Tuesday, October 21, 2014

India: How not to revive an economy...

I suppose progress is made incrementally, but I was hoping for more with India's new PM Narendra Modi. Maybe what's sadder is that this potentially is a step forward from the previous state of these government owned factories:

At British India Corporation’s textile factory in northern India, four men sit in a control room watching computerised gauges eight hours a day. When they are done, another group takes over, and then another, for 24 hours a day - much as they might at any major industrial plant.

The problem is, nothing is produced there.

The strange tale of British India Corporation is an example of how political patronage and India’s strict labour laws keep publicly owned companies going long after they are insolvent.

Now Prime Minister Narendra Modi, who campaigned in this year’s general election on a promise of “minimum government, maximum governance”, is preparing to invest more taxpayer money in ailing state-owned factories in a bid to turn them around.

While the government has announced the closure of six publicly owned companies, Minister for Heavy Industries and Public Enterprises Anand Geete said last month that about two-thirds of 64 loss-making firms can be revived with more money.

Interview with Marc Andreessen

Interesting interview with a storied entrepreneur/venture capitalist at New York Magazine. One highlight on education:

The one other thing that people are really underestimating is the impact of entertainment-industry economics applied to education. Right now, with MOOCS,11 the production values are pretty low: You’ll film the professor in the classroom. But let’s just project forward. In ten years, what if we had Math 101 online, and what if it was well regarded and you got fully accredited and certified? What if we knew that we were going to have a million students per semester? And what if we knew that they were going to be paying $100 per student, right? What if we knew that we’d have $100 million of revenue from that course per semester? What production budget would we be willing to field in order to have that course?

Walmart: Bringing price competition to primary healthcare?

Something to watch - Walmart delivers low cost primary healthcare to the poor (WSJ):

Wal-Mart Stores Inc. pushed down prices for some generic prescription drugs to just $4 eight years ago, setting a new industry standard. Now it is trying to do the same for seeing a doctor.

Wal-Mart now operates a dozen clinics in rural Texas, South Carolina and Georgia and has increased its expectation for openings this year to 17. On Friday, a Walmart Care Clinic opened in Dalton, Ga., six months after Walmart U.S., the retailer’s biggest unit, entered the business of providing primary health care.

An office visit costs $40, which Walmart U.S. says is about half the industry standard, and just $4 for Walmart U.S. employees and family members with the company’s insurance. A pregnancy test costs just $3, and a cholesterol test $8. A typical retail clinic offers acute care only. But a Walmart Care Clinic also treats chronic conditions such as diabetes. (Walmart U.S. also leases space in its stores to 94 clinics owned by others that set their own pricing.)

“It was very important to us that we establish a retail price in the health-care industry because price leadership matters to us,” said Jennifer LaPerre, a Walmart U.S. senior director responsible for health and wellness, in an interview.

Walmart U.S. hasn’t yet decided whether to roll out the clinics nationally. It so far has limited itself to markets where people are uninsured or underinsured, have a high rate of chronic diseases or struggle to get access to medical care, as well as places where it has a large number of employees. About 40% of the patients seen at the clinics so far don’t have a primary-care provider, Ms. LaPerre said.

The unintended consequences of self driving cars?

Nah. The unintended consequences of the commons - ie subsidizing public roads. From Wired:

As driving becomes less onerous and computer-controlled systems reduce traffic, some experts worry that will eliminate a powerful incentive—commuting sucks—for living near cities, where urban density makes for more efficient sharing of resources. In other words, autonomous vehicles could lead to urban sprawl.

It’s simple, says Ken Laberteaux, a senior scientist at Toyota. If you make transportation faster, easier and perhaps cheaper, then people won’t mind commuting. “What a consumer is expected to do is see what they can gain by moving a little further from the job centers or the cultural centers,” he says. That’s bad news: Urban sprawl is linked to economic, environmental, and health hardships.
As usual though, it's elites who seem to be wringing their hands over the poor(er) improving their lives in tangible ways.

Wednesday, October 15, 2014

Will autonomous driving start with transport trucks?

It would make sense as a path to consumer adoption (Wired):

Autonomous driving is nothing new for trucks in agricultural and military applications, and should be available for passenger cars by 2020. But trucks that share our highways are tempting candidates for shedding their human component: Highway driving is easy for computers but dangerous for us, especially when big machines are involved. In 2012, according to NHTSA, 333,000 large trucks were in crashes in the US. Those accidents killed nearly 4,000 people, the vast majority of whom were riding in passenger vehicles. Regulators have trouble ensuring that drivers get adequate rest, and the trucking industry has fought back against regulation.

With the idea that humans who drive less cause less trouble, Mercedes equipped the Future Truck 2025 with the “Highway Pilot” automated system. “It never gets tired. It’s always 100 percent and sharp. It’s never angry; it’s never distracted,” says Dr. Wolfgang Bernhard, the Daimler board member for trucks and buses. “So this is a much safer system.”

Friday, October 10, 2014

Mark Cuban: Fix the economy by putting a $10k cap on university loan guarantees

This would accelerate some of the radical changes in education that are happening already (but given the entrenched interests I can't see it happening any time soon) - from Inc.com:

The best way to get the economy back on track, according to Cuban, involves solving the student loan bubble that has saddled millions of recent grads with loans that will take decades to pay back. One of the reasons reversing this trend is so important is that college tuition has been skyrocketing for years.

"It’s easy for the colleges to ask for more, because then the potential students just take out bigger loans," Cuban said at Inc.'s GrowCo conference, adding that rising tuition costs have resulted in more than $1 trillion in student loan debt.

"That’s the same money that, when you graduated, you used to move out of the house or you went out and spent money that improved the economy and helped companies grow. It created more revenue and spending power. Instead, it’s going to build a better fitness center at your school."

So what's Cuban's plan to stem this problem?

"If Mark Cuban is running the economy, I'd go and say, 'Sallie Mae, the maximum amount that you’re allowed to guarantee for any student in a year is $10,000, period, end of story,'" he said.

Wednesday, October 08, 2014

Multitasking makes your brain smaller apparently

There's a mental note that I should be making on this (Inc.com) as I post this while I play Clash of Clans on the side...

Disintermediating healthcare insurers: more on a primary care healthcare model that works

From Reason.com:

Good MD, a primary care office set up this year, charges patients a single, flat monthly fee for unlimited visits. Monthly charges are based on age, and extra services—whether stitches or strep throat tests—are provided for an additional fee, posted online and in the office. The practice doesn't accept private insurance at all. The result is a system that benefits not third-party payers, but doctors and patients, Good MD founder Dr. Thuc Huynh, told local TV station WROC. "Insurance isn't who reimburses me or dictates what we do together in terms of our treatment. So, it's a direct financial relationship."
More here.

Sunday, October 05, 2014

Because entrepreneurship is one of the best paths for wealth advancement

Inc. presents the 10 wealthiest entrepreneurs in the US.

Does discrimination thrive in the absence of regulations to prevent it?

No (ASI):

It is a commonplace to the point of boringness among advocates of free markets that they make people pay to discriminate based on their tastes. A factory owner who restricts employment to whites only will face a narrower talent pool—likely paying higher wages for lower skills in total or on average. [...]

Employers cannot observe an employee’s productivity directly, at least before they employ them. But they can observe some things about them that signal productivity—using statistics. For example, if on average south Asians or Polish migrants tend to work harder than white Brits, they can use this fact about them to help make their employment decision. This isn’t racist—they don’t prefer employing south Asians, and they would be equally happy to pay a white Brit £6.50 an hour to produce £7 of stuff—it’s just that on average south Asians produce £7 of stuff an hour (say), whereas white Brits produce £6.40.

Which one is actually in place? We can test this. The answer is a resounding ‘statistical discrimination’. For example, minorities in France did worse when a large randomised study made them anonymous in job applications—so firms couldn’t see their names and thus ethnicities—implying that the reason they were called back and employed less was because their resumes/CVs were less attractive.

In Germany, job applicants with Turkish-sounding names got less callbacks than those with German-sounding names—unless both applicants had a favourable employment history reference. Then, for a given quality of reference, employers didn’t care whether they were Turkish or German. On eBay, white sellers receive lower prices selling stereotypically black products and black sellers receive lower prices selling stereotypically white products, but these differences go away when sellers build up credible reputations.

How far computer graphics has come...

Stunning (via TechCrunch):

Sunday, September 28, 2014

Conquering hunger, revolutionizing agriculture, and profiting... with bugs

Inc. profiles Glen Courtright and his company EnviroFlight:

His first idea: Launch a biodiesel business. He would make fuel out of oil from local restaurants and food-processing plants. But after researching the idea, raising capital, and building a production facility, Courtright pulled the plug in 2008, when availability of the oil proved unreliable.

But Courtright kept turning the idea over in his mind. What else on the planet makes fats and oils for biodiesel? "I looked at enzymes," he recalls. "Nah, too hard. I'm not a bacteriologist. I looked at algae. That was probably a 20-minute no-go decision. Then it hit me: bugs. They're easy to grow. At least, I thought they were." But after toying with the notion of using bugs for fuel, Courtright got a better idea: Use the protein and fat in bugs to feed the planet, not power it.

Making generosity profitable?

Inc has a quick blurb about generosity 'being good for business' riffing off of Adam Grant's Give and Take (Amazon) and for as much as all the warm and fuzzies this generates, I think I'd hypothesize this approach gets the most mileage taking two guidelines into account (above some of the positive publicity it generates):

  1. That generosity is consistent with the core values and more importantly "purpose" of the organization.
  2. The generosity demonstrates loyalty to employees (if you aren't loyal to your employees, why should they be loyal to you?)

Friday, September 26, 2014

Using a 'surprise journal' to make better decisions?

It's an interesting idea - and not sure if the act of recording cognitive dissonance and other surprises will necessarily help in making better decisions but it makes sense (FastCompany):

Galef set out on a personal quest to identify her wrong assumptions. The outcome: the Surprise Journal. She keeps this journal with her at all times, writing down when something surprises her and why. For example, she noticed she was surprised that both older and younger people were attending her workshops, because she assumed people would self-segregate by age. She was surprised that her students would mention a concept from one of her colleague’s classes, because she didn’t expect that idea to be very memorable. “I started thinking about surprise as a cue that my expectations were wrong,” she says.

Many behavioral psychology and cognitive science studies demonstrate that humans find it difficult to change their opinions. In what is known as the “bias blind spot,” it is much easier for us to see other people’s biases than our own. The “confirmation bias” reveals that we seek out feedback from people who are likely to agree with us: We read newspapers and watch TV talk shows that are probably going to tells us things we already agree with. Galef says that there is much more research about how biased humans are than how to change these biases. “I really wanted to get better at changing my mind,” she tells me. “This is not a perfect solution, but it has gone a long way to making me more open and less defensive about when I’m wrong.”

Sometimes the surprises she stumbles upon are major shockers--a friend she thought was loyal betrays her, or a scientific belief is disproven. But the everyday moments of surprise are actually more exciting to Galef. It surprised her, for instance, that her teaching ratings were sometimes lower than the ratings of colleagues. This signaled to her that she had been over-confident about her teaching abilities and had perhaps not been open to feedback that could have improved her skills. Sometimes, it surprises her when audience members seem enthusiastic about one of her talks. Rather than just being flattered by the positive feedback, Galef takes this as an opportunity to assess her own understanding of what makes a topic useful or exciting: Perhaps her pre-suppositions about what other people find interesting is due for a change?

Tuesday, September 23, 2014

Quote of the Day

I want this to be true... and I suspect it is because companies that have purpose are more likely to energize and rally staff to do great things - Scott Dietzen at TechCrunch:

The missionaries make more money than the mercenaries

Eric Schmidt: Jobs require disruption

Ironic given some of the things Schmidt supports when it comes to regulation - from Wired:

Schmidt blames Europe’s rampant unemployment on the inability to attract investors and innovators. In 2013, Europe’s unemployment rate was climbing above 12 percent, while in the U.S. it was drifting steadily downward below 7.5 percent. “Perhaps Europe’s most pressing problem is its high unemployment rate,” concluded Schmidt.

Uber is a fascinating case study in the types of employment that Americans are willing to accept. It’s easy for Uber to attract tens of thousands of new drivers because they’re all on freelance contract. Uber assumes very little liability and there’s no guarantee of wages.

“Uber stands for a particularly extreme form of wage dumping, which refuses to allow for any minimum wage,” said Dieter Schlenker of Germany’s Taxi Deutschland. “We hope that politicians will steer the taxi clearly into the future and won’t let the U.S. firms put any ideas in their heads.”

Tuesday, September 09, 2014

The best case scenario for the Chinese economy?

A kind of scary if fascinating read by Michael Pettis, mapping out the challenges China faces:

GDP growth must drop every year for the next five or six years by at least 1 percentage point a year. If it drops faster, the period of low growth will be shorter. If it drops more slowly, the period of low growth will be stretched out. On average, GDP growth during President Xi’s administration will not exceed 3-4%.

[...]If investment growth falls sharply, especially investment in the real estate sector, it should cause unemployment to surge, which of course puts downward pressure on household income growth as well as on consumption growth, potentially pushing China into a self-reinforcing downward spiral. This, I think, is one of the biggest risks to an orderly adjustment. The good news is that if large initial wealth transfers to households can kick start a rise in consumption, growth driven by household consumption, especially growth in services, tends to be much more labor intensive than the capital-intensive investment growth that too-low interest rates have forced onto China. A transfer of domestic demand from investment to consumption implies, in other words, that employment growth can be maintained at much lower levels of GDP growth.

Saturday, August 30, 2014

One emerging and successful healthcare model post 'Obamacare'

It's thriving specifically because of Obamacare - unintentionally. This may be the good news of the failing Affordable Care Act (aka 'Obamacare') that it may pave the way for models that are sustainable (Xeniagazette):

The Surgery Center of Oklahoma (SCO) has been open for 17 years, but 5 years ago decided to publish online the fees charged for various operations. Drs. Keith Smith and Steven Lantier, both anesthesiologists, felt the need to provide quality healthcare at reasonable prices. They contact local specialists and negotiate the fees charged. They include a reasonable fee for their services and add in a fair profit."

There are no hidden fees or charges.

They do not accept government funding for anything; your medical history and information are therefore not available online to the federal government – or anyone else. Most doctors agreed to computerize patient medical records and make them available online to the federal government, in return for reimbursements of the approximately $100,000 it cost them to do so.

Best of all, SCO’s maintains a zero or near-zero infection rate. Dr. Smith, CEO and managing partner of SCO believes their unbelievable low infection rate is due to their near-zero turnover rate in personnel. He commented, “Many of the people – in fact all of the people that worked for me 17 years ago – are either [still] working here, or they’re completely retired…. They just feel like it’s the best job they’ve ever had. People that are working in the same environment every day know the routine.”

Friday, August 29, 2014

Not sure what your purpose is in life? Pivot

It's not just for startups. Useful advice from Barking Up the Wrong Tree.

Delaying self driving cars: How regulations kill

Human error causes the large majority of accidents. While this isn't to say that computers can't be worse than humans (the buggy nature of most software being emblematic of this), this isn't to say technology can't also be a lot better and a lot more robust. So why won't regulators let car makers at least try?

Federal regulators are also putting the brakes on self-driving cars, which are closely related to the Uber innovation—enabling riders to order a car service using their smartphone app. If fast-moving technology hadn't collided with slow-moving regulators, this might have been the last summer you'd have to drive your own car.

Self-driving technology is reaching the limits of what U.S. regulators will allow. The 2014 Mercedes Benz S-Class sedan uses digital technology to be the first car most of the way to being self-driving. The S-Class combines active cruise control, automatic braking and lane-keeping technologies to offer what an industry analyst calls "70% autonomous driving." The car steers, accelerates and brakes on its own in congested traffic up to 40 miles an hour. On the highway, it uses numerous cameras and radars to remain centered in its lane at a safe distance from the car ahead, up to 120 miles an hour.

But U.S. regulators won't let car manufacturers go much beyond what Mercedes now offers. That means car makers can't roll out technologies they already have, and auto makers in Europe, which has fewer regulations limiting technology, have surpassed their U.S. competitors.

Wednesday, August 27, 2014

Why Britain is poorer than any US state, other than Mississippi

A story that's somewhat disruptive to a few narratives out there (TheSpectator):

It’s not surprising that America’s best-paid 10 per cent are wealthier than top 10 per cent. That fits our general idea of America: a country where the richest do best while the poorest are left to hang. The figures just don’t support this. As the below chart shows, middle-earning Americans are better-off than Brits. Even lower-income Americans, those at the bottom 20 per cent, are better-off than their British counterparts. The only group actually worse-off are the bottom 5 per cent.
Update: Maybe the Brits are poorer than even Mississippi (Forbes)

Monday, August 18, 2014

Wired's profile of Stewart Butterfield, Founder of Slack

An interesting profile of Stewart Butterfield and how he accidentally developed Flickr and now Slack which were both offspring of failed gaming projects (Wired).

Monday, August 11, 2014

Emerging consumer/market based healthcare in the US?

For the record, I think the Affordable Care Act (ACA), aka 'Obamacare' is a disaster and things will get worse before before it gets better but there are still a number of interesting experiments emerging.

While VentureBeat credits the ACA for "li[ghting] a fire under the movement to rethink they way we deliver and pay for healthcare," the examples they cite seem to show that this is despite - not because of the Act.

Cato recently highlighted the Direct Primary Care model:

“Direct primary care” is a rapidly growing alternative to the traditional “fee-for-service” model of paying for medical care. Instead of the patient or his insurance plan paying the doctor separately for each visit or service, the patient pays the physician a set monthly fee. In exchange, the physician is available to consult with and treat the patient as necessary.

For patients, the benefits of direct primary care are greater access to their doctors and more convenient and personalized care. Under direct primary care, patients can generally expect “all primary care services covered, including care management and care coordination…seven-day-a-week, around the clock access to doctors, same-day appointments, office visits of at least 30 minutes, basic tests at no additional charge, and phone and email access to the physician.” Some practices may offer additional services under the arrangement, such as EKGs or medications at wholesale cost.
In fact, studies are showing that a number of doctors abandoning the onerous demands of filing to get insurance claims in favor of cash (Forbes). Interestingly, the very first company that VentureBeat cites - Evolent Health, supports doctors who move towards a direct pay/subscription model. Healthgrades, another company cited, rates and ranks hospitals - further empowering consumers. The others - Doximity, a Linked-In for Doctors, MindForce, a CRM for health and wellness firms, and Best Doctors, a service providing expert opinions for the employees of compaanies, all operate outside the ACA. If the business models of Evolent and Healthgrades thrive, this could be the positive legacy of the Affordable Care Act.

How tax inversions have helped the US economy

A contrarian opinion from Diana Furchtgott-Roth, considering some prominent liberals have called for corporations to take a loyalty oath (TheDailyBeast) in light of recent tax inversions:

U.S.-based multinationals face a federal corporate tax rate of 35% on worldwide income, not just income generated in the United States. State taxes are extra. America is one of only seven Organisation for Economic Cooperation and Development countries that taxes companies on worldwide income, and the others have significantly lower corporate tax rates.

The United States, in fact, charges the highest tax rate in the developed world. The average of OECD countries is 24%. Some countries, such as Ireland, have corporate tax rates that are closer to half that.

If a foreign-based multinational had headquarters in Ireland, and wanted to bring back $100 million to invest in its plant in Detroit, then all the $100 million would be invested. None would go to the Treasury. Residents of Detroit would be better off, and the shareholders of the company would be better off. America would grow because companies generally spend money more effectively than does the government.

Since inverting to Panama in 1982, McDermott International MDR +2.22% has created American jobs by constructing pipelines and oil platforms in the Gulf of Mexico and across the country. Panama’s lower corporate income tax rate, 25%, leaves McDermott with more funds to hire the workers to complete those projects.

Saturday, August 09, 2014

Was Argentina bullied? Why does it matter?

So first off, anyone who reads/watches/listens to the CBC for actual business analysis deserves the returns they get. I'm not sure what is so difficult to understand: when you borrow money, the people you borrow the money from expect to be paid back in full. It doesn't seem like an unreasonable expectation that you should repay those who you owed money to first (so long as they are of the same class of debt holders) - and that is more or less what a New York court decided in the case of Argentina.

Argentina used to be incredibly wealthy. So what happened? Governments spent money it didn't have to effectively bribe their own electorate. This was their own doing (Cato). Argentina is a sovereign nation with a democratically elected government. No matter how much the CBC wants to paint them as an underdog (presumably as a historical defense of their own largesse off the backs of Canadians?), this was their own doing. Other countries should take note.

"Austerity" in the European Union

Nope, these governments couldn't possibly make any further cuts... (Cato):