Explaining Southern California's economy

Business don't need no stinkin' philosophers!

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Matthew DeBord

Welcome to Idealab, a new business incubator founded in 1996 and located in Pasadena, Calif.

Bronwyn Fryer has a sneakily important post at the Harvard Business Review blog. It's about how completely essentially it is for business to have what she calls "idea fusers" — people who can practice synthetic thinking, figuring out how to stick seemingly disparate pieces of production, data, insight, strategy — whatever — together to yield breakout results. I have my own term for this: "free range thinking." 

When I was in grad school, we commonly called this approach "dialectical," echoing the Marxist view that history was a process of two opposing ideas conflicting — or ideas developing internal conflicts — until they produced a third option. Thesis, antithesis, synthesis. The concept was actually adapted from Hegel, the study of which was to Marx what rocket science is to lawn mower repair (sorry, Karl).

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The next time you use a computer, remember Jacob Goldman, RIP

Xerox Announces Revenue Restatement

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The House that Jacob Goldman built. The innovator died on Tuesday, at age 90.

How would we ever get anything done without the contributions of Jacob Goldman, founder of Xerox PARC, who died yesterday at age 90? This is from the New York Times' obituary:

Established in 1970 in an industrial park next to Stanford, PARC researchers designed a remarkable array of computer technologies, including the Alto personal computer, the Ethernet office network, laser printing and the graphical user interface.

The technologies would later be commercialized by both Apple Computer and Microsoft, among others, and Xerox would be criticized for not capitalizing enough on the technologies it had pioneered...

So Xerox didn't bring us the personal computing revolution. But at least the right people were around to capitalize on the research. If there's a lesson in Goldman's life, it's that research matters. And it really matters when it's funded by big companies, even if they don't wind up knowing what to do with the innovation that it enables.

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China: Where's the innovation?

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A Chinese flag hangs next to a new development under construction on the busy Nanjing Road shopping street in Shanghai, China.

It's not a trivial question. This is Douglas Hervey, from the Harvard Business Review blog:

In the United States, disruptive innovation has harmed a few but benefited many. In China, top-down capitalism has benefited a few but harmed many. An absence of disruptive innovation and entrepreneurship is suffocating China's future growth potential. The future of that growth potential will depend in large part on whether China suppresses or unleashes its would-be disruptive entrepreneurs.

Hervey says that the Chinese are facing a "middle income trap — losing their competitive edge in labor-intensive industries and not yet gaining new sources of growth from innovation." So does this mean that China won't become the economic powerhouse we might once have expected?

It depends on how much faith you place in innovation. And here's why you should place a lot in it: because innovation really has no upper limit. More traditional contributors to GDP do. When an economy extracts as much growth as it can from some established process, it starts to outsource that process to a region where labor costs are cheaper. Or it fires up the innovation engine to make the process better — or replace the product in question with something better.

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GOP's Frank Luntz: The first rule of capitalism is you do not talk about capitalism

Check this out: the Occupy movement is changing the way that GOP strategists are telling people to talk about the protest phenomenon. Or more accurately, not talk about it.

At Yahoo, Chris Moody captures a series of talking/not-talking points dispensed by Frank Luntz at a Republican governors' gathering in Florida. Here are my two favorites (there are 10 total, plus a bonus, which agues that "bonuses" shouldn't be called that):

1. Don't say 'capitalism.'

"I'm trying to get that word removed and we're replacing it with either 'economic freedom' or 'free market,' " Luntz said. "The public . . . still prefers capitalism to socialism, but they think capitalism is immoral. And if we're seen as defenders of quote, Wall Street, end quote, we've got a problem."

[...]

8. Out: 'Entrepreneur.' In: 'Job creator.'

Use the phrases "small business owners" and "job creators" instead of "entrepreneurs" and "innovators."

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