Creative Class

The creative, knowledge economy is based - at least in part - upon the abilities of individuals and teams to leverage their collective information and ideas into new innovations.

But, how do ideas and information get shared? Does information flow along traditional corporate hierarchical and team division lines? Apparently not, according to research reviewed and summarized by Harvey Schachter in the Globe and Mail last week:

From his summary:

Organizational network analysis charts resemble a spider’s web, with endless crisscrossing strands that show who collaborates with whom….Often, the most important individuals are lower down in the organization, known to colleagues for their knowledge or the speed with which they respond to queries, while formal bosses prove to be bottlenecks, unreachable or not considered of much use in everyday work…

The most valuable knowledge workers, therefore, need to know who has information that they need - and, they themselves need to be a source of key information for others (which could simply be, who knows what).

The most successful senior managers would also know how to leverage this internal network of problem-solving and innovation-creating ability. This might mean knowing how to divide staff into teams such that there is not too much duplication of internal knowledge networks among team members.

Many workplace design firms now also try to design space to encourage organizational networking and internal idea sharing. This is one reason private, assigned offices are becoming less common in some industries as four walls and a door can discourage interaction.

How does information and knowledge flow where you work?

Paul Graham speculates that startups may herald a new era of political economy:

Startups may represent a new economic phase, on the scale of the Industrial Revolution. I’m not sure of this, but there seems a decent chance it’s true. People are dramatically more productive as founders or early employees of startups–imagine how much less Larry and Sergey would have achieved if they’d gone to work for a big company–and that scale of improvement can change social customs.

He notes that startups are highly clustered in certain cities:

Startups are a type of business that flourishes in certain places that specialize in it–that Silicon Valley specializes in startups in the same way Los Angeles specializes in movies, or New York in finance.

And he’s concerned about what this means for society:

If so, this revolution is going to be particularly revolutionary. All previous revolutions have spread. Agriculture, cities, and industrialization all spread widely. If startups end up being like the movie business, with just a handful of centers and one dominant one, that’s going to have novel consequences.

The spiky nature of our era - evident in everything from startup clustering to rising economic and geographic inequality - is among the most critical issues of our time. The crisis creates the opportunity to address it. But for some reason, U.S. and global policy-makers are unable or unwilling to take it on. The consequences will surely come back to haunt them sooner or later.

The Iranian Presidential Election will be held this Friday. Against seemingly insurmountable odds, Hossein Mousavi, a moderate and progressive candidate (by Iranian standards) has emerged as a serious contender to the incumbent Mahmoud Ahmadinejad.

While his “Green Revolution,” at first seemed nothing more than a Sisyphean struggle by a group of young moderate Iranians against a totalitarian and despotic government - destined for failure despite their greatest efforts - the winds of change have dramatically and suddenly tipped in Mousavi’s favor and, at this point, it’s anyone’s race.

Iran’s state-controlled media has given Mr. Mousavi no air-time, the government has banned his party from hosting peaceful rallies in sports stadiums and other public venues, and those rallies which have occurred spontaneously in the street have been met with hostilities from government officials. Still, his candidacy built momentum.

So how did Mr. Mousavi, whose supporters promise “a new greeting to the world,” emerge as a serious contender to Mr Ahmadinejad despite a state-wide government campaign to quell his movement? The answer: FACEBOOK. Mousavi’s supporters - mostly young people and educated urban dwellers - have taken to the Web, garnering support and enthusiasm on Facebook and on blogs, posting videos of their candidate on YouTube, and organizing impromptu street rallies by mass-texting fellow supporters literally on the fly. The result: a highly organized, energetic, and sophisticated force for change.

Mousavi supporter Emad Mortazavi, a 24-year-old sociology student, said, “Last week, there was suddenly this feeling that it was possible, that Mousavi could get enough votes. Social-networking sites and text-messaging have played a big role in spreading the message.”

In typical form, Ahmadinejad blocked Facebook in May in an attempt to silence his opposition, but to no avail (it was opened back up three days later). In the end, Iran’s youth proved more tech-savvy than anyone in Ahmadinejad’s government.

In an uncanny mirror image of the U.S. election last year, it appears the Net-Generation - people born between 1980 and 1996 - may once again anchor the winning candidate by embracing progressive attitudes and exploiting the power of the internet to collaborate and organize for their candidate. Evidence of a seismic demographic shift, the precipitous rise of Mousavi proves that young Iranians are a force to be reckoned with.

The AFP reports:

“With more than 60 percent of Iranians born after their nation’s Islamic revolution in 1979, the under-30 vote will be crucial in next week’s election in which hardline President Mahmoud Ahmadinejad is being challenged by three fiercely critical rivals.

Several analysts predict a high urban youth turnout in favour of former premier Mir Hossein Mousavi…Tehran has been gripped by a new fashion frenzy ahead of the June 12 vote, with scores of teenagers and 20-somethings sporting green wristbands, scarves and T-shirts.”

Iranian youth ultimately face many of the same problems as young people in Canada, the U.S., and Europe. In a time of economic turmoil they want a candidate who can answer their questions and who can appeal to their better instincts; not some religious zealot who spends most of his time demonizing the Western World and threatening the extinction of its neighbors. The DailyKos writes,

“The economy is a key issue, and many young people with college degrees cannot find jobs or acceptable living arrangements in Tehran and other major cities…the ruling elites cannot ignore the desires of such an enormous percentage of the nation for long. Iran is in for some major shifts due to demographics alone.”

Tomorrow, the Iranian people will take to the polls. The sun may rise Saturday morning on a very different looking Middle East.

What causes workplace stress today? The economy and the financial status of one’s employer are quite high on the list for many people. But, in 1998, it was new communications technologies - like the Internet.

From an article published in 1998:

The Kensington Stress & Technology in the Workplace Survey, which queried 501 adult U.S. full-time, traditional and home-office workers, uncovered new statistics on technology’s relationship to stress …

Nearly half of the workers surveyed, however, said technology increases stress, and 51 percent of them reported that the possibility of losing documents due to computer crashes causes them “a lot” or “some” stress. The demands of email and voice mail have also contributed to an overall increase in stress in the last year, according to the survey.

“Adjusting to new technologies-like the Web, networks, personal communications-that have saturated today’s workplace is creating new demands on workers, and that’s causing more stress;” said Odette Pollar, president of Oakland-based Time Management Systems and authority on stress in the workplace. “The question is how to make technology work in our favor without compromising our health and well-being.”

So, have we won? Do you think technologies today -  web 2.0, the internet, smart-phones, and our multiple computers - still increase stress? Or is this no longer an appropriate question?

Yesterday, we looked at the effects of class on economic growth. Today, we turn to the relationship between class and innovation.

It’s a well-established truism that innovation drives economic growth and development. Nations and regions around the world go to great measures to stimulate innovation in their attempts to create the “next Silicon Valley” which will generate new technologies, improve economic growth, and lift their living standards.

To examine the relationship between class and innovation, Charlotta Mellander used data on patents by country available from the World Intellectual Property Organization. Despite some limitations, patents are the best-available measure of innovation.

The relationships between class and innovation are, if anything, even stronger than between class and economic activity.

The working class and innovation - not so much. Countries with a large working class have much lower levels of innovation.

Source of all graphics: Martin Prosperity Institute

Here is a great interactive map of how stimulus dollars are being spent across the country. Lots of road construction and bridges are on the agenda. Click on the map for more details - you can mouse over the various cities and also drag ‘n’ drop to view by state.

I’m feeling very hopeful this morning reading about a new digital field guide to identify leaves (beginning in Central Park) on your phone! (New York Times “Digital Field Guides Eliminate the Guesswork” by Anne Eisenberg). Here in Florida, scientists are identifying dolphins by using a photo of their dorsal fins, which carries characteristics much like a fingerprint.

Design-minded as I am, I’ve always fantisized about being able to identify some interesting chair or table or object by using the image. Can it be long before we can photograph a vase or painting (or, for that matter, a building) and be able to identify it in an instant? Of course, probably the ones I’ll find most interesting will be those that confound the system. But, hey, it will be great to know you have a George Nakashima table before you unload it for $300! Bring on the app!

Ironically, the most effective telecommuters and home-based workers are those who are naturally great at connecting with people and intuitive, good communicators. This is one of the messages in Kate Lister and Tom Harnish’s new book, Undress for Success: The Naked Truth About Making Money at Home (John Wiley & Sons, 2009). Introverts tend to be less successful working from home.  Another key message is that slackers need not apply — successful home-based workers tend to be self-starters, highly motivated, and dedicated.

With technology now making it possible to work from virtually anywhere, this book offers some advice on whether you should try to do so, and how.

This book covers all variety of work that can be done away from the conventional office. Besides the option of shifting one’s regular corporate or government job to home, the authors cover other possibilities such as becoming a virtual assistant, medical transcriptionist, writer, or virtual nurse or doctor - and detail what’s involved in doing this as an employee or as a freelancer (your own business), including contracts, taxes, self-marketing, and pricing your time.

Although the authors personally have thrived operating their own businesses from home, they are quick to point out the pitfalls, drawing on others’ experiences as well. Among the challenges presented:

• The tendency feel like you should always be working, especially when working flex hours around children’s schedules. Over half of freelancers work more than 48 hours per week, for example.
• The difficulty in convincing family members and friends that you are really working, and therefore cannot be disturbed at certain times.
• How difficult it is for freelancers to maintain a steady stream of work and keep up with administrative requirements: most put in one to four hours of non-paid efforts for every billable hour, the authors claim.
• Self-control if you have tendencies toward over-eating or alcoholism.

The audience for this material appears mainly to be baby boomers, the authors’ generation. Most of the suggested work-from-home options require a number of years of professional experience as well as specific education. The book also devotes considerable time to explain how Google, Facebook, MySpace, Monster.com and Craigslist works, which may be helpful for baby boomers ready to try something different, but probably information that the average gen x’er or millennial person already knows.

Indeed, the authors have been away from the office for so long - and clearly had negative personal experiences with it - that they begin their book with two chapters and a foreword basically saying how ridiculous it is that anyone would want to work in one. They assume that offices are simply places where people waste time at the water cooler and no social interaction that takes place there is productive - which is far from the case in many office environments today where engineers collaborate, researcher-writers get new ideas, video game strategy is debated, and business direction is discussed. The authors miss that workplaces today are increasingly being designed as a resource to support this productive activity, rather than being a generic destination for spending time in exchange for a paycheck.

Most of their examples of office-building-based work sound like the office of the 1970s where strict hierarchies, rote work, and a micro-management approach reigned along with a different dress code. Indeed, Ms. Lister states several times that she left office work because she hated wearing pantyhose - it’s been at least a decade since women routinely felt they needed to wear those (pant suits anyone? or just more casual attire?).

For those readers seriously interested in how to work from home, and whether they possess the aptitudes and skills to do so, this book is a valuable resource - especially if you are over the age of approximately 40 and therefore have the experience to fit yourself into their examples and options. I do suggest you start your reading at chapter three however, where the writing becomes stronger and the inaccurate assumptions about today’s office as well as the forced cliches around working in your underwear are dropped.

Would you want to work from home 100 percent of the time? If you do, what are the pitfalls and benefits?

Matt Yglesias, responding to the automotive bailout debate, argues that it does:

What I find interesting, however, is not so much how irrational it is to attribute nationality to a business enterprise but how much nationality really does seem to matter. For example, the oil business is an global business. And the six “supermajor” firms are all global firms. But the CEO of Royal Dutch/Shell is Dutch. The CEO of Total is French. The CEO of BP is British. And the CEOs of ConocoPhillips and ExxonMobil are Americans. It’s a bit hard to understand why a competitive international labor market would work out that way. And beyond CEO nationality, local norms seem to make a big difference. The CEO of Total earns way less money than the CEOs of the other supermajors and to a first approximation the reason is that he’s French, and French CEOs just don’t get paid very well. More broadly, European and Japanese executives earn less money than American executives, with British executives in the middle. I recall that one of the issues with the DaimlerChrysler merger was that the executive pay scales were totally out of whack.

Beyond CEOs, Nestle has 15 directors. Of them one is Indian, one is Swiss/American, seven are Swiss, and the rest are from other European countries. But there’s nothing especially “European”—and certainly nothing Swiss—about the company’s actual operations. They earn a lot of money in Europe, but the majority of their revenue is from outside of Europe, and there’s production all over the world. It’s also totally normal for large multinational firms to be disproportionately owned by shareholders located in their “home country” and home continent.

Corporate nationality, in other words, doesn’t matter. But it seems as if it actually does. And for somewhat mysterious reasons.

Reasonable points all. (BTW, this is a huge deal in Canada, maybe even more so than in the U.S.).

But GM and Chrysler had U.S. management and ran their companies into the ground. Toyota, Honda, and the transplants have created jobs in America. Nationality cuts several ways.

Some time ago, when I was studying the globalization of the automotive industry and the rise of off-shore transplants, I discovered something interesting. U.S. and European companies all said it was much easier to set up cutting-edge plants outside their home company. New greenfield plants could be built from scratch, filled with new equipment, laid out flexibly, and staffed with “fresh” managers and workers. Older plants back home suffered less from being in old buildings but from built-up and near-impossible-to-change organizational structures and relationships.

Seems to me the real issue isn’t nationality of ownership or management but its quality. From an economic development perspective, I’d much rather encourage companies and plants with great management to invest and develop in my country or location than to protect and shield ones owned by my far less capable compatriots.

UPDATE: The governments of Canada and Ontario apparently now own a two percent equity stake in Chrysler, according the Conor Clarke of The Atlantic who notes: ”Chrysler is going to become part of an Italian car company. And it’s doing so with Canadian dollars”

The New York Times asks leading experts whether America “needs an auto industry.” Robert Lawrence and Tyler Cowen both point out that Japanese companies like Toyota make cars very effectively in the U.S. with American workers. As Lawrence writes, the problem is continuously “framed” in terms of costs and competitiveness, but that’s not really what’s the matter. The real problem is about out-of-touch, outmoded, ineffective Big Three management.

We’re told Chrysler needs a massive injection of “cutting-edge Fiat technology” to survive. Huh, why? What were these guys doing? Did they just forget that… er… new technology might be important to their long-run future?

Robert Reich lays down the gauntlet on jobs:

What? Having General Motors or Chrysler cut tens of thousands of jobs in order to be eligible for a government bailout reminds me of “saving” Vietnam by bombing it to smithereens. Aren’t we giving these companies billions of taxpayer dollars to save jobs? If not, we’re just transferring money from taxpayers to GM and Chrysler bondholders and shareholders …

[T]he “American auto industry” shouldn’t be defined as auto companies whose headquarters are in the United States. The true “American auto industry” is Americans who make automobiles. At the rate the Big Three are shrinking even as they’re bailed out, foreign automakers with American plants may soon employ more Americans than the Big Three do.”

Your thoughts?