Human VenturesFiled under: human capitalDo Smarter Workers Work Less? - Economix Blog
The linked article above has a nice summary of recent research by Richard Florida (of Creative Class fame) on the relationships, by state, between human capital, wages, hours worked, and numbers of immigrants. Apparently blue-collar workers are right to complain that management doesn't work as hard as they do ;)... Oh, and the complaints about immigrants deflating wages - FALSE! (at least on average). Three Things Every Business NeedsSome recent self-reflection and mentoring of soon-to-be alumni of my alma mater, St. Olaf, have caused me to think hard about those traits that make a person successful, regardless of the road they pursue.
Reading Amar Bhide's "The Origin and Evolution of New Businesses" has prompted me to think about what assets might allow a business to be successful, no matter what road it pursues, both initially and over time. Here is a try at three:
Human Capital - Intelligent and open-minded people are more capable of adapting to the major external changes that determine the life or death of a company, both initially and when it is well-established. Execution and process-oriented people ensure that an organization (profitably) realizes whatever vision it sets out to achieve. Hire and retain people like this, and you'll be well on your way.
Social Capital - This all about reputation and relationships. Build a strong brand, and do good by your customers, vendors, and employees. If you do, your ability to introduce new products and transform your business will be greatly facilitated.
Financial Capital - Money, like people and relationships, is fungible. If you can build a strong cash base and/or develop the reputation and relationships required to readily raise money, you can be much more strategic and planful in your execution.
It's Time to Re-Visit India
I'm reading two fascinating books on India that are making me think again about the country's economic relationship with the West.
The first is "Imagining India" by Nandan Nilekani, CEO of Infosys, and the second is "India's Global Powerhouses" by Nirmalya Kumar at London Business School The most powerful take-away from these books is that Indians may be the future of the global workforce.
The West and also China, due to its one-child policy, are facing the reality of smaller workforces supporting aged populations. This means lower total output, less saving and investment, and slower economic growth.
The baby boom that fueled decades of prosperity is over in the West and slowly ending in China, while India is in the thick of its own demographic boom, projected to last until about 2050. According to Nilekani's sources, by 2020 India will have an additional 47 million workers, a number equivalent to about 1/3 of the total US labor force and roughly equal to the projected aggregate workforce shortage in the West.
To boot, India is already graduating far more engineers and technical professionals than Western universities, and Indian-owned companies often spend far greater amounts on training than their Western counterparts, in order to keep employees' skills updated.
If that wasn't enough, aided by the scale advantages associated with operating within such a massive domestic economy, and because of the need to serve relatively low-income customers, many Indian companies have developed unique low-cost business and operating models that allow them to be massively profitable on a global stage. Those profits are fueling increasing numbers of large acquisitions of Western firms (see Kumar for more on this). Suddenly, more and more workforces across Europe and the US find themselves working for Indian bosses. It's easy to get overly bullish on India. There has been a great deal of hype surrounding the country and its economic potential, and slow change has caused many of us to become skeptical. Still, fundamental indicators continue to suggest that India's economic transformation is slowly but surely changing the global stage.
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