894 Posts Found

Dynamism is the drive to work, create, and innovate. It’s the desire to solve problems and do big things. Free market societies bring out dynamism like no other kind of society. But we also know creative destruction can hurt people. That feels wrong. We turn to government to tame capitalism, to make it more decent.

Content: Quotation | Author: Jonathan Haidt | Source: strategy+business | Subjects: Capitalism, Economics

As the automation of physical and knowledge work advances, many jobs will be redefined rather than eliminated—at least in the short term.

Content: Article | Authors: James Manyika, Mehdi Miremadi, Michael Chui | Source: McKinsey Quarterly | Subject: Economics

At the outset of the Great Depression, John Maynard Keynes penned a remarkable economic prognostication: that despite the ominous storm that was then enfolding the world, mankind was in fact on the brink of solving “the economic problem” — that is, the quest for daily subsistence.

The world of his grandchildren — the world of those of us living today — would, “for the first time…be faced with [mankind’s] real, his permanent … [ Read more ]

Content: Article | Author: Tim O’Reilly | Source: Medium | Subject: Economics

Throughout history, economic growth has been fueled by two factors: the expanding pool of workers and their rising productivity. From the perspective of rising prosperity, however, it is productivity that makes all the difference. Disparities in GDP per capita among countries—or between the past and the present in the same country—primarily reflect differences in labor productivity. That in turn is the result of production and … [ Read more ]

Content: Quotation | Authors: Jaana K. Remes, James Manyika, Jonathan R. Woetzel | Source: McKinsey Quarterly | Subject: Economics

Think back to Adam Smith’s The Wealth of Nations (1776), which identified three primary business inputs: labor, capital, and land (defined broadly as any resource that can be produced or mined from land or disposed of as waste on it). The two industrial revolutions the world has thus far seen focused primarily on labor and capital. The first gave us factories and limited-liability corporations to … [ Read more ]

Content: Quotation | Authors: Matt Rogers, Stefan Heck | Source: McKinsey Quarterly | Subject: Economics

There has been much discussion about the effects of rampant automation on the economy and on the labor market in particular. There has been much less attention paid to its effects on human talent and motivation. But what decades of human-factors research tell us is that when computers and other machines take challenging tasks away from us, we turn into observers rather than actors. Distanced … [ Read more ]

Content: Quotation | Author: Nicholas G. Carr | Subjects: Economics, Organizational Behavior, Skills

Our research shows that even if short-term investors cause day-to-day fluctuations in a company’s share price and dominate quarterly earnings calls, longer-term investors are the ones who align market prices with intrinsic value.

Content: Quotation | Authors: David Wessels, Marc H. Goedhart, Tim Koller | Source: McKinsey Quarterly | Subjects: Economics, Market/Investment

The great genius of capitalism—solving people’s problems—has, by necessity, a dark side: the solution to one person’s problem can create problems for someone else.

This is the age-old puzzle of political economy: how does an economic system resolve conflicts and distribute benefits? A fancy derivative product may help corporate treasurers solve their problem of managing corporate risk, and it might make bankers rich, but it might … [ Read more ]

Content: Quotation | Authors: Eric Beinhocker, Nick Hanauer | Source: McKinsey Quarterly | Subjects: Capitalism, Economics

Elevating the creation of shareholder value to the status of primary objective is based on a faulty assumption—that capital is the scarcest resource in an economy, when in reality it’s knowledge that’s the scarce, critical ingredient in solving problems. […] This is not to say that shareholders or other owners are unimportant. But providing them with a return that is competitive compared with the alternatives … [ Read more ]

Content: Quotation | Authors: Eric Beinhocker, Nick Hanauer | Source: McKinsey Quarterly | Subjects: Capitalism, Economics, Knowledge

The orthodox economic view holds that capitalism works because it is efficient. But in reality, capitalism’s great strength is its problem-solving creativity and effectiveness. It is this creative effectiveness that by necessity makes it hugely inefficient and, like all evolutionary processes, inherently wasteful. Proof of this can be found in the large numbers of product lines, investments, and business ventures that fail every year. Successful … [ Read more ]

Content: Quotation | Authors: Eric Beinhocker, Nick Hanauer | Source: McKinsey Quarterly | Subjects: Capitalism, Economics

If prosperity is created by solving human problems, a key question for society is what kind of economic system will solve the most problems for the most people most quickly. This is the genius of capitalism: it is an unmatched evolutionary system for finding solutions. […] Human creativity develops a variety of ways to solve such problems, but some inevitably work better than others, and … [ Read more ]

Content: Quotation | Authors: Eric Beinhocker, Nick Hanauer | Source: McKinsey Quarterly | Subjects: Capitalism, Economics

We typically talk about growth in terms of GDP, though it has been much criticized recently as a measure of progress. There have been a variety of attempts to make GDP account for things such as environmental damage, unpaid work, the progress of technology, or the development of human capital. In our view, the biggest problem with GDP is that it doesn’t necessarily reflect how … [ Read more ]

Content: Quotation | Authors: Eric Beinhocker, Nick Hanauer | Source: McKinsey Quarterly | Subjects: Capitalism, Economics

Prosperity in human societies can’t be properly understood by looking just at monetary measures, such as income or wealth. Prosperity in a society is the accumulation of solutions to human problems. These solutions run from the prosaic (crunchier potato chips) to the profound (cures for deadly diseases). Ultimately, the measure of the wealth of a society is the range of human problems it has solved … [ Read more ]

Content: Quotation | Authors: Eric Beinhocker, Nick Hanauer | Source: McKinsey Quarterly | Subjects: Capitalism, Economics

The essential role of capitalism is not allocation—it is creation. Life isn’t drastically better for billions of people today than it was in 1800 because we are allocating the resources of the 19th-century economy more efficiently. Rather, it is better because we have life-saving antibiotics, indoor plumbing, motorized transport, access to vast amounts of information, and an enormous number of technical and social innovations that … [ Read more ]

Content: Quotation | Authors: Eric Beinhocker, Nick Hanauer | Source: McKinsey Quarterly | Subjects: Capitalism, Economics

Andy Haldane, the chief economist of the Bank of England, notes that the conventional theory views the economy as a rocking horse that, when perturbed by an outside force, sways for a while before predictably settling back down to a static equilibrium. But, as Haldane has pointed out, what we saw during the crisis was more like a herd of wild horses—something spooks one of … [ Read more ]

Content: Quotation | Authors: Eric Beinhocker, Nick Hanauer | Source: McKinsey Quarterly | Subject: Economics

For the past century, the dominant economic paradigm—neoclassical economics—has painted a narrow and mechanistic view of how capitalism works, focusing on the role of markets and prices in the efficient allocation of society’s resources. The story is familiar: rational, self-interested firms maximize profits; rational, self-interested consumers maximize their “utility”; the decisions of these actors drive supply to equal demand; prices are set; the market clears; … [ Read more ]

Content: Quotation | Authors: Eric Beinhocker, Nick Hanauer | Source: McKinsey Quarterly | Subjects: Capitalism, Economics

A true marketplace needs natural pull on both the consumer and supplier side of the market. Aggregating suppliers is a necessary, but insufficient step on its own. You must also organically aggregate demand. With each step, it should get easier to acquire the incremental consumer AS WELL AS the incremental supplier. Highly liquid marketplaces naturally “tip” towards becoming a clearinghouse where neither the consumer nor … [ Read more ]

Content: Article | Author: Bill Gurley | Subjects: Economics, Entrepreneurship, Strategy

Even experts can be blind to important features of their subjects. I have done a lot of work on country competitiveness, but if anybody had asked me in 2000 to name the top 100 conditions that underpin a thriving economy, I wouldn’t have mentioned “a well-functioning land registry system.” Then I read [Hernando] de Soto’s compelling case that the ability to get clear title to … [ Read more ]

Content: Quotation | Author: Roger L. Martin | Source: strategy+business | Subjects: Economics, Expertise, Knowledge

There are not a lot of resources to help you build analytics marketplaces and other kind of networks. At daphni, we deeply believe in the platformization of the economy and look closely at these models. Several founders have asked us tips to structure their data-driven approach, so we’ve decided to publish a guide to help founders do it. We divided the guide in 2 parts: … [ Read more ]

Content: Article | Author: Willy Braun | Source: Medium | Subjects: Economics, Management, Strategy

Meeting increasing global demand requires dramatically improving resource productivity. Yet technological advances mean companies have an extraordinary opportunity not only to meet that challenge but to spark the next industrial revolution as well.

Content: Article | Authors: Matt Rogers, Stefan Heck | Source: McKinsey Quarterly | Subjects: Economics, Management, Social Responsibility (ESG)