Category: Creative Destruction

“Eat Meat, Not Animals”

(p. 18) Run through anyone’s list of “disruptive” innovations in the works today and they begin to seem like small-time stuff as we contemplate “Clean Meat: How Growing Meat Without Animals Will Revolutionize Dinner and the World.” Driverless cars, virtual reality, robots–these are interesting possibilities. But slaughter-free flesh for humanity, meat without misery, dinner without death: Now we’re talking “transformational.”
Who would not wish–all the more so if it meant giving up nothing–to make the abattoirs of the world fall silent? Suppose, as Paul Shapiro asks us to imagine, that after 10,000 or so years of raising other creatures for the killing, and some 60 years of raising them in the pitiless conditions of factory farms, we produced meat and other animal products from cultured cells, with no further need of the animals themselves, or at least no need that required their suffering.
. . .
To assume that the entrepreneurs and scientists described in “Clean Meat” cannot one day match precisely the beef, pork, chicken, duck and all the rest that carnivores demand is a bet against human ingenuity. Consider how close plant-based alternatives to meat, milk and eggs have come already. Not for nothing has Tyson Foods acquired a 5% stake in the startup Beyond Meat, through a venture fund focused, as Tyson announced, on “breakthrough technologies,” including clean meat.
“Eat Meat, Not Animals”–a slogan of the future, Mr. Shapiro hopes.

For the full review, see:
Matthew Scully. “Making Livestock Obsolete; Manufacturing meat without raising animals will soon shift from fantasy to reality. Early investors include Bill Gates, Richard Branson and Cargill Inc.–already the world’s largest supplier of ground beef.” The Wall Street Journal (Saturday, Jan. 6, 2018): 18.
(Note: ellipsis added.)
(Note: the online version of the review has the date Jan. 5, 2018, and has the title “Review: ‘Clean Meat’ Could Make Livestock Obsolete; Manufacturing meat without raising animals will soon shift from fantasy to reality. Early investors include Bill Gates, Richard Branson and Cargill Inc.–already the world’s largest supplier of ground beef.”)

The book under review, is:
Shapiro, Paul. Clean Meat: How Growing Meat without Animals Will Revolutionize Dinner and the World. New York: Gallery Books, 2018.

Some Elevator Operator Jobs Remain

(p. 10) There are 69,381 passenger elevators in this vertically obsessed city, and nearly all of them promise a journey about as exotic and exciting as making toast. You get in, you push a button, the doors open a few seconds later at your destination.
But there remain quite a few machines, manually controlled and chauffeur-driven, where climbing aboard is more like taking a short trip on the Orient Express.
. . .
Most of the elevators are in residential buildings, but a few war horses serve heavy duty in commercial complexes.
Collectively they form a hidden museum of obsolete technology and anachronistic employment, a network of cabinets of wonder staffed round the clock. No one knows how many there are, exactly. The city Department of Buildings offered a list of more than 600, but spot checks indicated that most had gone push-button long ago. On the other hand, officials at Local 32BJ of the Service Employees International Union, to which most doormen and elevator operators belong, said they knew of only one or two.
A non-exhaustive field survey this fall turned up 53 buildings with manual passenger elevators. There are undoubtedly dozens more, but probably not hundreds.
Why they still exist in such relative profusion, when the city is down to its last few seltzer men and its final full-time typewriter repair shop, when replacement parts are no longer made and must be machined by hand, is a question with many answers. But sentiment plays a large part.
. . .
Push-button elevators had actually been around since the 1890s, but were not practical for larger buildings. They were slow. Initially they could make only one stop per trip. Later, they could make multiple stops, but only in the order the buttons were pressed.
It took until 1950 for Otis to perfect a push-button system smart enough to handle the traffic and shifting demands for service over the course of the day in a multi-elevator building. The company’s Autotronic system, Otis boasted in advertisements, “minimizes the human element” and “gives tenants a sprightly feeling of independence.”
The elevator man’s fate was sealed.
Almost.

For the full story, see:
ANDY NEWMAN. “Riding a Time Capsule to Apt. 8G.” The New York Times, First Section (Sun., DEC. 17, 2017): 10.
(Note: ellipses added.)
(Note: the online version of the story has the date DEC. 15, 2017, and has the title “Riding a Time Capsule to Apartment 8G.”)

Steel Mills Repurposed as Online Warehouses

(p. A1) BETHLEHEM, Pa. — Ellen Gaugler remembers driving her father to the Bethlehem Steel mill, where he spent his working years hauling beams off the assembly line and onto rail cars.
When the Pennsylvania plant shut down about two decades ago, Ms. Gaugler thought it was the last time she or anyone in Bethlehem would come to its gates to find a job that paid a decent wage for a physical day of work.
But she saw an ad in the paper last year for a position at a local warehouse that changed her mind. She’d never heard of Zulily, the online retailer doing the hiring, but she knew the address: It was on the old mill site, steps from where her father worked.
“When I came for the interviews I looked up and said, ‘Oh, my God, I feel like I am at home,'” Ms. Gaugler said. She got the job.
As shopping has shifted from conventional stores to online marketplaces, many retail workers have been left in the cold, but Ms. Gaugler is coming out ahead. Sellers like Zulily, Amazon and Walmart are competing to get goods to the buyer’s doorstep as quickly as possible, giving rise to a constellation of vast warehouses that have fueled a boom for workers without college degrees and breathed new life into pockets of the country that had fallen economically behind.

For the full story, see:
NATALIE KITROEFF. ” Idle Steel Mills Rumble to Life As Online Sellers’ Warehouses.” The New York Times (Mon., OCT. 23, 2017): A1 & A13.
(Note: the online version of the story has the date OCT. 22, 2017, and has the title “Where Internet Orders Mean Real Jobs, and New Life for Communities.”)

Can Incremental Oil Innovations Preserve Combustion Engines?

(p. A10) Big oil companies and giant auto makers are teaming up to preserve the internal combustion engine, as tough regulation and electric vehicles put the car industry’s century-old technology at risk. Their secret weapon: high-tech engine oil.
Exxon Mobil Corp., BP PLC, Royal Dutch Shell PLC and other oil companies are spending millions of dollars a year in concert with auto makers such as Ford Motor Co. and Fiat Chrysler Automobiles NV to create the next generation of super-slick engine lubricants. They are betting that the new, thinner oils will help them squeeze even more efficiency out of traditional car engines, allowing them to comply with stricter environmental rules and remain relevant as new technologies such as zero-emission electric vehicles gain traction.

For the full story, see:
Sarah Kent and Chester Dawson. “Combustion Engines Catch New Spark.” The Wall Street Journal (Mon., NOV. 20, 2017): A10.
(Note: the online version of the story has the date NOV. 18, 2017, and has the title “Big Oil and Auto Makers Throw a Lifeline to the Combustion Engine.”)

Knowledge Transforms a Weed into a Resource

(p. A10) ZADAR, Croatia — For generations, residents of Zadar, an idyllic town on the Adriatic coast of Croatia, used the dry, stringy stems and yellow blossoms of a common variety of a wild daisy as kindling, mostly to singe the hair off pigs destined for the spit.
But about five years ago, cosmetics manufacturers and the essential oils industry started using a rare extract from the flower — known as the curry plant for its spicy aroma — as a critical ingredient in high-end creams, ointments and tinctures, sold for their purported rejuvenating powers.
So let the pigs shave themselves, local residents decided, turning their attention to gathering bushels of the once widely ignored weed, in hopes of creating a new local industry to add to an economy based on construction, fruit farming, olive oil and a touch of tourism.

For the full story, see:
JOSEPH OROVIC. “ZADAR JOURNAL; Croatian Farmers’ Hopes of New Life Rest on a Weed Called Immortelle.” The New York Times (Fri., NOV. 24, 2017): A10.
(Note: the online version of the story has the date NOV. 23, 2017, and has the title “ZADAR; JOURNAL; Can a Wild Daisy Rejuvenate Croatia’s Farming Economy?”)

Brooklyn Reinvented Through Creative Destruction

(p. A13) The Wythe Hotel sits in the heart of Williamsburg, a Brooklyn neighborhood directly across the river from Manhattan. Opened to rave reviews in 2012, the hotel offers luxury dining at Reynard restaurant and spectacular city views from the rooftop bar. (Beers: $11.) Not long ago, the Williamsburg waterfront was a postindustrial wilderness, abandoned but for squatting artists; today it’s lined with glass towers and strolling millennials. The Wythe, set in a 1901 factory that once produced barrels for local breweries, features rooms with exposed-brick walls, spare concrete floors and beds made from salvaged wood. The streetscape retains a gritty feel–except at 3 a.m. on a Saturday, when party kids pour out of the nearby nightclubs and limos jostle for curb space with Ubers.
It’s easy to mock such scenes. But the borough’s boom deserves to be taken seriously, argues Kay S. Hymowitz in her engaging book, “The New Brooklyn: What It Takes to Bring a City Back.” Ms. Hymowitz, a fellow at the Manhattan Institute, recounts how “a left-for-dead city”–“a cultural and economic peasant enviously eyeing the seigneur just across the East River”–has reinvented itself in recent decades and emerged as “just about the coolest place on earth.” What, she asks, turned Brooklyn into a global brand?
The history of the borough, according to Ms. Hymowitz, embodies what economist Joseph Schumpeter dubbed the “creative destruction” of capitalism–the continual obliteration of old modes of production by rising industries and new technologies. In colonial times, Dutch and English farmers tamed the lush hills of Long Island’s southwestern tip. Slavery flourished; the indigenous Canarsee people disappeared. In the 19th century, industrial growth annihilated the bucolic past, while immigration reshaped the city’s culture. Factories closed and capital fled in the postwar decades, shattering communities and leaving the built landscape to decay. That destruction, though, cleared the decks for another burst of creative energy–one that has made Brooklyn a model, and a cautionary tale, for the cities of tomorrow.

For the full review, see:

Michael Woodsworth. “BOOKSHELF; Kings County Comeback.” The Wall Street Journal (Thurs., Aug. 17, 2017): A13.
(Note: the online version of the review has the date Aug. 16, 2017.)

The book under review, is:
Hymowitz, Kay S. The New Brooklyn: What It Takes to Bring a City Back. Lanham, Maryland: Rowman & Littlefield Publishers, 2017.

Silicon Valley Firm Defies Disruption

(p. A1) LOS GATOS, Calif.–Companies that resist change don’t tend to last long in the caldron of innovation called Silicon Valley.
Then there’s the Z.A. Macabee Gopher Trap Co.
Founded in 1900 by local barber and inventor Zephyr Albert Macabee to manufacture his patented metal gopher traps, the company is a stickler for tradition.
The traps’ design has remained exactly the same, including their forest green color–despite complaints that the hue makes them hard to spot. Some customers gripe of hitting them with mowers, and have repainted them bright red or other colors. Still, the company doesn’t waver.
Macabee operates out of the same small Victorian house where “Zeph” Macabee started it all on a quiet residential street. Even the packaging—Spartan white boxes of 24–remain unchanged since the postearthquake edition of 1906.
“We have a strong product identity,” says Ronald Fink, the company’s cheerful septuagenarian general manager, who grew up on a nearby apricot farm.
But existential questions loom. The company’s patent expired in 1917. The threat of cheap Asian knockoffs led the company in (p. A10) 2008 to shift all production to China and lay off the eight Cambodian refugees who built traps in the basement on decades-old machines.
Another new competitor has popped up: a pest exterminator named Steve Albano, founder of Trapline Products in Redwood City, who used and studied Macabee traps and came up with what he considers a better design. “I think they just work better,” says Mr. Albano.
. . .
As the owners sort out their differences, copycat traps are flooding the market. Most retail for about a third less than the roughly $9 a Macabee commands, including several that even mimic the forest color.
“But people still buy us, because they know they’re getting quality,” says Mr. Fink.

For the full story, see:
Timothy Aeppel. “Old Time Rodent-Trap Company Doesn’t Gopher Change; At one firm in Silicon Valley, disruption is a dirty word; existential fears after 100 years.” The New York Times (Fri., June 19, 2015): A1 & A10.
(Note: ellipsis added.)
(Note: the online version of the story has the title “Macabee, an Old Time Maker of Rodent Traps, Doesn’t Gopher Change; At one firm in Silicon Valley, disruption is a dirty word; existential fears after 100 years.”)

“Vinyl Rose from the Ashes”

(p. A10) LODENICE, Czech Republic — He was a businessman, not a clairvoyant. Zdenek Pelc did not really foresee, a generation ago, that vinyl records would one day make a return from near extinction.
But he was smart enough to keep a vinyl record factory here, a relic of the Communist era, through all those years when albums gave way to CDs and then to iTunes and streaming, and to be ready when vinyl suddenly got hot again.
And that is why this village of 1,800, nestled in a lush furl of the Bohemian hills, improbably finds itself a world leader in the production of vinyl albums.
“I realized when I came to the company 33 years ago that vinyl would be finished one day,” said Mr. Pelc, 64, who now owns GZ Media and serves as president. “But I wanted our company to be the last one to stop making them.”
The trajectory of the company — and the village it once dominated — traces the Czech Republic’s transition to quirky capitalist colt from cranky Communist nag, all played to the kind of rock soundtrack that accompanies many modern Czech tales.
Instead of getting rid of the old equipment and moving CD-making machines into their space — as most music production companies around the world did in the late 1980s and early ’90s — Mr. Pelc kept only enough machines running to meet the dwindling demand, moving the rest into storage and cannibalizing their parts as needed.
“Frankly, if someone had told me back then that vinyl would return, I wouldn’t have believed it,” he said.
. . .
“Vinyl rose from the ashes,” Mr. Pelc said happily.
. . .
“From around 2005, the demand for vinyl grew steadily,” said Michael Sterba, GZ Media’s chief executive. “Then, it really took off in the last two or three years, like, whoosh.”
. . .
“Only an idiot thinks this can go on forever,” Mr. Sterba said. “Maybe making vinyl is a fashion that will disappear in a few years. Who knows? No one predicted this.”

For the full story, see:
RICK LYMAN. “LODENICE JOURNAL; Long-Playing Czech Company Rides a Resurgence to the Top.” The New York Times (Fri., AUG. 7, 2015): A10.
(Note: ellipses added.)
(Note: the online version of the story has the date AUG. 6, 2015, and has the title “LODENICE JOURNAL; Czech Company, Pressing Hits for Years on Vinyl, Finds It Has Become One.”)

Ann Arbor Recovers from Borders Bankruptcy “with Remarkable Speed”

(p. B6) ANN ARBOR, Mich. — A patch of sidewalk on the south side of East Liberty Street, four blocks from the main University of Michigan campus, has returned from the dead with remarkable speed.
At almost any hour of day, and especially at mealtimes, a mix of bargain-seeking undergraduates, white-collar tech workers and middle-class townies weave in and out of the restaurants, coffee shop and bank that now line the corridor.
The foot traffic is almost enough to make many in this city feel lucky that the single previous occupant of this red brick low-rise building on the 600 block went bankrupt five years ago. Almost, that is, because that previous tenant was the flagship Borders store.
“In some ways, the neighborhood is stronger and more interesting and more vibrant than it was when Borders was here,” said Susan Pollay, executive director of the Ann Arbor Downtown Development Authority. “As much as I loved Borders — and I mean, I loved it — in the evolution of this building, it’s better than it was.”
Such talk is probably still sacrilege for some local nostalgics, who remember that the store was started by a pair of brothers and Michigan graduates before it turned into an international book chain, but it is difficult to argue on a dollars-and-cents basis with the transformation.
For more than 70 years, the site in this pivotal city block was occupied by a single-business anchor, first a regional department store, Jacobson’s, and then, for decades, Borders.
The chain’s bankruptcy — which, by 2011, was almost overdue as customers had long since turned en masse to the internet to buy books — created a once-in-a-generation release of a large piece of real estate. Suddenly available: a 50,000-square-foot former bookstore that fronts a full block of busy Liberty Street and a 45,000-square-foot adjacent building that previously housed Borders’ corporate headquarters.
There were many ideas about how to use all that space, but one option was immediately taken off the table: installing another anchor tenant.
“We wanted, on purpose, to have a multipurpose building,” said Ron Hughes of Hughes Properties. “I think it’s better for the city as well.”

For the full story, see:
STEVE FRIESS. “Square Feet; Going Small Energizes a Downtown.” The New York Times (Weds., NOV. 9, 2016): B6.
(Note: the online version of the story has the date NOV. 8, 2016, and has the title “Square Feet; At the Former Home to Borders Books, a Tech Hub Now Sprouts.”)

GDP Neglects Benefits of New Goods

(p. A13) . . . [one] source of underestimation of growth is the failure to capture the benefit of new goods and services. Here’s how the current procedure works: When a new product is developed and sold to the public, its market value enters into nominal gross domestic product. But there is no attempt to take into account the full value to consumers created by the new product per se.
Think about statins, the remarkable class of drugs that lower cholesterol and reduce deaths from heart attacks. By 2003 statins were the best-selling pharmaceutical product in history. The total dollar amount of statin sales was counted in GDP, but the government’s measure of real income never included anything for improvements in health that resulted from statins–such as a one-third decrease in the death rate from heart disease among those over 65 between 2000 and 2007.
Or consider consumer electronics. New York University economist William Easterly recently tweeted an image of a 1991 RadioShack newspaper ad and noted that all the functions of the devices on sale–clock radio, calculator, cellphone, tape-recorder, compact-disk player, camcorder, desktop computer–are “now available on a $200 smartphone.” The benefits to consumers from these advances don’t show up in GDP.

For the full commentary, see:

Martin Feldstein. “We’re Richer Than We Realize; The official economic statistics fail to account for quality improvements and new products.” The Wall Street Journal (Sat., Sept. 9, 2017): A13.
(Note: ellipsis, and bracketed word, added.)
(Note: the online version of the commentary has the date Sept. 8, 2017.)

Some New Jobs Require Same Skills as Old Jobs Did

(p. B1) . . . many of the skills needed to do fading jobs are applicable to growing jobs.
. . .
(p. B2) A New York Times review of the activities and skills that jobs entail, based on the Labor Department’s O*Net database, shows how much overlap there is between many seemingly dissimilar occupations. Service industry jobs, for example, require social skills and experience working with customers — which also apply to sales and office jobs.
. . .
. . . , employers hire based on credentials that job applicants can’t change — a college degree or previous job title — rather than assessing the skills an applicant has developed, said Mr. Auguste, who was an economic adviser in the Obama administration. He said the approach should instead be, “If you learned it at Harvard or Cal State Northridge or on the job as a secretary or in the Navy or as a volunteer, awesome.”

For the full commentary, see:
CLAIRE CAIN MILLER and QUOCTRUNG BUI. “The Upshot; Old Skills, New Career.” The New York Times (Fri., JULY 28, 2017): B1-B2.
(Note: ellipses added.)
(Note: the online version of the commentary has the date JULY 27, 2017, and has the title “The Upshot; Switching Careers Doesn’t Have to Be Hard: Charting Jobs That Are Similar to Yours.”)