Some Chicago Boyz know each other from student days at the University of Chicago. Others are Chicago boys in spirit. The blog name is also intended as a good-humored gesture of admiration for distinguished Chicago School economists and fellow travelers.
David Brooks argues that the crime wave of the 1970s has had a long-term effect on the American psyche, and especially on parenting. (via FFOF)
Victor Davis Hanson reflects on small-town America.
Paul Levy describes redesign of the pharmacy in the hospital he runs, making use of Lean principles, including mock-ups and heavy participation from those who will be using the new space. (via Lean Blog)
About 3 weeks ago, I wrote about Senator Christopher Dodd’s proposals for increased regulation of venture capital and angel investing and why these are very bad and damaging ideas. WSJ (4/22) makes several points about this proposed legislation:
Amazon, Yahoo, Google and Facebook all benefited from angel investors, who typically target companies under five years old…such firms are less than 1% of all companies yet generate about 10% of new jobs. Between 1980 and 2005, companies less than five years old accounted for all net job growth in the U.S. In 2008, angels invested some $19 billion in more than 55,000 companies.
Mr. Dodd’s bill would change all this for the worse. Most preposterously, it would require that start-ups seeking angel investments file with the Securities and Exchange Commission and endure a 120-day review. Rare is the new company that doesn’t need immediate access to the capital it raises, and a four-month delay is the kind of rule popular in banana republics that create few new businesses.
There’s a lot wrong with Dodd’s ideas on VC and angel investing; see my earlier post and the WSJ article for more details. There’s plenty more to be concerned about in the current approaches to financial regulation being devised on Capitol Hill.
This may seem slightly redundant, in light of David Foster’s post below which inspired me to post this on my own blog, but Lexington Green strongly felt that the point could stand repeating ( or shouting from the rooftops). So, here goes:
Senator Chris Dodd (D-Connecticut) is working hard in Washington…. to make sure that only those who are already Rich and Powerful will have a shot at being rich and powerful.
Tim Cavanaugh at Reason, observes that the peak of the dot-dom bubble was reached ten years ago today. The dot-com bubble and other technology bubbles are often held out as examples of the irrational nature of market economies by those who think they could do a better job of running the planetary economy than the rest of us can.
This is myth. Booms and busts represent two equal and necessary phases of technological development. A bust looks ugly but so does the birth of child. The busts are every bit as necessary as the booms and every bit as good for the general society and economy.
John Hagel is in a small category of thinkers who manage to routinely be thinking ahead of the curve ( he calls his blog, where he features longer but more infrequent posts than is typical, Edge Perspectives). I want to draw attention to the core conclusion of his latest:
Challenging Mindsets: From Reverse Innovation to Innovation Blowback
Innovation blowbackFive years ago, John Seely Brown and I wrote an article for the McKinsey Quarterly entitled “Innovation Blowback: Disruptive Management Practices from Asia.” In that article, we described a series of innovations emerging in Asia that were much more fundamental than isolated product or service innovations. We drew attention to a different form of innovation – institutional innovation. In arenas as diverse as motorcycles, apparel, turbine engines and consumer electronics, we detected a much more disruptive form of innovation.In these very diverse industries, we saw entrepreneurs re-thinking institutional arrangements across very large
numbers of enterprises, offering all participants an opportunity to learn faster and innovate more effectively by working together. While Western companies were lured into various forms of financial leverage, these entrepreneurs were developing sophisticated approaches to capability leverage in scalable business networks that could generate not just one product innovation, but an accelerating stream of product and service innovations.