Continued improvement in U.S. labor market in 2014

Thanks David Nordfors for the heads up!

Good news, it seems - unemployment is going down, wages are going up.

http://qz.com/395203/the-impossible-just-happened-american-wages-are-rising/

http://www.bls.gov/opub/mlr/2015/article/continued-improvement-in-u-s-labor-market-in-2014-1.htm

The U.S. labor market continued to improve in 2014, with both a decline in unemployment and an increase in the share of the population employed; high levels of long-term joblessness and involuntary part-time employment, however, persisted.

Unemployment in the United States continued to decline in 2014, with the number of unemployed falling by 1.9 million over the year, to 8.9 million in the fourth quarter. The unemployment rate fell to 5.7 percent by year’s end—1.0 percentage point above the pre-recessionary rate of 2007.¹ Employment, as measured by the Current Population Survey (CPS; see accompanying box), grew at a faster pace than it did the previous year, expanding by 3.1 million in 2014, and the employment-to-population ratio increased by 0.7 percentage point following a slight decline in 2013.² The civilian labor force—the sum of the employed and the unemployed—grew by 1.3 million, reaching 156.3 million in the fourth quarter of 2014. The labor force participation rate, however, held fairly steady over the year.

This article summarizes changes in key labor market measures from the CPS during 2014, both overall and for various demographic groups. The article also examines changes in usual weekly earnings and in labor force status flows, and reviews the employment situations of veterans, people with a disability, and the foreign born.

Comment from Curt:-

We have a LONG way to go.  Unemployment, as you know, is a funny metric.  What really matters is how many people are working.  

-- 

Reply by David:- 

Although the statistic represents a fraction of the people working, it seems the economy is recovering - Although the bigger issues remain ahead of us!

The upturn in the economy will only spur entrepreneurs maximizing the value of people by innovation, if anything.

From Bob Cohen:-

Yes, the recovery has been difficult but last year showed an increase in the total workforce and nearly 4 million net new jobs. Nice work after losing about 700,000 jobs a month after the financial crisis.

While investment is down in oil and gas, there are signs of a more sustained upswing in housing. Capital infrastructure firms like Caterpillar and Deere are using Big Data to drive hundreds of millions in cost savings and shifting spending to new analytics systems and new types of jobs. UPS and FedEx are using similar analytics systems to optimize truck routes and flight schedules with the trucking savings alone for UPS hitting about $600 million per year. With flights, savings for both could easily be a billion dollars per year each for FedEx and UPS. This is fueling more investments for new digital ecosystems.

Much of this is under the radar screen but it suggests that besides profits new technologies are freeing up funds for a broad digital revolution even at big firms (somewhat contrary to John Hagel's contention that these big industries will fracture).

So that's a bit of what some economists see happening, not just me. Perhaps not quite so long a way to go.

Reply from Curt:-

We are very slowly recovering.  Growth this quarter was 0.2%—ug.  We need to get above 3% to make a difference and make up for the past 5-8 years.  I just came back from Singapore where I work with the government.  They take a “different” approach and they are doing fine.  They actually do nothing that would be surprising to this group, they just stick to the fundamentals of innovation, economics, and business and work to continuously improve.  And guess what, it works.  Pretty good for a country that was in poverty 40 years ago without any significant infrastructure and now has a PPP GDP per capita 20-30% above ours.  And this with no water, resources, agriculture, energy, hardly any land, and many enemies.  They do have a port, but they had to develop that too.  They are not us, but we can learn a lot from them.  The fundamentals work.

How to spark innovation

Extract from Esko Kilpi

For an entrepreneur, the economic success in creative work is the result of 

• the energy and interest you create, 
• the cool factor; 
• to fail to  “motivate” people, to find no one truly interested in what you try to achieve. 
• Successful ideas and arguments are the one’s that capture people’s inspiration and bridge different purposes. 
• Paradoxically you always need people who agree, but equally, you need people who don’t think like you. 
• Thinking develops best through friction, argumentation and negotiation.

Read more https://medium.com/@EskoKilpi/transforming-ideas-to-customer-value-fba43b0dab84

Venture Capital in Australia: Technology Disruption will cause current leaders i...

Venture Capital in Australia: Technology Disruption will cause current leaders i...:   Insights from Vivek Wadhwa based on his talk from big think on youtube – extracted from April 2015 acuity magazine ( Aus / NZ Charte...

Inspire your stakeholders with the right Narrative

Deepa writes about the need to inspire your stakeholders through great Narrative - with a core of TRUST

Make sure your narrative aligns with reality!

Deepa Prahalad is a strategy consultant and co-author (with Ravi Sawhney) of Predictable Magic: Unleash the Power of Design Strategy to Transform Your Business. Follow her on Twitter at @deepaprahalad.

1) Internal Narrative about purpose

I would place the famous Peter Drucker question, "What is the purpose?",  and the "moonshots" that companies identify in this category.  These do not have a direct, measurable outcome but a huge impact on creating internal motivation and direction, provided that they are done well (e.g. a Coke within arm's reach of everyone on the planet, etc.)

True but Jobs did not do that—a distraction.  The commercial projects were fascinating enough!

In the cases of business leaders like Jobs, Elon Musk, etc. the vision that they articulate also adds value because they can attract great people to work with them,

A good narrative at this stage in my view is about intentions (how we are making the world a better place).  It should also give some indication about the means (how we will train/ reward people, expected standards of behavior)  for how the given organization will strive to achieve those objectives.

Right.

2) Customer Narrative 

From the consumers point of view, the relationship often works in reverse.  People become interested in your vision and views if they connect emotionally with the product/service after interacting with it.  (This is the transformation that Curt described in earlier posts).  Many brands create this emotional connection at many different price points - but they do have one thing in common:  Successful companies make people feel good about themselves. 

Nice.  But, for example, GE, or, or — I worked there?

In the book I co-authored, Predictable Magic, we used the Hero's Journey from Joseph Campbell to describe how consumers navigate the marketplace.  The Moment of Truth in this construct happens post-purchase when people actually interact and find that their experience meets or exceeds their expectations based on the narrative that has been presented.

Expectations.  

In the best cases, people  are inspired to do more and become evangelists (app developers, Facebook fans, online reviews).  

What makes a narrative compelling is more than the fact that it is novel or has a "worthy" goal.  It has to be backed by systems and processes that make it possible to execute and build trust.  

TRUST

An analogy would be the fact that in some places democracy is about the right to vote, and on others it spans to include personal freedom and economic opportunity.  The outcome of any real innovation effort is uncertain by definition, so codes of conduct are incredibly important (the role of religion, etc is obvious here).  

Comment from Curt:- 

Interesting example.  I was once in Singapore at an invited conference of folks like here and a Chinese visiting scholar at Harvard said the main advantage of America was our Judaeo Christian background.  That was interesting, why?  He said that no system can wrote down all the laws—most of them have to be part of the culture with no need to be explicit.  

Non-profits create amazing narratives, common purpose, etc, but often often produce incredibly lackluster results.  

True.  The narrative is everything.

We also need to look at what the reality any narrative would create for individuals and society at large.  There are many narratives that are shared, connect emotionally and are backed by systems that are incredibly destructive (ISIS, Nazi Germany).  I think a focus on ethics/ empathy is a necessary criteria as narratives are created (at least a Hippocratic -type Do No Harm condition).   

In my experience, I have found that because of new strategic frameworks and Big Data, companies have gotten a lot better at identifying potential opportunities, but still lag in understand consumer mindset/ emotions and connecting with them.  

When there is a significant gap between the story and the reality, the result is not only a failed innovation but a dissolution of trust.  

Many of the best companies today are going after the same stated goals - sustainability, addressing inequality, etc.  

I see teams all over the world working on the same stuff with no competitive advantage.  

As I remind people during many presentations, people are not waiting anxiously to download mission statements.  They are waiting to see and feel something that taps into their aspirations and inspires them.  Great narratives bring these aspirations closer to the surface. 

I very often use my father CK Prahalad's tests:

• Will it change the conversation?
• Does it show the opportunity?
• Will it lead to some action?
• and most importantly - Who will be better off because of this work?   

Learning from Everyone

https://hbr.org/2011/12/why-trust-matters-more-than-ev/

What makes an Innovation Hotspot

Extracts about The creation of a innovative Hotspots from David Nordfors - founder of i4j

http://blog.innovationjournalism.org/2008/09/speed-of-new-words-as-innovation.html

I recently had the great pleasure of being one of the World Economic Forum "Innovation 100" who convened here at Stanford in order to discuss the reasons behind innovative clusters. 

It creates an 'Innovation Heatmap' of the world. People have ideas all over the world, but where are the places they are being successful, and what is it with these places that makes it happen just there? Finding the places is not so tricky, once they are successful in innovating - like Silicon Valley. 

But it is very difficult to nail down a good set of indicators that are useful for benchmarking innovation hot spots, offer a clue of why innovation is going well or not, and that can predict which are the coming hot spots.

So far, the number of registered patents is considered as one of the most important indicators, but it is far from the whole story.

One crucial issue for innovation: mobility. Mobility can be between various professional domains: innovation is not driven by science OR technology OR business OR politics, but by the interaction between them. Mobility is also geographical: Silicon Valley hosts people from all over the world. Even though it seems doable to trace the mobility of people, it is a controversial thing to do - people have the right to privacy. It is also difficult to quantify in an easy way (its much easier with number of patents or math test ratings)

Innovation is often about new combinations of existing concepts, or re-framing something in a new context. In the seventies, very few thought of computers having anything to do with storing pictures, even less music. Bringing artists into the world of computers and vice versa was probably more important for innovation than doubling the number of excellent Cobol programmers (the biggest programming language of that day). At the same time, many innovation scoreboards will care more for programmers than artists, and not think of addressing the communication between them. The people running such scoreboards may have some valid concerns about how to address such issues: how does any measurable quantity relating to artists relate to innovation? Does the number of art galleries scale with innovation? How? How can the innovative interaction between artists and programmers be measured?

I have a hunch that innovation hot spots are more likely to be places with low thresholds between people doing different things, where people easily get to know each other, and where they can easily interact in making novelties happen. I imagine they are places with a high concentration of people that find few things as important as the next big thing, who want to be a part of it, and who like chatting about it with anybody who is interested, regardless of profession or background. In Silicon Valley, it happens that people start companies with people they met at their children's birthday parties.

All this requires one thing: This diversity of people in the innovation ecosystem need to share a language that allows them to chat about the stuff that interests them. Otherwise they will have a tough time sharing interests and adding their own parts to it in a way that other people will understand. Innovation is about the introduction of novelties, which often come with new words and narratives, so I guess I am suggesting that innovation hotspots are more likely to be places where people in the innovation ecosystem can rapidly develop new shared language. 

Since a few years back, there are tools on the Internet that can measure the development of language. Google Trends is one entertaining example, it 'charts how often a particular search term is entered relative the total search volume across various regions of the world, and in various languages' (Wikipedia). I think future key innovation indicators can be found through sources like Google or Facebook, finding the hotspots on the geographical world map, as well as the social map, where new language is growing the fastest, also analyzing how the new language connects to market value, weighing these things together.

Today, not many of the people dealing with how we innovate give much conscious thought of how we generate the shared language that is needed for any process of innovation or successful outcome thereof. Sociolinguistics and studies of innovation can be a great pair!

Here are some arguments, linking the thought about language as an innovation indicator back to earlier thoughts posted on this blog:

The formation of new shared language is always a part of innovation.

A concept requires the following language components in order to be shared by people:

1. A Name - so that it can be referred to
2. A Definition - so that it can be identified
3. A Narrative - so that it can be related to and put into context; a narrative is needed to relate a concept to the surroundings and lives of people, to cultures, or to other concepts

Innovation is "the process of creating and introducing new customer value to the market" (as defined by C. Carlson and W. Wilmot). This makes it always into interaction between many people, requiring new language.

1. Innovation is the creation and introduction of new custome rvalue to the market
   
2. In order to introduce something, it needs to be communicated
3. Communication requires shared language
4. New concepts need new names, definitions and narratives to be a part of the language
5. The new names and definitions need to be called to peoples attention so that the new things can be discussed and introduced in our language.
6. People's attention will influenced by attention workers - professionals who generate and broker peoples attention, such as journalism, PR, marketing or lobbying - who have a stake in innovation. They typically take part in the innovation value chain by acting either in the interest of the sources of new language (PR, Marketing, Lobbying) or in the interest of the audience for new language (journalism). The attention workers of different sorts interact with each other, forming an ecosystem which will be facilitating the formation and introduction of new shared language. It may be referred to as the innovation communication system.

As I said above, innovation is not about science OR technology OR business OR politics, etc. - it is about the connection between them! All involved professional fields have their own language. The concept of 'attention workers' and the 'innovation communication system' introduces incentives and mechanisms for creating shared language between different sectors and professions who come in touch with each other through innovation.

I believe our ability to generate new shared language is one of the bottlenecks for innovation. It is especially challenging to 'bridge verticals'. People in different professions can be talking about the same things without understanding each other, because they have different language for it. Sometimes different specialists don't have words for what other specialists are doing: Most politicians don't understand radioengineering and most radioengineers don't understand political science. Bridging them is an opportunity for attention workers, the key professional group from the societal point of view are the journalists - the attention workers who act in the interest of the readership (PR are attention workers who act in the interest of the sources - they are both needed in the bigger game).

--------------------

David Nordfors, Ph.D.

CEO, IIIJ   

david@iiij.org

The Wiki way of Working

Inspiration and extracts from my colleague from i4j, Esko Kelpi.

http://eskokilpi.blogging.fi/2014/04/15/the-wiki-way-of-working/ 

 Esko is a key note speaker , researcher and international thought leader  in the topics of the networked based view of the firm, internet based business models and communication design based on the latest interaction technologies.

Physical tasks can be divided by assigning people to different smaller parts of the whole and managed to completion. Parts and jobs are arranged in the right way and project managed to optimize efficiency. (Eg building a house - architect plans , quantity surveyor sources and costs material , builder builds, interior designer furnishes . Real estate agent sells,)

How do you take intellectual tasks ( innovation creation) and complete them as a team - without an effective workflow? 

Innovation is often created through ideas and chaotic activity in an organised environment.... (brainstorming by many , international collaboration from many cultures - within an organised framework .)

The success and efficiency of an organization is often reflected in its RELATIONSHIPS and CONNECTIONS with the glue of TRUST, in relation to the contexts of value, and the things that matter to them.

Examples of possible effective environments

• Masterminds, 
• meetings, 
• workshops, 
• forums, 
• universities, 
• board meetings, 
• huddles, 
• hackathons, 
• coaching clubs to name a few .

The wiki enables the above to happen online - at different times, creating an environment that effectively enables work and cooperation between people.

Wikis let people work digitally together in the very same way they would work face-to-face. 

In a physical meeting, there are always more or less the wrong people present and the transaction costs are very high. 

Email pushes copies of the same information to people to work on or edit separately

A wiki pulls non co-located people together to work cooperatively and inclusively, with very low transaction costs. 

Email and physical meetings are methods which exclude. They always leave people out. A wiki, depending on the topic, the context and the people taking part, is always inviting and including. 

The goal is to enable groups to form around shared contexts without preset organizational walls, or rules of engagement.

In 1995 Ward Cunningham described his invention as the simplest online database that could possibly work. 

An important principle of the wiki is the conscious emphasis on using as little structure as possible to get the job done. 

A wiki does not force a hierarchy on people. In this case, less structure and less hierarchy mean lower transaction costs. 
A wiki always starts out flat, with all the pages on the same level. 

This allows people to dynamically create the organization and, yes, also the hierarchy that makes most sense in the situation at hand.

People work together to reach a balance of different viewpoints through interaction as they iterate the content of work.

The wiki way of working is essentially a digital and more advanced version of a meeting or a workshop. It enables multiple people to inhabit the same space, see the same thing and participate freely. Some might just listen, some make comments or small edits, while others might make more significant contributions and draw more significant conclusions.

New work is about responsive, free and voluntary participation by people who contribute as little, or as much as they like, and who are motivated by something much more elusive than only money. 

Society has moved away from the era of boxes to the time of networks and linked, social individualism. 

Being connected to people, also from elsewhere, is a cultural necessity and links, not boxes, are the new texture of value creation.

Venture Capital in Australia: What is innovation?

Venture Capital in Australia: What is innovation?: Most technological innovations are small, but they all matter. Thousands of small and medium sized innovations accumulate and occasionally another transformational innovation, like the smartphone, is created. These disruptive innovations come with surprising new knowledge, language, and narratives. The world is forever changed.