1 Innovation, not manufacturing, is the multiplier
(Noah Smith in Gulf News) Changes in the US industrial mix, and in technology
itself, mean there’s no going back to the economy of yesteryear. In his book, ‘The
New Geography of Jobs’, economist Enrico Moretti says that there really are two
Americas — one that’s healthy, rich and growing, and a second that’s
increasingly being left behind.
The two nations-within-a-nation are divided not so
much by region or race or religion, but by the kinds of industries they
support. Those cities and towns that are home to innovative industries —
information technology, pharmaceuticals, advanced manufacturing and the like —
are wealthier, healthier and safer, while the places without these industries
are steadily declining.
He shows that the cities with better social
indicators in the 1980s — longer life expectancy, lower divorce rates and
higher voter turnout — have steadily increased their advantage since then. And
these are also the cities with the highest number of college graduates — the
innovation hubs. The places that are being left behind are the ones that lack
top-end human capital.
The reason for the divergence, Moretti explains, is
what economists call local multipliers. Every American with a high-paying
innovation job — every software engineer, every manager at a drug company —
shops locally. They pay doctors to fix their knees. They pay yoga teachers and
personal trainers and dietitians. They hire roofers and landscapers and
electricians and plumbers.
They shop at local stores and eat at local
restaurants. Every dollar that the innovation industries pull in from outside
gets spent around town, and then spent again. Local multipliers are the key to
providing Americans with good jobs.
Manufacturing creates local multipliers too. But the
kind of industries the US used to specialise in — textiles, steel and cars —
provide much smaller multipliers than the innovative industries that the
country has now shifted into. The US didn’t lose out to China — it simply
shifted into more productive industries. If the country were to return to the
kind of low-multiplier manufacturing that it left behind in the 1980s, it would
be a lot poorer as a result.
2 Signs of startup bubble fizzling (Olivia Solon in
The Guardian) Silicon Valley’s technology bubble has had some of its wind
knocked out – not bursting, but fizzling – with VCs making fewer investments,
startup valuations falling, and recruitment slowing.
“We’re starting to get a lot of résumés from
[software engineers at] companies where the business model isn’t working and
they can’t get funding, so they are closing down or cutting back,” said Mark
Dinan, a software recruiter.
These startups are running out of money because VCs
are being more discerning about where they place their money, making fewer,
bigger bets. This is partly because of a slowdown in companies going public.
Last year was the slowest for US IPOs since the recession, with the amount
raised by technology companies falling 60% from 2015.
Then there are the so-called “decacorns” – unicorn
startups valued at tens of billions of dollars – such as Airbnb, Uber and
Palantir – which some believe are overvalued, but it’s hard to tell until they
go public and are forced to reveal details of their underlying finances.
Ride-sharing app Uber, for example, has raised more
than $16bn and is valued at more than $69bn. That’s more than automotive giants
such as General Motors and Ford, despite the company losing $2.2bn last year.
One critical difference with the dotcom era is that
it’s not a universal tech slowdown. There are now large established technology
companies such as Google, Oracle, Facebook, Apple and Salesforce trading on
public markets that can bring stability to the region.
3 Rock ‘n’ roll pioneer Chuck Berry no more (San
Francisco Chronicle) Chuck Berry, rock 'n' roll's founding guitar hero and
storyteller who defined the music's joy and rebellion in such classics as
"Johnny B. Goode," ''Sweet Little Sixteen" and "Roll Over
Beethoven," died Saturday at his home west of St. Louis. He was 90.
Berry's core repertoire was some three dozen songs,
his influence incalculable, from the Beatles and the Rolling Stones to
virtually any group from garage band to arena act that called itself rock 'n
roll. While Elvis Presley gave rock its libidinous, hip-shaking image, Berry
was the auteur, setting the template for a new sound and way of life.
Well before the rise of Bob Dylan, Berry wedded
social commentary to the beat and rush of popular music. "He was singing
good lyrics, and intelligent lyrics, in the '50s when people were singing,
"Oh, baby, I love you so,'" John Lennon once observed.
Berry, in his late 20s before his first major hit,
crafted lyrics that spoke to the teenagers of the day and remained fresh
decades later. "Sweet Little Sixteen" captured rock 'n' roll fandom,
an early and innocent ode to the young girls later known as
"groupies."
Charles Edward Anderson Berry was born in St. Louis
on Oct. 18, 1926. As a child he practiced a bent-leg stride that enabled him to
slip under tables, a prelude to the duck walk of his adult years. His mother
told him he would make it, and make it big.
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