Is corporate market power really surging?
By Alex Verkhivker – In economic circles, an argument has gained traction that corporate market power is surging, resulting in skyrocketing markups, a falling labor share, and other negative consequences for consumers and workers. But some researchers are pushing back, emphasizing weaknesses in the argument and urging policy makers to be cautious before taking any actions.
Proponents of the market-power argument often rely on one of two methodologies, one that calculates and compares total revenues and costs at the economy-wide level and another that uses company-level data. University of Minnesota’s Loukas Karabarbounis and Chicago Booth’s Brent Neiman focus on the first of these two, in which the economy is considered a pie that is made of up three slices: the labor share (which goes to workers), the capital share (costs incurred to use factories, equipment, software, etc.), and economic profits. Economic profits are calculated by finding the difference between revenues and costs, including the cost of capital faced by companies to fund their assets used in production. more>
The Future of the Internet Is Fiber Deep
By Elias Cagiannos – Netflix is the poster child for over-the-top (OTT) content and has no doubt played a large role in shifting the status quo when it comes to our entertainment and viewing habits. The company can be credited with reimagining content distribution — investing in homegrown content and a content delivery network to feed our binge-viewing habits.
However, these habits are primarily supported on MSO networks, which have one of the best internet service products on the market. These companies are focused on the future, making investments in the people, processes and infrastructure necessary to help them match their capabilities to a new generation of users.
Consumer demand for improved viewing options has created an environment where MSOs can’t tolerate service disruptions or quality issues. However, aging coaxial plants, analog repeaters and limited spectrum make meeting customer demand for fast and reliable service a challenge. MSOs recognize this and are already moving in the right direction, but they will advance even faster with fiber deep — the concept by which operators push fiber closer to the end user, which helps improve service. more>
Posted in Banking, Broadband, Business, Communication industry, Economic development, Economy, Education, Leadership, Net, Product, Science, Technology
Tagged CCAP, Ciena, Converged Cable Access Platform, Fiber optics, OTT, Over the top, ToDo list
World Bank – Scientific and technological advances are transforming lives: they are even helping poorer countries close the gap with rich countries in life expectancy. But, poorer countries still face tremendous challenges, as almost a quarter of children under five are malnourished, and 60 percent of primary school students are failing to achieve even a rudimentary education.
In fact, more than 260 million children and youth in poorer countries are receiving no education at all.
“Human capital” – the potential of individuals – is going to be the most important long-term investment any country can make for its people’s future prosperity and quality of life.
In many countries, the workforce is unprepared for the future that is fast unfolding.
This is a key insight from the World Bank’s forthcoming World Development Report 2019: The Changing Nature of Work. The frontier for skills is moving faster than ever before. Countries need to gear up now to prepare their workforces for the tremendous challenges and opportunities that are being driven by technological change. more>
Posted in Broadband, Business, Economic development, Economy, Education, History, Leadership, Science, Technology
Tagged Broadband, Capital, Government, Internet, Jobs, Leadership, Skills, Technology
By Annie Lowrey – Stock buybacks are eating the world. The once illegal practice of companies purchasing their own shares is pulling money away from employee compensation, research and development, and other corporate priorities—with potentially sweeping effects on business dynamism, income and wealth inequality, working-class economic stagnation, and the country’s growth rate. Evidence for that conclusion comes from a new report by Irene Tung of the National Employment Law Project (NELP) and Katy Milani of the Roosevelt Institute, who looked at share buybacks in the restaurant, retail, and food industries from 2015 to 2017.
Buybacks occur when a company takes profits, cash reserves, or borrowed money to purchase its own shares on the public markets, a practice barred until the Ronald Reagan administration.
The regulatory argument against allowing the practice is that it is a way for companies to manipulate the markets; the regulatory argument for it is that companies should be able to spend money how they see fit.
In recent years, with corporate profits high, American firms have bought their own stocks with extraordinary zeal.
Federal Reserve data show that buybacks are now equivalent to 4 percent of annual economic output, up from zero percent in the 1990s. Companies spent roughly $7 trillion on their own shares from 2004 to 2014, and have spent hundreds of billions of dollars on buybacks in the past six months alone. more>
Posted in Banking, Business, CONGRESS WATCH, Economic development, Economy, History, Leadership, Regulations
Tagged Banking reform, Capital, Financial crisis, Government, Regulations, Stock buyback, United States
By Zhang Jun – In the West, many economists and observers now portray China as a fierce competitor for global technological supremacy. They believe that the Chinese state’s capacity is enabling the country, through top-down industrial policies, to stand virtually shoulder-to-shoulder with Europe and the US.
This is a serious misrepresentation.
While it is true that digital technologies are transforming China’s economy, this reflects the implementation of mobile-Internet-enabled business models more than the development of cutting-edge technologies, and it affects consumption patterns more than, say, manufacturing.
In fact, Western observers – not just the media, but also academics and government leaders, including US President Donald Trump – have fundamentally misunderstood the nature and exaggerated the role of China’s policies for developing strategic and high-tech industries. Contrary to popular belief, these policies do little more than help lower the entry cost for firms and enhance competition. In fact, such policies encourage excessive entry, and the resulting competition and lack of protection for existing firms have been constantly criticized in China. Therefore, if China relies on effective industrial policies, they would not create much unfairness in terms of global rules.
Clearly, there is a big difference between applying digital technologies to consumer-oriented business models and becoming a world leader in developing and producing hard technology. more>
Posted in Broadband, Business, Economic development, Economy, Education, History, Leadership, Media, Science, Technology
Tagged Business, Capital, China, Credit, Government, Jobs, Manufacturing, Super regions