UNIQUENESS ABOUT THESE ANALYSES
Added on 7/30/15
https://www.banque-france.fr/en/economics-statistics/research/working-paper-series/document/557-1.html (Interesting article)
There are certain issues with this analysis:
for eg., most of the CEOs, Senior Administrators, Presidents of Universities and Senior Executives don't patent innovations, but utilize those innovations towards productivity growth. Moreover, improper application of innovations rather than the innovation itself, along with disproportionate compensation structure certainly can exaggerate wealth gap. There are other factors too impacting wealth gap on top of what is presented in this article (for some of those other issues - please read the other articles shared in this section).
With the general theme of this work further supporting my research analysis, there is a good chance for a Nobel prize in Economics. This work presented in the above link is similar to the experimental work in the 1910's that strengthened Dr. Einstein's relativistic theory.
Added on 8/6/2015
Is Creative Destruction the primary cause for widening wealth gap, and shorter life of organizations?
There was an article recently from a leading consulting firm that cited length of organizations getting shortened post 1990's. But, if you were to look at the following article, the life of S&P companies came down from around 60 years in 1958 to 25 years by 1980 (18 years in 2011) even before the growth of internet. Secondly, labor force size has been constantly increasing, and companies have managed to keep more people employed in absolute numbers over the years.
At the same time, factors such as, rapid advancements in technology potentially not giving enough time for majority to adapt, considerable increase in inflationary rates in education, real estate, health care across many parts of the world, societal/family issues are all magnifying the complexity of the situation. This increase in complexity coming from interconnected factors appears to have increased the fraction of population without quality jobs and right compensation over the cumulative career lifespan of individuals, and over the years.
Further, data clearly shows that there is a widening gap in salaries between various tiers since 1967 (as I have shown in one of the figures - Article 11 - prior census data not available), and increased level of globalization where comparative advantage has been the primary strategy of use for a while has also played a role in widening wealth gap.
It is not creativity that is the issue, but the misuse of creativity that is the problem.
What is unique about my analyses? Most important one - Demographic analyses
I have captured various other issues as well - For example, increase in divorce rates, and reduction in family size certainly can impact psychology, and in turn, family finances and also demand for resources. I have also shown how demographics has played a part in compensation mismatch in terms of education, and nature/type of employment. In addition, I have also supported the analysis with data on educational attainment, and disproportionate increase in inflation in various other areas. Most importantly, I have also included the cumulative life time employment going down, which impacts financial security of families.
The point being: According to Mr. Foster, who popularized the term, Creative Destruction, originally coined by Dr. Schumpeter, market forces should solve the problem. But, I believe, that it is way beyond market forces. Instead of the 5% suggestion put forth, the best market forces would be to increase healthy competition that I have been recommending for a while now (500 MNEs accounting for 50% of the world trade is certainly an issue to be addressed through healthy competition) supported with right education, compensation structure. Taking these actions still may not improve the longevity of organizations, but can help individuals in getting more transferable skills, and financial stability. Other variables being, improving the policies and legal structure to reduce misapplication of technologies.
Someone had asked me a question about the current globalized world vs world in the 1920's, and what really happened prior to WW II?
Though the economic globalization that we are seeing now is not the same as what was prevalent during 1920's, still it was a globalized, but colonized world then to a large extent. Obviously, that strategy did not work.
I was also asked once on what really happened prior to WWII?
All the data suggests that there was a big run up in the markets, and wealth gap widened to a point where 90% or more of the population had less than 10% in wealth, which resulted in liquidity crises. Further, weathering phenomenon also aggravated the situation. Additionally, lack of good communication structure for leaders to communicate along with unavailability of data combined with clash of egos and power complicated the situation. Unlike then, we have so much reliable data out there, and a much better communication structure through various means, which should help in solving global problems, if leaders desire. This is where technology can play a crucial role.
When it comes to wealth distribution, what is a right distribution?
It is difficult to say, but a more dispersed one compared to 90/10 is essential to have sufficient liquidity in the marketplace. At the same time, there needs to be some wealth gap where wealth correlates to talent, performance, creativity to name some variables. Moreover, philosophically, value of money should be seen through some level of meaningful dispersion in wealth otherwise, money will lose its meaning as it happened in Zimbabwe. The dispersion in wealth combined with morals, values, faith, and law among the majority of population will play a crucial role in balancing the level of societal issues.
Added on 8/25/15
http://www.wired.com/2015/08/robots-will-steal-jobs-theyll-give-us-new-ones/ (Added on 8/25/15)
Interesting article -
My views on some key points in this article -
1. "In a widely cited study from 2013, Oxford professors Carl Frey and Michael Osbourne say that machines could replace about 47 percent of our jobs over the next 20 years, but in a new report released today, Gownder takes a more conservative view. Drawing on government employment data and myriad interviews with businesses, academics, and, yes, pundits, Gownder predicts that new automation will cause a net loss of only 9.1 million U.S. jobs by 2025." -
My comments - Gowdner's prediction of 9.1 million jobs still equates close to 6% with respect to the current labor force of 155 million. Moreover, the 9.1 million jobs lost will be the number within the next 10 years. Technological evolution goes through a life cycle, and if the operational improvements are significant in the next 10 years, then it will expedite the automation process in the following 10 years. Moreover, current compensation structure along with technologies such as, IoT, provides avenue for power mongers to drive the global system towards slavery. It is also the reason that I keep on calling for prudent policies, and evolving rule of law.
2. "But Gownder rightly points out that such technology is still in the early stages of development—and that it still requires much help from humans." -
My comments - AI has been going through incremental progress over the years, and as with smartphones ecosystem, there will be a time when incremental developments will evolve to a disruptive technology. For example, image processing and natural language processing that is cited in the article, which when combines with emotional intelligence can make machines not only compete with humans, but also take over the decision-making process. As stated in one of my other article, when this transformation happens combined with individualization of the world -
a. provides 7+ billion ways (based on current population) to misuse the technology
b. the worst would be when the machines/humanoids with EI takes over the decision-making process
3. “Technology does change the mix of jobs. You’re going to see doctors taking more of the role that involves the personal interaction with patients and less of the role of trying to keep huge amounts of evidence in there head. The nurse may become more prestigious than the doctor,” Moore says. “But if you look around, there are also new kinds of creatives roles being produced across the market. There are so many jobs that didn’t exist just a few years ago.”
My comments - Basically, what this means is that we would not need doctors any more. When a particular area of profession dwindles down, though there will be more demand for nurses, it will also make more individuals opt for nursing programs, and in the end, supply demand dynamics still will compress the wage rates for the general masses.
When it comes to the point on not needing to keep huge amounts of evidence in the head, humanity has progressed through the ability to think. When humans become more and more dependent on machines, there is no incentive for humans to figure out things in a hands-on manner. For example, though it is easy to google for information on how to make something, it will not be the same as making it ourselves. When humans move away from this process of experiential and tacit learning, many part of the brain will not be wired as it should be, and will limit the decision-making process. In a way, over-reliance on technologies will be equivalent to technological addictions, and addictions of different forms (substance or behavioral addictions) have shown to hinder the decision-making process, and can also cause societal issues.
Here is one example - https://news.yahoo.com/wife-company-she-needs-her-electronic-devices-050022683.html
4. "He says that he has seen no evidence that this technology is stealing jobs—and that, as time goes on, it will likely create an enormous number of jobs."
My comments - It is not completely true. With wage not increasing compared to inflationary rate (revolving around key areas such as, education, health care etc), majority of the masses are not able to keep up with the inflationary rate irrespective of new jobs created or not. Moreover, cumulative career span of employment is also coming down around the globe. These changes, in a way, is equivalent to supply-demand mismatch. For professors in academics, as they are assured of a job until retirement, they don't see the changes. May be, there needs to be some performance metrics system, which should place academicians in the same environment as the rest of the world. When this happens, academicians will take the time to see what is going on around the world.
5. Am I contradicting myself?
No. Technology has made the world flat, and has created more jobs in absolute numbers. But, the fraction of the world population without meaningful and stable jobs over an individual's career life span have also increased over time. Further, the technological enhancements is providing opportunities for people with resources to become even more powerful, which can negatively impact the global ecosystem over time.
When AI + EI combo takes over, the nature of disruption will be of proportion never seen in the history before.