Category: Creative Destruction

Automation Predicted to Destroy 19 Million Old Jobs and Create 21 Million New Jobs

(p. B5) At least 21 new job categories may soon emerge from technological and other societal changes, says a new report from IT-services and consulting firm Cognizant Technology Solutions Corp.
With titles such as “genetic diversity officer,” “virtual store sherpa” and “personal memory curator,” these roles aren’t science fiction, the study’s authors argue. Rather, they are identified as jobs many employers will have to fill within the next decade.
“It’s easier to understand what types of jobs are going to go away,” says Ben Pring, director of Cognizant’s Center for the Future of Work, . . .   The idea behind the report, he says, was “to craft a credible narrative of what we’re going to gain.”
. . .
Mr. Pring and his colleagues say the dawning age of intelligent machines won’t be without painful upheaval: They estimate about 19 million positions in the U.S. will be automated out of existence in the next 15 years, while employers create some 21 million new roles. At the same time, the majority of existing ones will likely be enhanced. “Work will change, but it won’t go away,” Mr. Pring says.

For the full story, see:
Vanessa Fuhrmans. “A Future Without Jobs? Think Again.” The Wall Street Journal (Thursday, November 16, 2017): B5.
(Note: ellipses added.)
(Note: the online version of the story has the date Nov. 15, 2017, and has the title “How the Robot Revolution Could Create 21 Million Jobs.”)

The Cognizant report, mentioned above, is:
Pring, Ben, Robert H. Brown, Euan Davis, Manish Bahl, and Michael Cook. “21 Jobs of the Future: A Guide to Getting – and Staying – Employed for the Next 10 Years.” Teaneck, NJ: Cognizant’s Center for the Future of Work, Nov. 15, 2017.

German Bookstore Thrives Selling Bread and Sausage

(p. A7) BAD SOODEN-ALLENDORF, Germany — At five minutes after seven on a Saturday morning, the bookstore in this idyllic town was not yet officially open — that happens at 7:30 a.m. — but Susanne Frühauf had already rung up the first three customers of the day. At a shelf in the corner, behind a rack of discount paperbacks, her husband Wolfgang was working as quickly as he could.
“They’re like moths,” said Mr. Frühauf, genially, of his customers. “As soon as the lights go on, they come.”
With that, he got back to work, stacking not books, but rows of freshly baked bread rolls sprinkled with poppy, pumpkin, flax, sesame or sunflower seeds that have brought townspeople flocking. Next to him stood a small refrigerator hung with “ahle wurst” — a delicious air-dried, salami-like pork sausage that is one of the region’s culinary specialties — while in the center aisle, organic tomatoes and cucumbers vied with crime novels for table space.
. . .
Mr. Frühauf’s grandfather founded a bookbindery nearly a century ago, right here on the ground floor of the family house on the market square; Mr. Frühauf grew up above the bookstore, which his parents and uncle ran together. Five years ago, when he saw the numbers, Mr. Frühauf — who still lives upstairs, with his mother and his wife — said the situation was clear: “We had to do something.”
At the same time, news came that the town’s last two bakeries were closing. For residents like Mr. Frühauf, who remember when half a dozen local bakers strove to make the town’s best cream-covered plum cake, cumin roll or pumpernickel loaf, this blow was followed by hopeful news: Norbert Schill, who had lost his storefront lease, wanted to keep baking.
“I said, ‘before there’s no fresh bakery, I’ll clear a shelf, and we can sell the bread here,'” Mr. Frühauf said. Mr. Schill agreed to give it a try.
The experiment was a success. Mr. Frühauf began keeping baker’s hours, and Mr. Schill’s former customers started coming to the bookstore to buy their daily bread. Some, like Norbert Bergmann, a retired Catholic priest, got into the habit of picking up a book or TV guide, too.
Some of Mr. Frühauf’s regular customers found the idea strange at first, but they came around quickly. “It’s fun to eat breakfast again,” said Regina Kistner, who raised her family here, and had been making do with the processed rolls sold at the supermarket. “These taste good,” she added, leaving the store with two rolls (one rye and one sesame), a tabloid paper (for her neighbor) and the British romance novel “A Summer at Sea.”
Mr. Schill, the baker, said he for one was very happy to have found such an open-minded partner in the bookseller. “There’s a saying, I remember learning as a child, from the old people. ‘Go with the times, or with time, you’ll go.'”
. . .
Locking up after a long, warm morning, Mr. Frühauf paused. He took a look around at the 17th century building that houses his eclectic store, and said he enjoys being at the center of a new network of butchers, bakers and beekeepers. “In Germany, I think there’s a tendency now, to be very backward-looking, to say, ‘everything used to be better,'” said Mr. Frühauf. “But all you really need are some new ideas.”

For the full story, see:
Sally McGrane. “‘To Stay Afloat After 100 Years, a German Bookstore Sells Sausage.” The New York Times (Saturday, Sept. 22, 2018): A7.
(Note: ellipses added.)
(Note: the online version of the story has the title “‘Would You Like Some Sausage With Your Novel?”)

E-Commerce Creates “More and Better Jobs than It Destroys”

(p. A17) . . . , the men and women who go to work each day in e-commerce fulfillment centers are much better-equipped with information technology–and therefore more productive and better-paid. Our research shows that fulfillment center weekly wages are 31% higher on average than brick-and-mortar retail in the same area.
. . .
But does e-commerce destroy more jobs than it creates? So far the answer seems to be no. From the third quarter of 2015 to the third quarter of 2017, brick-and-mortar retail full-time-equivalent jobs fell by roughly 123,000, or about 1%, according to my think tank’s analysis of the latest Labor Department data.
Over the same two-year stretch, the e-commerce industry has added some 178,000 jobs in fulfillment centers and electronic shopping firms. In addition, express delivery companies and other local couriers boosted their full-time-equivalent workers by another 58,000.
. . .
The Internet of Goods–our term for the fast-growing digitization of the production, sorting and movement of physical products–will be the next major step in the internet’s evolution.
If e-commerce is any guide, the jobs created for the Internet of Goods will require workers who have a good mix of physical and cognitive skills, just like the industrial jobs of the early-20th century. Moreover, they will be more evenly spread around the country, boosting growth in America’s heartland as well as the coasts.

For the full commentary, see:
Michael Mandel. “Get Ready for the Internet of Goods; Already, e-commerce has been creating more and better jobs than it destroys.” The Wall Street Journal (Monday, Oct. 15, 2017): A17.
(Note: ellipses added.)
(Note: the online version of the commentary has the date Oct. 15, 2017.)

Emmanuel Macron Invokes the Spirit of Joseph Schumpeter

(p. A7) PARIS–Speaking at the annual gathering of the business and political elite in Davos earlier this year, French President Emmanuel Macron invoked the spirit of one of his favorite early-20th-century thinkers, Joseph Schumpeter.
The economist is the father of “creative destruction,” the theory that innovation sustains growth by destroying old business models. The embrace of such thinking has made Mr. Macron, an investment banker turned head-of-state, a darling of the globalist set. But this time, Mr. Macron warned that disruption was descending into a battle for the survival of the fittest.
“Schumpeter is very soon going to look like Darwin. And living in a completely Darwinian world is not good,” Mr. Macron said.
France’s president is on a mission to save globalism from itself and, lately, that has become a lonely road.

For the full story, see:
Stacy Meichtry and William Horobin. “Macron Walks a Line on Globalism.” The Wall Street Journal (Saturday, April 21, 2018): A7.
(Note: the online version of the story has the date April 20, 2018, and has the title “Macron’s Lonely Road: Saving Globalism From Itself.” In the last couple of sentences quoted, the wording follows the online version rather than the slightly different print version.)

Even the Mighty Fall: Dow Drops GE

(p. B1) General Electric Co. will drop out of the Dow Jones Industrial Average next week, a milestone in the decline of a firm that once ranked among the mightiest of blue-chips and was a pillar of the U.S. economy.
. . .
The decision to drop GE, an original member of the Dow that has been a part of the 30-stock index continuously since 1907, marks the latest setback for a company that once was the most valuable U.S. firm but has been hit hard in recent years by the unraveling of its finance business and competitive problems.

For the full story, see:
Michael Wursthorn and Thomas Gryta. “GE Drops Out of the Dow After A Century.” The Wall Street Journal (Wednesday, June 20, 2018): B1 & B12.
(Note: ellipsis added.)
(Note: the online version of the story has the date June 19, 2018, and has the title “GE Drops Out of the Dow After More Than a Century.” The passages quoted above follow the slightly longer wording in the online version.)

After Losing Circus Job, Clown Applies His Skills by Running for Congress as a Democrat

(p. A1) As an elephant handler for Ringling Bros. and Barnum & Bailey Circus, Lauren Ramsay used to spend her time herding four-ton pachyderms.
As an elephant handler for Ringling Bros. and Barnum & Bailey Circus, Lauren Ramsay used to spend her time herding four-ton pachyderms.
Last May, the circus closed down after 146 years traveling the country and thrilling millions with “the Greatest Show on Earth.” In the year since, the contortionists, acrobats, stilt walkers and other per-(p. A8)formers have walked a tightrope trying to adapt to more-conventional jobs, while sometimes using their circus skills. It takes some professional clowns a while to find a second act: One is now running for Congress.
Former clown Sandor Eke, of Las Vegas, Nev., wanted to put his entertaining and juggling skills to work behind a bar after 20 years with the circus. But nobody would hire him without experience. He’s now picking up random clown jobs and painting houses. “I try to have fun with it, but it’s not exactly what I wanted with life. I mean, I used to be a clown!”
In April, Mr. Eke auditioned for a mascot job with the Oakland Raiders once they move to Las Vegas for the 2020 season. He tried on the “Rushing Raider” costume, and did what he called a “crowd-pleasing routine.” He’s waiting to hear back, but remains hopeful. “I got good vibes,” he says.
. . .
Former clown Steve Lough, of Camden, S.C., who left the circus in 2004, later found employment working for McDonald’s at special events and volunteering for political campaigns.
This spring, Mr. Lough decided to run for office himself and is running in the Democratic primary for U.S. Congress in South Carolina. “I juggle at every campaign stop now,” he says.
He did a pratfall at the South Carolina Democratic Convention in April that “got a big reaction and laugh.”
. . .
. . . Mr. Lough says the crowds love his clown skills.

For the full story, see:
John Clarke. “Ex-Clown Is Hard to Hide on a Résumé.” The Wall Street Journal (Tuesday, May 22, 2018): A1 & A8.
(Note: ellipses added.)
(Note: the online version of the story has the date May 21, 2018, and has the title “What’s A Clown to Do After the Circus? One Is Running for Congress.”)

We Underestimate How Entrepreneurial the Americans Were in the 1800s

(p. C6) Jim DeFelice’s “West Like Lightning,” a history of the Pony Express, begins with an anxious young rider waiting to take the news to California that Abraham Lincoln had been elected president. The delivery service lasted only about 18 months, but its revolutionary speed left an indelible mark on the country. Many, including Mark Twain, marveled at riders’ courage and the spectacle of their switching horses every 10 miles or so for a fresh burst of speed.
. . .
In what way is the book you wrote different from the book you set out to write?
Historians, God bless them, they do a lot of debunking of legends. They can sometimes come off as schoolmarms. The reality is, those legends are fun. They’re the exciting part. I separate fact and fiction, but I love those stories — and underneath them, there’s a much deeper truth. There’s a reason we value these 19- and 20-year-old kids pushing themselves against the elements.
I knew there would be some debunking involved. What I didn’t know was how true a lot of those stories turned out to be. If I were a Pony Express rider, I’d be bragging about how fast I made it. These guys didn’t brag about that — they bragged about how far they went. They were bragging about endurance and dealing with the elements. That impressed me, the resilience.
I also think sometimes we underestimate — and I’m guilty of this — just how entrepreneurial and into technology people were in the past. We think we’re cool because we can fly somewhere and be there tomorrow. But for these guys, 10 days was huge. If you gave them something in downtown New York, it would be in San Francisco two weeks later. At the time, that would be like going from dial-up to the fastest speeds we have today.

For the full interview, see:
John Williams, interviewer, ” Making Good Time and Even Better Tales.” The New York Times (Monday, May 21, 2018): C6.
(Note: ellipses added.)
(Note: the online version of the interview has the date May 20, 2018, and has the title “Tell Us 5 Things About Your Book: Making Good Time With the Pony Express.” The first paragraph and the bold question are John Williams. The paragraphs following the bold question, are Jim DeFelice’s answer.)

The book discussed in the interview quoted above, is:
DeFelice, Jim. West Like Lightning: The Brief, Legendary Ride of the Pony Express. New York: William Morrow, 2018.

Ode to Physical Film Premieres on Digital Netflix

(p. C6) “Kodachrome” is based on an article that A.G. Sulzberger, who became the publisher of The New York Times this January, wrote in 2010. It concerned the international rush on Dwayne’s Photo in Parsons, Kan., which became the world’s last processor of the discontinued color film Kodachrome.
But in a twist that may make camera buffs’ heads explode, the feature, directed by Mark Raso, arrives courtesy of Netflix, which bought the movie after it was made. Despite a credit noting that the movie was shot (to little effect) on 35-millimeter Kodak film, “Kodachrome” will mostly be seen on the streaming platform, whose current business model hastens the destruction of physical media.

For the full review, see:

BEN KENIGSBERG. “An Ode to Color Film, Now Streaming Near You.” The New York Times (Friday, April 20, 2018): C6.
(Note: the online version of the review has the date APRIL 19, 2018, and has the title “Review: ‘Kodachrome,’ an Ode to Color Film, Now Streaming Near You.”)

Case Study of Effects of Closing a Factory

(p. B1) Perhaps the most illuminating business book of the year, for me, is Amy Goldstein’s “Janesville: An American Story.” If you really want to understand what’s going on in today’s real economy — beyond the headlines about new stock-market highs, tax policy or the latest list of billionaires — spend some time with this true tale of what happened in the middle-class town of Janesville, Wis., after General Motors closed a factory there.
Ms. Goldstein admirably shows all sides of this story, capturing in microcosm all of the issues that so many communities across the United States are facing. You will probably be left doing some hard thinking about what is driving the politics of the moment, although Ms. Goldstein brilliantly, and respectfully, paints the book’s characters with such nuance that readers from across the ideological spectrum are likely to arrive at different conclusions about heroes and villains.
In crafting this deeply reported and riveting read, Ms. Goldstein spent considerable time in Janesville. As a result, you get a palpable sense of what life is like there; of the financial and psychological impact that a major plant closing has; and of the knock-on effects such an event has on other businesses and institutions. She paints vivid portraits of characters who include laid-off workers seeking retraining, union officials and local politicians, Speaker Paul D. Ryan among them. If you liked “Hillbilly Elegy: A Memoir of a Family and Culture in Crisis,” J. D. Vance’s best-seller about growing up in Ohio and the decline of the industrial Midwest, I think you’ll find that “Janesville” makes these issues real in a new and compelling way.

For the full commentary, see:
Sorkin, Andrew Ross. “DEALBOOK For a Year Filled With News, A List of Books Worth a Look.” The New York Times (Tuesday, DEC. 26, 2017): B1 & B3.
(Note: the online version of the commentary has the date DEC. 25, 2017, and has the title “DEALBOOK; In a Year of Nonstop News, a Batch of Business Books Worth Reading.”)

The Goldstein book mentioned above, is:
Goldstein, Amy. Janesville: An American Story. New York: Simon & Schuster, 2017.

Xerox Will Cease to Exist as Independent Firm

(p. A1) When Xerox introduced its popular copying machines in 1959, their wizardry was considered as high tech as the iPhone when Steve Jobs presented it to the world almost 50 years later.
But just as Xerox made carbon paper obsolete, the iPhone, Google Docs and the cloud made Xerox a company of the past.
On Wednesday [January 31, 2018], Xerox said that, after 115 years as an independent business, it would combine operations with Fujifilm Holdings of Japan. The deal signaled the end of a company that was once an American corporate powerhouse.
“Xerox is the poster child for monopoly technology businesses that cannot make the transition to a new generation of technology,” said David B. Yoffie, a professor at the Harvard Business School.
The move offers a stark reminder that no matter how high a company may fly, it is still vulnerable to the next big breakthrough. Xerox joins once formidable tech companies like Kodak and BlackBerry that lost the innovation footrace.
Under the deal, Fujifilm will own just over 50 percent of the Xerox business. There are plans to cut $1.7 billion in costs in coming (p. A11) years. Fujifilm said its joint venture with Xerox would cut its payroll by 10,000 workers worldwide.
How Xerox fell so far is a case study in what management experts call the “competency trap” — an organization becomes so good at one thing, it can’t learn to do anything new.
Xerox traces its origins to the founding in 1903 of the M. H. Kuhn Company. But it was an invention dreamed up in a makeshift Queens lab in the 1930s — a forerunner of the Silicon Valley garages used by the likes of Mr. Jobs — that changed Xerox’s trajectory.
That invention, by Chester Carlson, a patent lawyer, led to the creation of the modern copy machine. He even came up with a term for the process: “xerography.” In 1959, Xerox, which had won the right to explore the technology, offered the office copier that went mainstream.

For the full story, see:
STEVE LOHR and CARLOS TEJADA, “Xerox, Tech Icon That Became a Verb, Is Suddenly Past Tense.” The New York Times (Thursday, Feb. 1, 2018): A1 & A11.
(Note: bracketed date added.)
(Note: the online version of the article has the date JAN. 31, 2018, and has the title “After Era That Made It a Verb, Xerox, in a Sale, Is Past Tense.” The online version says that the New York edition also had title “After Era That Made It a Verb, Xerox, in a Sale, Is Past Tense.” My copy was the “National Edition.”)

Decline in Startups Reduces Labor Market Dynamism

DynamismDeclineGraph2018-03-02.pngSource of graphs: online version of the NYT commentary quoted and cited below.

(p. B1) . . . a broad sweep of statistics reveals a peculiar weariness spreading through the economy. Belying breathless headlines about the fabulous opportunities that technology is about to bestow on society, it suggests that many rich market democracies have lost much of their dynamism. Their companies are getting old, and their labor markets are getting stuck. Productivity growth has slumped. And many workers in their prime are peeling off from the labor force.
. . .
(p. B4) . . . , the economy’s ability to generate and support new businesses — agents of creative destruction that bring new products and methods into the marketplace — appears to be faltering across the world. In the United States, the rate of company formation is half what it was four decades ago. And it is slowing in many industrialized countries.
. . .
In a study published on Tuesday [February 6, 2018] by the Hamilton Project at the Brookings Institution, Jay Shambaugh, Ryan Nunn and Patrick Liu explore what economists have figured out about the American economy’s inertia and the fallout for wages and living standards.
The evidence paints a distinct picture of decline: Fewer start-ups mean fewer new ideas and fewer young, productive businesses to replace older, less productive ones. Researchers have found that the decline in companies entering the market since 1980 has trimmed productivity growth by about 3.1 percent.
The dearth of new businesses is also cutting off one of the main paths to workers’ advancement: the outside job offer. Changing jobs allows workers to shift to positions in which they are more productive, and better paid. But labor market fluidity — job switching, creation and destruction — has been declining since the 1980s.
Clear though the pattern may be, the researchers acknowledge that we haven’t yet figured out what is holding the economy’s dynamism back. “This is one of those big, economywide trends,” Mr. Shambaugh told me. “There is room for a lot of stories.”

For the full commentary, see:
Porter, Eduardo. “ECONOMIC SCENE; What to Worry About: Decrease in Start-Ups Is a Sign of Stagnation.” The New York Times (Wednesday, February 7, 2018): B1 & B4.
(Note: ellipses, and bracketed date, added.)
(Note: the online version of the commentary has the date FEB. 6, 2018, and has the title “ECONOMIC SCENE; Where Are the Start-Ups? Loss of Dynamism Is Impeding Growth.”)

The paper by Shambaugh, Nunn, and Liu, that is mentioned above, is:
Shambaugh, Jay, Ryan Nunn, and Patrick Liu. “How Declining Dynamism Affects Wages.” In Revitalizing Wage Growth Policies to Get American Workers a Raise, edited by Jay Shambaugh and Ryan Nunn, Washington, D.C.: Brookings, 2018, pp. 11-23.