Category: Economics

AI Algorithms Use Massive Data to Do “Narrow Tasks”

(p. B2) A funny thing happens among engineers and researchers who build artificial intelligence once they attain a deep level of expertise in their field. Some of them—especially those who understand what actual, biological intelligences are capable of—conclude that there’s nothing “intelligent” about AI at all.

. . .

. . . the muddle that the term AI creates fuels a tech-industry drive to claim that every system involving the least bit of machine learning qualifies as AI, and is therefore potentially revolutionary. Calling these piles of complicated math with narrow and limited utility “intelligent” also contributes to wild claims that our “AI” will soon reach human-level intelligence. These claims can spur big rounds of investment and mislead the public and policy makers who must decide how to prepare national economies for new innovations.

. . .

The tendency for CEOs and researchers alike to say that their system “understands” a given input—whether it’s gigabytes of text, images or audio—or that it can “think” about those inputs, or that it has any intention at all, are examples of what Drew McDermott, a computer scientist at Yale, once called “wishful mnemonics.” That he coined this phrase in 1976 makes it no less applicable to the present day.

“I think AI is somewhat of a misnomer,” says Daron Acemoglu, an economist at Massachusetts Institute of Technology whose research on AI’s economic impacts requires a precise definition of the term. What we now call AI doesn’t fulfill the early dreams of the field’s founders—either to create a system that can reason as a person does, or to create tools that can augment our abilities. “Instead, it uses massive amounts of data to turn very, very narrow tasks into prediction problems,” he says.

When AI researchers say that their algorithms are good at “narrow” tasks, what they mean is that, with enough data, it’s possible to “train” their algorithms to, say, identify a cat. But unlike a human toddler, these algorithms tend not to be very adaptable. For example, if they haven’t seen cats in unusual circumstances—say, swimming—they might not be able to identify them in that context. And training an algorithm to identify cats generally doesn’t also increase its ability to identify any other kind of animal or object. Identifying dogs means more or less starting from scratch.

For the full commentary, see:

Christopher Mims. “AI’s Big Chill.” The Wall Street Journal (Sat., July 31, 2021): B2.

(Note: ellipses added.)

(Note: the online version of the commentary has the date July 30, 2021, and has the title “Artificial Intelligence’s Big Chill.” When you click on the title in the search list internal to the WSJ, you get a different title on the page of the article itself: “Why Artificial Intelligence Isn’t Intelligent.”)

120 Million Added People Face Food Scarcity Due to Covid-19

(p. A1) An estimated 270 million people are expected to face potentially life-threatening food shortages this year — compared to 150 million before the pandemic — according to analysis from the World Food Program, the anti-hunger agency of the United Nations. The number of people on the brink of famine, the most severe phase of a hunger crisis, jumped to 41 million people currently from 34 million last year, the analysis showed.

The World Food Program sounded the alarm further last week in a joint report with the U.N.’s Food and Agriculture Organization, warning that “conflict, the economic repercussions of Covid-19 and the climate crisis are expected to drive higher levels of acute food insecurity in 23 hunger hot spots over the next four months,” mostly in Africa but also Central America, Afghanistan and North Korea.

The situation is particularly bleak in Africa, where new infections have surged. In recent months, aid organizations have raised alarms about Ethiopia — where the number of people affected by famine is higher than anywhere in the world — and (p. A5) southern Madagascar, where hundreds of thousands are nearing famine after an extraordinarily severe drought.

. . .

In South Africa, typically one of the most food-secure nations on the continent, hunger has rippled across the country.

. . .

An estimated three million South Africans lost their jobs and pushed the unemployment rate to 32.6 percent — a record high since the government began collecting quarterly data in 2008.

. . .

In Duncan Village, the sprawling township in Eastern Cape Province, the economic lifelines for tens of thousands of families have been destroyed.

Before the pandemic, the orange-and-teal sea of corrugated metal shacks and concrete houses buzzed every morning as workers boarded minibuses bound for the heart of nearby East London. An industrial hub for car assembly plants, textiles and processed food, the city offered stable jobs and steady incomes.

“We always had enough — we had plenty,” said Anelisa Langeni, 32, sitting at the kitchen table of the two-bedroom home she shared with her father and twin sister in Duncan Village.

For nearly 40 years, her father worked as a machine operator at the Mercedes-Benz plant. By the time he retired, he had saved enough to build two more single family homes on their plot — rental units he hoped would provide some financial stability for his children.

The pandemic upended those plans. Within weeks of the first lockdown, the tenants lost their jobs and could no longer pay rent. When Ms. Langeni was laid off from her waitressing job at a seafood restaurant and her sister lost her job at a popular pizza joint, they leaned on their father’s $120 monthly pension.

Then in July, he collapsed with a cough and fever and died of suspected Covid-19 en route to the hospital.

“I couldn’t breathe when they told me,” Ms. Langeni said. “My father and everything we had, everything, gone.”

For the full story, see:

Christina Goldbaum and Joao Silva. “No Job, No Food: Virus Deepens Global Hunger.” The New York Times (Friday, August 6, 2021): A1 & A5.

(Note: ellipses added.)

(Note: the online version of the story was updated Aug. 6, 2021, and has the title “No Work, No Food: Pandemic Deepens Global Hunger.”)

The Walt Disney Company Cheats Scarlett Johansson

Walt Disney is one of my heroes. The current Walt Disney Company is not.

(p. B1) The fight between actress Scarlett Johansson and Walt Disney Co. over her contract for the movie “Black Widow” has a new participant: the powerful Creative Artists Agency, which represents Ms. Johansson and many of Hollywood’s biggest stars.

On Thursday, Ms. Johansson filed a lawsuit against Disney alleging her contract was breached when the company decided to put “Black Widow” on its Disney+ streaming service at the same time it was released in movie theaters.

. . .

“They have shamelessly and falsely accused Ms. Johansson of being insensitive to the global Covid pandemic,” CAA Co-Chairman Bryan Lourd said in a statement.

Mr. Lourd blasted Disney for releasing details of Ms. Johansson’s salary and for attempting to tie (p. B2) her lawsuit to the pandemic. Disney “included her salary in their press statement in an attempt to weaponize her success as an artist and businesswoman, as if that were something she should be ashamed of,” he added.

Mr. Lourd said Disney’s response to Ms. Johansson is an attack on her character that is “beneath the company that many of us in the creative community have worked with successfully for decades.”

. . .

“They have very deliberately moved the revenue stream and profits to the Disney+ side of the company, leaving artistic and financial partners out of their new equation. That’s it, pure and simple,” Mr. Lourd said.

For the full story, see:

Joe Flint. “Johansson’s Agent Rips Disney Over Film Flap.” The Wall Street Journal (Sat., July 31, 2021): B1-B2.

(Note: ellipses added.)

(Note: the online version of the story has the date July 30, 2021, and has the title “Scarlett Johansson’s Agent Rips Disney Over ‘Black Widow’ Dispute.”)

Musk Pushed Hard to Achieve Sustainable Scale at Tesla

(p. B1) This was Mr. Hunter’s big moment: His team had scheduled 1,700 people to pick up their Model 3s in the coming days—a record—and he was proud to announce the achievement. The compact Model 3 was Mr. Musk’s bet-the-company shot at transforming Tesla into a mainstream auto maker and ushering in a new era of electric vehicles—and at that moment, Tesla needed to move thousands of them to stay afloat.

Mr. Hunter had set a record, but Mr. Musk wasn’t happy. The Tesla chief executive ordered Mr. Hunter to more than double the number the next day or else he’d personally take over.

There was more. Mr. Musk said he’d heard that Mr. Hunter’s team had been relying on phone calls to schedule car pickups. That stopped now. Nobody likes talking on (p. B6) the phone, Mr. Musk said; it takes up too much time. Text customers instead. That would be faster. If he heard about any calls being made the next day, Mr. Hunter was fired.

Mr. Hunter’s wife and children had only recently joined him in Las Vegas; they had just finished unpacking their boxes. Now Mr. Musk was threatening to fire him if he didn’t do the impossible in 24 hours.

Tesla was 15 years old, and it was running out of time and money.

. . .

The sales organization didn’t have hundreds of company cellphones that Mr. Hunter’s sales team could use to send text messages, as Mr. Musk demanded, and they didn’t want their employees using their own personal phones.

Overnight, Mr. Hunter and other managers pieced together a solution, employing software that allowed his team to text from their computers. They stopped the practice of walking customers through the reams of sales paperwork that would eventually need to be completed and signed. If Mr. Musk’s goal was to have people in a queue to pick up their cars, then that’s what they would do. They’d just start assigning pickup times for customers: Can you come in at 4 p.m. on Friday to get your new Model 3?

Often, Mr. Hunter didn’t even wait for any response before putting a customer on the list for pickup. If the customer couldn’t make it, she might be told she would lose her spot in line for a car that quarter. Customers became more motivated to complete the tedious paperwork needed to complete a sale when there was a Model 3 dangled in front of them. Mr. Hunter’s team began telling customers to have it all completed 48 hours before delivery.

The team raced through their list of customers, assigning times at pickup centers around the U.S. By 6 p.m. the next day, they had reached 5,000 appointments. Mr. Hunter gathered the team to thank them for their work. He fought back tears. He hadn’t told them that his job was on the line; all they knew was that it was super-important to schedule a bunch of deliveries. That night on the call, Mr. Hunter reported the results to Mr. Musk.

“Wow,” Mr. Musk said.

. . .

As the clock ticked down to the end of September [2020] and Tesla’s outrageous sales goal seemed out of reach, Mr. Musk turned to Twitter to make an unusual request to his loyal customers: Help us deliver vehicles.

Longtime owners showed up at stores around the country. They focused on showing customers how to operate their new cars, and explained life with an electric vehicle, freeing up paid staff to handle the overflow of paperwork. Mr. Musk and his new girlfriend, pop musician Grimes, worked at the Fremont delivery center, joined by board member Antonio Gracias. Mr. Musk’s brother, Kimbal, also a member of the board, showed up at a store in Colorado. It was truly an all-hands-on-deck moment. Surrounded by friends and kin, Musk seemed at his happiest, one manager recalled: “It was like a big family event…. He likes that—he likes loyalty.”

The company was ready to tabulate the quarter’s final delivery results. It was close. Deliveries reached 83,500—a record that exceeded Wall Street’s expectations but that was more than 15% shy of the internal goal of 100,000. (It was also uncannily close to the estimate by the head of customer experience, who had seemingly been ousted for suggesting it.) Almost 12,000 vehicles were still en route to customers, missing the deadline for the third quarter.

For the full essay, see:

Tim Higgins. “The Race to Rescue Tesla.” The Wall Street Journal (Sat., July 31, 2021): B1 & B6.

(Note: ellipses, and bracketed year, added.)

(Note: the online version of the essay has the date July 30, 2021, and has the title “Elon Musk’s ‘Delivery Hell’.”)

The essay quoted above is based on Higgins’s book:

Higgins, Tim. Power Play: Tesla, Elon Musk, and the Bet of the Century. New York: Doubleday, 2021.

Toyota Bets Hybrids Are Still Short-Term Best Green Car Technology

(p. B3) TOKYO— Toyota Motor Corp. said most of its U.S. vehicles would still run on gasoline a decade from now because it doesn’t think fully electric vehicles will have caught up in cost and convenience.

Toyota doubled down on its commitment to a technology it pioneered, hybrid vehicles, which are fueled with gasoline but also have an electric motor that raises fuel efficiency. The company projected that in 2030, slightly more than half of the vehicles it sells in North America would be hybrids, while around 30% would run on traditional gasoline engines and the remainder would be fully electric.

“If you take a snapshot of 2030, the price of battery EVs and the provision of infrastructure around the globe probably won’t have advanced all that much,” said Toyota executive Jun Nagata at a news conference Wednesday. “Hybrids and plug-in hybrids will be easier for customers to buy.”

. . .

“The goal is not electric vehicles, the goal is carbon neutrality, and even if we have the best technology, if it’s not chosen by customers, it will not have the impact of reducing emissions,” Mr. Kuffner said at Wednesday’s news conference.

For the full story, see:

Peter Landers. “Toyota Doubles Down on Hybrid Technology.” The Wall Street Journal (Thurs., May 13, 2021): B3.

(Note: ellipsis added.)

(Note: the online version of the story has the date May 12, 2021, and has the title “Most Toyotas Will Still Use Gasoline in 2030, Company Says.”)

SAS Entrepreneurs Forgo Billions in Order to Maintain Firm’s Tightknit Culture

Profits provide valuable information about whether a firm is doing something that consumers like, at a price they are willing to pay. But I think it is OK for a firm’s owners to seek less profits in return for more of some other values. Though personally, I would not forgo billions in order to preserve a yoga studio and a disc golf course.

(p. B1) Talks for Broadcom Inc. to buy SAS Institute Inc. have ended after the founders of the closely held software company changed their minds about a sale, people familiar with the matter said.

The Wall Street Journal reported Monday that the companies were discussing a deal that would value SAS in the range of $15 billion to $20 billion, including any debt. Following the report, Jim Goodnight and John Sall, who co-founded SAS decades ago and still run the company, had a change of heart and decided not to sell to Broadcom, the people said. Whether another suitor for SAS could emerge isn’t clear.

Some SAS employees saw the company as a strange fit for efficiency-focused Broadcom, some of the people familiar with the matter said. SAS is known for a tightknit culture and has a sprawling North Carolina campus with amenities including a yoga studio and a disc golf course.

For the full story, see:

Cara Lombardo. “SAS Calls Off Broadcom Talks.” The Wall Street Journal (Weds., July 14, 2021): B1.

(Note: ellipses added.)

(Note: the online version of the story has the date July 13, 2021, and has the title “Broadcom No Longer in Talks to Buy SAS.” The words “and a disc golf course” appear in the online version, but not in the print version.)

Cuban Communists Ban “Patria y Vida”

I highlighted the spirit and courage of those who sang the “Patria y Vida” song in my blog entry on February 22, 2021.

(p. A1) The protesters pouring into streets across Cuba have a common rallying cry: “Patria y Vida,” or “Fatherland and Life.” The phrase comes from a hip-hop song released a few months ago by dissident Cuban artists who set out to challenge the government—and in the process helped spark a wave of protests against the 62-year communist regime.

In the demonstrations that began Sunday, Cubans have called for an end to the regime, protesting the scarcity of food and medicine amid a surge of coronavirus cases. For Cuba’s frustrated youth in particular, “Patria y Vida” has become a danceable protest anthem and a viral sensation, with nearly six million views on YouTube.

. . .

(p. A8) The Cuban regime has banned any playing of “Patria y Vida.” The lyrics respond to Cuba’s revolutionary motto of “Patria o Muerte,” or “Fatherland or Death,” with lines like: “No more lies! My people demand freedom. No more doctrines! / Let us no longer shout ‘Fatherland or Death’ but ‘Fatherland and Life.’ ”

. . .

Messrs. Castillo, Otero and about 20 others created the San Isidro Movement to challenge the government by taking art from the galleries and music studios to the street, making performances public and organizing independent exhibits. The name came from the neighborhood where Messrs. Castillo and Otero live in Old Havana.

. . .

“It’s your fault that a whole nation is suffering,” sang Mr. Castillo in a song titled “Because of You, Sir,” and directed to Fidel Castro. The video juxtaposes images of the famed revolutionary leader next to rundown scenes of Havana, with hungry and hopeless residents looking through garbage.

Weeks after the release of “Patria y Vida,” police attempted to arrest Mr. Castillo near Mr. Otero’s home, but hundreds of angry San Isidro residents forced them to retreat. Video that was later shared widely captured him strutting on the street shirtless with a pair of handcuffs dangling from his wrist, while hundreds in the crowd sang “Patria y Vida” . . . .

For the full story, see:

Santiago Pérez and José de Córdoba. “Rap Artists Stir Cuban Protests.” The Wall Street Journal (Wednesday, July 14, 2021): A1 & A8.

(Note: ellipses added.)

(Note: the online version of the story has the date July 13, 2021, and has the title “‘Patria y Vida’: The Dissident Rappers Helping Drive Cuba’s Protests.” The online version of the article says the print version had the title “The Artists Rattling Cuba’s Regime,” but my print version had the title “Rap Artists Stir Cuban Protests.” I think I receive the Central edition, but can’t find where that is stated.)

Highly Praised Robot Is Replaced by Humans in a Variety of Jobs

(p. A1) TOKYO—Having a robot read scripture to mourners seemed like a cost-effective idea to the people at Nissei Eco Co., a plastics manufacturer with a sideline in the funeral business.

The company hired child-sized robot Pepper, clothed it in the vestments of Buddhist clergy and programmed it to chant several sutras, or Buddhist scriptures, depending on the sect of the deceased.

Alas, the robot, made by SoftBank Group Corp., kept breaking down during practice runs. “What if it refused to operate in the middle of a ceremony?” said funeral-business manager Osamu Funaki. “It would be such a disaster.”

Pepper was fired. The company ended its lease of the robot and sent it back to the manufacturer. After a rash of similar mishaps across Japan, in which Pepper botched its job at (p. A10) a nursing home and gave baseball fans a creepy feeling, some people are saying the humanoid itself will need a funeral soon.

. . .

. . . , a Japanese hotel chain created a robot-operated hotel, with dinosaur-shaped robots handling front-desk duties, only to reverse course after the plan failed to save money and created more work for humans.

Pepper was given a perky demeanor and programmed to grasp human emotions and engage in basic conversation. It starred in some early demonstrations. But like a candidate who puts on a fine performance at his job interview only to drive his bosses crazy later, Pepper lacked the skills it said it had, say some of his managers.

In 2016, a Tokyo-area nursing-home operator called Ittokai introduced three units of Pepper, each at a cost of around $900 a month, to lead singing and exercises for elderly people at the home.

“Users got excited to have it early on because of its novelty,” said Masataka Iida, an executive at the company. “But they lost interest sooner than expected.” Mr. Iida said Pepper’s repertoire of exercise moves was limited and, owing to mechanical errors, it sometimes took unplanned breaks in the middle of its shift. After three years, the company pulled the plug.

. . .

SoftBank also touted Pepper as a companion for the home. The initial batch of 1,000 units sold out in a minute despite the hefty price tag.

Technology journalist Tsutsumu Ishikawa said he “fell in love at first sight” after seeing Mr. Son, the SoftBank chief, present a futuristic picture of living with a chatty Pepper.

After arriving at the Ishikawa home, however, Pepper couldn’t recognize the faces of family members or carry on a proper conversation, said Mr. Ishikawa. The robot, connected to the cloud, is supposed to remember the family even after a breakdown, Mr. Ishikawa says, but when Pepper returned home after the repair of a sensor, Pepper greeted him, “Nice to meet you!”

He shipped the robot back to SoftBank in 2018 after spending at least $9,000 over the three-year life of his subscription services agreement; he wasn’t eligible for any form of refund.

“It was such a waste of money. I still regret it,” he said.

For the full story, see:

Miho Inada. “Humanoid Robot Keeps Getting Fired From Jobs.” The Wall Street Journal (Wednesday, July 14, 2021): A1 & A10.

(Note: ellipses added.)

(Note: the online version of the story has the date July 13, 2021, and has the title “Humanoid Robot Keeps Getting Fired From His Jobs.”)

India’s Tata “Paid a Harsh Price” for Keeping Distance from Government

(p. A15) Mr. Raianu, a historian at the University of Maryland, is guilty of no hype when he titles his book “Tata: The Global Corporation That Built Indian Capitalism.”

. . .

No other company has dominated the history of its national commerce and industry quite as much as the house of Tata in India, where it is one of the few major businesses still regarded as unstained by overt corruption. Although family-run for most of its existence—the stubborn Indian norm for merchants—the Tata company was from an early date “unusual” among India’s corporate groups (Mr. Raianu says) in employing professional executives and “talented nonrelatives.” The company also “kept its distance from the state” in both colonial and postcolonial times. It gave only lukewarm support to the Indian National Congress, which meant that the Tatas had few political chips to cash when the Congress party came to govern a free India. It paid a harsh price for this aloofness when Air India—the Tatas’ thriving aviation arm—was nationalized by Prime Minister Nehru in 1953.

. . .

The Parsi character of the company has, in many ways, helped it to transcend the mud pit of Indian business. The Parsis are a minuscule community, numbering around 57,000 Indians today. Practitioners of Zoroastrianism, they fled to India in the eighth century when Persia came under the sway of Islam. They embraced Western ways more readily than other Indians and, as a result, thrived under the British. Parsis, writes Mr. Raianu, “typified the religious minority exempt from ritual restrictions of caste and guild systems, much like European Jews.” And so they were more ready to look outward—to foreign opportunities—than the hidebound Indian business castes.

For the full review, see:

Tunku Varadarajan. “BOOKSHELF; From Homestead to Hegemony.” The Wall Street Journal (Wednesday, July 14, 2021): A15.

(Note: ellipses added.)

(Note: the online version of the review has the date July 13, 2021, and has the title “BOOKSHELF; ‘Tata’ Review: From Homestead to Hegemony.”)

The book under review is:

Raianu, Mircea. Tata: The Global Corporation That Built Indian Capitalism. Cambridge, MA: Harvard University Press, 2021.

Supply Chain Fragility During Pandemic Undermines “Just-in-Time” Business Dogma

(p. A1) TOKYO— Toyota Motor Corp. is stockpiling up to four months of some parts. Volkswagen AG is building six factories so it can get its own batteries. And, in shades of Henry Ford, Tesla Inc. is trying to lock up access to raw materials.

The hyperefficient auto supply chain symbolized by the words “just in time” is undergoing its biggest transformation in more than half a century, accelerated by the troubles car makers have suffered during the pandemic. After sudden swings in demand, freak weather and a series of accidents, they are reassessing their basic assumption that they could always get the parts they needed when they needed them.

“The just-in-time model is designed for supply-chain efficiencies and economies of scale,” said Ashwani Gupta, Nissan Motor Co.’s chief operating officer. “The repercussions of an unprecedented crisis like Covid highlight the fragility of our supply-chain model.”

. . .

(p. A10) One day in 1950, Toyota executive Taiichi Ohno visited an American supermarket and marveled how the shelves were restocked as they were emptied, as Jeffrey Liker recounts in his book “The Toyota Way.” Shoppers were kept happy even though the supermarket had only small storerooms. It was the polar opposite of the car industry where warehouses were kept full of sheet metal and tires to ensure the assembly line never shut down.

Supermarkets had little choice, since they couldn’t stockpile bananas for months. Still, Mr. Ohno reasoned, their practices eliminated waste and cut costs. Toyota would only pay for what it needed to produce cars for a day. That meant they could make do with smaller factories and warehouses.

. . .

The tide began to turn with the global financial crisis. At least 50 auto suppliers went bankrupt, catching car makers by surprise. When suppliers like Visteon Corp. , a maker of air conditioners, radios and other components, declared bankruptcy, it led to fears that car factories relying on Visteon would also be unable to operate.

A different shock prompted a rethinking of just in time at the company where it started. The 2011 earthquake in northern Japan hit Toyota suppliers including chip maker Renesas Electronics Corp.

. . .

For certain components, Toyota asked its suppliers to stockpile parts, the antithesis of just in time. The on-hand inventory held by Toyota’s largest supplier, Denso Corp., rose to around 50 days’ worth of supply in the year ended March 2020, up from 38 days in 2011, according to its financial filings. Denso declined to comment on inventory figures but said it has started keeping emergency stores of parts, especially semiconductors.

Toyota’s efforts have helped it weather this year’s shortages of semiconductors better than many of its rivals, although it wasn’t perfect.

For the full story, see:

Sean McLain. “Auto Makers Hit Brakes On Just-in-Time Manufacturing.” The Wall Street Journal (Thursday, May 04, 2021): A1 & A10.

(Note: ellipses added.)

(Note: the online version of the story has the date May 3, 2021, and has the title “Auto Makers Retreat From 50 Years of ‘Just in Time’ Manufacturing.”)

The most recent edition of the classic book on Toyota’s success, mentioned above, is:

Liker, Jeffrey. The Toyota Way, 14 Management Principles from the World’s Greatest Manufacturer. 2nd ed. New York: McGraw-Hill Education, 2021.

Serendipitous Water Cooler Collaboration “Is More Fairy Tale Than Reality”

(p. B1) When Yahoo banned working from home in 2013, the reason was one often cited in corporate America: Being in the office is essential for spontaneous collaboration and innovation.

. . .

Yet people who study the issue say there is no evidence that working in person is essential for creativity and collaboration. It may even hurt innovation, they say, because the demand for doing office work at a prescribed time and place is a big reason the American workplace has been inhospitable for many people.

“That’s led to a lot of the outcomes we see in the modern office environment — long hours, burnout, the lack of representation — because that office culture is set up for the advantage of the few, not the many,” said Dan Spaulding, chief people officer at Zillow, the real estate market-(p. B7)place.

“The idea you can only be collaborative face-to-face is a bias,” he said. “And I’d ask, how much creativity and innovation have been driven out of the office because you weren’t in the insider group, you weren’t listened to, you didn’t go to the same places as the people in positions of power were gathering?”

“All of this suggests to me that the idea of random serendipity being productive is more fairy tale than reality,” he said.

. . .

“There’s credibility behind the argument that if you put people in spaces where they are likely to collide with one another, they are likely to have a conversation,” said Ethan S. Bernstein, who teaches at Harvard Business School and studies the topic. “But is that conversation likely to be helpful for innovation, creativity, useful at all for what an organization hopes people would talk about? There, there is almost no data whatsoever.”

“All of this suggests to me that the idea of random serendipity being productive is more fairy tale than reality,” he said.

. . .

. . . Professor Bernstein found that contemporary open offices led to 70 percent fewer face-to-face interactions. People didn’t find it helpful to have so many spontaneous conversations, so they wore headphones and avoided one another.

. . .

. . . some creative professionals, like architects and designers, have been surprised at how effective remote work has been during the pandemic, while scientists and academic researchers have long worked on projects with colleagues in other places.

Requiring people to be in the office can drive out innovation, some researchers and executives said, because for many people, in-person office jobs were never a great fit. They include many women, racial minorities and people with caregiving responsibilities or disabilities. Also, people who are shy; who need to live far from the office; who are productive at odd hours; or who were excluded from golf games or happy hours.

For the full commentary, see:

Claire Cain Miller. “THE UPSHOT;Returning to the Office? The Myth of Serendipity.” The New York Times, SundayBusiness Section (Sunday, July 2, 2021): B1 & B7.

(Note: the online version of the commentary was updated July 1, 2021, and has the title “THE UPSHOT; Do Chance Meetings at the Office Boost Innovation? There’s No Evidence of It.”)

The Bernstein research mentioned above is:

Bernstein, Ethan, and Ben Waber. “The Truth About Open Offices.” Harvard Business Review 97, no. 6 (Nov./Dec. 2019): 82-91.