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Get Ready to Defend the Free Market
06.02.97 | Forbes | Rich Karlgaard

LET'S CLONE GEORGE GILDER. One is just not enough. The original I'd keep in his current job as a technology writer and forecaster of the first rank. Nobody rea...
Rich_Karlgaard  free_markets  George_Soros  warp_speed  George_Gilder  income_inequality  tempo  operational_tempo  '90s  capitalism  digital_economy 
august 2017 by jerryking
Prepare for a New Supercycle of Innovation - WSJ
By John Michaelson
May 9, 2017

Things are about to change. Consider information technology. Today’s enterprise IT systems are built on platforms dating from the 1970s to the 1990s. These systems are now horrendously expensive to operate, prone to catastrophic crashes, and unable to ensure data security. The cloud only made this worse by increasing complexity.

Corporate CEOs complain that they are unable to get the data they need. These rickety systems cannot easily accommodate data mining and artificial intelligence. Evidence of their deficiencies is seen daily. The New York Stock Exchange stops trading for hours. Yahoo acknowledges the compromise of one billion user accounts. Airline reservation systems go down repeatedly. The pain level for users is becoming intolerable.

Each decade for the past 60 years, we have seen a thousand-fold increase in world-wide processing power, bandwidth and storage. At the same time, costs have fallen by a factor of 10,000. Advances in these platforms, in themselves, do not produce innovation. But they facilitate the development and deployment of entirely new applications that take advantage of these advances. [jk: The Republican intellectual George F. Gilder taught us that we should husband resources that are scarce and costly, but can waste resources that are abundant and cheap] Amazing new applications are almost never predictable. They come from human creativity (jk: human ingenuity). That is one reason they almost never come from incumbent companies. But once barriers to innovation are lowered, new applications follow.
10x  artificial_intelligence  CEOs  creativity  cyber_security  data_mining  economic_downturn  flash_crashes  George_Gilder  Gilder's  Law  innovation  history  human_ingenuity  incumbents  IT  legacy_tech  Moore's_Law  NYSE 
may 2017 by jerryking
New Hope for the New Economy
January 15, 2001 | WSJ | By Anthony Perkins. Mr. Perkins is editor-in-chief of Red Herring and co-author of "The Internet Bubble" (HarperBusiness, 1999).

By the end of last year, more than 100 dot-...
Silicon_Valley  George_Gilder  Kleiner_Perkins  Gilder's_Law  Andy_Grove 
january 2014 by jerryking
David Isenberg Sees Smart Business Model In 'Stupid Network'
February 20, 1998 | Wall Street Journal p. B1 | by THOMAS PETZINGER JR.

Dr. Isenberg worshipped the émigré biologist Albert Szent-Gyorgyi, a Nobel laureate and friend of his family. "If you're going to fish," the old scientist told him, "use a big hook." . . .

Picture of
David Isenberg by Elliot Banfield
Used with permission of Elliot Banfield
AT&T  telecommunications  free  disruption  Thomas_Petzinger  Nobel_Prizes  contrarians  Bell_Labs  George_Gilder  business_models 
march 2013 by jerryking
A Capitalist’s Dilemma, Whoever Wins the Election - NYTimes.com
November 3, 2012 | NYT| By CLAYTON M. CHRISTENSEN.

cash hoards in the billions are sitting unused on the pristine balance sheets of Fortune 500 corporations. Billions in capital is also sitting inert and uninvested at private equity funds.

Capitalists seem almost uninterested in capitalism, even as entrepreneurs eager to start companies find that they can’t get financing. Businesses and investors sound like the Ancient Mariner, who complained of “Water, water everywhere — nor any drop to drink.”

It’s a paradox, and at its nexus is what I’ll call the Doctrine of New Finance, which is taught with increasingly religious zeal by economists, and at times even by business professors like me who have failed to challenge it. This doctrine embraces measures of profitability that guide capitalists away from investments that can create real economic growth.

Executives and investors might finance three types of innovations with their capital.
(1)“empowering” innovations. These transform complicated and costly products available to a few into simpler, cheaper products available to the many.

The Ford Model T was an empowering innovation, as was the Sony transistor radio. So were the personal computers of I.B.M. and Compaq and online trading at Schwab. A more recent example is cloud computing....Empowering innovations create jobs, because they require more and more people who can build, distribute, sell and service these products. Empowering investments also use capital — to expand capacity and to finance receivables and inventory.
(2) “sustaining” innovations. These replace old products with new models. For example, the Toyota Prius hybrid is a marvelous product. But it’s not as if every time Toyota sells a Prius, the same customer also buys a Camry. There is a zero-sum aspect to sustaining innovations: They replace yesterday’s products with today’s products and create few jobs. They keep our economy vibrant — and, in dollars, they account for the most innovation. But they have a neutral effect on economic activity and on capital.
(3) “efficiency” innovations. These reduce the cost of making and distributing existing products and services. Examples are minimills in steel and Geico in online insurance underwriting. Taken together in an industry, such innovations almost always reduce the net number of jobs, because they streamline processes. But they also preserve many of the remaining jobs — because without them entire companies and industries would disappear in competition against companies abroad that have innovated more efficiently.

Efficiency innovations also emancipate capital. Without them, much of an economy’s capital is held captive on balance sheets, with no way to redeploy it as fuel for new, empowering innovations....The economic machine is out of balance and losing its horsepower. But why?

The answer is that efficiency innovations are liberating capital, and in the United States this capital is being reinvested into still more efficiency innovations. In contrast, America is generating many fewer empowering innovations than in the past. We need to reset the balance between empowering and efficiency innovations.

The Doctrine of New Finance helped create this situation.. The Republican intellectual George F. Gilder taught us that we should husband resources that are scarce and costly, but can waste resources that are abundant and cheap. ...in the 1930s and the ‘50s, capital was relatively scarce in our economy. So we taught our students how to magnify every dollar put into a company, to get the most revenue and profit per dollar of capital deployed. To measure the efficiency of doing this, we redefined profit not as dollars, yen or renminbi, but as ratios like RONA (return on net assets), ROCE (return on capital employed) and I.R.R. (internal rate of return). ...

Three ideas to seed a productive discussion:
(A) CHANGE THE METRICS. We can use capital with abandon now, because it’s abundant and cheap. But we can no longer waste education, subsidizing it in fields that offer few jobs. Optimizing return on capital will generate less growth than optimizing return on education.
(B) CHANGE CAPITAL-GAINS TAX RATES
(C) CHANGE THE POLITICS
Clayton_Christensen  capitalism  metrics  George_Gilder  Gilder's_Law  taxation  tax_reform  innovation  idle_funds  taxonomy  Fortune_500  cash_reserves  abundance  ratios  ROCE 
november 2012 by jerryking
The Real Reagan Lesson for Romney-Ryan - WSJ.com
August 30, 2012 | WSJ | By GEORGE GILDER.

George Gilder: The Real Reagan Lesson for Romney-Ryan
Follow Peter Drucker's advice: Don't solve problems, pursue opportunities. Like unlocking America's entrepreneurial value.
George_Gilder  Mitt_Romney  Paul_Ryan  Peter_Drucker 
august 2012 by jerryking
Ten Laws Of The Modern World
04.19.05 | Forbes | Rich Karlgaard.

• Gilder's Law: Winner's Waste. The futurist George Gilder wrote about this a few years ago in a Forbes publication. The best business models, he said, waste the era's cheapest resources in order to conserve the era's most expensive resources. When steam became cheaper than horses, the smartest businesses used steam and spared horses. Today the cheapest resources are computer power and bandwidth. Both are getting cheaper by the year (at the pace of Moore's Law). Google (nasdaq: GOOG - news - people ) is a successful business because it wastes computer power--it has some 120,000 servers powering its search engine--while it conserves its dearest resource, people. Google has fewer than 3,500 employees, yet it generates $5 billion in (current run rate) sales.

• Ricardo's Law. The more transparent an economy becomes, the more David Ricardo's 19th-century law of comparative advantage rules the day. Then came the commercial Internet, the greatest window into comparative advantage ever invented. Which means if your firm's price-value proposition is lousy, too bad. The world knows.

• Wriston's Law. This is named after the late Walter Wriston, a giant of banking and finance. In his 1992 book, The Twilight of Sovereignty, Wriston predicted the rise of electronic networks and their chief effect. He said capital (meaning both money and ideas), when freed to travel at the speed of light, "will go where it is wanted, stay where it is well-treated...." By applying Wriston's Law of capital and talent flow, you can predict the fortunes of countries and companies.

• The Laffer Curve. In the 1970s the young economist Arthur Laffer proposed a wild idea. Cut taxes at the margin, on income and capital, and you'll get more tax revenue, not less. Laffer reasoned that lower taxes would beckon risk capital out of hiding. Businesses and people would become more productive. The pie would grow. Application of the Laffer Curve is why the United States boomed in the 1980s and 1990s, why India is rocking now and why eastern Europe will outperform western Europe.

• Drucker's Law. Odd as it seems, you will achieve the greatest results in business and career if you drop the word "achievement" from your vocabulary. Replace it with "contribution," says the great management guru Peter Drucker. Contribution puts the focus where it should be--on your customers, employees and shareholders.

• Ogilvy's Law. David Ogilvy gets my vote as the greatest advertising mind of the 20th century. The founder of Ogilvy & Mather--now part of WPP (nasdaq: WPPGY - news - people )--left a rich legacy of ideas in his books, my favorite being Ogilvy on Advertising. Ogilvy wrote that whenever someone was appointed to head an office of O&M, he would give the manager a Russian nesting doll. These dolls open in the middle to reveal a smaller doll, which opens in the middle to reveal a yet smaller doll...and so on. Inside the smallest doll would be a note from Ogilvy. It read: "If each of us hires people who are smaller than we are, we shall become a company of dwarfs. But if each of us hires people who are bigger than we are, we shall become a company of giants." Ogilvy knew in the 1950s that people make or break businesses. It was true then; it's truer today.
Rich_Karlgaard  matryoshka_dolls  Moore's_Law  Metcalfe's_Law  Peter_Drucker  Ogilvy_&_Mather  Gilder's_Law  hiring  talent  advertising_agencies  transparency  value_propositions  capital_flows  talent_flows  David_Ogilvy  inexpensive  waste  abundance  scarcity  constraints  George_Gilder 
june 2012 by jerryking

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