Monday, September 2, 2013

The Changes in the World: Where is Value Created?

Another economist opined on how the world will change. Again the opinions given are in my opinion clearly baseless and fail to understand what moves things forward. Value creation is a fundamental principle. Do something that someone else values well above your cost to do it and you can be successful. However the return you may attain is often more dependent upon society's perception of that value.

Consider the following examples:

1. Banking: People who control money control all. In the old days, some fifty or so years ago, bankers were poorly paid with the exception of those who were the heads of the firms. Today any smart MBA can work themselves into some hedge fund and manage to get 9 figures in short order. It is not that you come from wealth, to the contrary one just needs the technical and personal skills to be positioned properly. Now finance really is a value transfer business. It doe not create value, it allows fore those who have created it to expand it and they get a bit off the top. No banker have ever created true value.

2. Biotech: The next few decades will see explosive growth in biotech. Pathway focused therapeutics, epigenetic controls, and the like are changing both the way we understand disease and how we treat it. However the equivalent people in that profession are often underpaid and over worked. Yet they are the true value creators. They will be the change agents in the next century. As computer types reached a pinnacle in the past decade, these folks will have a chance in the next decades. Unlike banking these folks must really know something and then once attained they must fight daily to keep at the leading edge as new insights flow almost hourly.

3. Education: This professor is another one of the apparently poorly educated regarding the online course area. Getting an A in say Genetics does not mean that you either understand it properly or can apply it. Understanding requires an ability to integrate disparate parts to create a whole. On line courses are akin to education in China and India. Memorize what the instructor said, feed it back exactly and you win. Then the challenge is to innovate. That comes from those who are "educated" by challenge at the US best universities. Not by online courses.

4. The smart phone: This is just a single step into a fully distributed world. The Apps explosion is really a simplified set of toy tools in many cases. The real challenge is embedding the measurement tools in people and things for beneficial purposes as well as economically profitable purposes. Just having an App to find a data is not adding much to our economic success. Having an implant to monitor and control caloric input and glucose levels is.

This one really got me:

MOTIVATORS A lot of jobs will consist of making people feel either very good or very bad about themselves. Coaches, mentors and disciplinarians will spread to many areas of life, at least for those of us who can stand to listen to them. These people will cajole us, flatter us and shame us into improving our lives, our work habits and our consumption. That’s why so many people go to yoga class instead of relying on the podcast. Managers who are motivators of first-rate talent will see their earnings continue to rise.

 What happened to the individual. Yes the world is filled with leaders and followers, and the rest who must just get out of the way. But the development of new ideas is often an individual like function. One frequently must ignore the others and lead by example. A good leader does so by example more often than my motivation. People often follow the successful person rather than just the nice one.

Then this one really shocked me:

PEOPLE WITH DELICATE FEELINGS Computing and software will make it easier to measure performance and productivity. It will be harder to gloss over our failings and maintain self-deception. In essence everyone will suffer the fate of professional chess players, who always know when they have lost a game, have an exact numerical rating for their overall performance, and find excuses for failure hard to come by. Individuals will have many measures of their proficiency. They will have an incentive to disclose that information to get the better job or social opportunity. You’ll assume the worst about those who keep secrets, and so openness will reign. Many of us will start to hate the idea of Big Data.

I remember back in the early 70s I was working at a Lab at MIT  and the Group Leader had just finished some "feelings" type seminar. He then decided that all in the group should learn from what he did and so he took it upon himself to have us go through a sensitivity type training session. We would share our feelings. That lasted but a brief time until the Air Force Security folks found that it may very well compromise many security clearances. His attempt at 70s feelings stopped abruptly. As to disclosing, try not to with a TS plus clearance. The world concerning disclosures to the appropriate authorities has always been there. But disclosing to the world is and should remain one's own choice. Individuals should not have to tell their boss all about their personal lives. I believe there are laws about that even now.

Thus in conclusion this was in my opinion one of the most incoherent and nonsensical articles I have ever read. But then it was written by one of those economists. No surprise there.