The epic mistake about manufacturing that’s cost Americans millions of jobs

Source: The epic mistake about manufacturing that’s cost Americans millions of jobs, by Gwynn Guilford
RE: Understanding the Decline of U.S. Manufacturing Employment, by Susan N. Houseman, Upjohn Institute for Employment Research

What’s odd is that, even as US factories laid off an historically unprecedented share of workers, the amount of stuff they made rose steadily—or at least, it appeared to. The sector’s growth in output, adjusted for inflation, had been chugging away at roughly the same pace as US GDP since the late 1940s. … That rests on the basic assumption that the manufacturing output data reflect the actual volume of stuff produced by US factories.

An economist at the Upjohn Institute, an independent organization that researches employment, Houseman specializes in measuring globalization. She had been working with a team of Federal Reserve economists with access to more granular data than was publicly available, which allowed them to strip away the computers industry output from the rest of the data.

In order to understand how the manufacturing sector is doing, economists look at how much stuff factories are making compared with previous years. … To make the output volume comparable from one year to the next, the statisticians aggregating the data adjust for price changes, as well as improvements in product quality. … But most economists and policymakers have failed to take into account how adjusting for quality improvements in a relatively small subsector skews the manufacturing output data.

There are also observable signs that automation wasn’t to blame. Consider the shuttering of some 78,000 manufacturing plants between 2000 and 2014, a 22% drop. This is odd given that robots, like humans, have to work somewhere. Then there’s the fact that there simply aren’t that many robots in US factories, compared with other advanced economies.

To be clear, automation did happen in manufacturing. However, throughout the 2000s, the industry was automating at about the same pace as in the rest of the private sector. And if booming robot-led productivity growth wasn’t displacing factory workers, then the sweeping scale of job losses in manufacturing necessarily stemmed from something else entirely.

Insider trading has been rife on Wall Street, academics conclude – In the know | The Economist

Source: Insider trading has been rife on Wall Street, academics conclude – In the know | The Economist

One study suggests insiders profited even from the global financial crisis; another that the whole share-trading system is rigged.

The papers make imaginative use of pattern analysis from data to find that insider trading is probably pervasive. The approach reflects a new way of analysing conduct in the financial markets. It also raises questions about how to treat behaviour if it is systemic rather than limited to the occasional rogue trader.

US startups don’t want to go public anymore. That’s bad news for Americans – Quartz

Source: US startups don’t want to go public anymore. That’s bad news for Americans – Quartz, by Gwynn Guilford

The upside of public listing is that it lets companies raise huge sums of capital, issue more shares, issue debt with relative ease, and use equity to fund acquisitions. But because of the ways the American economy has evolved, those advantages are less important than they once were.

The problem is, two features of public listings—disclosure and accounting standards—make things tough on companies with more intangible assets.

‘Red Oceans’: How to Find Profitable Startup Ideas- Capital & Growth, by CSSheppard

Source: ‘Red Oceans’: How to Find Profitable Startup Ideas – Capital & Growth

Some entrepreneurs start businesses based upon their hobbies or avocational interests. They turned their passion for a particular activity or subject into a business venture. … Often these businesses are not started to reap considerable profits, but instead to pursue a lifestyle that brings joy and personal satisfaction to the entrepreneur.

But if the market for what you like, what interests you or where you live is too small or diffused to support your business idea, then creating that business is a fool’s errand (unless you have money to burn).

The External Approach (or the “Outside-In approach”) to discovering viable business ideas looks first to the external market (verses the skills, knowledge and tastes of the entrepreneur) and tries to methodically discover market gaps that already exist.

  • Observing the Market
  • Focus Groups
  • Reverse Brainstorming
  • Market Growth
  • Matrix Charting for Insights
  • The “Slice of Life” Approach
  • The Market-Area Saturation Approach
  • The Competitive Matrix Approach