Major Advances Seldom Come from Big Incumbent Firms

(p. 109) Most of today’s Fortune 500 were not there fifty years ago. All of the private sector’s net new jobs in the United States during the past twenty years were added by companies not on the Fortune 1000 twenty years ago: two thirds of the net new jobs came from companies with fewer than twenty employees twenty years ago. Ten years ago our automobile giants seemed invincible. Today we wonder whether more than one will survive.

In 1960, Theodore Levitt of Harvard wrote an article in the Harvard Business Review, “Marketing Myopia,” in which he pointed out that every industry was once a growth industry. Perversely, a vicious cycle sets in. After experiencing continued growth for a while, managers in the industry come to believe that continuing growth is assured. They persuade themselves that there is no competitive substitute for their product, and develop too much faith in (p. 110) the benefits of mass production and the inevitable steady cost reduction that results as output rises. Managements become preoccupied with products that lend themselves to carefully controlled improvement and the benefits of manufacturing cost reduction. All of these forces combine to produce an inevitable stagnation or decline.
In Dynamic Economics, the economist Burton Klein puts forward a carefully researched and very similar view: “Assuming that an industry has already reached the stage of slow history, the advances will seldom come from the major firms in the industry. In fact, of some fifty inventions [fifty key twentieth-century breakthrough innovations that he studied] that resulted in new S-shaped curves [major new growth patterns] in relatively static industries, I could find no case in which the advance in question came from a major firm in the industry.” George Gilder elaborates on Klein’s work “The very process by which a firm becomes most productive in an industry tends to render it less flexible and inventive.”
It appears that evolution is continuously at work in the marketplace; that adaptation is crucial; and that few big businesses, if any, pull it off. Many of our excellent companies most probably will not stay buoyant forever. We would merely argue that they’ve had a long run–a much longer and more successful run than most–and are coming much closer than the rest to maintaining adaptability and size at the same time.

Source:
Peters, Thomas J., and Robert H. Waterman. In Search of Excellence: Lessons from America’s Best-Run Companies. New York: HarperCollins, 2004.
(Note: italics and brackets in original.)

Taiwan Government’s Industrial Policy Ruins Economy

ExportsPlungeEastAsia2009-05-31.jpg Source of graphic: online version of the NYT article quoted and cited below.

(p. A8) Taiwan, where for years the government encouraged information technology companies with tax breaks, cheap land, loans and more, is probably the most endangered of the small Asian economies. The result of that government largess is an economy extremely dependent on a single industrial sector that has been devastated by plunging worldwide sales of electronics. “Half of the industries just got a bad cold, they probably can recover quickly — the other 50 percent, they’ve got, not cancer, but close,” said Preston W. Chen, a chemicals tycoon who is also the chairman of Taiwan’s Chinese National Federation of Industries.

For the full article, see:
KEITH BRADSHER. “Memo From Singapore – East Asia’s Small Edens of Trade Wilt as Need for Exports Dries Up.” The New York Times (Thurs., March 5, 2009): A8.

Jewish Immigrant Garment Entrepreneurs “Worked Hard”

(p. 145) “There is no doubt that those Jewish immigrants
arrived at the perfect time, with the perfect skills,” says
the sociologist Stephen Steinberg. “To exploit that opportunity,
you had to have certain virtues, and those immigrants
worked hard. They sacrificed. They scrimped and
saved and invested wisely. But still, you have to remember
that the garment industry in those years was growing
by leaps and bounds. The economy was desperate for the
skills that they possessed.”

Source:
Gladwell, Malcolm. Outliers: The Story of Success. New York, NY: Little, Brown, and Co., 2008.
(Note: italics in original.)

Global Warming Lowers Sea Levels Near Juneau

GlaciersRecedingJuneau2009-05-31.jpg“Glaciers around Juneau are receding 30 feet or more each year.” Source of photo and caption: online version of the NYT article quoted and cited below.

(p. A1) JUNEAU, Alaska — Global warming conjures images of rising seas that threaten coastal areas. But in Juneau, as almost nowhere else in the world, climate change is having the opposite effect: As the glaciers here melt, the land is rising, causing the sea to retreat.

Morgan DeBoer, a property owner, opened a nine-hole golf course at the mouth of Glacier Bay in 1998, on land that was underwater when his family first settled here 50 years ago.
“The highest tides of the year would come into what is now my driving range area,” Mr. DeBoer said.
Now, with the high-tide line receding even farther, he is contemplating adding another nine holes.
“It just keeps rising,” he said.
The geology is complex, but it boils down to this: Relieved of billions of tons of glacial weight, the land has risen much as a cushion regains its shape after someone gets up from a couch. The land is ascending so fast that the rising seas — a ubiquitous byproduct of global warming — cannot keep pace. As a result, the relative sea level is falling, at a rate “among the highest ever recorded,” according to a 2007 report by a panel of experts convened by Mayor Bruce Botelho of Juneau.

For the full article, see:
CORNELIA DEAN. “Higher Seas? As Alaska Glaciers Melt, Land Rises.” The New York Times (Mon., May 18, 2009): A1 & A11.

(Note: the title of the online version of the article is: “As Alaska Glaciers Melt, It’s Land That’s Rising.”)

JuneuauGolfCourse2009-05-31.jpg“Morgan DeBoer opened a nine-hole golf course, above, at the mouth of Glacier Bay in 1998 on land that did not exist when his family settled in the area 50 years ago.” Source of photo and caption: online version of the NYT article quoted and cited above.

The Ascent of Science Led to Belief that the World Could Improve

I believe the following paragraph expresses the central message of Steven Johnson’s book The Invention of Air:

(p. 211) In the popular folklore of American History, there is a sense in which the founders’ various achievements in natural philosophy—Franklin’s electrical experiments, Jefferson’s botany—serve as a (p. 212) kind of sanctified extracurricular activity. They were statesmen and political visionaries who just happened to be hobbyists in science, albeit amazingly successful ones. Their great passions were liberty and freedom and democracy; the experiments were a side project. But the Priestley view suggests that the story has it backward. Yes, they were hobbyists and amateurs at natural philosophy, but so were all the great minds of Enlightenment-era science. What they shared was a fundamental belief that the world could change—that it could improve— if the light of reason was allowed to shine upon it. And that believe emanated from the great ascent of science over the past century, the upward trajectory that Priestley had s powerfully conveyed in his History and Present State of Electricity. The political possibilities for change were modeled after the change they had all experience through the advancements in natural philosophy. With Priestley, they grasped the political power of the air pump and the electrical machine.

Source:
Johnson, Steven. The Invention of Air: A Story of Science, Faith, Revolution, and the Birth of America. New York: Riverhead Books, 2008.
(Note: italics in original.)

China’s Grass-Mud Horse Has “Made Government Censors Look Ridiculous”

GrassMudHorseA2009-05-31.jpg“Songs about a mythical alpaca-like creature have taken hold online in China.” Source of screen capture and caption: online version of the NYT article quoted and cited below.

(p. A1) BEIJING — Since its first unheralded appearance in January on a Chinese Web page, the grass-mud horse has become nothing less than a phenomenon.

A YouTube children’s song about the beast has drawn nearly 1.4 million viewers. A grass-mud horse cartoon has logged a quarter million more views. A nature documentary on its habits attracted 180,000 more. Stores are selling grass-mud horse dolls. Chinese intellectuals are writing treatises on the grass-mud horse’s social importance. The story of the grass-mud horse’s struggle against the evil river crab has spread far and wide across the Chinese online community.
Not bad for a mythical creature whose name, in Chinese, sounds very much like an especially vile obscenity. Which is precisely the point.
The grass-mud horse is an example of something that, in China’s authoritarian system, passes as subversive behavior. Conceived as an impish protest against censorship, the foul-named little horse has not merely made government censors look ridiculous, although it has surely done that.
It has also raised real ques-(p. A12)tions about China’s ability to stanch the flow of information over the Internet — a project on which the Chinese government already has expended untold riches, and written countless software algorithms to weed deviant thought from the world’s largest cyber-community.

For the full story, see:
MICHAEL WINES. “Mythical Beast (a Dirty Pun) Tweaks China’s Web Censors.” The New York Times (Thurs., March 12, 2009): A1 & A12.
(Note: the online title of the article is: “A Dirty Pun Tweaks China’s Online Censors.”)

GrassMudHorseB2009-05-31.jpg“The popularity of the grass-mud horse has raised questions about China’s ability to stanch the flow of information.” Source of screen capture and caption: online version of the NYT article quoted and cited above.

The Meaningful Work of Immigrant Sweatshop Entrepreneurs

(p. 141) “To me the greatest wonder in this was not the mere
quantity of garments–although that was a miracle in
itself–” Borgenicht would write years later, after he
became a prosperous manufacturer of women’s and children’s
clothing, “but the fact that in America even poor
people could save all the dreary, time-consuming labor of
making their own clothes simply by going into a store and
walking out with what they needed. There was a field to
go into, a field to thrill to.”

Borgenicht took out a small notebook. Everywhere he
went, he wrote down what people were wearing and what
was for sale–mens wear, women’s wear, children’s wear. He
wanted to find a “novel” item, something that people would
wear that was not being sold in the stores. For four more
days he walked the streets. On the evening of the final day
as he walked toward home, he saw a half dozen girls playing
hopscotch. One of the girls was wearing a tiny embroidered
apron over her dress, cut low in the front with a tie in the
back, and it struck him, suddenly, that in his previous days
of relentlessly inventorying the clothing shops of the Lower
East Side, he had never seen one of those aprons for sale.
He came home and told Regina. She had an ancient
sewing machine that they had bought upon their arrival in
America. The next morning, he went to a dry-goods store
on Hester Street and bought a hundred yards of gingham
and fifty yards of white crossbar. He came back to their
tiny apartment and laid the goods out on the dining room
table. Regina began to cut the gingham–small sizes for
toddlers, larger for small children–until she had forty (p. 142)
aprons. She began to sew. At midnight, she went to bed
and Louis took up where she had left off. At dawn, she rose
and began cutting buttonholes and adding buttons. By ten
in the morning, the aprons were finished. Louis gathered
them up over his arm and ventured out onto Hester Street.
“Children’s aprons! Little girls’ aprons! Colored ones,
ten cents. White ones, fifteen cents! Little girls’ aprons!”
By one o’clock, all forty were gone.
“Ma, we’ve got our business,” he shouted out to Regina,
after running all the way home from Hester Street.
He grabbed her by the waist and began swinging her
around and around.
“You’ve got to help me,” he cried out. “We’ll work
together! Ma, this is our business.”

Source:
Gladwell, Malcolm. Outliers: The Story of Success. New York, NY: Little, Brown, and Co., 2008.
(Note: italics in original.)

Medical Care is Much Advanced Since Victorian Era of Mid-1800s


In the final sentences quoted below, note the under-appreciated role of air conditioning, and electric light, in advancing medical education.

(p. W6) “Gray’s Anatomy” is one of the most famous medical books of all time, but if a picture is worth a thousand words, then the man most responsible for the success of the book was its long-forgotten illustrator, Henry Vandyke Carter. In “The Making of Mr. Gray’s Anatomy,” Ruth Richardson shows how Carter and Henry Gray came together to produce a classic that originally bore neither of their names — it was published as “Anatomy Descriptive and Surgical” — but she also affords us a remarkable glimpse of science in the 19th century.
. . .
Not much of a paper record exists regarding Henry Gray’s life. Ms. Richardson speculates that his possessions were burned in the “Victorian terror” stirred by smallpox, the disease that would kill him at age 34. Henry Carter kept a diary, but its contents are not exactly a trove of detail about his life and times. . . .
. . .
Describing their methods, Ms. Richardson reminds us of what we now take for granted in medicine by relating what wasn’t feasible back then. The “dissecting season” was the colder months, January-March, to make the most of the cadavers’ preservation. And the work day had to begin soon after dawn because sunlight was so much better for close observation than any other light source.

For the full review, see:
MARK F. TEAFORD. “Dissecting an Unheralded Alliance; A classic medical text bears one man’s name, but it was the product of a true collaboration.” Wall Street Journal (Fri., MARCH 27, 2009): W6.
(Note: ellipses added.)

The reference to the reviewed book is:
Richardson, Ruth. The Making of Mr. Gray’s Anatomy. Oxford, UK: Oxford University Press.

MakingOfMrGraysAnatomyBK.jpg

Source of book cover image: online version of the WSJ review quoted and cited above.

Adams, as a Point of Honor, Defended the Innovations of Science

(p. 211) It is no accident that, despite the long litany of injuries Adams felt had been dealt him in Jefferson’s letters to Priestley, he chose to begin his counterassault by denying, as a point of honor, that he had ever publicly taken a position as president that was resistant to the innovations of science. Remember that Jefferson had also insinuated that Adams had betrayed the Constitution with his “libel on legislation.” But Adams lashed out first at the accusation that he was anti-science. That alone tells us something about the gap that separates the current political climate from that of the founders.

Source:
Johnson, Steven. The Invention of Air: A Story of Science, Faith, Revolution, and the Birth of America. New York: Riverhead Books, 2008.

“Infinitely Smart” Physicist and Futurist Expresses Global Warming Doubts

DysonFreeman2009-05-30a.jpg Dyson says that the “climate-studies people” have “. . . come to believe models are real and forget they are only models.” Source of photo and caption: online version of the NYT article quoted and cited below. (The caption used here is adapted from the body of the article, and is not the caption used under the photo in the article.)

The cover story of the March 29, 2009 Sunday New York Times Magazine section was a breath of fresh air on an old hot topic. Here is a small sample of a large article:

(p. 32) FOR MORE THAN HALF A CENTURY the eminent physicist Freeman Dyson has quietly resided in PrinceĀ­ton, N.J., on the wooded former farmland that is home to his employer, the Institute for Advanced Study, this country’s most rarefied community of scholars. Lately, however, since coming “out of the closet as far as global warming is concerned,” as Dyson sometimes puts it, there has been noise all around him. Chat rooms, Web threads, editors’ letter boxes and Dyson’s own e-mail queue resonate with a thermal current of invective in which Dyson has discovered himself variously described as “a pompous twit,” “a blowhard,” “a cesspool of misinformation,” “an old coot riding into the sunset” and, perhaps inevitably, “a mad scientist.” Dyson had proposed that whatever inflammations the climate was experiencing might be a (p. 34 sic) good thing because carbon dioxide helps plants of all kinds grow. Then he added the caveat that if CO2 levels soared too high, they could be soothed by the mass cultivation of specially bred “carbon-eating trees,” whereupon the University of Chicago law professor Eric Posner looked through the thick grove of honorary degrees Dyson has been awarded — there are 21 from universities like Georgetown, Princeton and Oxford — and suggested that “perhaps trees can also be designed so that they can give directions to lost hikers.” Dyson’s son, George, a technology historian, says his father’s views have cooled friendships, while many others have concluded that time has cost Dyson something else. There is the suspicion that, at age 85, a great scientist of the 20th century is no longer just far out, he is far gone — out of his beautiful mind.

But in the considered opinion of the neurologist Oliver Sacks, Dyson’s friend and fellow English expatriate, this is far from the case. “His mind is still so open and flexible,” Sacks says. Which makes Dyson something far more formidable than just the latest peevish right-wing climate-change denier. Dyson is a scientist whose intelligence is revered by other scientists — William Press, former deputy director of the Los Alamos National Laboratory and now a professor of computer science at the University of Texas, calls him “infinitely smart.” Dyson — a mathematics prodigy who came to this country at 23 and right away contributed seminal work to physics by unifying quantum and electrodynamic theory — not only did path-breaking science of his own; he also witnessed the development of modern physics, thinking alongside most of the luminous figures of the age, including Einstein, Richard Feynman, Niels Bohr, Enrico Fermi, Hans Bethe, Edward Teller, J. Robert Oppenheimer and Edward Witten, the “high priest of string theory” whose office at the institute is just across the hall from Dyson’s. Yet instead of hewing to that fundamental field, Dyson chose to pursue broader and more unusual pursuits than most physicists — and has lived a more original life.
. . .
(p. 36) Not long ago Dyson sat in his institute office, a chamber so neat it reminds Dyson’s friend, the writer John McPhee, of a Japanese living room. On shelves beside Dyson were books about stellar evolution, viruses, thermodynamics and terrorism. “The climate-studies people who work with models always tend to overestimate their models,” Dyson was saying. “They come to believe models are real and forget they are only models.” Dyson speaks in calm, clear tones that carry simultaneous evidence of his English childhood, the move to the United States after completing his university studies at Cambridge and more than 50 years of marriage to the German-born Imme, but his opinions can be barbed, especially when a conversation turns to climate change. Climate models, he says, take into account atmospheric motion and water levels but have no feeling for the chemistry and biology of sky, soil and trees. “The biologists have essentially been pushed aside,” he continues. “Al Gore’s just an opportunist. The person who is really responsible for this overestimate of global warming is Jim Hansen. He consistently exaggerates all the dangers.”
Dyson agrees with the prevailing view that there are rapidly rising carbon-dioxide levels in the atmosphere caused by human activity. To the planet, he suggests, the rising carbon may well be a MacGuffin, a striking yet ultimately benign occurrence in what Dyson says is still “a relatively cool period in the earth’s history.” The warming, he says, is not global but local, “making cold places warmer rather than making hot places hotter.” Far from expecting any drastic harmful consequences from these increased temperatures, he says the carbon may well be salubrious — a sign that “the climate is actually improving rather than getting worse,” because carbon acts as an ideal fertilizer promoting forest growth and crop yields. “Most of the evolution of life occurred on a planet substantially warmer than it is now,” he contends, “and substantially richer in carbon dioxide.” Dyson calls ocean acidification, which many scientists say is destroying the saltwater food chain, a genuine but probably exaggerated problem. Sea levels, he says, are rising steadily, but why this is and what dangers it might portend “cannot be predicted until we know much more about its causes.”

For the full article, see:

NICHOLAS DAWIDOFF. “The Civil Heretic.” The New York Times Magazine (Sun., March 29, 2009): 32-39, 54, 57-59.

(Note: ellipses in top photo caption, and in article quotes, are added.)

DysonFreeman2009-0530b.jpg

“Freeman Dyson.” Source of photo and caption: online version of the NYT article quoted and cited above.