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Entrepreneurs on a planeReading a work-related book on an airplane is the ultimate example of entrepreneurial activity. It's a matter of increasing one's human capital during otherwise wasted time. Even if it's done by an ordinary line employee at a large, bureaucratic organization, it's a potent choice of initiative to better one's own circumstances in a highly entrepreneurial way.
Industrial policyWhen the quest for manufacturing jobs goes wacky: France is headed for a more state-interventionist economy, if the government gets its way. State-interventionism tends to contaminate any market economy, but its effects are more subdued in emerging economies (like in Singapore or South Korea, 50 years ago). But in a mature economy like France? Sounds like a recipe for boondoggles, waste, and corruption. It's quite lovely that the political class there wants to dream of creating a "third industrial revolution", but the people who actually create industrial revolutions aren't working for the state.
■ The best thing a country can do if the political leadership wants certain technological innovations (like the 34 projects they'll pursue in France) is to establish inducement prizes (or, perhaps they could better be called "innovation prizes") that concentrate the rewards for actually delivering on those innovations. Governments ought to be largely agnostic about the exact steps involved in getting expensive things with public funding. Trying to micromanage a macro-economy is a really good way to demonstrate foolishness. Instead, define carefully what you want and decide precisely what it's worth to you, then publicize the prize and stay out of the way. That's how the X Prizes work. (And they really do work.)
■ Understand that for government to concentrate benefits around any particular result distorts the market -- but if there are enough benefits to the result, say, in the form of public goods, then that distortion may be worthwhile. But distorting through micromanagement and rough-edged "industrial policy" is a great way to waste the taxes taken from hard-working people.
■ France's problem is a really high unemployment rate. That, quite often, is a symptom of an economy with too little labor mobility and too many regulations on employment. (For an American counterpart to this problem, compare the experiences of the heavily-unionized automakers with the non-unionized ones. Sure, the unionized ones promised lots of benefits to the workers, but the companies' promises exceeded their capacities, and two of them went broke. The non-unionized ones had more flexibility to shrink when needed and to grow when needed, making them more nimble and thus more capable of taking advantage of shifts in the market. And thus Toyota is hiring and expanding in a big way inside the US, while the US and Canadian governments are only now getting around to backing out of owning (that is, propping up) GM.
■ It's far more defensible for small, developing countries to try a coordinated industrial policy, but to do so requires that the politicians have the wisdom and self-restraint to pull away the "punch bowl" of government protection once the party starts to heat up. South Korea used the government protection of the chaebol to spur industrialization. But the protections outlasted their usefulness, and caused the chaebol to become sclerotic and hazardous to the health of the nation's economy as a whole. The last decade or more has been spent trying to rein in the chaebol so the rest of the economy can flourish. Any government considering an interventionist industrial policy needs to think twice.
News of the week
How to get rich: Reinvest 90% of your earnings
The Koch brothers get a lot of heat for their political spending. But from a business perspective, they are admirable -- reinvesting 90% of their profits back into the business. It's a model worth examining by all businesses -- and by individuals and families, as well. We can't always reinvest everything, but almost all of us could be reinvesting more than we do.
Innovation comes to hockey
Players can't take off their own helmets to fight. But players found the loophole: They can take off the other guy's helmet instead. The takeaway: People in charge of rulemaking usually think they're the smartest people in the room. But, quite often, the organic response to the rules is that just one or two people will figure out a desirable loophole, and soon everyone else jumps on board. That's the way of nature -- we spray for weeds or take antibiotics, but when corners get cut, nature finds a way to poke through, and we end up with herbicide-resistant weeds and MRSA. That's why we should always be skeptical when politicians and policymakers think they have all of the answers to the world's problems. Often, they'll just impose more costs on the public generally, while the worst offenders find the loopholes. Our best defense against the worst abuses in many sectors is often to mandate transparency and educate people to deal with the information they get. The bizarro world of investment banking wouldn't be nearly so profitable as it is if people took the time to understand money as well as they understand fantasy football, and then withheld their money from those who charge fees disproportionate to the value they create.
Tech startups get funding through connections
Silicon Valley isn't quite an open meritocracy. More often than not, people went to the "right" school or already know the "right" people. Which in turn suggests that there's some real opportunity to be had funding projects by people with good ideas who are outside those existing networks. But startups are speculative by nature, anyway, so which of those risks are worth taking?
Microsoft frames Surface tablet as a necessary (but expensive) learning experience
Fortunately for the company, there's such a franchise built around Windows with so much ongoing earnings power behind it that they can afford to make big mistakes while finding other income streams.
Apple's new iPhones launch today
But whose idea was it to come out with a higher-powered phone and a lower-tech model at the same time, and distinguish their model names only by calling one the "5c" and one the "5s"? Apple just made things too complicated for the very casual user -- and that's the market Apple should be trying to win over. The company endless ballyhoo over being user-friendly, and now that smartphones outsell regular phones, the remaining market to be conquered is the set of users who have thus far been afraid to buy smartphones for fear of their complexity. Many will go into stores and want "the new iPhone", and then get lost in the details of a "5c" versus a "5s". Oh, and there's also that complication that "5" and "S" look a lot alike. Poor branding choice for Apple, if they want to catch up with Android (or just hold their own) in the smartphone market. Don't make customers learn your codes; just give them model names that are simple and catchy to ask for. The iPhone series is turning into jargon soup.
Whatever came of "Generation Iowa"?
Not a great deal, at least not structurally. Iowa and other "brain-drained" states need to stop obsessing so much over where recent graduates choose to live and think more about making sure the tax and regulatory environment is friendly to business in general (and thus, by extension, to small and startup businesses). The friendlier the climate for business, the more opportunities for those who want to work for themselves, and the greater the choice for those who prefer to work for others.
The life of a hotel housekeeper
Nielsen (the TV ratings company) buys Arbitron (the radio ratings company)
Comedy bordering on the profound
Louis CK's thoughts on smartphones ring all too true
Solar power may finally have fallen to competitive prices
"[W]ind power is now cheaper than coal and gas"
Even when unsubsidized (at least in Australia), according to a Bloomberg analysis
Warren Buffett has no "second choice" for Fed chair
He wants Ben Bernanke to come back. Related: There was very little net change in unemployment last month.
AllThingsD to split off from Dow Jones
That's too bad; the brand alliance gave AllThingsD a certain level of credibility that its all-too-casual name did not
Broadband-use limits are an archaic response to Internet use
As Internet service providers impose usage caps, people are finding ever more ways to use the Internet. Any firm imposing caps instead of putting new fiber-optic cable in the ground is probably one that needs a dose of competition.
How the self-made wealthy got on the Forbes 400 list
Investments, technology, and real estate are the top three routes
Does pent-up demand beat rising interest rates?
Mortgage interest rates have risen and will probably continue to rise -- but they're still at incomprehensible lows, from a historical standpoint. So will rising rates be offset by demand that's been pent-up as people left homeownership? Seems like the demand-side issue will probably be market-specific, while the interest rates will have a more universal impact.