Leapfrogged Technologies, with a Few Traits Some Value, Often Persist in Small Numbers

(p. A1) Magnus Jern was sitting around with some programmers at Google headquarters when he remembered he needed to answer an email. But when he pulled out his phone and started tapping, the room grew silent.

“What is that?” one woman asked.

The reaction was no surprise to Mr. Jern, part of a die-hard band devoted to a device that was once a status symbol, then was ubiquitous, and now is almost an endangered species: the BlackBerry. Continue reading “Leapfrogged Technologies, with a Few Traits Some Value, Often Persist in Small Numbers”

Apart from R&D, Scientists and Engineers May Improve Firm Processes

(p. B5) Companies with a higher proportion of scientists and engineers are more productive than their peers, even when those workers aren’t directly involved in the research-and-development tasks that drive the most obvious forms of innovation, a new paper from the National Bureau of Economic Research suggests.

. . .

Some 80% of industrial scientists and engineers work in roles outside of formal R&D, such as information technology and operations. Their knowledge and training is critical to firms’ ability to improve processes, fix broken systems and implement new technologies, says Richard Freeman, a Harvard University economist and co-author of the paper.

For the full story, see:

Lauren Weber. “Scientists Are Useful Beyond R&D Work.” The New York Times (Wednesday, June 28, 2017): B5.

(Note: ellipsis added.)

(Note: the online version of the story has the date June 27, 2017, and has the title “For a More Productive Workforce, Scientific Know-How Helps.”)

The published version of the Freeman co-authored paper mentioned above, is:

Barth, Erling, James C. Davis, Richard B. Freeman, and Andrew J. Wang. “The Effects of Scientists and Engineers on Productivity and Earnings at the Establishment Where They Work.” In U.S. Engineering in a Global Economy, edited by Richard B. Freeman and Hal Salzman. Chicago: University of Chicago Press, 2018, pp. 167 – 91.

With G.E. Exit, Dow Index Has None of Original Firms

(p. B2) General Electric, the last original member of the Dow Jones industrial average, was dropped from the blue-chip index late Tuesday [June 19, 2019] and replaced by the Walgreens Boots Alliance drugstore chain.

. . .

The removal of G.E., which will formally occur June 26, reflects a shift in the economic composition of the United States, which long ago tilted away from heavy industry and toward services, such as technology, finance and health care.

And it also amounted to a milestone for General Electric. It was the last remaining original member of the index, when the stock market measure was introduced in 1896.

For the full story, see:

Matt Phillips. “G.E. Is Dropped From Dow; Was Last Original Member.” The New York Times (Wednesday, June 20, 2018): B2.

(Note: ellipsis, and bracketed date, added.)

(Note: the online version of the story has the date June 19, 2018, and has the title “G.E. Dropped From the Dow After More Than a Century.”)

Table 7.1 and Table 7.2 Correctly Formatted in Free PDF

Table 7.1 from p. 95 of Openness to Creative Destruction, corrected for OUP post-proof formatting errors.
Table 7.2 from p. 96 of Openness to Creative Destruction, corrected for OUP post-proof formatting errors.

After my last viewing of the page proofs for my Openness to Creative Destruction, formatting errors were introduced by Oxford University Press (OUP) into Table 7.1 and Table 7.2.

A PDF with corrected versions of the tables can be downloaded for free at:

Google Is Vulnerable to Competition

(p. A1) Google’s once-untouchable online-advertising operation took a body blow, hurt by mounting competition and struggles within its increasingly high-profile YouTube unit.

Google parent Alphabet Inc. in the first quarter posted its slowest revenue growth since 2015. The poor results highlight the risks for one of Silicon Valley’s biggest names in effectively leaning on one massive, if lucrative, business.

For all its myriad arms and efforts to diversify, Google remains essentially an old-fashioned billboard operation with a high-tech gloss—and it now faces more rivals.

. . .

(p. A4) Rivals like Amazon, once content to play in their own corners of the Silicon Valley sandbox, are making big plays at online advertising. In a potentially existential threat to Mountain View, Calif.-based Google, more online shoppers now begin their searches directly on Amazon than on search engines.

For the full story, see:

Rob Copeland. “Google Shows Its First Cracks in Years.” The Wall Street Journal (Tuesday, April 30, 2019): A15.

(Note: ellipsis added.)

(Note: the online version of the story has the date April 29, 2019, and has the title “Google Shows First Cracks in Years.”)

Largest U.S. Firm Now Has 3% of U.S. Market Capitalization; In 1930s through 1990s the Largest U.S. Firm Had About 6%

(p. B5) . . . , consider the history of all the companies that have ranked No. 1 by market size. It’s full of surprises.

. . .

Hendrik Bessembinder and Goeun Choi, finance researchers at Arizona State University, calculate that the largest company in the U.S. clung to that spot for an average of 20 months from the late 1920s through the late 1950s—although it was nearly always either AT&T or GM.

From the 1960s through the end of the 1990s, the top company held the No. 1 position for an average of 12 months. From 2000 through mid-2018, the average tenure at the top was 15 months.

Over the past month, Apple, Microsoft and Amazon, all with market values of $700 billion or more, have each been No. 1 for several days at a time.

. . .

The single largest stock has made up about 3% of total U.S. market capitalization for the past 20 years, according to Savina Rizova, co-head of research at Dimensional Fund Advisors, an investment firm in Austin, Texas, that manages $517 billion. That’s down from the earlier average, since the late 1920s, of nearly 6%.

. . .

All in all, Amazon’s ascendancy is a reminder not of how new this era is but how old the dominance by big companies is. In some ways, these are the good old days: The top stocks account for less of the total market, and the giants don’t appear to be much easier—or harder—to topple than they used to be.

For the full commentary, see:

Jason Zweig. “Don’t Get Too Comfy At the Top, Amazon.” The Wall Street Journal (Saturday, January 12, 2019): B5.

(Note: ellipses added.)

(Note: the online version of the commentary has the date Jan. 11, 2019, and has the title ” THE INTELLIGENT INVESTOR; What Amazon’s Rise to No. 1 Says About the Stock Market.”)

Closed Factories Re-purposed as E-commerce Distribution Hubs

(p. B7) As the United States economy continues its shift away from manufacturing, locations that once housed industries such as automobiles or chemicals are being remade as distribution hubs for the millions of items bought by consumers online.

Developers are trying to meet growing demand by modifying industrial buildings to meet the requirements of the logistics business or, more likely, demolishing them to make way for facilities built for the distribution industry. These sites offer many benefits ideal for distribution, including easy access to highways, ports and rail links and a proximity to major markets.

“Logistics and fulfillment is really the segment of the industrial world that has backfilled the void that manufacturing has left in terms of employment and economic activity,” said Thomas J. Hanna, president of Harvey Hanna & Associates, which plans to tear down a former General Motors assembly plant at Newport, Del., to create a three-million-square-foot complex for distribution companies.

Plans are in place to redevelop other former manufacturing sites across the nation, including a former plastics factory in Piscataway, N.J., and an old Ford plant in Lorain, Ohio.

E-commerce is driving strong growth in demand for industrial sites, according to a report from Newmark Knight Frank, a global commercial real estate company. “As consumers across economic and demographic spectrums continue to demand more rapid product delivery, developers have had to innovate their product and offer more highly efficient space in the largest urban markets,” the report said.

For the full story, see:

Jon Hurdle. “SQUARE FEET; Places That Once Made Goods Now Speed Them to Your Door.” The New York Times (Wednesday, Sept. 19, 2018): B7.

(Note: the online version of the story has the date Sept. 18, 2018, and has the title “SQUARE FEET; These Sites No Longer Make Goods. Now They’ll Get Them to You Faster.”)