Innovation happens elsewhere!

Innovation happens elsewhere!

“The innovators dilemma” is a book by Clayton Christensen, first published in 1997. In it, he explores the paradox that successful companies that do everything right can still fail. The source of this failure, or that observed by the book, is new entrants to markets pushing market disrupting technologies and products, allied to a management inertia avoiding the necessary changes. This article looks at how these threats impact business strategy, its decision-making (particularly investment decisions) and political parties, specifically the Labour Party.

The innovation problem for political parties was brought to my attention in an unfinished white Paper by Emmanuelle Avril of the Université Sorbonne Nouvelle and in the text she quotes the Innovator’s Dilemma. I conclude that, Innovation happens elsewhere and is inexorable.

The complete article is available overleaf …

More Macro

More Macro

In this article, “Britain’s tax delusion”, the ‘Statesman identifies that the UK is not overtaxed, that taxing non-doms and imposing VAT on school fees will raise trivial amounts of money and that the clawback of child benefit has a disincentive on the supply of effort. It is silent on the clawback of the personal allowance which does the same, and fails to substantiate its arguments on income and wealth equality by not quoting the gini coefficient or any altenrative statistics, or facts as I like to call them.

… creates a system that is not just dysfunctional but profoundly inequitable, in which the average effective tax rate paid by those earning more than £10m a year is lower than that of most nurses. In 1845, Benjamin Disraeli wrote of England’s division into “two nations”: the rich and the poor. Today, the gulf between Asset Britain and Austerity Britain is as wide.

Since both major parties identify growth as the answer, we need to ask how they think it’ll happen, the three sources of growth are investment (private or public), government expenditures (i.e. the deficit), or exports (and we know why they’re fucked).

The challenge for Western democracies is to provide for that spending while encouraging investment and job creation. It is a challenge that Britain is failing. Instead, the UK’s tax system is quietly managing our ­economy towards disaster.

Business taxation does not encourage investment; the UK’s investment rate is low by international comparison.

Growth strategies must only be pursued in the context of combatting climate change. So a new coal mine is not a good idea.

Modern economists argue that investment in human capital is a priority as an incubator of growth. Even those politicians who agree are silent in the face of monetarist orthodoxy which requires continued austerity. After 13 years you’d think they’d have learnt, but it seems not.

Image Credit: from asb.org.uk , cropped. Fair use as it has no economic impact on the original publisher. …

Brexit & modern supply side economics

Brexit & modern supply side economics

I have just read Jonathn Portes’ review of Peter Foster’s book “What Went Wrong With Brexit?”. Portes looks at the economic damage, the under investment in human capital and the continued timidity of our politicians. In this review, I [hope I] add to the debate by looking at long term goals and short term modern supply side programmes, most importantly in my mind, rejoining Horizon Europe.

There's a couple of things in the article which interest me. Portes in the subtitle ensures that we understand the damage that Cameron and Osborne 's austerity has done to the UK economy. A critical conclusion from this article is that the problems in the British economy are endemic, predate the Brexit vote but are made worse by the increased bureaucracy in conducting foreign trade, and the miserly modern supply side policies of this Tory government. Portes suggests that the realistic choice, because of our political leader’s timidity is between minimal change to the future trade and cooperation agreement or rejoining the single market. Portes suggests that the minimal change suggestions i.e. fixing Brexit will not be as easy to achieve as its proponents hope.

I finish my review by looking at the contradictions in Sunak's policy by continuing to exclude the UK from Horizon Europe. It is curious that Sunak permits this policy to stand, given that he is a fan of Paul Romer's work on investment & innovation. Romer argues that growth is driven by investment in Human Capital. re-joining Horizon Europe, would be a simple remediation of a number of barriers to growth.

For the full review, press the "Read More" button.

Whose jobs are AI coming for?

Whose jobs are AI coming for?

McKinsey have produced a report on the role of generative AI on productivity and the future economy. The white paper can be found on their website. They launched the paper with a series of webinars, one of which I attended. The rest of this article describes my notes and thoughts ... I made a blog post on linkedin which I mirrored here, to see the full article, either "Read More", or click the linkedin hyperlink.

Ralph Miliband on Labour’s last year in opposition

But that was in 1963, sixty years ago. Due to some personal reappraisals of my politics, I have been looking at the writing of Ralph Miliband and was pointed at an article he wrote in the run up to the 1964 election, called “If Labour wins”, republished in the New Left Review. I found it worth reading to observe the parallels between then and now. Wilson’s Labour were leading in the polls, the Tories had suffered the setbacks of Suez, and the Profumo affair and replaced a popular and powerful leader with a patrician land owner who was not even an MP arguable a stalemate choice between the then two leading Tory candidates.

This article contains a number of quotes from the article, as they speak for themselves, although of course I can’t help but comment. I have collected the quotes and comments into pieces on culture and comedy, economics, foreign affairs, corruption, campaigning and hope and the Labour left. … …

Intergenerational Equity

Intergenerational Equity

In this article, in the FT, Sarah O’Connor argues that the impact of high interest rates is less effective at demand suppression than has historically been the case. The exclusion of the young from the housing market and the impact of older people having finished paying off their mortgages has led to reduction in the number of households with mortgages, from 40% to 30%. It interests me, that the author argues the purpose of increasing interest rates is demand suppression and yet its effectiveness as a demand suppression tool is less than it once was. This article also looks at the role of tuition fees in discriminating against the young and asks if demand suppression is an effective tool in reducing inflation. Fore the whole article, "read more" ...

The trillion dollar coin

Last month, the US passed through a politically created fiscal crisis; commentators were suggesting that for the third time Congress would cause the Federal Government to run out of cash and default on bond and salary payments, and 3rd party bills for goods and services. This is a tactic pursued by those who don’t like government expenditure unless its on arms. I argue that there were three ways that the Government could have sidestepped this piece of legislative extortion. The most amusing route would be to mint a $1Tn coin. I conclude, overleaf, by arguing that, progressives should be wary, this idea of legislating, or embedding fiscal policy in treaties or constitutions is designed by people who support the founding fathers, who while they opposed taxation without representation, were almost equally opposed to taxation with representation. NB The EU’s stability and growth treaty commits its signatories to a level of national debt and a level of national deficit. They need to change this, these decisions need to be under democratic control. There's [much] more overleaf ... ...

What did CoFoE say about digitisation?

What did CoFoE say about digitisation?

When socialising the CoFoE final outcome last summer, I didn’t look at the Digitisation chapter. I have decided to plug that gap. This is a personal summary of the Digitisation chapter of the Proposals/Outcomes of the CoFoE. The CoFoE was organised into streams and within those streams there were usually four citizen’s panels. This led to on occasion multiple proposals on the same topic, which have been collected together. In some cases, a topic is dealt with in multiple proposals and even multiple chapters.

There are four proposals in the Digitisation Chapter, they cover a right of access and use, the accrual of benefits to be shared by all, a safe, resilient, and trustworthy digital society covering cyber security, fake news, and data protection & privacy.  The issues of investment and citizen rights are covered in all four proposals.

The bulk of the article is overleaf, please use the "Read More" button ...

On proposals for a British digital currency

The UK Govt have issued a consultation on how or whether to implement a Central Bank Digital Currency. I have written up my thoughts on LinkedIn & Medium and have some further notes on my wiki. I look at the arguments in favour, cite some Swedish sources, who are four years ahead of the UK, and conclude, “This is ideologically dangerous, technically complex, and a solution in search of a problem.” …

On WOTCs permissive licences

On WOTCs permissive licences

Earlier this year, Wizards of the Coast, the owners of Dungeons & Dragons, bought D&D Beyond, the premiere and largest web store for the rules of D&D and they are now trialling a new version of the rules called One D&D; they are also planning to release a virtual table top solution and have a new movie in production. Also recently at a Hasbro earnings call, one of their executives stated that D&D was now a lifestyle brand and was under-monetised. This has created a sense of fear amongst 3rd party creators that WOTC will revise their intellectual property sharing agreements to the detriment of themselves and non-Dungeon Master players who have been identified as under spenders. Depending on where you look, this has created a lot of noise; I think there’s a lot of fear being generated, and it interests me to consider the issues in the context of the software industry practice. I think that software industry grew the open source models and the interaction by games vendors such as Wizards with software continues to inform good & bad practice, There's more overleaf ...