The Demise of US Productivity
In addition to the notion that only 15% of employees worldwide, and only 30% in the U.S, are so to speak 'engaged' in their job with ineffective management practices and a low number of good jobs being the source of the blame, this article digs further to pinpoint another cause of the drop in productivity.
The late highly-regarded economist, William Baumol, mentions an unproductive type of entrepreneurship, where companies drive their profits by bending the rules of the government with a study revealing that
executives with close ties to key policy makers have abnormally high stock returns.What might be more concerning is the increased profits are causing wage inequality even within their own firms inducing a vicious cycle that further hinders the development of productive entrepreneurial ventures.
Thoughts fellow brethren?
Source: https://hbr.org/2017/06/is-america-encouraging-th…
https://www.linkedin.com/pulse/worlds-broken-work…
Think firms should introduce short 2-3 week cross-training or new skills training yearly for workers who want to use it.
I'm not talking about some ice-breaker seminar bs, but 3 week course in learning python, vba, design etc.
That is important and many successful firms implement that, however the article is focusing on the overarching firm strategy and its impact on the economy.
How do they know productivity is declining? Seems tough to measure. There is so much incredible technology out there that I think productivity is increasing more than they think.
How do they define "productivity" and why is it so important anyways?
Output/hours worked.
It is unproductive because those companies are dedicating much resources for lobbying that is only making them competitive by increasing their guard in their industries rather than through innovations that are considered productive entrepreneurship which help the economy. The article also states that since 2009, company deaths have exceeded births in over three decades, which points to a general decline in productive entrepreneurship.
M&A can potentially increase profit by volume (not necessarily as a percentage). The whole business of M&A is politics +/-. I'd say that statement is correct. And, obviously, the people at the top bring in more and better resources to improve their income. That's just commonsense. Why pay more for some college educated schmuck when you can get Joe Blow to do it for less, unless it yields better for you?
While true, the article is looking more at the strategy behind those organizations that is driving their income, securing their positions, and overall impact on the economy. Their taking advantage of political maneuvers to stifle competition is hindering productive entrepreneurship.
That part, specifically, is talking about relationships (i.e. political affiliations). I would say that my perspective carries through into this. If you think about the importance of a person's fit in IB, there's a major emphasis on cultural identity. Banks want people they can count on to bring in deals in the future, and traditionally, those deals are going to come from people who were bred in a proper community, such as Harvard or something like a New England Town, such as whoever knew Zuckerberg when he started raising a lot of capital.
I used to think that the world was really big. But it's actually not that big. You never know how close some of the most powerful people in this country are to you, especially if you did grow up in a well-educated family or went to one of the top schools. I think it's a natural development in this country for more things to be happening behind closed doors and through back channeling. And it's obvious that this is happening, just look at the almost perfect support for Democrats by the tech industry, and the opposite for more mature industries like Energy. If politicians aren't directly going to companies and saying "support me," there's definitely that going on amongst themselves when tech leaders are attending the latest Ted Talk, or whatever.
I brought up banking since it's one of the other industries where this is evident, from the 5 ex-Goldman bankers in Trump's administration, to its own share of higher profits.
To the point, all of these guys are definitely connected and have things pretty tightly locked up. But it's complacency that is causing it, it's not a conspiracy or their trying to exploit the other classes. It's probably time for Government leaders to just take action and enforce reasonably higher starting wages. That's not a Bernie thing, it's an American thing. It would combat the stale nature of the current establishment, to reduce their size of the pie to a more appropriate level and it challenges those same people to find alternative solutions to their income goals, while new businesses and ideas get a chance to flourish. So, yeah, I'm saying I agree that our country's leaders are way too protected by each other and content with the status quo, which is hurting the economy.
Well said.
Too many old fogies who still control the daily goings-ons at most firms. They tend to be completely inept with technology and unwilling to even make the slightest attempt at being competent. Once they're out NA will see a boost to productivity imo.
Why do you think that Corporate America heavily invests in funding progressive policies and most corporate types have a vitriolic hatred for Trump?
Voluptatum vel et quo sit ipsa id dolorem. Odit et magnam aperiam facere dignissimos nulla tenetur sed. Eum nam eligendi voluptate est enim molestias.
Quas minus voluptatum laudantium dolor soluta quisquam. Minus eveniet iste sunt consequatur natus et sequi. Omnis atque fuga ut consequatur. Libero consequatur ut qui.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...