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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.
Facebook founder and CEO Mark Zuckerberg speaks during a news conference at Facebook headquarters on October 6, 2010 in Palo Alto, California.
OK, maybe not the worst thing. But according to Harvard Business Review blogger Daniel Gulati, not exactly a force for happiness:
When Facebook was founded in 2004, it began with a seemingly innocuous mission: to connect friends. Some seven years and 800 million users later, the social network has taken over most aspects of our personal and professional lives, and is fast becoming the dominant communication platform of the future.
But this new world of ubiquitous connections has a dark side. In my last post, I noted that Facebook and social media are major contributors to career anxiety. After seeing some of the comments and reactions to the post, it's clear that Facebook in particular takes it a step further: It's actually making us miserable.
He goes on. This is my favorite part:
[Facebook is] creating a den of comparison. Since our Facebook profiles are self-curated, users have a strong bias toward sharing positive milestones and avoid mentioning the more humdrum, negative parts of their lives. Accomplishments like, "Hey, I just got promoted!" or "Take a look at my new sports car," trump sharing the intricacies of our daily commute or a life-shattering divorce. This creates an online culture of competition and comparison. One interviewee even remarked, "I'm pretty competitive by nature, so when my close friends post good news, I always try and one-up them."
Cleaning services are vulnerable to the underground economy and price competition.
How much does the "underground economy" cost California every year in lost tax revenue? A whopping $7 billion, according to LA Times:
A recent review of records from nearly 1,500 employers revealed that nearly a third lacked legally required workers' compensation insurance coverage to pay the medical bills of employees hurt on the job, Baker said.
Many of those workers seek treatment at hospital emergency rooms, a burden that ultimately falls on insured patients and taxpayers. They also seek benefits from state workers' compensation courts and money that comes from a special state fund that passes the costs along to law-abiding employers. Off-the-books laborers likewise don't pay income taxes, while their employers avoid payroll taxes to fund unemployment insurance benefits.
Bottom line: Tax-paying companies, consumers and taxpayers are stuck paying the bill for cheats.
UPDATE: A commenter has me thinking that Three Wishes may be produced by...the same people who make the Chuck (The Bronco Wine Company)! A bit of an interesting "conspiracy" in the ultra-cheap wine world? It would create an interesting wrinkle in Whole Foods' "chuck the Chuck" argument. I'll see what I can learn...
A little more than a month ago, Whole Foods rolled out an alternative to Trader Joe's "Two Buck Chuck," the lineup of $1.99 Charles Shaw wines that have been wildly successful for the retailer. Whole Foods isn't kidding around: "chuck the Chuck" is its sales pitch.
I've always believed that Two-Buck Chuck is among the most imporant wines every introduced. The wines aren't very good. But they have made it possible for people to load up on wine and drink it more frequently. Brilliant. Plus, the brand has become an institution and eliminated much of an anxiety that wine seems to induce. It comes in a premium-type wine bottle and it has a cork. It's not a jug wine. It's not a box wine. It's not rotgut.
Maybe this should be his nickname, henceforth: Jon "Rusty" Corzine. The former Senator and New Jersey governor — not to mention former Goldman Sachs CEO — marched up to Capitol Hill today to explain how his most recent firm, MF Global, was plunged into bankruptcy, taking $1 billion in supposedly protected client funds with it.
MF Global was no Goldman Sachs, and various theories have been offered about how that's a significant difference. Like, Corzine wasn't being dogged by the crack, risk-assessment pros he dealt with at Goldman. He could make bets on European sovereign debt based on his own sense that Europe would solve its financial mess.
But I like Marketplace's Heidi N. Moore's take, which is that Corzine had been out of the Wall Street action for too long. His ambition was to take MF Global, a respectable broker-dealer but hardly a Goldman-level investment bank, and turn it into a junior Goldman. It was a bold move. But maybe he wasn't up to the job.