Category Archives: Economic development

Three Cheers for Financial Repression

By Tom Streithorst – “Financial repression.” It sounds terrifying, right? It smacks of authoritarian bureaucrats sucking the life-blood out of hard-working, innovative makers and doers.

Umm, no. That’s not even close. It’s about bondholders. Economists started using the term in the 1970s when bondholders were losing money because inflation exceeded the interest rate.

These days, it’s market forces more than government policy that push real interest rates below zero. Whether you call it a savings glut or secular stagnation, our collective desire to save far exceeds our collective desire to invest. Savers want safe assets more than borrowers want to invest in productive capacity.

Don’t cry for the rentier class. For the past forty years (ever since Federal Reserve Chairman Paul Volcker manufactured a brutal recession in order to eliminate 1970s inflation) economic policymakers have concentrated on ensuring the profitability of the bond market more than just about anything else. They focused their attention on financial stability and low inflation rather than the traditional goal of promoting full employment.

Consequently, the financial sector has quadrupled in size relative to the rest of the economy, the rich absorb most of the benefits of growth, and workers’ real wages have stagnated or even declined. Financialization has made wealthholders richer than ever, but it hasn’t done much for the rest of us.

What is good for the bankers has not been good for the economy as a whole. more>


Updates from GE

Leading The Charge: As Battery Storage Sweeps The World, GE Finds Its Place In The Sun
By Tomas Kellner – The “duck curve” has two distinct peaks — one in the morning and the other after sunset — connected by a sagging belly pulled down by the deluge of renewable energy generated by the millions of solar panels sprinkled across California’s roofs and fields.

On a sunny Sunday, this glut of input could even lead to oversupply, a situation where wholesale energy prices drop so much that producers pay utilities to take their energy.

The problem reverses when the sun sinks into the Pacific. Power producers must quickly crank up their plants – many of them burning gas or coal – to replace those missing solar electrons with 11,000 megawatts to keep the state’s homes and businesses humming.

“The peak for solar power generation is at noon,” says Eric Gebhardt, vice president of strategic technology for GE Power. “What if you could store this energy and release it six hours later when the sun goes down and people come home, start cooking dinner and watch TV?” Gebhardt asks.

That’s precisely the point of GE’s Reservoir, a new grid-scale energy storage system the company unveiled today. The grid has to be perfectly balanced, meaning that power supply and demand match, to prevent it from crashing.

The Reservoir will allow producers to “decouple when energy is produced and when it is consumed,” Gebhardt says. “Without it, if you have too much solar during the day, the only option you have is to curtail production.”

The rise of the electric car unleashed innovation in the battery space, and the spread of solar power has brought costs down 50 percent over the last four years, says Keith Longtin, product breakout leader at GE Global Research in Niskayuna, New York. “You are now getting to a point where energy storage starts to make sense,” he says. more>


Updates from Ciena

What is Fiber Densification?
By Helen Xenos – The term “network densification” is being used more often in relation to wireless network deployments, and more recently, “fiber densification” has become a hot a topic of discussion. So, what exactly is densification?

Densification simply describes the goal or end state of supporting more capacity within the same area or footprint. It is borne from the need of network providers to not only keep up with the increase in bandwidth demand they are seeing, but also grow their competitive edge in delivering a better end user experience for their customers.

Cable or Multi-Service Operators (MSOs) are undergoing a multi-year upgrade of their Hybrid Fiber Coax (HFC) access infrastructure. To provide a better quality of experience to subscribers, they are delivering higher capacity to smaller groups of homes and pushing fiber closer to the edge of the network.

HFC Fiber nodes, which on average service 500 homes per node, are being replaced with 10 to 12 Digital Fiber nodes. These nodes will now service 40 to 64 homes, be pushed deeper into the access, and increase per-user capacity.

An incredible amount of digital fiber nodes are expected to be deployed in the next few years, from tens to hundreds of thousands globally in 2018 and 2019. Fiber densification, the ability to pack as much capacity as possible over the limited fiber resources available, is of critical importance to achieve business objectives.

Finally, the simplest example of fiber densification is the hyperscale data center interconnect application. Global content providers are deploying huge amounts of fiber between massive data centers to maintain their aggressive pace of innovation and keep up with the doubling of bandwidth they are seeing on a yearly basis. more>


Think Like a Gambler: Innovation Is About Making Bets


Thinking in Bets, Author: Annie Duke.

By Alan Pentz – As humans we are often overconfident in our decision-making and even if we are unsure, we become more confident after a decision has been made. Studies of confirmation bias show that we seek information confirming our views and filter out evidence to the contrary. That’s a great strategy to feel good in the short term but isn’t going to lead to the best outcomes for your organization in the long term.

Thinking in bets (or thinking probabilistically) forces us out of that framework. Duke points out that people who are asked probabilistic questions are less sure and tend to hedge. It’s easy to say, “I’m 100 percent sure about this,” when nothing is really on the line, but if I ask you how much would you bet that you are right, suddenly the calculus changes.

So how does this impact government innovation? more>


More Democracy At Work? Do We Need That?

By Peter Scherrer – It is, in my view, more necessary now than ever before to put the fight for more democracy at work on the political agenda. But at the same time, it is an issue to which neither the general public nor the EU political élite pays much, if any, attention, even though it is of great importance for millions of working people. The European Trade Union Confederation (ETUC), at its Executive Committee meeting this week, went ahead in that spirit and adopted the strategy.

ETUC members are deeply convinced that a European approach to democracy at work can directly improve working life, collective labor rights and the concrete participation of workers in society and the economy.

The performance of EU Member States like Sweden, Denmark, Germany and Austria demonstrates that extending workers’ participation rights in companies and in administration is not an obstacle to a productive and profitable economy.

Many EU member countries have developed fair rights to information and consultation and a significant number have workers’ representation on company boards. The active involvement of trade unionists and workers’ representatives contributes to economic success and employment stability.

A glance at the current situation shows that democracy at work is being eroded by e.g. increasing centralization of company decision-making in all areas and increased concealment of real ownership etc. This widening gap could be partly closed by European legislation on workers’ participation.

But a huge danger to the options for more democratic labor/industrial relations comes from the rapid growth in the proportion of ‘digital’ workers and employees in the so-called sharing economy. more>


Updates from GE

Industrial Medicine: Cell Therapy Scales Up
By Maggie Sieger – Cell therapy is a new way to treat serious diseases like cancer by extracting living cells from a donor or a patient, changing them so they can recognize and attack diseased cells or deliver treatment, and returning them to the patient’s body. But manufacturing the cells is a costly and time-consuming endeavor. A single dose can cost hundreds of thousands of dollars to make.

That’s because in the more than 900 ongoing regenerative medicine trials worldwide — a 19 percent jump since 2016 — researchers generally manufacture each patient’s dose of bio-engineered cells by hand. The individualized nature of cell therapy makes it not only prohibitively pricey, but also difficult to scale into commercial production.

That hasn’t been a problem while cell therapy was still confined to research labs. But as medical science advances and regulators approve a growing numbers of modified cell therapies for general use, handcrafting doses won’t be enough. “It’s relatively easy to do 15 or 20 doses by hand, but it’s nearly impossible to efficiently make thousands,” says GE Healthcare’s Aaron Dulgar-Tulloch, director of cell therapy research and development at the Centre for Advanced Therapeutic Cell Technologies (CATCT) in Toronto.

One way to speed the process is GE Healthcare’s FlexFactory for cell therapy. Cellular Biomedicine Group Inc. (CBMG) will be the first company to install this closed, semi-automated system for manufacturing bio-engineered cells in its Shanghai plant and use it to create cell therapies to treat various blood and solid tumor cancers. more>


Europe’s Poor Need More Than Jobs

By Ive Marx – The idea that – to use a ubiquitous political slogan – “the best protection against poverty is a job” remains the mantra in the corridors of power right across Europe and indeed in Brussels. It is, alas, more tenet of faith than a statement of fact.

Unfortunately, things are not as simple. Employment growth never yielded the hoped-for reductions in poverty in the past (see here). There is no reason to expect that things will turn out any different this time.

First, many of the poor live in households where no adult has a job. Such “jobless households” often face severe financial hardship, including any children. In the past, employment growth never produced anywhere near commensurate drops in household jobless rates. Instead it tended to boost the number of double- or multi-earner households.

A second reason why more people in work does not automatically bring less poverty is that getting a job may not be enough for a household to escape poverty. Long considered a typically American phenomenon, there is now ample evidence that the “working poor” are to be found in significant numbers in every European country.

In conclusion: it is time to remind Europe’s politicians of the promises they made to bring poverty down. They seem to think that Europe’s buoyant labor markets will do the job. They will not. more>


Why Amartya Sen remains the century’s great critic of capitalism


The Moral Economists: R H Tawney, Karl Polanyi, E P Thompson and the Critique of Capitalism, Author: Tim Rogan.

By Tim Rogan – Critiques of capitalism come in two varieties. First, there is the moral or spiritual critique. This critique rejects Homo economicus as the organizing heuristic of human affairs. Human beings, it says, need more than material things to prosper. Calculating power is only a small part of what makes us who we are. Moral and spiritual relationships are first-order concerns. Material fixes such as a universal basic income will make no difference to societies in which the basic relationships are felt to be unjust.

Then there is the material critique of capitalism. The economists who lead discussions of inequality now are its leading exponents. Homo economicus is the right starting point for social thought. We are poor calculators and single-minded, failing to see our advantage in the rational distribution of prosperity across societies. Hence inequality, the wages of ungoverned growth. But we are calculators all the same, and what we need above all is material plenty, thus the focus on the redress of material inequality. From good material outcomes, the rest follows.

But then there is Amartya Sen. Every major work on material inequality in the 21st century owes a debt to Sen.

But his own writings treat material inequality as though the moral frameworks and social relationships that mediate economic exchanges matter. Famine is the nadir of material deprivation.

But it seldom occurs – Sen argues – for lack of food.

To understand why a people goes hungry, look not for catastrophic crop failure; look rather for malfunctions of the moral economy that moderates competing demands upon a scarce commodity. Material inequality of the most egregious kind is the problem here. more>


How capitalism without growth could build a more stable economy

By Adam Barrett – On a finite planet, endless economic growth is impossible. There is also plenty of evidence that in the developed world, a continued increase of GDP does not increase happiness.

Back in 1930 the economist John Maynard Keynes predicted that growth would end within a century – but he was unclear whether a post-growth capitalism was really possible.

Today, mainstream economic thinking still considers growth to be a vital policy objective – essential to the health of a capitalist economy. There remains a concern that ultimately, a capitalist economy will collapse without growth.

I recently published new research that suggests a different view – that a post-growth economy could actually be more stable and even bring higher wages. It begins with an acceptance that capitalism is unstable and prone to crisis even during a period of strong and stable growth – as the great financial crash of 2007-08 demonstrated.

I found that an end to growth reduces profits for business owners.

Therefore, if it remains relatively easy for money to flow across borders, then investors might abandon a post-growth country for a fast-growing developing country. Also, businesses are beholden to shareholders keen on growth as a means to rapid profit accumulation.

Some mainstream commentators and economists are now predicting a transition to a post-growth era, whatever our environmental policy – which means the study of post-growth economics is a field which itself will grow. more>


Updates from GE

Next Stop, Kyiv: Ukrainian Railways’ $1 Billion Deal With
GE Is Set To Dispatch Its Trains Into the Future

By Dorothy Pomerantz – Today (Feb 23, 2018), the Ukrainian government announced it will buy 30 new GE locomotives, which will be built in the U.S. and will arrive in Ukraine for final assembly by the end of the year. The framework agreement, which is valued at over $1 billion, also includes the modernization of existing locomotives in Ukrainian Railways’ fleet, plus additional new GE units over the next decade and a long-term service contract to help maintain them.

The deal is part of a rail-system upgrade the country is undertaking to make sure its $2 billion agricultural sector, which the U.S. Department of Commerce calls “the most promising sector” of the country’s economy, can continue to sell and export the food it produces.

Crucial to this plan: locomotives that work better and don’t break down.

Modernizing a locomotive is like gut-renovating a house, stripping it down to the bare studs and putting in all new walls, stairways and appliances. For Ukrainian Railways, the modernization process will start with the old Soviet-built locomotives that the national rail company has been using for decades.

Workers from GE and local companies will take out the locomotive’s insides, the control system, radiator and engine, until only the bare metal skeleton is left. Then each locomotive will be rebuilt with a shipment of GE equipment, known as a kit. more>