Business & Economics: April 2010 Archives
According to the Computer & Communications Industry Association, fair use generates $4.7 trillion in revenue each year.
Industries that rely on fair use exceptions to copyright law grew faster than the rest of the U.S. economy from 2002 to 2007, expanded 5 percent and accounted for 23 percent of real economic growth, according to a new economic study. The Computer & Communications Industry Association released its 2010 economic study “Fair Use in the U.S. Economy” on Capitol Hill today.CCIA commissioned the study conducted using publicly available government data and World Intellectual Property Organization methodology. It found companies benefiting from limitations on copyright-holders’ exclusive rights, such as “fair use” – generated revenue of $4.7 trillion in 2007 – a 36 percent increase over 2002 revenue of $3.4 trillion. The most significant growth over this period was in Internet publishing and broadcasting, web search portals, electronic shopping, electronic auctions and other financial investment activity.
Promoters of strengthened intellectual property rights want to capture some of that revenue for themselves, but will certain destroy much of the value in the process.
(HT: The Hill and RD.)
The work experiences of a business consultant working for Boston Consulting Group in Dubai.
Analytical skills were overrated, for the simple reason that clients usually didn’t know why they had hired us. They sent us vague requests for proposal, we returned vague case proposals, and by the time we were hired, no one was the wiser as to why exactly we were there.I got the feeling that our clients were simply trying to mimic successful businesses, and that as consultants, our earnings came from having the luck of being included in an elaborate cargo-cult ritual. In any case it fell to us to decide for ourselves what question we had been hired to answer, and as a matter of convenience, we elected to answer questions that we had already answered in the course of previous cases — no sense in doing new work when old work will do. The toolkit I brought with me from MIT was absolute overkill in this environment. Most of my day was spent thinking up and writing PowerPoint slides. Sometimes, I didn’t even need to write them — we had a service in India that could put together pretty good copy if you provided them with a sketch and some instructions.
Yeah, most business consulting is a scam. I'm not sure I completely agree with the writer's perspective on the fleecing of his clients.
What I could not get my head around was having to force-fit analysis to a conclusion. In one case, the question I was tasked with solving had a clear and unambiguous answer: By my estimate, the client’s plan of action had a net present discounted value of negative one billion dollars. Even after accounting for some degree of error in my reckoning, I could still be sure that theirs was a losing proposition. But the client did not want analysis that contradicted their own, and my manager told me plainly that it was not our place to question what the client wanted.In theory, it was their money to lose. If they wanted a consulting report that parroted back their pre-determined conclusion, who was I to complain? I did not have any right to dictate that their money be spent differently. And yet, to not speak out was wrong. To destroy a billion dollars is to destroy an almost unimaginable amount of human well-being. Spent carefully on anti-malarial bed nets and medicine, one billion dollars could save a million lives. This was a crime, and failing to try and stop it would be as bad as committing it myself. And if I could not prevent it, then what reason was I being paid such a high salary? How could I justify my income if not by prevailing in situations such as these?
The billion dollars wasn't "destroyed" however, it was paid out to the people executing the doomed project. The wealth was reallocated away from the client's foolish shareholders and to the client's employees, contractors, and suppliers. Some wealth was possibly lost due to transaction costs, but certainly not the whole billion. In reality, it might be better to think of the wealth as being freed from the clutches of the foolish shareholders and released back into the wild!
(HT: RB.)
The Speculist writes that despite the burgeoning economic recovery many jobs may not ever come back thanks to automation.
The efficiencies that can allow a company to get by with 10% fewer staff or an economy to get by with a 10% smaller employment base are many -- better management practices, longer work hours, more highly motivated or better trained staff. But the big one has got to be automation. Historically, automation boosts productivity and reduces the need for human workers. Over the past four decades, our economy has made a massive shift to a highly automated, digitized substrate. As recently as a decade and a half or so ago, economists were still scratching their heads over when the big productivity gains would emerge from this shift. Then about five or six years ago, those productivity numbers started showing up. Some of us took this to be unambiguously good news. And, in fact, I still think it's excellent news. But it may have something to say about the future of employment, and the need for our thinking around employment to change.
Phil Bowermaster goes on to talk about how our economy will have to shift to accommodate the growing mass of ex-workers who are no longer capable of contributing anything of value to an increasingly automated workforce. Today, in 2010, anyone with an IQ of 70 or higher can do something of value, but what happens as that threshold rises? As automation "IQ equivalent" increases, the number of people displaced will grow quickly until the IQ 100 median hump is surpassed. When robots can do the work of any human with an IQ of 100, how will society adapt?
One thing I can say for sure: women will be the big winners. Why? Because they can carry babies more cheaply, efficiently, and reliably that any conceivable robot. Men who are of sub-robot capability will be worthless to society, but womens ability to produce children take much longer to displace.
The effect of this is obvious: women leaving the workforce more rapidly than men and turning their energies to producing and raising children. As robots become more and more capable, the predominance of males over females at the high end of the IQ curve will lead to an ever-shrinking male-dominated aristocracy consisting of the few humans who are able to contribute something of value to an economy run by robots. It's no feminist paradise, but childbearing women will be far better off than men of sub-robot intelligence who will be unable to do anything a robot can't.
