There are at least two systems of achieving productivity growth: path dependence and disruption. What if there is a third way? This post unpacks that paragraph and explores ways through. It will start with explaining lock in and path dependence. We’ll cover the application narrow machine intelligence in a very narrow industry. It will end with a small scenario and a few what ifs. Lock In Consider banner advertising. This is a relatively old industry. Its roots predate the Internet by at least a couple hundred years. It may have started thousands of years ago. It starts out with a person with a problem. They need to get the word out about their product or service. Reframed, they need to[…]
Tag: economics
Torben Iversen and Anne Wren wrote (1998) “Equality, Employment, and Budgetary Restraint: The Trilemma of the Service Economy” and published it in World Politics, (50), 4, pp. 507-546. And it’s a good read. And you could read it for yourself right here. Here’s a summary in one image: What It Means What causes the Trilemma itself? It’s the idea that productivity doesn’t really grow in a pure local services economy. A restaurant can only serve so many meals, barber cut so many heads, a teacher so many students, a surgeon so many people, a police officer so many arrests. It’s far harder to get compounded year on year growth in productivity in services. As I’ll argue below, it isn’t impossible.[…]
What do you think causes the demand curve? Mechanically, it’s pretty easy to describe the laws of demand. The way pretty lines shift to the right or the left from shocks. It’s possible to deduce the real, rough, shape of the demand curve for a product (It just takes a lot of courage!). We can import all the knowledge about demand, segmentation and price discrimination. We can describe a demand curve just fine. Why does it exist? What causes it to exist? If intelligence didn’t exist, demand wouldn’t exist. It’s fun to think of a machine generating it’s own preferences, independent any human input. Most of human trainers of such machines seem to keep them on a short leash. Monkeys,[…]
What causes conversion? Demand. It’s a simple answer and worthy of unpacking. You could thank Claude C. Hopkins for the simple answer. Hopkins wrote two books towards the end of his life – Scientific Advertising and My Life In Advertising. He seemed to regret his experiences as an agency president, and left some direct advice on how master marketers should think of their choices. In his last decade of life, Hopkins marketed his marketing expertise. Instead of continuing to take on all the risk of marketing product on behalf of somebody else (and maybe getting paid if the product sold), he set up a system where products would be pitched to him. If the product was good, he’d take a[…]
This WSJ piece “Has the world lost faith in Capitalism” had this infographic: And prompted Marc Andreessen @pmarca to remark on Twitter: “The inevitable result of 15 years of slow economic growth.” His tweet prompted me to think about the relationship between economic growth and the gini coefficient (a measure of income inequality). And there’s a lot to it. I don’t think it’s a straight line causal model between economic growth and inequality. (And I’m not suggesting that Marc thinks it is, it is, after all, Twitter). The core representation of a causal model is depicted below: In very short terms, when we decided in 80’s that we were going to go for a service based economy, the linkage between wage growth and productivity[…]