The above segment, by reporter Brent Weber, ran on WOWT’s 10 PM news on Tuesday, Aug. 10, 2021. It includes a couple of brief comments by me near the end.
Category: Labor Economics
Anderson Led NCR to Disrupt Its Own Cash Register Technology
I believe that Clayton Christensen (with Raynor) in The Innovator’s Solution, used the NCR transition from mechanical cash registers to electronic cash registers as an example of creative destruction that was NOT an example of his disruptive innovation. Alternatively, should this be considered a rare case where a firm succeeds in disrupting itself, especially rare because it was not implemented by the firm founders? (The usual case of rare self-disruption is HP disrupting its laser printer by developing the ink jet printer.)
(p. A9) The same self-belief that kept Mr. Anderson alive as a POW gave him confidence he could save NCR.
“The most important message I try to get across to our managers all over the world is that we are in trouble but we will overcome it,” he told Business Week, which reported that he had the “stance and mien of a middleweight boxer.”
Founded in 1884, NCR was comfortably entrenched as a dominant supplier of mechanical cash registers and machines used in accounting and banking. It underestimated the speed at which microelectronics and computers would wipe out its legacy product line. By the early 1970s, NCR was losing sales to more nimble rivals.
A factory complex covering 55 acres in Dayton made hundreds of exceedingly complicated machines rapidly becoming obsolete. Mr. Anderson found that NCR was using about 130,000 different parts, including more than 9,000 types and sizes of screws. For 1972, his first year as president, NCR took a $70 million charge, largely to write down the value of parts and inventory and replace outdated production equipment.
Mr. Anderson slashed the payroll and invested in new products, including automated teller machines and computers. Profitability recovered, and NCR reported record revenue of $4.07 billion for 1984, the year he retired as chairman.
For the full obituary, see:
(Note: the online version of the obituary has the date July 6, 2021, and has the title “Former Prisoner of War Saved NCR From Obsolescence.”)
The Christensen co-authored book mentioned above is:
Christensen, Clayton M., and Michael E. Raynor. The Innovator’s Solution: Creating and Sustaining Successful Growth. Boston, MA: Harvard Business School Press, 2003.
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.”)
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:
(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.
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.)
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:
(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.”)
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:
(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:
Bezos’s Intuitions Drove Amazon’s Innovations
(p. 12) . . . Alexa, the voice coming out of my Echo, more or less is Jeff Bezos. He came up with the idea of a smart speaker in January 2011, back in the era of Google Plus and the iPod Shuffle. Bezos emailed his top deputies that month and declared, “We should build a $20 device with its brains in the cloud that’s completely controlled by our voice.”
For the next nearly four years, he obsessively micromanaged the project, pushing teams in Atlanta and Gdansk to make speech recognition seamless. He put in place a surreal testing protocol that involved hiring temps to spend days in empty apartments chattering away to silent speakers, and berated executives who told him it would take decades to develop speech recognition. He took home an early Echo prototype and when, in a moment of frustration, he told it to go “shoot yourself in the head,” it sent a wave of panic through the engineers who were listening in. He even came up with the idea for the LED ring on top, Stone writes, and with the name “Alexa” (in homage to the ancient library of Alexandria).
. . .
Amazon in the 2010s was an intensely personal venture, run by one of the wealthiest men in the world according to his own desires and reflecting his own personality.
. . .
Like Alexa, Amazon as a company seems to embody some of Bezos’ best personal qualities (his relentless drive to get you that package on time) and his worst (an “informal cruelty” that defines his company’s culture and requires that his factory workers and executives make personal sacrifices for corporate needs).
At Amazon, nearly every big decision comes down to a meeting with Bezos, at which his deputies hold their breaths, genuinely uncertain of whether he will berate them and tear up their proposals, or double their planned budgets. Some of his fixations, like his determination to create a smart speaker, are visionary.
. . .
It was, Stone writes, “a different style of innovation,” in which employees “worked backwards from Bezos’ intuition and were catering to his sometimes eclectic tastes (literally).”
For the full review, see:
Ben Smith. “Colossus.” The New York Times Book Review (Sunday, June 13, 2021): 12.
(Note: ellipses added.)
(Note: the online version of the review was updated June 17,, 2021, and has the title “To Understand Amazon, We Must Understand Jeff Bezos.”)
The book under review is:
Stone, Brad. Amazon Unbound: Jeff Bezos and the Invention of a Global Empire. New York: Simon & Schuster, 2021.
Subsidies for Black Farmers Fuel Claims of “Reverse Racism” and “All Farmers Matter”
(p. 1) LaGRANGE, Mo. — Shade Lewis had just come in from feeding his cows one sunny spring afternoon when he opened a letter that could change his life: The government was offering to pay off his $200,000 farm loan, part of a new debt relief program created by Democrats to help farmers who have endured generations of racial discrimination.
It was a windfall for a 29-year-old who has spent the past decade scratching out a living as the only Black farmer in his corner of northeastern Missouri, where signposts quoting Genesis line the soybean fields and traffic signals warn drivers to go slow because it is planting season.
But the $4 billion fund has angered conservative white farmers who say they are being unfairly excluded because of their race. And it has plunged Mr. Lewis and other farmers of color into a new culture war over race, money and power in American farming.
. . .
(p. 19) The plans have drawn thousands of enraged comments on farm forums and are being fought by banks worried about losing interest income. And some rural residents have rallied around a new slogan, cribbed from the conservative response to the Black Lives Matter movement: All Farmers Matter.
. . .
“It’s a bunch of crap,” said Jeffrey Lay, who grows corn and soybeans on 2,000 acres and is president of the county farm bureau. “They talk about they want to get rid of discrimination. But they’re not even thinking about the fact that they’re discriminating against us.”
. . .
. . . rural residents upset with the repayments call them reverse racism.
White conservative farmers and ranchers from Florida, Texas and the Midwest quickly sued to block the program, arguing that the promised money amounts to illegal discrimination. America First Legal, a group run by the former Trump aide Stephen Miller, is backing the Texas lawsuit, whose plaintiff is the state’s agriculture commissioner.
“It’s anti-white,” said Jon Stevens, one of five Midwestern farmers who filed a lawsuit through the Wisconsin Institute for Law and Liberty, a conservative legal group. “Since when does Agriculture get into this kind of race politics?”
. . .
One recent afternoon, a friend, Brad Klauser, who runs his family’s large cattle and grain farm, swung by Mr. Lewis’s barn to catch up. As they talked bills, rising fuel costs and sky-high land prices, the conversation turned to the debt relief that only one of them was eligible to receive.
“Everybody should have the same option,” said Mr. Klauser, who is white, leaning on the flatbed of Mr. Lewis’s pickup. “Do you think you’re disadvantaged?”
“There’s definitely disadvantages,” Mr. Lewis replied, saying that officials scoffed when he first tried to get a federal farm loan. “They didn’t take me serious.”
After Mr. Klauser headed home, Mr. Lewis thought about how the two friends were both trying to reap a profit from the land. “Everyone should have a chance at farming,” he said.
For the full story, see:
(Note: ellipses added.)
(Note: the online version of the story was updated May 24, 2021, and has the title “‘You Can Feel the Tension’: A Windfall for Minority Farmers Divides Rural America.” The online “pressreader” version showed the continuation page as p. 21. The continuation page of my “National” print version was p. 19.)
World Population Decline Will Slow Global Warming
(p. 1) All over the world, countries are confronting population stagnation and a fertility bust, a dizzying reversal unmatched in recorded history that will make first-birthday parties a rarer sight than funerals, and empty homes a common eyesore.
Maternity wards are already shutting down in Italy. Ghost cities are appearing in northeastern China. Universities in South Korea can’t find enough students, and in Germany, hundreds of thousands of properties have been razed, with the land turned into parks.
Like an avalanche, the demographic forces — pushing toward more deaths than births — seem to be expanding and accelerating. Though some countries continue to see their populations grow, especially in Africa, fertility rates are falling nearly everywhere else. Demographers now predict that by the latter half of the century or possibly earlier, the global population will enter a sustained decline for the first time.
A planet with fewer people could ease pressure on resources, slow the destructive impact of climate change and reduce household burdens for women.
For the full story, see:
(Note: the online version of the story was updated May 24, 2021, and has the title “Long Slide Looms for World Population, With Sweeping Ramifications.”)