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.