Institute for Innovation & Information Productivity

It Pays to be An Older Worker

Daniel W. Rasmus writes: I just blog entry on my Future of Information Work blog (It Pays to be An Older Worker) about pay for older workers. My thought process raised some issues about the fundamentals of the BusinessWeek article in which the analysis orignally appeared (see "Golden Paychecks").

The issue of dollars as an indicator of value disregards what the Millennial generation is saying about their motivations. Many younger people state that they are willing to give up money and benefits - for flexible time. That incentive mix would show just what this data shows, lower wages for them - but for the picture to be more complete, we would need richer data relationships that include employee satisfaction and retention, which would then demonstrate that wages aren't the only thing keeping Millennials around (or show that the mix of benefits is indeed working or not).

As we engage in our work on measurement, we need to be aware that single points don't tell a story - and then look for the data that does tell the story.

Operational Metrics, Innovation and the Return on Dreams:

Daniel W. Rasmus writes: Besides this blog, which is where I will now concentrate commentary on productivity and the economics of innovation, I have another blog about the future of work. Late last week I blogged there about what I call the "return on dreams." The blog pointed out that our operational driven culture and its associated metrics often dissuades people from going after things that risk being difficult to measure, or where we have a measure, the only return is one associated with cost or time. For the pioneers of early NASA, and for Walt Disney, such metrics seldom held sway. The adoption of operational mentality at both organizations as significantly changed them and dramatically reduced their innovative output.

You can read the entire post here:  http://future-of-work.spaces.live.com/blog/cns!C07907DBA0E3BEA6!667.entry.

Offshoring and Phantom GDP

Daniel W. Rasmus writes: On June 18^th, BusinessWeek launched an investigative report (The Real Cost of Offshoring) on the issue of “Phatom GDP.” As an organization interested in finding new methods of measurement in the information age, this article caught my attention immediately. And according to the July 9&16 2007 issue of the BusinessWeek, it caught the attention of economists and others (A Storm over Offshoring).

Several of the issues related to the original story were about how late BusinessWeek was to the table, or arugments about the size of the issue. What I think was important was the general agreement that we faced a phantom GDP isse and as author Michael Mandel writes in his feedback commentary:

“Hall and other commenters have a valid point. And it may very well be that real GDP and domestic productivity are no longer the best guide to policy.”

I would like to add that in the global economy, we have three big risks when it comes to understanding performance.

First, most measurements, at all levels, from personal productivity to the economic health of a nation, are seen through an industrial age lens. We need a new lens sooner than later, as industrial age perspectives no longer reflect our global, interconnected information age economy.

Second, we are still too locally focused on measurements. As noted in item one, national measures were great in isolationist economies, cold war economies and developing economies (which I would argue the US was until after World War II) – but they don’t reflect the reality of the connections and tradeoffs of globalization – and the reinforce nationalistic tendencies by creating competitive comparisons without stating reciprocal benefits, risks or other detriments. The public is feed numbers in a vacuum and we need to fix that by creating more meaningful, and more inclusive descriptions of economic health, however, as number three points out, we decide to define what that means.

Third, we are too focused on industrial measures and growth measures determined by industrial mentality. Economics are arbitrary in terms of what they measure. We have created a “science” around industrial measures, but as physicists and cosmologists well know, when you fundamental understanding of something changes, the measurements change as well. What does GDP mean, for instance, if we were to measure global economic performance on sustainability rather than growth? The answer is, it would mean very little, except perhaps as a negative indicator for countries not yet on the new bandwagon.

I look forward to research and discussion on these topics, and to your feedback.

BusinessWeek Response: Can China Be Fixed

Daniel W. Rasmus writes: In the 23 July 2007 BusinessWeek (Broken China,) the editors ask the question if China can repair its internal problems in order to become the next work power. The article focuses on environmental issues, consumer protection, corruption and financial markets. What the article doesn’t do is dive into the underlying issue of a county trying to become an industrial power in the information age.

This issue has two aspects. First, China isn’t doing anything that the United States or most European countries didn’t do during their rampant and chaotic rise to industrial might. American is still reeling from environmental issues, and the current policy still ignores much of what we know about the negative impact of an unconstrained industrial economy in favor of status quo. What China has that the US or Europe didn’t is global watch dogs tracking every chemical spill, death, quoting small administrators in large contexts and all of the other trappings of the information age.

The second aspect of their dilemma comes from trying to build an industrial economy when they should be trying to build an information economy. Of course, they are trying to build both, but by focusing on internal means of production, they are losing the opportunity to obtain world class products from outside their country, and drive their economy with innovation. China to me, is the first failure of the information age in that as the largest emerging economy they are trying to become an industrial giant rather than inventing an entirely new economic form that challenges the assumptions of the last hundred years. What they are doing is too quickly trying to fit into those assumptions. China still has the opportunity to reinvent itself, not through the ideological means of Mao, but through modern distributed collaboration of its people to create, perhaps more so than even, a truly effective communal society.

The answer to the question from BusinessWeek is yes. China can be fixed. Just as they are accelerating their industrial age at a pace that would be impossible without the information economy, they will also very likely accelerate their movement toward a political correctness that better aligns with global perspectives. China knows that its economic future is not governed by internal consumption, but by participating in global markets. Their current path, however, is as an also ran against industrial nations with much more experience. We may need to look to India, and not to China, for the model of economics that will lead the world in this century.