Entrepreneurship – Page 49 – artdiamondblog.com

Business Formations During Pandemic Are “Off the Charts”

Source: Haltiwanger as reprinted in WSJ article cited below.

(p. A4) “Sixty or more years ago, most of us, including me, were altogether too willing to treat the economy as close to fully competitive. I now think that was a mistake,” Nobel Prize-winning economist Robert Solow said in a recent interview. “The economy has grown less competitive and the elements of monopoly power are probably very important for the distribution of income between work and wealth and ultimately across individuals.”

Douglas Holtz-Eakin, president of the American Action Forum, a conservative research group, said he is skeptical of the notion that corporate power has hurt consumers. He and other Republicans say the rise of big companies such as Walmart, Home Depot and Amazon has benefited U.S. consumers by helping to push down prices.

“I take all of this talk with a healthy dose of show me,” Mr. Holtz-Eakin said. While Republicans could likely get behind some of Mr. Biden’s proposals—such as pushing back against firms forcing workers to sign noncompete clauses or states imposing what some workers say are unnecessary licensing requirements on workers—other ideas may go too far.

Some research has found less cause for concern around business consolidation. “There are reasons to be cautious about concluding that market concentration has risen or is a meaningful problem for market competition and consumer welfare,” Nancy Rose, a professor in the economics department of the Massachusetts Institute of Technology, concluded in a 2019 examination of research on the issue, citing measurement challenges among reasons for skepticism.

. . .

With the rise of a few big companies, jobs also have become concentrated there. John Haltiwanger, a University of Maryland professor, finds that the share of U.S. jobs at young, small firms declined to 16% in 2018 from 26% in 1987. During the same period, the share of jobs in older, larger firms rose from 41% to more than half.

Mr. Haltiwanger’s research shows that the U.S. economy became less dynamic during this period, with fewer new jobs created by startup firms, less job-hopping by workers seeking out new opportunities and slower worker productivity growth.

. . .

Mr. Haltiwanger said the competition dynamics might now be changing due to the coronavirus pandemic. Tracking business identification data from the Internal Revenue Service, he spotted a surge in business formations in the second half of 2020, a trend that persisted into 2021.

“It is off the charts,” he said. “I think we discovered during the pandemic that our technological infrastructure is just phenomenal. We can do almost anything we want from anywhere. That leads to lots of market opportunities. I think there is going to be a surge of dynamism. The question is will it be transitory, or true innovation?”

For the full story, see:

Jon Hilsenrath. “Economic Competition Scrutinized.” The Wall Street Journal (Monday, July 12, 2021): A4.

(Note: ellipses added.)

(Note: the online version of the story has the date July 11, 2021, and has the title “Biden Stakes Out Position in Debate Over Power of Big Companies.”)

“Weak Venture Capitalists Who Kowtow to Charismatic Entrepreneurs”

(p. 11) . . . the unbelievability of the rise and fall of a company that marketed itself to investors as a tech enterprise when it actually rented work space to gig-economy freelancers and starry-eyed entrepreneurs is part of the considerable lure of “The Cult of We: WeWork, Adam Neumann, and the Great Startup Delusion,” a juicy guided tour through the highly leveraged, not-quite-rags-to-billion-dollar-parachute saga of WeWork and its co-founder Adam Neumann, a startup demagogue who aspired to be a demigod, but got hamstrung by his ego and greed.

. . .

. . ., the book saves its firepower for the cataclysmic combination of Neumann’s gift for salesmanship, addiction to fund-raising and focus on his personal wealth. We meet weak venture capitalists who kowtow to charismatic entrepreneurs as well as mutual fund directors, investment bankers and deep-pocketed benefactors like SoftBank’s Masayoshi Son who enabled Neumann.

For the full review, see:

Katherine Rosman. “Office Space.” The New York Times Book Review (Sunday, August 15, 2021): 11.

(Note: ellipses added.)

(Note: the online version of the review has the date July [sic] 18, 2021, and has the title “‘How to Explain the Rise and Fall of WeWork?”)

The book under review is:

Brown, Eliot, and Maureen Farrell. The Cult of We: Wework, Adam Neumann, and the Great Startup Delusion. New York: Crown, 2021.

“Extrapolate to Doomsday”

(p. B1) The giant tech companies with their power-hungry, football-field-size data centers are not the environmental villains they are sometimes portrayed to be on social media and elsewhere.

Shutting off your Zoom camera or throttling your Netflix service to lower-definition viewing does not yield a big saving in energy use, contrary to what some people have claimed.

Even the predicted environmental impact of Bitcoin, which does require lots of computing firepower, has been considerably exaggerated by some researchers.

Those are the conclusions of a new analysis by Jonathan Koomey and Eric Masanet, two leading scientists in the field of technology, energy use and the environment. Mr. Koomey is now an independent analyst, and Mr. Masanet is a professor at the University of California, Santa Barbara. (Mr. Masanet receives research funding from Amazon.)

They said their analysis, published on Thursday [June 24, 2021] as a commentary article in Joule, a scientific journal, was not necessarily intended to be reassuring. Instead, they said, it is meant to inject a dose of reality into the public discussion of technology’s impact on the environment.

. . .

(p. B3) Exaggerated claims, the pair said, are often well-intentioned efforts by researchers who make what may seem like reasonable assumptions. But they are not familiar with fast-changing computer technology — processing, memory, storage and networks. In making predictions, they tend to underestimate the pace of energy-saving innovation and how the systems work.

. . .

Computer data centers are a case study. The biggest data centers, from which consumers and workers tap services and software over the internet, do consume huge amounts of electricity. These so-called cloud data centers are operated by companies including Alibaba, Amazon, Apple, Facebook, Google and Microsoft.

From 2010 to 2018, the data workloads hosted by the cloud data centers increased 2,600 percent and energy consumption increased 500 percent. But energy consumption for all data centers rose less than 10 percent.

What happened, the authors explain, was mainly a huge shift of workloads to the bigger, more efficient cloud data centers — and away from traditional computer centers, largely owned and run by non-tech companies.

In 2010, an estimated 79 percent of data center computing was done in traditional computer centers. By 2018, 89 percent of data center computing took place in cloud data centers.

“The big cloud providers displaced vastly less efficient corporate data centers,” Mr. Koomey said. “You have to look at the whole system and take substitution effects into account.”

The complexity, dynamism and unpredictability of technology development and markets, the authors say, make projecting out more than two or three years suspect. They critiqued a Bitcoin energy paper that projected out decades, based on what they said were old data and simplified assumptions — an approach Mr. Masanet called “extrapolate to Doomsday.”

For the full story, see:

Steve Lohr. “The Internet Is Eating Up Less Energy Than Expected.” The New York Times (Saturday, June 26, 2021): B1 & B3.

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

(Note: the online version of the story has the date June 24, 2021, and has the title “The Internet Eats Up Less Energy Than You Might Think.”)

The commentary summarized in the passages quoted above is:

Koomey, Jonathan, and Eric Masanet. “Does Not Compute: Avoiding Pitfalls Assessing the Internet’s Energy and Carbon Impacts.” Joule 5, no. 7 (July 21, 2021): 1625-28.

MSG Seasoning Maker Finds Lucrative Tech Use for MSG Byproducts

(p. B10) The chip shortage is adding extra flavor to a 113-year-old Japanese seasoning company.

Japan’s Ajinomoto is renowned for inventing monosodium glutamate—the controversial flavor enhancer that adds umami to dishes. But it also makes a material that goes into the central processing units of computers around the world.

Ajinomoto manufactures a type of insulation material called Ajinomoto Buildup Film, or ABF. It was once made using byproducts from MSG manufacturing but isn’t any longer. The insulation material in turn goes into a semiconductor component called ABF substrate, which connects microchips to circuit boards.

. . .

Ajinomoto expects ABF shipment volume to grow 67% over the next four fiscal years. And its customers downstream are expanding capacity to meet demand. Ajinomoto said growth this fiscal year may slow but it will pick up again once those expansion plans are realized.

Ajinomoto’s core seasoning business is a less tasty morsel, but the business has still weathered the pandemic well. Even though demand from restaurants dropped, increases in home cooking have helped profits since retail products sell at higher margins.

For the full story, see:

Jacky Wong. “Microchips Punch Up MSG Maker.” The Wall Street Journal (Friday, Aug. 20, 2021): B10.

(Note: ellipsis added.)

(Note: the online version of the story has the date August 19, 2021, and has the title “Is MSG Bad for You? Not if It Comes With a Side of Microchips.”)

Emerson’s Buoyancy and Resilience in Adversity

(p. C5) Life compelled Emerson to become something of an expert on resilience. As a young man he lost the love of his life, his wife Ellen, to tuberculosis when she was just 19. His oldest son, Waldo—a joyful child who seemed to concentrate in himself what was most uninhibitedly life-loving in his father—died of scarlet fever when he was 5 years old.

. . .

In the essay “Power,” Emerson writes that we carefully watch children to see if they possess “the recuperative force.” Those who instinctively retire to their rooms in sorrow when they’re slighted, miss the prize or lose the game will be at a serious disadvantage in adult life. “But,” Emerson continues, “if they have the buoyancy and resistance that preoccupies them with new interest in the new moment,—the wounds cicatrize, and the fiber is the tougher for the hurt.”

When Waldo died, Emerson needed that kind of buoyancy and resistance to overcome the greatest sadness of his life.

. . .

Emerson’s resilience was shaped by his conviction that we are mortal and there is no other life than this. Nothing can redeem the time when you did not plunge forward and do what you had to do. The moral quality Emerson commends above all others isn’t love, faith or patriotism but a commitment to work. “But do your work and I shall know you,” he writes in “Self-Reliance.”

Emerson’s commitment to rapid recovery from loss isn’t gentle or humanitarian. But it is classically American in its insistence on affirming the future over the past. For all our faults, Americans are still people who look ahead, scope the territory, move forward. When we fail at something, we give it one more go and maybe get it half right.

For the full essay, see:

Mark Edmundson. “What Emerson Can Teach Us About Resilience.” The Wall Street Journal (Sat., June 19, 2021): C5.

(Note: ellipses added.)

(Note: the online version of the essay has the date June 18, 2021, and has the same title as the print version.)

Emerson’s most famous essay, “Self-Reliance,” can be found in:

Emerson, Ralph Waldo. Self-Reliance and Other Essays. New York: Dover Publications, Inc., 1993.

George Soros Tells Why Xi Will Fail

(p. A11) I consider Mr. Xi the most dangerous enemy of open societies in the world. The Chinese people as a whole are among his victims, but domestic political opponents and religious and ethnic minorities suffer from his persecution much more. I find it particularly disturbing that so many Chinese people seem to find his social-credit surveillance system not only tolerable but attractive. It provides them social services free of charge and tells them how to stay out of trouble by not saying anything critical of Mr. Xi or his regime. If he could perfect the social-credit system and assure a steadily rising standard of living, his regime would become much more secure. But he is bound to run into difficulties on both counts.

. . .

Mr. Xi is engaged in a systematic campaign to remove or neutralize people who have amassed a fortune. His latest victim is Sun Dawu, a billionaire pig farmer. Mr. Sun has been sentenced to 18 years in prison and persuaded to “donate” the bulk of his wealth to charity.

This campaign threatens to destroy the geese that lay the golden eggs. Mr. Xi is determined to bring the creators of wealth under the control of the one-party state. He has reintroduced a dual-management structure into large privately owned companies that had largely lapsed during the reform era of Deng. Now private and state-owned companies are being run not only by their management but also a party representative who ranks higher than the company president. This creates a perverse incentive not to innovate but to await instructions from higher authorities.

China’s largest, highly leveraged real-estate company, Evergrande, has recently run into difficulties servicing its debt. The real-estate market, which has been a driver of the economic recovery, is in disarray. The authorities have always been flexible enough to deal with any crisis, but they are losing their flexibility. To illustrate, a state-owned company produced a Covid-19 vaccine, Sinopharm, which has been widely exported all over the world, but its performance is inferior to all other widely marketed vaccines. Sinopharm won’t win any friends for China.

To prevail in 2022, Mr. Xi has turned himself into a dictator. Instead of allowing the party to tell him what policies to adopt, he dictates the policies he wants it to follow. State media is now broadcasting a stunning scene in which Mr. Xi leads the Standing Committee of the Politburo in slavishly repeating after him an oath of loyalty to the party and to him personally. This must be a humiliating experience, and it is liable to turn against Mr. Xi even those who had previously accepted him.

In other words, he has turned them into his own yes-men, abolishing the legacy of Deng’s consensual rule. With Mr. Xi there is little room for checks and balances. He will find it difficult to adjust his policies to a changing reality, because he rules by intimidation. His underlings are afraid to tell him how reality has changed for fear of triggering his anger. This dynamic endangers the future of China’s one-party state.

For the full commentary, see:

George Soros. “Xi’s Dictatorship Threatens the Chinese State.” The Wall Street Journal (Saturday, Aug. 14, 2021): A11.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date August 13, 2021, and has the same title as the print version.)

Milton Friedman Will Be Vindicated on China

I was lucky to be able to take Milton Friedman’s Price Theory graduate course the last time he taught a full version of it. (I think he taught an abbreviated version a year or two later.) He was, and remains, one of my heroes. He predicted that China’s move to the market would also lead it to more political freedom. I suspect that he will still turn out to be correct, but with a longer delay than he or I thought likely. A dynamic economy depends on innovative entrepreneurship and innovative entrepreneurship depends on freedom of thought and speech. Xi is systematically destroying freedom of thought and speech in China; the house of cards will fall and Milton will be vindicated in the end.

(p. A15) “I predict that China will move increasingly toward political freedom if it continues its successful move to economic freedom.”

So spoke Milton Friedman in 2003. It seemed a good idea at the time, especially after the transformations of the dictatorships in Taiwan and South Korea into messy but functioning democracies.

. . .

Under Mr. Xi, Beijing has carried out genocide against China’s Uyghur minority, threatened Taiwan with invasion, shut down a pro-democracy newspaper in Hong Kong, covered up the origins of Covid-19, and so on. Even so, China’s economy continues to boom—it grew more than 18% in the first quarter from a year earlier—and Friedman now looks to have gotten it colossally wrong about capitalism and freedom.

For the full commentary, see:

William McGurn. “Milton Friedman Wrong About China?” The Wall Street Journal (Tuesday, June 29, 2021): A15.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date June 28, 2021, and has the title “Was Milton Friedman Wrong About China?”)

Startup Technology Captures 80% of Truck Carbon Dioxide for Reuse

(p. B6) A handful of heavy-duty truck operators are hoping an early-stage startup can help lower the carbon emissions of their industry, one that has been particularly hard to clean up.

Companies including Ryder System Inc., Werner Enterprises Inc., NFI Industries, ArcBest Corp. and Cargill Inc. are planning to test a mobile carbon-capture system in development by Echeneidae Inc., which does business as Remora. The tests start later this year.

Remora’s 24-year-old chief executive and co-founder, Paul Gross, said he was surprised at how quickly he got interest from the trucking industry, where he knew no one as of last year. “I thought this would be one of the hardest parts of starting a company,” he added. Livonia, Mich.-based Remora, named after a suckerfish that clings onto sharks and cleans them, was incorporated in November.

Remora’s device is attached to the tailpipes of 18-wheelers with the intent of capturing as much as 80% of the emitted carbon dioxide. Remora then plans to sell the carbon dioxide for reuse.

. . .

Supply-chain snarls at electric-truck plants have been a particular obstacle in getting the vehicles on the road. Production of electric trucks at Tesla Inc., Nikola Corp. and others has been delayed.

“There’s a lot of talk about producing vehicles, but the actual production and delivery of vehicles is a different thing,” Ms. Jones said.

That is where carbon-capture technology comes in, she added.

“While I call Remora a little bit of a bridge to EV, it actually is more than a bridge,” Ms. Jones said.

For the full story see:

Yuliya Chernova. “Truck Operators To Test Mobile Carbon Capture.” The Wall Street Journal (Tuesday, August 10, 2021): B6.

(Note: ellipsis added.)

(Note: the online version of the story has the date Aug. 9, 2021, and has the title “Heavy-Duty Truck Operators to Test Startup’s Onboard Carbon-Capture System.”)

Dog Sniffs Identify Covid-19 Faster, Cheaper, and More Accurately than Antigen Tests

(p. A6) A growing body of research by scientists and dog trainers from the U.S. to the United Arab Emirates suggests that dogs can use their powerful sense of smell to sniff out Covid-19 infections, including in people without symptoms.

With more than 300 million scent receptors (compared with roughly five million in humans), dogs can do this with a high degree of accuracy by detecting compounds the human body releases in secretions like sweat and saliva as it reacts to the coronavirus, according to scientists.

Dogs have long been trained to detect odors associated with drugs or explosives and have also been used to identify diseases such as cancer, malaria and diabetes.

. . .

One dog can screen 250 to 300 people a day, according to the WHO.

Prof. Grandjean calculated that dog screenings in France could cost as little as one euro, equivalent to about $1.20, per person, as opposed to roughly €75 for a polymerase chain reaction, or PCR, test, a highly accurate test that involves a nasal swab.

. . .

Studies have shown that dogs can be trained to identify Covid-19 infections with roughly 82% to 99% sensitivity and 84% to 98% specificity, Prof. Grandjean said. A test’s sensitivity indicates its ability to correctly detect an infection, while its specificity shows how well it can avoid giving false positives.

Researchers at the University of Veterinary Medicine in Hannover, Germany, trained eight dogs for one week to detect respiratory secretions from infected patients with an average detection rate of 94%, according to a study published recently in the journal BMC Infectious Diseases

In a study of 21 dogs led by Prof. Grandjean, 15 of the animals were able to detect Covid-19 with a sensitivity of 90% or more, with six dogs showing a sensitivity of 71% to 87%. The study was published in April in the Open Access Journal of Veterinary Science and Research.

Such results mean dogs may be more precise than many rapid antigen tests, which correctly identify Covid-19 infections in an average of 72% of people showing symptoms and 58% of asymptomatic people, according to a recent review from Cochrane, a U.K.-based nonprofit that evaluates scientific research.

For the full story see:

Ruth Bender and Rachel Bachman. “Dogs Deployed to Sniff Out Covid.” The Wall Street Journal (Thursday, May 20, 2021): A6.

(Note: ellipses added.)

(Note: the online version of the story has the date May 19, 2021, and has the title “Your Next Covid-19 Test Could Be a Dog’s Sniff.”)

The articles mentioned in the passages above are:

Jendrny, Paula, Claudia Schulz, Friederike Twele, Sebastian Meller, Maren von Köckritz-Blickwede, Albertus Dominicus Marcellinus Erasmus Osterhaus, Janek Ebbers, Veronika Pilchová, Isabell Pink, Tobias Welte, Michael Peter Manns, Anahita Fathi, Christiane Ernst, Marylyn Martina Addo, Esther Schalke, and Holger Andreas Volk. “Scent Dog Identification of Samples from Covid-19 Patients – a Pilot Study.” BMC Infectious Diseases 20, no. 1 (2020). DOI:10.1186/s12879-020-05281-3

Grandjean, Dominique, Dana Humaid Al Marzooqi, Clothilde Lecoq-Julien, Quentin Muzzin, Hamad Katir Al Hammadi, Guillaume Alvergnat, Kalthoom Mohammad Al Blooshi, Salah Khalifa Al Mazrouei, Mohammed Saeed Alhmoudi, Faisal Musleh Al Ahbabi, Yasser Saifallah Mohammed, Nasser Mohammed Alfalasi, Noor Majed Almheiri, Sumaya Mohamed Al Blooshi, and Loïc Desquilbet. “Use of Canine Olfactory Detection for Covid-19 Testing Study on U.A.E. Trained Detection Dog Sensitivity ” Open Access Journal of Veterinary Science & Research (OAJVSR) 6, no. 2 (May 2021). DOI: 10.23880/oajvsr-16000210.

Dinnes, J., J. J. Deeks, S. Berhane, M. Taylor, A. Adriano, C. Davenport, S. Dittrich, D. Emperador, Y. Takwoingi, J. Cunningham, and et al. “Rapid, Point‐of‐Care Antigen and Molecular‐Based Tests for Diagnosis of Sars‐Cov‐2 Infection.” Cochrane Database of Systematic Reviews, no. 3 (2021). DOI: 10.1002/14651858.CD013705.pub2

“Creatively Destructive Innovation” Is Continuous in Book Publishing Industry

(p. A13) In 2000 the RAND Corporation invited a group of historians—including me—to address a newly pressing question: Would digital media revolutionize society as profoundly as Gutenberg and movable type? Two decades later, John Thompson’s answer is yes, but not entirely as predicted. And our forecasts were often wrong because we overlooked key variables: We cannot understand the impact of technologies “without taking account of the complex social processes in which these technologies were embedded and of which they were part.”

Mr. Thompson provides that context in “Book Wars” (Polity, 511 pages, $35), an expert diagnosis of publishers and publishing, robustly illustrated with charts, graphs, tables, statistics and case studies.

. . .

My warning to the RAND corporation was to avoid succumbing to the “Two Big Bangs Theory”—the assumption that there were only two world-changing events in the history of print, in or around 1450 and 2000. With books, change is a constant. In the last two centuries the publishing trade has dealt with one creatively destructive innovation after another—mechanized printing and papermaking, railway bookstalls and distribution networks, linotype and offset printing, photomechanical reproduction, paperbacking and books-of-the-month. The movies opened up vast new possibilities (and revenues) for novelists, who increasingly wrote with the screen in mind, as Ernest Hemingway did when he insisted on casting Gary Cooper in “For Whom the Bell Tolls.” And television supercharged book publicity, climaxing (so far) with Oprah. While Mr. Thompson is entirely right to conclude that the transformation of publishing in the past 20 years has been bewildering, that’s nothing new. In a dynamic capitalist economy, the dust never settles.

For the full review, see:

Jonathan Rose. “BOOKSHELF; Publishing In a Protean Age.” The Wall Street Journal (Monday, August 9, 2021): A13.

(Note: ellipsis added.)

(Note: the online version of the review has the date August 8, 2021, and has the title “BOOKSHELF; ‘Book Wars’ Review: Publishing in a Protean Age.”)

The book under review is:

Thompson, John B. Book Wars: The Digital Revolution in Publishing. Cambridge, UK: Polity Press, 2021.

Capitalist Innovations Made Rapid Covid-19 Vaccines Possible

(p. A15) The Wuhan lab appears to have operated, in part, with U.S. government grant funding, although American scientists had no oversight role. Chinese scientists allegedly pursued gain-of-function research, increasing the virulence and transmissibility of certain viruses. It isn’t unheard of for a virus to escape from a government-funded lab, and the evidence increasingly suggests that’s what happened in Wuhan, even as China dubiously points a finger at the U.S. military.

Regardless of which government, if any, contributed to the emergence of Covid-19, the pandemic was quickly controlled by innovation from the private economy. New vaccines and private protocols, not government mandates, mainly slowed the spread in workplaces and schools. The pandemic originated from government failures that had to be corrected by private actors.

Even if the lab-leak theory proves false, and it turns out that SARS-CoV2 passed directly from animals to humans, one could still argue the Chinese government’s actions created the pandemic. Beijing covered up evidence of the virus’s early spread and allowed international flights from Wuhan during January and February 2020 while locking down domestic travel.

. . .

American capitalism supported decades of innovation that created conditions conducive to the rapid development of the Covid vaccines. About 70% of the returns to medical research and development across the world come from the U.S., where price controls are less prevalent than elsewhere and companies compete to bring new treatments and cures to market. Without the U.S. market, investors would have shied away from funding the cumulative advances that eventually led to successful Covid vaccines. In this sense, the U.S. market-based healthcare economy saved the world from Covid-19. None of it would have happened in a government-run health system.

For the full commentary see:

Casey B. Mulligan and Tomas J. Philipson. “Government Failure Gave the World Covid.” The Wall Street Journal (Tuesday, Aug. 10, 2021): A15.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date August 9, 2021, and has the same title as the print version.)