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[Cees Binkhorst]

REPLY TO: D66 at nic.surfnet.nl

Dit is leesvoer dat de moeite waard is ;)
Wellicht dat de auteurs de financiele sector nog tegenkomen, die volgens
de laatste berichten 24% van de netto-winst maakte in de USA.
Kwam ook tegen dat GS zo'n 40% van de omzet van de NYExchange voor zijn
rekening zou nemen, in diverse vormen (waaronder ongetwijfeld up- en
down-ticks :)
Die beurs verwondert me al langere tijd.
Veel mensen doen héél véél moeite om zoveel mogelijk aandelen daar
genoteerd te krijgen. Sommige fondsen worden zelfs 'geimporteerd' (VNU  en
AEX b.v.).
Anderen doen hun best de omzet op te krikken door sterk aan te bevelen
meer winst uit keren, en maken vervolgens weer omzet door de uitgifte van
nieuwe aandelen te verzorgen als dezelfde bedrijven meer kapitaal nodig
hebben ;)

Groet / Cees

PS Die ex-employee van GS die 35MB broncode wilde meenemen was
waarschijnlijk een paar 'gold nuggets' op het spoor?

http://blog.irvingwb.com/blog/2009/07/the-big-shift-from-scalable-efficiency-to-scalable-learning.html
The Big Shift: from Scalable Efficiency to Scalable Learning

I have known John Seely Brown for many years and have served with him on
several committees and boards.  John was Chief Scientist at Xerox and
Director of its Palo Alto Research Center for almost twenty years.  Since
retiring from Xerox, he has continued to be very busy as a speaker,
writer, member of the boards of several public and private companies and
lots of other activities.   In his website, he writes “Today, I’m Chief of
Confusion, helping people ask the right questions, trying to make a
difference through my work - speaking, writing, teaching.”

I have indeed learned that John is always asking just the right questions,
be they about technology, business, learning or society in general.  So,
when he recently sent me an e-mail, recommending that I look into his
latest project and recent papers, I proceeded to do so.

The project John referred me to is called The Big Shift.  It is being
conducted at the Center for the Edge, which is part of Deloitte
Consulting.  The Center is co-chaired by John Hagel, whom I have also
worked with and greatly respect, and John Seely Brown.  They just
published an article on their research in the July-August issue of the
Harvard Business Review, co-written with Lang Davidson, Executive Director
of the Center for the Edge, as well as a more extensive report explaining
their ideas and methodologies in detail - Measuring the forces of
long-term change: The 2009 Shift Index.

As we all know, digital technologies are causing long-term transformations
in the global business environment.  The team at the Center for the Edge
has been studying these long-term business transformation, which they
named the Big Shift .  They have been trying to render explicit some of
the major drivers behind this historical transformation, as well as
providing an overall framework for research on the subject.

The Center team has come up with a number of major findings.  In
particular, they have uncovered a seemingly baffling paradox.  The Return
on Assets (ROA) of US companies has been steadily dropping over the past
decades, and is now 75 percent lower than their 1965 levels.  ROA is a
general indicator of the profitability of a company, so this means that
something profound has happened in business to cause the ROA of US
companies to drop to a quarter of their 1965 levels.

But, at the same time, labor productivity - the goods and services that a
worker produces in a given amount of time, -  has continued to rise and is
now double what it was in 1965.  Where are the benefits of these
productivity gains going if not to the bottom line of companies, which
have seen their overall profitability drop so much during the same period?

The Center research has begun to answer these questions by looking at who
might be benefitting from the increases in productivity, if not the
companies themselves.  Two strong candidates stand out, both indicating a
shift of power from institutions to individuals.  Customers are now
getting a lot more for their money, not surprisingly given the increased
competition; and the compensation of creative talent has increased
substantially faster than overall compensation.

In addition, leading indicators point to a highly volatile market
environment.  The performance gap between companies which do well, -
winners, -  and those which do not has been increasing over time, but
winners don’t remain winners for long. The topple rate and competitive
intensity has more than doubled since 1965.  And, all these changes are
being ultimately driven by the fast adoption rate of digital
infrastructures, which is two to five times faster than previous
infrastructures like the electric grids and telephone networks.

To help them better make sense of all these findings, the research team
investigated how to best quantify this Big Shift, so they could measure
the rate and magnitude of the long-term changes they were uncovering.  The
result is The Shift Index, which consists of 25 metrics grouped into three
major indices designed to quantify the waves of long term change:
Foundations, Flows and Impacts.  Let me briefly describe these key
components of the Shift Index.

The Foundation index measures the fast moving evolution of the digital
infrastructure, as well as the shifts of global public policy that are
reducing the barriers to entry and movement.  This is the easiest part of
the Big Shift to comprehend, quantify and measure.  It tracks the rate of
change in the components of the digital infrastructure - computing,
storage and bandwidth, the usage of the infrastructure as measured by
number of Internet users and wireless subscriptions, as well as the Index
of Economic Freedom,  an integrated measure of the extent to which
individuals can control their own labor and property.

Driven by the rapid advances in digital technologies and Internet usage in
the last fifteen years, the Foundation index has been increasing at a ten
percent CGR since 1993.  It is, without doubt the primary driver of all
the other changes.

The Flow index is designed to measure the flows of capital talent and
knowledge across institutional and geographic boundaries, especially as
enabled by the advances in the digital infrastructure.  In the past, our
stocks of knowledge, - what we know, - was a great source of economic
value.  That is no longer the case, because the increasing rate of change
all around us is rapidly obsolescing knowledge.  Therefore, the real
economic value has now moved from the stocks of knowledge to the flows of
new knowledge that we are now able to quickly acquire, and thus refresh
and expand our rapidly depleting stocks of knowledge.

The Flow index is an intriguing and elegant concept that nicely captures
the essence of the knowledge economy.  Some of its metrics measure
Physical Flows, - the flows enabled by the movement of people so they are
in close proximity to each other, including the migration of talent to
creative cities, travel volume, and movement of capital.  Virtual Flows
measure the flow of knowledge enabled by advances in the digital
infrastructure, including inter-firm collaborations, as well as wireless
and Internet usage.  Finally, the Flow index includes a set of Flow
Amplifiers, which measure how engaged or passionate workers are in what
they are doing, as well as the impact of social media activity in helping
people connect and enhance their knowledge.

The Flow index has been growing at seven percent CGR since 1993, and thus
lags the faster advances of the Foundation index.  This is to be expected,
as it takes a while for individuals, institutions and communities to
embrace the new ways of working and communicating enabled by advances in
technology.

While the Foundation and Flow indices quantify the major changes we see
happening all around us, the Impact index aims to explain how and why it
all matters.  It attempts to quantify the ways the market environment is
changing, as well as how those changes impact the way companies and
consumers operate.  The Impact index is a measure of the transformations
underway in Markets, Firms and People.  Let's  look at each of these three
constituents.

Stock price volatility, labor productivity and competitive intensity are
used as measure of markets and market dynamics.  Since there is no
consensus on how to measure competitive intensity, a proxy is used, the
Herfindahl-Hirschman Index of industry concentration, which measures the
size of firms in relation to the industry and is a widely agreed indicator
of the degree of competition among them.

To measure the impact of the intensifying competition and volatility on
firms, the Impact index uses four metrics:  asset profitability; topple
rate, - which tracks the rate at which big companies change ranks as
defined by ROA performance; and two measures of the growing gap between
winners and those not doing so well: ROA performance gap, and shareholder
value gap.

The last category in the Impact index is people.  It uses four metrics to
characterize the impact of all these changes on consumers and talent.

Consumer power is increasing, because consumers now have access to vastly
more product information and product choice.  This increase was quantified
based on 4300 responses to a survey the Center conducted consisting of six
questions designed to test various indicators of consumer power.  The same
survey included questions which were used to measure brand disloyalty, a
byproduct of the increased consumer power and market competition.

The last two people metrics concern talent.  Returns to talent is a
measure of the increased value  associated with so-called creative classes
of workers, as evidenced by compensation data from the Bureau of Labor
Statistics.  Executive turnover is a measure of how performance pressures
have raised the degree of difficulty of senior management jobs, resulting
in both raising their remuneration but causing them to lose their jobs
more frequently.

While the Foundation and Flow indices have both increased rapidly over the
last fifteen years, the Impact index has changed much more slowly and
paints a very different story.  High market volatility is taking a heavy
toll on corporate performance.  It is causing a major transfer of power
from companies to individuals, especially to talented workers and
managers, as well as to well informed consumers.

What does this all mean?  We are indeed in the middle of a historical
transformation as we transition from the industrial to the knowledge
economy, a transformation driven by huge changes in technology, markets
and society in general.  The traditional, industrial-age way of doing
business is under siege and must evolve.

The hierarchically organized firms of the industrial age were optimized to
achieve economies of scale.  Firms must now embrace knowledge-age
organizational structures designed to help them reach out, absorb and
integrate all the expertise and talent out there, including employees,
partners and clients.  As the report repeatedly points out, “companies
must move from scalable efficiency to scalable learning and performance.
Only then will they make the most of our new era's fast-moving digital
infrastrtucture.”

The Big Shift is a very innovative, difficult and important project.  I
strongly urge you to look at the full report to learn more about their
objectives, methodologies and conclusions.  You may not agree with all the
measures chosen by the Center for the Edge team, but that is to be
expected.  Like any complex initiative, getting going is what counts.  The
Big Shift project will undoubtedely keep getting better and sharpening its
results over time, especially, as it practices the spirit of learning and
collaboration that it so strongly advocates.

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