Daily Archives: June 30, 2020

The Main Street manifesto

By Nouriel Roubini – The mass protests following the killing of George Floyd by a Minneapolis police officer are about systemic racism and police brutality in the United States, but also so much more.

A vast underclass of increasingly indebted, socially immobile Americans—African-Americans, Latinos and, increasingly, whites—is revolting against a system that has failed it.

This phenomenon is not limited to the US, of course. In 2019 alone, massive demonstrations rocked Bolivia, Chile, Colombia, France, Hong Kong, India, Iran, Iraq, Lebanon, Malaysia and Pakistan, among other countries. Though these episodes each had different triggers, they all reflected resentment over economic malaise, corruption, and a lack of economic opportunities.

The same factors help to explain populist and authoritarian leaders’ growing electoral support in recent years. After the 2008 financial crisis, many firms sought to boost profits by cutting costs, starting with labor. Instead of hiring workers in formal employment contracts with good wages and benefits, companies adopted a model based on part-time, hourly, gig, freelance and contract work, creating what the economist Guy Standing calls a ‘precariat’. Within this group, he explains, ‘internal divisions have led to the villainization of migrants and other vulnerable groups, and some are susceptible to the dangers of political extremism’.

The precariat is the contemporary version of Karl Marx’s proletariat: a new class of alienated, insecure workers who are ripe for radicalization and mobilization against the plutocracy (or what Marx called the bourgeoisie). This class is growing once again, now that highly leveraged corporations are responding to the Covid-19 crisis as they did after 2008: taking bailouts and hitting their earnings targets by slashing labor costs.

One segment of the precariat comprises younger, less-educated white religious conservatives in small towns and semi-rural areas who voted for Trump in 2016. They hoped that he would actually do something about the economic ‘carnage’ that he described in his inaugural address. But while Trump ran as a populist, he has governed like a plutocrat, cutting taxes for the rich, bashing workers and unions, undermining the Affordable Care Act (‘Obamacare’), and otherwise favoring policies that hurt many of the people who voted for him. more>

Updates from McKinsey

Ready, set, go: Reinventing the organization for speed in the post-COVID-19 era
The need for speed has never been greater. Here are nine ways companies can get faster.
By Aaron De Smet, Daniel Pacthod, Charlotte Relyea, and Bob Sternfels – hen the coronavirus pandemic erupted, companies had to change. Many business-as-usual approaches to serving customers, working with suppliers, and collaborating with colleagues—or just getting anything done—would have failed. They had to increase the speed of decision making, while improving productivity, using technology and data in new ways, and accelerating the scope and scale of innovation. And it worked. Organizations in a wide range of sectors and geographies have accomplished difficult tasks and achieved positive results in record time:

Redeploying talent. A global telco redeployed 1,000 store employees to inside sales and retrained them in three weeks.

Launching new business models. A US-based retailer launched curbside delivery in two days versus the previously-planned 18 months.

Improving productivity. An industrial factory ran at 90-percent-plus capacity with 40 percent of the workforce.

Developing new products. An engineering company designed and manufactured ventilators within a week.

Shifting operations. Coordinating with local officials, a major shipbuilder switched from three shifts to two, with thousands of employees.

At the heart of each of these examples is speed—getting things done fast, and well. Organizations have removed boundaries and have broken down silos in ways no one thought was possible. They have streamlined decisions and processes, empowered frontline leaders, and suspended slow-moving hierarchies and bureaucracies. The results, CEOs from a wide range of industries have told us, have often been stunning:

“Decision making accelerated when we cut the nonsense. We make decisions in one meeting, limit groups to no more than nine people, and have banned PowerPoint.”

“I asked on Monday, and by Friday we had a working prototype.”

“We have increased time in direct connection with teams—resetting the role and energizing our managers.”

“We adopted new technology overnight—not the usual years—as we have a higher tolerance for mistakes that don’t threaten the business.”

“We’re putting teams of our best people on the hardest problems. If they can’t solve it, no one can.”

Because of the pandemic, leadership teams have embraced technology and data, reinventing core processes and adopting new collaboration tools. Technology and people interacting in new ways is at the heart of the new operating model for business—and of creating an effective postpandemic organization. more>

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Updates from Ciena

With great fiber count comes great responsibility
Spatial Division Multiplexing (SDM) cables are a key focus area for submarine network innovation in 2020. Ciena’s Brian Lavallée explains how SDM cables offer massive increases in submarine cable carrying capacity and the challenges associated with these new wet plant designs.
By Brian Lavallée – In a recent blog entitled “The Submarine Network Seascape in 2020”, I wrote about what I believe are key areas for focused submarine network innovation in 2020. One key area is Spatial Division Multiplexing (SDM) cables. This new wet plant design allows submarine cable operators to “side-step” the Shannon Limit by expanding Channel Bandwidth (B) in the equation, which is the usable optical bandwidth in the submarine cable. In other words, the more bandwidth available in the cable, the more capacity is enabled. It’s as simple as that.

Once a submarine cable (wet plant) is laid upon the seabed, the Channel Bandwidth (B) is fixed and is dictated by the number of fiber pairs and the total usable optical spectrum of the optical repeaters (a historical industry misnomer of what are today, optical amplifiers). This means that once a submarine cable is deployed, one must improve the Signal-to-Noise Ratio, on the right side of the equation above, to increase the Channel Capacity (C). This is exactly what the industry has been doing for years with constant technology innovation taking place in the Submarine Line Terminating Equipment (SLTE) and the coherent modems they house.

However, as we get ever-closer to the Shannon Limit of a submarine optical fiber, we start to experience diminishing returns in terms of the upgrade leaps in total information-carrying capacity of the optical fiber. This means that the industry focus must shift back to the wet plant interconnecting the SLTE coherent modems.

Compared to rapid, ongoing SLTE coherent modem innovation over the past decade, the wet plants they connect to have witnessed comparatively less innovation – until recently. One way to expand the Channel Bandwidth (B) in the equation above is to add many more fiber pairs to the submarine cable to provide a higher aggregate of usable optical spectrum in the submarine cable. This is referred to as Spatial Division Multiplexing (SDM). Modern submarine cables have 4 to 8 Fiber Pairs (FP), while SDM offers 12 to 16 FPs, and potentially more in the future.

As an industry proof point, the first SDM submarine cable will be Google’s transatlantic 6,400km  Dunant cable, which supports up to 250Tb/s of overall capacity provided by an aggregate of 12 fiber pairs – very impressive! more>

Updates from Chicago Booth

Could anything unite the United States?
Cultural and political divisions have persisted for decades. Now there’s a growing gap in how Americans see each other.
By Rose Jacobs – As the Democratic Party battles over whether a moderate or liberal presidential candidate stands the better chance of winning the White House in November 2020, many Americans are asking a similar but broader question: Has the country ever been so divided?

Academics, for their part, are attempting to measure what often feel like widening gaps. In 2017, Stanford’s Matthew Gentzkow looked at a series of Pew Research Center surveys of Americans’ views on policies ranging from government regulation to welfare, immigration, and the environment, and noted that fewer individuals in 2014 than 10 years earlier held positions that put them across the political divide from their own, self-identified political party.

Nor do divides appear confined to politics and policy. Chicago Booth’s Marianne Bertrand and Emir Kamenica examined three national surveys that probe Americans’ consumption habits, leisure time, and social attitudes. They find that different groups of Americans—rich and poor, black and white, men and women, politically liberal and conservative, college educated and not—tend to eat different food, watch different television programs, pursue different hobbies, and adopt different social attitudes. The algorithms the researchers developed for their study were able to predict people’s income bracket with nearly 90 percent accuracy on the basis of the brands of products and services they bought; they could do the same for gender by looking at what TV shows and films people watched and what magazines they read; and they could predict race with 75–85 percent accuracy using self-reported stances on topics such as marriage, law enforcement, and government spending.

Yes, then, the nation appears to be divided.

Bertrand and Kamenica point out that cultural gaps in the categories that they studied, between rich and poor or black and white, for instance, are worrisome in part because they might dampen social and economic mobility. The real-world effects of growing partisanship are less obvious, but research is beginning to probe how a politically divided populace plays out in areas ranging from corporate finance to macroeconomics to medicine and law.

The researchers looked at the months surrounding President Trump’s election in 2016, and find that analysts registered as Democrats were more likely to issue downgrades to the companies they covered after November 8 than were Republican analysts. This effect was greater with analysts who voted more frequently. This result is in line with their wider analysis of political affiliation and presidential elections going back 18 years, which suggests that analysts whose politics do not align with the sitting president’s are more likely to downgrade companies’ debt than analysts who share a political party with the president. more>

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