prosper in the future global economy? The US may have to play a new game with new rules put forward by China as they ascend the ladder to become the next great, global economic superpower. Our standard of living depends on working with new concepts of economy management to optimize growth, new concepts of intellectual property rights to improve the rate and scope of innovation of products and services, and new approaches to taxation. The US government must abandon the “old-world” rulebook and adopt a “New-World” framework – a ‘new “Playbook” for global competition and economic survival.

A Conversation

I asked a long-standing client these questions a few days ago – the questions weren’t quite as specific, but the train of the conversation was centered on these questions:

  • Is your company investing enough in new product development? How do you know?
  • Is your company investing in new products that meet global requirements broadly enough, or are you more focused on domestic requirements?
  • Are your company’s foreign markets expanding more rapidly than your domestic market? Is your domestic market contracting, and if so, why?
  • Where is your company deriving more profit from, foreign markets or your domestic market?
  • Are your manufacturing assets fully deployed or nearly so? If not, is unused capacity growing or shrinking?

The answers were simply vague.

I was looking for a clear sense of current strategy, and I was looking for statistics and measures that would support a rational and defensible strategy. I was also looking for evidence of a sustainable strategy. What I heard from my client is that the future is not sufficiently stable or secure enough to plan confidently. Before I take a step forward on the pressing micro issues for my client, I think we will take one step backward together to understand some macro issues and how they drive the micro issues my client is asking about…

As I was about to turn the conversation to less “heady” topics over a beer, my client asked me, “Brian, how am I going to compete with China? They play by different rules…”, and that set my brain to think…

The Economy Mission of a Government

My client’s company is confronting much the same conundrum of macro issues that face national economies such as the US economy. Substitute “country” for “company” and “industry” for “product” in the questions I asked my client, and you have significant questions for a National economic policy to address. Unlike my client, I think I can clearly discern the answers to some of the questions as they pertain to the US economy today. To a great extent, I think that the US economy is stuck in an “old-world”. I wish I had more facts to support my casual observations, but facts are hard to find – I will endeavor to look harder! And this is a “fuzzy” observation. Let me draw some conclusions and propose some new strategies for a ten year agenda for modernization of the US economic system to compete in the “New-World” marketplace with new superpower economic players.

With China’s emergence as an economic superpower, it becomes critically important to evaluate how “the rules of the game” are changing, and to recast strategies, competitive tools and expectations. There are seven frameworks or “eco-pillars” for a more modern US economy to compete head-on in a “New-World”. On the surface, they are all familiar. Currently cast in the “old-world”, though, these frameworks require substantial revision.

1) Investors, enterprises and consumers must all be “willing and able” to participate in the economy.

2) Investors, enterprises and consumers must expect a “square deal” in an efficient market.

3) The economy must grow for investors, enterprises and consumers, and the growth must be sustainable.

4) Essential infrastructures and services must be accessible, reliable and effective for every economy participant.

5) Ownership and control of intellectual property must allow for easy access and efficient exploitation by all economy participants; exploitation of private information must allow for control by the individual owner.

6) Investors, enterprises and consumers must pay the Government for the benefits they derive from the Government.

7) The workforce must be adequately and suitably skilled and continuously trained.

Is Less Government Better?

I have wondered this for decades: “Is less governmental participation in the economy better than more?” Like the three bowls of porridge, the challenge is to find the bowl that is “just right.” The lawless tendency of opportunists in the “Wild West” demanded a host of new laws and measures to enforce those laws. Things haven’t changed, really. The irresponsible risk taking that created the mortgage debt crisis is a good example of reckless speculation and profiteering and how it is harmful – the “Wild West” has simply been recast in the modern-day world. It is clear to me that there is a mandatory economic regulatory and management role for the Government to play in the “New-World”. In this sense, more is better – but it must be a much more wisely crafted role for the Government than currently exists today.

See this blog by Dr. Robert Reich, past Secretary of Labor for President Clinton:

Robert Reich

See also in one of his books: Aftershock, Knopf, 2010.

Dr. Reich is demanding change, and I think he “gets it” like few others do.

I am reminded of an observation many, many years ago in elementary school:

“Too many rules, and you can’t play the game.”

And another reminder also from elementary school:

“When you can no longer play the game, it’s time to tip the board off the table and start over (press the reset button),” and that generally creates an ugly confrontation…

You can read my entire proposal for a ten-year agenda here if you are inclined:

7-Eco-Pillars

Rescuing the Economy – Proposal #2

October 26, 2010

Solutions to every problem can be compared with four measures: 1) opportunities, 2) risks, 3) benefits and 4) costs. A superior solution maximizes opportunities and benefits, of course. A “wise” solution eliminates current costs and future costs without sacrificing benefits and opportunities or incurring additional risks – you want to get more for less, in other words. This all sounds like common sense, but when one looks at the problem solving process as it plays out in Congress, it is clear that common sense can easily “fly out the window…” My previous post on rescuing the economy is somewhat “tongue-in-cheek”, and more a rant than a constructive article. This article is a constructive muse.

So, how do we, we engineers in particular, rescue our economy? We’ll call this PROPOSAL #2. I propose that the US Government establish a venture capital program and retain an equity stake in the funded ventures. We engineers will champion new technology ventures funded by the Government and invent the new cornerstones of a broad, technology-based future economy. Let me “peel the onion” and expose the next layer of detail in this proposal with seven principle points:

#2A – Expand the Small Business Innovation Research (SBIR) initiatives to include commercializing a large number of non-medical engineering solutions.

In a nutshell, the SBIR’s current mission is to pull specific medical research out of the university lab and into the commercial marketplace. The SBIR ignores funding basic research – the NSF and the NIH have that mission through other channels. See this link for a SBIR list of current funding opportunities, and it will be clear that the vast majority of SBIR opportunities are medical ones.

SBIR – Small Business Innovation Research

I think that the SBIR’s medical focus is far too tight. To extend my proposal:

#2B – Solicit funding for projects from every agency, bureau, commission and department that realizes an advantage through the application of technology. A government-wide “ABCD” initiative…

For example, the DOT’s smart highway initiative seemingly at a standstill today could be propelled forward with a new marketable car-to-car signaling technology. Fund that project through the SBIR! Note that the DOT currently has several SBIR project solicitations – good for them.

The DOE already has a funding opportunity or two in the SBIR – good for them, too – expand that department’s SBIR programs with new proposal solicitations for backyard power generation, for example.

The above ideas reveal a potentially lower-tech “flavor” of project funding opportunity than currently exists that is better addressable by a larger audience of engineers and technology entrepreneurs.

Today, the Government generally relinquishes an equity stake in the SBIR programs. This is a goldmine – a windfall opportunity for a very few, and SBIR programs produce a small or even unmeasurable gain for the taxpayer who funds these programs through their tax dollars. Shouldn’t the taxpayer share in the successes?

#2C – The government should retain an equity ownership commensurate with the size of the grant compared to the total equity value of the company – up to 49% equity ownership. The government’s equity ownership must be sold in the equity market within a certain number of years – say, within seven years of the grant award.

The government, and by association the people should become stakeholders and share the successes of the the grant awards and exercise some control. This equity ownership posture also reduces the marginal tax rate for the small funded company for a period of time, and it provides oversight and control over the funded company that any investor can conventionally exercise today with shares of stock.

The SBIR opportunities should be open to all “comers” equally.

#2D – Eliminate all currently advantageous minority owner considerations.

Further, there should be an effort to eliminate “double-dipping”.

#2E – Eliminate all previously extended State and Federal assistance such as unemployment benefits, job training benefits, welfare benefits, liability awards, damage awards and other same-problem grant awards for all principle participants named in the grant proposal for the duration of the grant program.

And let’s not ignore “scamming”…

#2F – Anyone who misuses a grant award should be pursued to retrieve unspent monies, prosecuted for fraud, and they should be “black-balleed” in Federal programs for life!

And finally, attract the essential talent as easily as possible.

#2G – Extend the employment authorization for the duration of the grant award period for any foreign citizens currently working legally in the USA with expiring authorization who work on one of these grants for more than 50% of their total compensation. Allow these foreign nationals to “but-in-line” in the citizenship process to encourage their permanent role in the USA economy.

This last point is important. Skilled and educated foreign nationals who leave the US take opportunity with them to benefit another economy – they “offshore” themselves in a sense if they leave the USA. Retain the talent that is legally here and keep it here and put it to good use for the long term. Everyone benefits.

The SBIR is well administered today with their narrow scope. Retaining an equity stake could make the SBIR self-sustaining in the future. The currently lopsided benefit to the medical industry ignores terrific opportunities in other markets that can play a large role in a more prosperous future economy. The SBIR can breathe innovation into many markets with a new expanded role as the Government Venture Capitalist.

I figure about $1.2B would be a good funding start. It could be a magnitude larger in time, but for for starters this is what I propose:

  • fund 1000 proposals every 3 months with $50,000;
  • fund 100 proposals every 6 months with $2,500,000;
  • fund 10 companies every year with $50,000,000;
  • allow promising companies to receive funding multiple times.

A billion dollars in the hands of bright engineers – what a huge potential! Imagine what 10 or 20 times that would bring about…

How You and I will Rescue the Economy

October 20, 2010

I have been fiddling with this post for awhile – I half write it – don’t like it – add and delete. You know where I am coming from. Well, I had a dream in the springtime of 2009. I dreamt that I died with no money in my pocket. The last words I heard were from my insurance advocate who said directly to the doctor standing next to me, “He’s out of money – we have it all. Now, we can pull the plug.” And I awoke to an electrical storm and my cat looking up asking me for breakfast. This dream revealed to me how we are going to save the American economy. I won’t like it one bit. Neither will you.

Premise #1: the most vibrant capitalist economy depends heavily on three elements:

  1. a vast marketplace selling desirable and affordable goods and services;
  2. everybody spending their income primarily on domestically manufactured goods and on a variety of locally provided services;
  3. enterprises exporting every good and service possible to other economies.

Every time you buy an imported good or service, you contribute directly to another economy, and to your own only to the degree that your economy adds value by bringing that good or service to you so that you can buy it the way you want it. That added value can be high if an imported good is designed, developed, managed, sold and serviced by a local company such as Apple, but Apple is the exception, and not the rule…

Premise #2: you can’t very easily import healthcare – that service is provided to you directly by a local service provider – a doctor or nurse who examines you, runs tests and supervises your care, or a surgeon, an office or hospital, a testing laboratory minutes or hours away, and by pharmaceuticals that are sold locally. Healthcare is a good contributor to a local economy.

Premise #3: healthcare administration, medicines and equipment are all easily exported. A bill for services can just as easily come from Timbuktu as from New York City. You should expect a heavy emphasis in these areas in our future national economy.

Premise #4: the healthcare industry accounts for about one-sixth of our national economy today, and that portion is forecast to double over the next 10 years – and continue to grow and become more globally focused.

Premise #5: entitlement systems are only sustainable into the long term if individuals on the whole contribute more over their lifetimes that they withdraw from those systems. The Medicare and Social Security systems are likely to change in some significant ways to demand greater rates of contribution over longer periods of time with shorter periods of benefit payout.

The longer you live, the longer you can work – and consume healthcare. The longer you work, the more you pay into entitlement systems and the less you withdraw from these systems.  Many of us are likely to work into our 70’s – like it or not.

Healthcare’s mission may well evolve to this objective:

Prolong our Working Lifetimes.

Entitlement systems may also evolve to incorporate this directive:

Eliminate prolonged, lingering deaths by requiring Living Wills for all system participants.

So, if we all spend every dime we have on our healthcare before we die, you and I may very well help rescue our faltering economy – we’ll be doing “our part”, yes sir! And when one runs out of money, well, then I guess you can die – and die quickly when that time comes. It may require an entire country of exuberant healthcare consumers who spend more on their healthcare than on food and shelter to buoy our future national economy. I can’t for the life of me think of a sustainable alternative cure for our current economic woes as we flounder, offshore manufacturing and jobs, and underinvest in many other industries.

Lest I forget – what I want from my healthcare providers:

  • a focus on long term good health and high quality of life
  • a focus on cures and not chronic illness management
  • a promptly delivered, cost-effective and efficient service
  • a statement of services and costs before service is provided
  • a “warranty” – my satisfaction guaranteed, or my money back
  • an ombudsman to resolve consumer complaints, not a lawyer

Likely? Probably not in my lifetime.

And who will refuse to purchase a product or service that will immediately extend their life by even a few quality moments? No one with money in their pockets… Until it is all gone, of course…

16 Questions – Answers, anyone?

February 18, 2010

The Economy – is there a paradigm shift happening that we don’t see, yet? One that will impact us in the future? One that gives us new opportunities?

1. Economic modeling – why did the economists miss the recent global economic crisis? What should the average person look for and change in their own mental models of the economy? What is changing at the macro level and the micro level that may not be apparent to the casual observer – or maybe it is apparent, but we don’t see it very well as individual participants in the economy? Can a major economy shed almost all manufacturing, retain managerial and oversight functions, add to the service sector, maintain the current standard of living and still be a sustainable economy? Does a vibrant economy have to manufacture?? Hyper-Inflation could cure this country’s debt load (but ruin the value of my savings) – is that likely? What will potentially high future inflation do to retirement planning, and how does one insure their future financial security today?

2. Workforce – is the US workforce transitioning from an army split between sole proprietors and “W2” corporate employees to an army of “1099 mercenaries”? How do you evolve from a “W2’er” to a “1099’er”? What will the workforce look like in 2025? How do you recast your career at mid-career? What is the risk to a company that sheds experienced staff and chooses to retain larger numbers of cheaper and less experienced skilled workers? Will mentoring return to professions as a new way to utilize experienced workers?

3. Geopolitics – is China a threat to the US? Will the US economy play very well/very happily as second fiddle to China? Will the US economy even play second fiddle? To China? To Europe? Will there be a new rise of Russia in the world economy? Does a capitalist system tend to decompose into a communist system just like a communist system tends to decompose into a capitalist system? Is China really communist? Russia really capitalist? What is the economic “steady state” – a socialist system of some kind? Are the Scandinavian countries at a real macroeconomic “stable point” compared to the rest of the world?

4. Global Warming – what is the real economic impact of global warming? The real social impact? To me? To my city or State and country? To the world? Where/when is the” tipping point”, and just what is the tipping point?? What is the real cost to curb global warming? How does curbing global warming impact my lifestyle today? Five years from now? Twenty years from now? Is there a net financial gain or loss due to the paradigm shift required to curb global warming? On a micro-scale and a macro-scale? Will it matter in our lifetime? Does it matter at all – in the big scheme of things (over eons)? Is Global Warming a real problem? Is attacking global warming like adding a stoplight to a busy intersection – you have to have a significant accident before you can justify acting to fix things?

5. Healthcare – roughly 1/6 of the US economy is in the health care sector forecast to grow to 1/3 of the US economy in the future – is this a realistic forecast? Is this an unhealthy concentration of industry in the economy? The healthcare industry wants every dollar in my pocket – and when it is all gone, then I can die, I guess… I want to spend zero dollars on healthcare, not 1/3 of my personal wealth (or more) – is a 1/3 concentration on healthcare in the future economy essential for a sustainable future economy? Do we have to adopt this spending habit at this level to be fiscally healthy in the future? I want this industry to treat me like a consumer – what will it cost (tell me beforehand) – if I am not satisfied, is there a guarantee or warranty? Why should I pay for ineffective treatments or medications? Should the compensation model for healthcare change – should we pay to stay healthy, and not to get better, for example? Should we tax consumption of unhealthy food ingredients such as saturated fats, sugar and salt and health-impacting products such as cigarettes and alcohol to pay for the medical cost to society that results from the consumption?

6. Taxes – what is the real impact of the average person being unable to do their own taxes? How many people do their own taxes by following the IRS publications that the IRS mails out? Should the taxpayer be able to allocate a portion of their taxes to specific programs? What are the real consequences of a consumption-based tax system or flat tax system compared to the current progressive tax system? What would be the “ripple effect” in the economy, in other words, with different tax systems – would spending habits change significantly with a different basis for taxation?

7. Disruptive technologies – where does future opportunity lie, and what current opportunities are in decline that will be replaced by these disruptive technologies? Will “Local” and community power generation (windmills and solar panels) actually replace centralized power generation on a large scale in the future? What about miniature nuclear reactors? What about backyard fuel cells? Will nanotechnology change “everything” – paper and pens, paint, medical instrumentation and medicine delivery, food production and processing, new pollutants and new approaches to pollution management?  When will homes become “super-efficient” and LEED-certified – how will “going green” affect established housing and new housing? Ubiquitous computing and “ad-hoc” computer networks – how will computers invade our clothing, appliances, cars, homes, businesses, bathrooms, grocery stores and workplaces? How do you “jump on the bandwagon” and pitch a business plan when banks are risk-averse and VC’s are reluctant to invest, too?  Who has been successful and how did they succeed – what was the nuance that they exploited and the critical difference they brought to the market? Social networking on-line – how do you build and manage an on-line presence? Are Internet-based social networks going to change the “face” of local, State and Federal governments? Of education? Does a Tweet deliver enough context and information, or is tweeting harmful because it stifles deeper thinking and communicating en-masse?

8. Intellectual Property – is there really value in patenting inventions? For the individual inventor? For the corporation? What are the flaws in the system that must be repaired? How does the individual best protect their intellectual property today and tomorrow? How does “open source” impact the future of intellectual property ownership and its exploitation by the creator? By others?

Odds and ends – a hodgepodge of curious mishmash – with tangible impact to our prosperity and well-being…

9. Education – is there a beter way to learn? The US spends more per student on public education than any other country in the world, but ranks in the middle ground on measures of success in the K-12 programs – why is that? How can schools better engage students? Parents? Teachers? What is the impact to the future economy of the US if our children are poorly educated compared to the rest of the world?

10. Privacy – do we actually have a Constitutional guarantee of privacy – a “real” right to privacy? Is privacy now a “thing of the past”? How do you protect your privacy? Should you even worry about it? Do you want to be bombarded my “meaningful” advertising and promotion in the future instead of the mass-mailings received today because a marketer knows more about you that you know about yourself? Do we need to sacrifice our privacy for the sake of our security? Is there a shifting balance in privacy vs. security that needs to be recognized and arrested or even reversed?

11. The law – I can’t read the law and understand it (and I am pretty smart) – is that ultimately damaging to a democratic society? There are so many laws – how do you remove from the body of law when the compulsion of legislators is to add to the body of law? Is it harmful to have laws that are inconsistently enforced, or laws that are unpopular or onerous and simply disregarded by the public? Why isn’t computer or network hacking treated like criminal trespassing, and identity theft treated like burglary? The law tends to focus on the tail-end (the consumer end) of an illicit “food chain” and not the head-end (the producer) or the middle (the distributor) – why this enforcement focus when it isn’t effective to stop the flow of illicit goods and the resulting profiteering?

12. Prisons – roughly 10% of the US lives has lived in prison at some time – what is the cost? What is the lost economic contribution of the prison population? What is the ability to constructively reintegrate convicts into society? The ability for a convict to be reformed? What is the opportunity cost of the “war on drugs”? What is the cost to incarcerate individual consumers for “victimless” crimes and “possession” crimes?

13. Terrorism – can technology ever really protect us effectively from terrorists? Full body scanners, ariel drones with cameras, particle detectors for bio/rad/chem threats? What’s next? How do you evacuate a city?  What is the real threat of “cyberterrorism” – what will it look like, and how would it impact us? What is being done about cyberterrorism, and how are we protected today? How will be better protected tomorrow? Is ID theft really a dimension of cyberterrorism – should it be considered as such?

14. Religion – has the notion of “separation of Church and State” disappeared from our culture? Is the US really a “Christian State” just like Iran is a “Muslim State”? What does the Declaration of Independence, the Constitution and the Bill of Rights really say about the separation between Church and State?

15. Media and creative self-expression – how do you self-publish a book or magazine or blog and make it a business? Amazon and Lulu publish individually generated physical media (paper, CD’s and DVD”s) on demand for anyone. WordPress and Blogspot publish on-line media on demand for anyone. How do you market and prosper with these relatively new capabilities? What is the business model? How do you get started?

16. The power of volunteering – is volunteering a new future wave of economic contribution for the individual? Has it ever been measured? What is the total economic value of volunteerism today locally? Nationally?Globally? Are some cultures reluctant to embrace volunteerism? Which, and why? How to “infect” uninterested individuals and cultures?

If you know the answers, please let me know…