Economics – Page 213 – artdiamondblog.com

Daniel Pink on What Motivates Workers to Work Well

Source of book image: online version of the WSJ review quoted and cited below.

Daniel Pink’s Free Agent Nation was a provocative account of how the entrepreneur benefits from being an entrepreneur. I enjoyed the book, and reference it frequently.
I have not had a chance to read Pink’s recent Drive, but hope to do so soon.

(p. A17) Science, Mr. Pink says, has shown that we are motivated as much intrinsically, by the sheer joy and purpose of certain activities, as extrinsically, by rewards like pay raises and promotions.

The science that Mr. Pink is referring to rests largely on the work of Edward Deci and Richard Ryan at the University of Rochester and Mihaly Csikszentmihalyi at Claremont Graduate University. These three researchers have found that we do our best work when motivated from within, when we have control over our time and decisions and when we feel a deep sense of purpose. Under such conditions, we can achieve real mastery over whatever it is that we do.
The modern workplace, Mr. Pink laments, is too often set up to deny us this opportunity. Firms that hope to optimize efficiency by making their employees clock in and out, attend compulsory meetings, and receive pay for performance are de-motivating through excessive control. What they should be doing, he argues, is giving workers the chance to do their best work by granting them more autonomy and helping them to achieve the mastery that may come with it.
Mr. Pink cites an Australian software firm, Atlassian, that allows its programmers 20% of their time to work on any software problem they like, provided it is not part of their regular job. The programmers turn out to be much more efficient with that 20% of their time than they are with their regular work hours. Atlassian credits the 20% with many of its innovations and its high staff retention. Companies as large as Google and 3M have similar programs that have produced everything from Google News to the Post-It note.
. . .
. . . : Beyond serving our basic needs, money doesn’t buy happiness. We need a greater purpose in our lives. Our most precious resource is time. We respond badly to conditions of servitude, whether the lash of the galley master or the more subtle enslavement of monthly paychecks, quarterly performance targets and the fear of losing health insurance. Work that allows us to feel in control of our lives is better than work that does not. . . . , these lessons are worth repeating, and if more companies feel emboldened to follow Mr. Pink’s advice, then so much the better.

For the full review, see:
PHILIP DELVES BROUGHTON. “More Than a Paycheck; Workers are more efficient, loyal and creative when they feel a sense of purpose–when work has meaning.” The Wall Street Journal (Tues., Feb. 2, 2010): A17.
(Note: ellipses added.)
(Note: the online version of the review is dated Feb. 5, 2010.)

“Real Innovation in Technology Involves a Leap Ahead”

“GAME CHANGER? After months of anticipation, Apple unveiled its iPad tablet computer last week.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. 1) The more, the better. That’s the fashionable recipe for nurturing new ideas these days. It emphasizes a kind of Internet-era egalitarianism that celebrates the “wisdom of the crowd” and “open innovation.” Assemble all the contributions in the digital suggestion box, we’re told in books and academic research, and the result will be collective intelligence.

Yet Apple, a creativity factory meticulously built by Steven P. Jobs since he returned to the company in 1997, suggests another innovation formula — one more elitist and individual.
This approach is reflected in the company’s latest potentially game-changing gadget, the iPad tablet, unveiled last week. It may succeed or stumble but it clearly carries the taste and perspective of Mr. Jobs and seems stamped by the company’s earlier marketing motto: Think Different.
. . .
(p. 6) Great products, according to Mr. Jobs, are triumphs of “taste.” And taste, he explains, is a byproduct of study, observation and being steeped in the culture of the past and present, of “trying to expose yourself to the best things humans have done and then bring those things into what you are doing.”
His is not a product-design philosophy steered by committee or determined by market research. The Jobs formula, say colleagues, relies heavily on tenacity, patience, belief and instinct. He gets deeply involved in hardware and software design choices, which await his personal nod or veto. Mr. Jobs, of course, is one member of a large team at Apple, even if he is the leader. Indeed, he has often described his role as a team leader. In choosing key members of his team, he looks for the multiplier factor of excellence. Truly outstanding designers, engineers and managers, he says, are not just 10 percent, 20 percent or 30 percent better than merely very good ones, but 10 times better. Their contributions, he adds, are the raw material of “aha” products, which make users rethink their notions of, say, a music player or cellphone.
“Real innovation in technology involves a leap ahead, anticipating needs that no one really knew they had and then delivering capabilities that redefine product categories,” said David B. Yoffie, a professor at the Harvard Business School. “That’s what Steve Jobs has done.”

For the full commentary, see:
STEVE LOHR. “The Apple in His Eye.” The New York Times, Week in Review Section (Sun., MARCH 4, 2010): 1 & 6.
(Note: ellipsis added.)
(Note: the online version of the article is dated January 29, 2010 and had the title “Steve Jobs and the Economics of Elitism.”)

New York Forces Entrepreneur to Subsidize His Competitor

(p. A24) Last year, the State Legislature levied a new tariff on most of the businesses in the New York City region. The metropolitan commuter transportation mobility tax requires employers to set aside 34 cents for every $100 in payroll costs, and hand the money over to a battered, barely breathing patient on the state’s fiscal operating table: the Metropolitan Transportation Authority.

The tax has not worked out so well. So far, its projected revenues are coming in about $400 million below the state’s estimates — which, in part, will mean reduced subway and bus service for New Yorkers starting this summer. It has also prompted a furious backlash from suburban officials who resent bankrolling an agency that, they say, benefits the city at the expense of its surrounding counties.
And then there is William Schoolman, 69, amateur activist, self-described ”prototypical entrepreneur,” and proprietor of the Hampton Luxury Liner bus fleet. In December, he filed a lawsuit in State Supreme Court claiming the tax is unconstitutional and demanding its repeal. The reason?
”Competition,” Mr. Schoolman said in a recent telephone interview, anger rising in his voice. ”This is the first time that I ever had to pay a subsidy directly to my competitor. That’s the thing that really bothers me.”

For the full story, see:
MICHAEL M. GRYNBAUM. “Suing Over a Transit Tax, in the Name of Competition.” The New York Times (Tues., February 16, 2010): A24.

Entrepreneur Pleases Dwarfs; Critics Are Appalled

“Yang Jinlu, 18, left, and Zhang Yinghua, 37.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A10) KUNMING, China — Chen Mingjing’s entrepreneurial instincts vaulted him from a peasant upbringing to undreamed-of wealth, acquired in ventures ranging from making electric meters to investing in real estate. But when he was 44, the allure of making money for money’s sake began to wane. He wanted to run a business that accomplished some good.

And so last September, Mr. Chen did what any socially aware entrepreneur might do: He opened a theme park of dwarfs, charging tourists about $9 a head to watch dozens of dwarfs in pink tutus perform a slapstick version of “Swan Lake” along with other skits.
Mr. Chen has big plans for his Kingdom of the Little People. Imagine a $115 million universe in miniature, set amid 13,000 acres of rolling hills and peaceful lakes in southern China’s Yunnan Province, with tiny dogs, tiny fruit trees, a 230-foot-high performance hall that looks like the stump of a prehistoric tree and standard-size guest cabins.
Also, a black BMW modified to resemble a flying saucer, from which dwarfs will spill forth to begin their performances.
“It will be like a fairy tale,” Mr. Chen said. “Everything here I have designed myself.”
. . .
Critics say displaying dwarfs is at best misguided and at worst immoral, a throwback to times when freak shows pandered to people’s morbid curiosity.
“Are they just going there to look at curious objects?” asked Yu Haibo, who leads a volunteer organization for the disabled in Jilin Province in the northeast.
“I think it is horrible,” said Gary Arnold, the spokesman for Little People of America Inc., a dwarfism support group based in California. “What is the difference between it and a zoo?” Even the term “dwarf” is offensive to some; his organization prefers “person of short stature.”
. . .
But there is another view, and Mr. Chen and some of his short-statured workers present it forcefully. One hundred permanently employed dwarfs, they contend, is better than 100 dwarfs scrounging for odd jobs. They insist that the audiences who see the dwarfs sing, dance and perform comic routines leave impressed by their skills and courage.
Many performers said they enjoyed being part of a community where everyone shares the same challenges, like the height of a sink. “Before, when we were at home, we didn’t know anyone our size. When we hang out together with normal-size people, we can not really do the same things,” said Wu Zhihong, 20. “So I really felt lonely sometimes.”
. . .
Supporters and critics agree on one point: the fact that the park is awash in job applications shows the disturbing dearth of opportunities for the disabled in China. Cao Yu, Mr. Chen’s assistant, says she receives three or four job inquiries a week.
“Under the current social situation in China, they really will not be able to find a better employment situation,” she said.
. . .
Mr. Chen said his employees had gained self-respect and self-sufficiency. “It doesn’t really matter to me what other people say,” he said. “The question is whether meeting me has changed their lives.”

For the full story, see:

SHARON LaFRANIERE. “Kunming Journal; A Miniature World Magnifies Dwarf Life.” The New York Times (Thurs., March 4, 2010): A10.
(Note: ellipses added.)
(Note: the online version of the article is dated March 3, 2010.)

“Workers relaxed in the dormitories.” Source of caption and photo: online version of the NYT article quoted and cited above.

An “Entrepreneur’s Visa” to Let the Future Sergey Brin In

(p. A19) . . . , there is one way to create a lot more jobs without spending federal money. Let’s import them. More precisely, let’s import the people who create them: entrepreneurs.

A bipartisan bill that would begin to do just that was introduced on Feb. 24 by Sens. John Kerry (D., Mass.) and Richard Lugar (R., Ind.). Their “Startup Visa Act” would create a new, two-year visa for immigrant entrepreneurs whose firms attract at least $250,000 in financing from American angel investors or venture capital firms.
. . .
Here’s a way to improve on the Kerry-Lugar plan. Create a true “job creator’s visa,” one tied directly and only to job creation by new immigrant entrepreneurs. The visa could be a temporary one for immigrants already here on another visa who establish a business. It could then be extended if the firm hires at least one American non-family resident. The visa should become permanent once the enterprise crosses a certain job threshold (such as five or 10 workers). But it would not be tied to financing.
. . .
Google was founded by Sergey Brin, a Russian immigrant, and American Larry Page by borrowing funds from their own credit cards. Why on earth would we want to create an entrepreneurs’ visa that couldn’t let in the future Sergey Brin?

For the full commentary, see:
ROBERT E. LITAN. “Visas for the Next Sergey Brin; To create more jobs, let’s import more employers.” The Wall Street Journal (Mon., MARCH 8, 2010): A19.
(Note: ellipses added.)
(Note: the online version of the article is dated MARCH 7, 2010.)

United States Exports “High-Value-Added Services that Support Well-Paying Jobs”

Source of graph: online version of the WSJ article quoted and cited below.

(p. A23) Exports of American services have jumped by 84 percent since 2000, while the growth rate among goods was 66 percent. America trails both China and Germany in sales of goods abroad, but ranks No. 1 in global services by a wide margin. And while trade deficits in goods have been enormous — $840 billion in 2008 — the country runs a large and growing surplus in services: we exported $144 billion more in services than we imported, dwarfing the surpluses of $75 billion in 2000 and $58 billion in 1992.

Equally important, Commerce Department data show that the United States is a top-notch competitor in many of the high-value-added services that support well-paying jobs.
. . .
. . . , will Washington offer tax breaks or other export incentives? While businesses may clamor for them, these would be a setback for freer trade — after all, for years it has been America that has been hectoring other countries to end their subsidies to exporters. Will Washington try to pick winners in the global marketplace, like green energy? More often than not, this kind of industrial policy wastes money, fosters inefficiency and creates few permanent jobs.

For the full story, see:
W. MICHAEL COX. “An Order of Prosperity, to Go.” The New York Times (Weds., February 17, 2010): A23.
(Note: ellipses added.)

At Odds with Academic Culture, Wiki Programmer Adams Released Early and Released Often

(p. 67) Adams did something unexpected for the academic community, but common in open source culture–release early and release often. Within weeks of its launch, one of the biggest annoyances of Wikipedia was resolved directly by the software’s author. It was not because of monetary compensation or any formal request, but simply because the author was interested in solving it on his own time, and sharing it with others. It was the hacker ethos, and it had crossed from the domain of tech programmers into the world of encyclopedias.

Source:
Lih, Andrew. The Wikipedia Revolution: How a Bunch of Nobodies Created the World’s Greatest Encyclopedia. New York: Hyperion, 2009.

The Ultimate Complement: When Your Competitor Uses Your Product

“. . . apparently a photo that was snapped from the iPhone as Ballmer brandished it above his head.” Source of caption and photo: http://www.gearfuse.com/ballmer-lashes-out-at-microsoft-employed-iphone-user-threatens-to-smash-iphone/

(p. A1) REDMOND, Wash.–Microsoft Corp. employees are passionate users of the latest tech toys. But there is one gadget love that many at the company dare not name: the iPhone.

The iPhone is made, of course, by Microsoft’s longtime rival, Apple Inc. The device’s success is a nagging reminder for Microsoft executives of how the company’s own efforts to compete in the mobile business have fallen short in recent years. What is especially painful is that many of Microsoft’s own employees are nuts for the device.
The perils of being an iPhone user at Microsoft were on display last September. At an all- company meeting in a Seattle sports stadium, one hapless employee used his iPhone to snap photos of Microsoft Chief Executive Steve Ballmer. Mr. Ballmer snatched the iPhone out of the employee’s hands, placed it on the ground and pretended to stomp on it in front of thousands of Microsoft workers, according to people present.
. . .
Nearly 10,000 iPhone users were accessing the Microsoft employee email system last year, say two people who heard the estimates from senior Microsoft executives. That figure equals about 10% of the company’s glo-(p. A10)bal work force.
Employees at Apple, in contrast, appear to be more devoted to the company’s own mobile phone. Several people who work at the company or deal regularly with employees there say they can’t recall seeing Apple workers with mobile phones other than the iPhone in recent memory.

For the full story, see:
NICK WINGFIELD. “Forbidden Fruit: Microsoft Workers Hide Their iPhones; Steve Ballmer Sours on Apple Product; Work for Ford, Drive a Ford.” The Wall Street Journal (Sat., MARCH 13, 2010): A1 & A10.
(Note: ellipses added.)
(Note: the online version of the article had the date MARCH 12, 2010.)

When Wales Earned “Enough”

(p. 22) By 1998, the business was good enough that Wales wanted to leave not just the world of Chicago Options Associates but the city of Chicago too. As a trader, he had made enough money to live comfortably for a while, or as he would say, “I made out OK” and earned “enough.” With no incentive to stay in the Windy City, and with the warmer weather of California calling, Wales and Shell decided they could relocate to San Diego and run the business from there. Wales and his wife, Christine, made the move in 1998.

Source:
Lih, Andrew. The Wikipedia Revolution: How a Bunch of Nobodies Created the World’s Greatest Encyclopedia. New York: Hyperion, 2009.

Brin Plays Google’s “Ethical Trump Card”

“Co-founder Sergey Brin has been active in Google’s dealings with China.” Source of caption and photo: online version of the WSJ article quoted and cited below.

(p. A8) As a boy growing up in the Soviet Union, Sergey Brin witnessed the consequences of censorship. Now the Google Inc. co-founder is drawing on that experience in shaping the company’s showdown with the Chinese government.

Mr. Brin has long been Google’s moral compass on China-related issues, say people familiar with the matter. He expressed the greatest concern among decision makers, they say, about the compromises Google made when it launched its Chinese-language search engine, Google.cn, in 2006. He is now the guiding force behind Google’s decision to stop filtering search results in China, say people familiar with the decision.
. . .
The move is the clearest manifestation yet of a tension that has always existed at Google.
The Internet company, on one hand, is analytical: It built its core search business on algorithms that determine the relevance of Web sites and has tried to apply quantitative analysis to traditionally subjective parts of a business, such as hiring decisions. On the other hand, Mr. Brin and co-founder Larry Page have passionately touted Google’s ability to spread democracy through access to information, and adopted the unofficial and now-famous motto, “Don’t Be Evil.”
“At its best, Google is data-driven with an ethical trump card,” said Larry Brilliant, who headed up the company’s philanthropic efforts until 2009. Always it was the founders, Messrs. Brin and Page, who could play that card, he added.

For the full story, see:

BEN WORTHEN. “Soviet-Born Brin Has Shaped Google’s Stand.” The Wall Street Journal (Sat., MARCH 13, 2010): A8.
(Note: ellipsis added.)
(Note: the online version of the article had the date MARCH 12, 2010 and has the slightly longer title “Soviet-Born Brin Has Shaped Google’s Stand on China.”)

Wikipedia Works in Practice, Not in Theory

(p. 20) Jimmy walked into the offices of Chicago Options Associates in 1994 and met the CEO Michael Davis for a job interview. Davis had looked over Wales’s academic publication about options pricing.

“It was impressive looking,” says Wales wryly about the paper. “It was a very theoretical paper but it wasn’t very practical.” But Davis was sufficiently intrigued, as he wanted someone like Wales to pore over the firm’s financial models and help improve them. So he took on young Wales, who seemed to be sharp and had acumen for numbers. Little did either of them know they would have a long road ahead together, with Wikipedia in the future.
Wales’s first job was to go over the firm’s current pricing models. “What was really fascinating was that it was truly a step beyond what I’d seen in academia,” he recalls. “It was very practical, and didn’t have a real theoretical foundation.” Wales was intrigued that the firm traded on principles that worked in practice, not in theory. (This is something he would say about his future endeavor Wikipedia.) “Basically they just knew in the marketplace that the existing models were wrong.”

Source:
Lih, Andrew. The Wikipedia Revolution: How a Bunch of Nobodies Created the World’s Greatest Encyclopedia. New York: Hyperion, 2009.
(Note: italics in original.)