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Manufacturing is special. Poor countries have access to world markets, off-the-shelf technologies developed by others, and rich countries’ savings.

Manufacturing is special

So in principle, they should develop rapidly – more rapidly than advanced economies, which are already at the technological frontier. Yet the historical record belies this expectation. Economic convergence depends in practice on a whole host of policy, institutional, and geographic determinants, the nature of which remains vigorously debated (Acemoglu 2009). Yet it turns out that there is an important segment of developing countries’ economies that behaves precisely as simple theories predict. As I document in a recent paper (Rodrik 2011a), labour productivity in (formal) manufacturing displays a clear tendency towards unconditional convergence. I estimate a coefficient of unconditional convergence that is statistically highly significant and quite large, at 3.0-5.6% per year depending on the estimation horizon. My central result is illustrated in Figure 1. Race Against the Machine.

Artificial intelligence: Difference Engine: Luddite legacy. AN APOCRYPHAL tale is told about Henry Ford II showing Walter Reuther, the veteran leader of the United Automobile Workers, around a newly automated car plant.

Artificial intelligence: Difference Engine: Luddite legacy

Ecosystem & Porter. A common characteristic of Next generation organisations (as opposed to traditional) is their focus on ecosystems and the provision of platforms to support their growth.

Ecosystem & Porter

The purpose of such ecosystems is not simply some form of marketing exercise but instead a mechanism for managing the innovation paradox (i.e. the need to be efficient to compete today but also to be creative in order to compete tomorrow). Consider the provision through an online API of a software system whether it’s SalesForce, Amazon’s AWS or PayPal’s x.commerce platform. These services are core utilities that the organisation is providing with the express aim of others consuming i.e. an ecosystem of consumers developing around the service.

The consumption of the service may represent general use or even novel and more creative uses e.g. the early provision of big data Hadoop systems on AWS. Naturally, if those activities are useful (i.e. Local Money Creates Wealth Outside the Bubble. Ever since the crash several years ago, Americans have felt precarious about the nation's economy and the value of its currency.

Local Money Creates Wealth Outside the Bubble

Money seems to take inconceivable, abstract, and even magical forms, traveling around the world at lightening speed with little oversight and obvious mismanagement. We have little control over it — the value of our currency is tied to conditions well beyond our control. It moves in directions that most of us are vehemently opposed to. We trusted that the banks, Congress, the Federal Reserve, corporations and Wall Street are managing money responsibly on our behalf, particularly with retirement funds and mortgages, but lately that trust has been broken.

In response, local currencies have drawn interest from Occupy and other economic resistance groups to create an alternative to state-controlled money. An introductory series on “peer to peer” urbanism (bio-urbanism) I’ve asked Øyvind Holmstad to introduce a new series of essays on bio-urbanism which are appearing in Metropolis magazine.

An introductory series on “peer to peer” urbanism (bio-urbanism)

They are all to be found here. The myth of financial innovation and the Great Moderation. Many changes have taken place in the financial sector over the last couple of decades.

The myth of financial innovation and the Great Moderation

Deregulation was followed by a burst of innovation, a step-up in leverage, an increase in cross-border capital flows, and larger financial institutions. The recent financial crisis is believed to have been caused by some of these changes in the financial sector, and lawmakers are under pressure to come up with new legislation that will do a better job in restraining the financial sector and result in a more stable economy.

But it is not that long ago that growth of the financial sector and financial innovation were thought to be central for sustainable growth and also to be partly responsible for the Great Moderation (the period with mild business cycle volatility characterising several developed economies from the mid-1980s to the onset of the crisis). It is difficult to deny that the behaviour of financial institutions played a key role in the recent crisis. The maker movement's potential for education, jobs and innovation is growing. Dale Dougherty (@dalepd), one of the co-founders of O’Reilly Media, was honored at the White House yesterday as a “Champion of Change.”

The maker movement's potential for education, jobs and innovation is growing

This White House initiative profiles Americans who are helping their fellow citizens “meet the challenges of the 21st century.” The recognition came as part of what the White House is calling “Make it in America,” which convenes people from around the country to discuss American manufacturing and jobs. Innovation, education and Makers. On the Monday following Maker Faire New York, the National Science Foundation (NSF) sponsored a workshop titled “Innovation, Education and the Maker Movement.”

Innovation, education and Makers

It was organized by Margaret Honey of the New York Hall of Science, Thomas Kalil of the White House Office of Science and Technology Policy, and myself. I asked Tom if we could publish his talk, which opened the workshop. New York Hall of Science, September 29, 2010. Three game characteristics that can be applied to education.

In a related post, I talked about what the notion of gamification as applied to education might mean on three levels.

Three game characteristics that can be applied to education

In particular, I described the lessons that might be learned by the field of education from the different types of gaming encountered in World of Warcraft and Minecraft — two very different online multiplayer games. In this post, I look at the technology roadmap that can support these three levels of application in real schools. Level 1: Leveling up and questing The first level is one where leveling, questing, and leaderboards can help motivate students to engage more with their schoolwork.

Like a gamer who chooses his or her own path and pace to “level up,” a student will choose his or her own path and pace to learn a standard curriculum and be able to prove advancement to that next level through performance on tests. Despite the numerous challenges to achieve this level in reality, this is actually the easiest of the three levels. Level 2: Group collaboration Level 3: Play. Chart: One Year of Prison Costs More Than One Year at Princeton - Brian Resnick - National.

One year at Princeton University: $37,000.

Chart: One Year of Prison Costs More Than One Year at Princeton - Brian Resnick - National

One year at a New Jersey state prison: $44,000. Prison and college "are the two most divergent paths one can take in life," Joseph Staten, an info-graphic researcher with Public Administration, says. Whereas one is a positive experience that increases lifetime earning potential, the other is a near dead end, which is why Staten found it striking that the lion's share of government funding goes toward incarceration. The comparison between higher education spending and correction spending highlighted in the following chart is not perfect. Putting extended families under 1 roof -

Zen and the Art of Making. This week for my bi-weekly soapbox column, I thought I’d share some of my notes I’ve jotted down recently about making things, working with and supporting beginners. Differing Attitudes Toward Genuine Hypocrisy. Paul Krugman has a question for you: Genuine Hypocrisy, And Attitudes Thereto, by Paul Krugman: Not sure how much blogging I can do this weekend... But here’s an item that caught my eye, given what I wrote about hypocrisy yesterday: Deadbeat Rep. Joe Walsh, Who Owes $100k In Child Support, Receives ‘Pro-Family’ Award From Family Research Council. Miscellaneous. Larry Summers : To end slump, United States must spend, MIT News: ... Summers also weighed in on economists’ performance in light of the largely unanticipated economic crisis.

For the most part, Summers defended economists, arguing that the profession has made world leaders better informed in recent decades. “I’ve had meetings with vice premiers, number-two people in China, who have asked me questions about NBER [National Bureau of Economic Research] working papers in macroeconomics,” Summers said. “That says the work has an enormously positive and important impact.”However, Summers asserted, the dynamic stochastic general equilibrium models used by many economists, which often assume the economy will naturally return to a basic equilibrium with full employment, have been of little value in these complex times.

David Autor: More than half of Florida homeowners in default are 2 years overdue. More than half of Florida homeowners in foreclosure have not made a mortgage payment in two years or more. That's higher than the national average and one indication of why banks are paying borrowers up to $20,000 to execute a short sale.

A new report from Jacksonville-based LPS Applied Analytics found that as of September, 56 percent of Florida's mortgages in foreclosure are 24 months or more behind in payments, compared with 39 percent nationwide. About 84 percent of Florida foreclosures are more than 18 months in arrears. Considering recent figures that estimate the time from initial filing to auction at 676 days in Florida, LPS Senior Vice President Herb Blecher said, he's not shocked by the mounting late payments. In January 2010, just 19 percent of Florida's foreclosures were 24 months or more delinquent.

Living with the folks - Nov. 4. NEW YORK (CNNMoney) -- With job openings scarce, getting adult children to leave the nest is becoming a lot more difficult. The number of adult children who live with their parents, especially young males, has soared since the economy started heading south. Among males age 25 to 34, 19% live with their parents today, a 5 percentage point increase from 2005, according to Census data released Thursday. Capital Institute.

Peter Victor–eminent ecological economist, winner of the Canadian Council for the Arts' prestigious Molson Award, and author of Managing Without Growth–challenges us to reframe our economic discussions to focus on managing material and energy flows rather than GDP growth. Artificial intelligence: Difference Engine: Luddite legacy. The Polarization of Job Opportunities in the U.S. Labor Market. When offshoring backfires. As the global economic downturn grinds on, more companies are acknowledging that labour costs aren’t always the most important factor when deciding where to build their next factory. This column argues that, in times of recession, some companies find that bringing their business home can give them a competitive edge. While politicians argue strategies to create jobs in the faltering global economy, the debate around offshoring has intensified.

Once considered a clear competitive advantage in the fast-changing global market, manufacturers rushed to replace domestic labour forces with lower-cost workers in emerging markets. By 2002–03, about a quarter to half of the manufacturing companies in Western Europe were involved in offshore production (Dachs et al 2006). Disrupting the Disruptors: Three Design Patterns for Combatting Disruption in Incumbent Organizations.

Divining a Digital Future. Divining a Digital Future - Paul Dourish and Genevieve Bell. Paul Dourish and Genevieve Bell. Forum. UCSD Study: Not Enough Bandwidth for an 'Internet of Things' Yesterday's groundbreaking proposal by IBM for a new and open-source asynchronous protocol for machine-to-machine (M2M) Internet communication, called MQTT, cites a projected 1000x (put another way, 100,000%) increase in broadband device-generated traffic by the year 2020, and the need for a formal protocol for managing it all. Now, a study from the University of California San Diego's Global Information Industry Center (GIIC) projects, using data supplied by numerous sources including the FCC and network systems leader Cisco, suggests that bandwidth of that magnitude doesn't just simply fall out of the sky.

On businesses that sustain the commons. Qdot/keepoff - GitHub. Technological Plateau or Promise? The Era of Small and Many. Economy Driving More Americans to Extreme Poverty. What Do The Occupiers Want? Phase Change. The Five Big Surprises of Radical Management. Global Village Construction Set by Marcin Jakubowski. The Desktop Regulatory State. Rad Geek People's Daily 2008-05-29 – Dump the rentiers off your back. Make the Dangerous Choice to Dissent - Umair Haque. Why your startup should use data competitions. The Ethics of Sharing. What Is Free Culture? Is Consumer Capitalism Outdated? Solitude and Leadership. Anthropology extracts the true nature of tech.

Utopia is creepy. Talent Management - October 2011 [26 - 27] Google+ Ripples Feature Shows How Posts Are Shared. The Middleware Connection: Scala, Akka, and Heroku. How do we achieve a civil(ised) economy? How Can Business-to-Business Trade Networks Build Local Resilience. Microsoft Offers a Glimpse into the Future of Productivity - The Official Microsoft Blog – News and Perspectives from Microsoft. Alf Hornborg on How We Have Been Mystified by Technology. The long slow make. David Li on the merger of open hardware with Chinese Shanzai manufacturing.

US Employment to Population Ratio Continues Annual Decline. Boom In Shadow Financing Exacts High Toll In China. Mcor Technologies. The future is amazing, and Microsoft has video to prove it. Paul Hartzog on turning the Internet into a real ecosystem by enabling interoperability. Are American workers in a race against the machine? All Watched Over by Machines of Loving Grace.

Startups, Innovation and the Decline of the Corporation. The future of work: What happens when talent trumps capital? Wen talent trumps capital? DB's review of Race Against The Machine: How the Digital ... Kickstarter campaign for the Global Village Construction Set. Does Redistributing Income Reduce Poverty? - Jagdish Bhagwati. Why Companies Can't Find the Employees They Need -

Money As Debt II: promises unleashed (full movie) Evolution and Innovation - Information Is Cheap, Meaning Is Expensive. Fixing America's Economy: Nine Ideas from Around the World. Economic Letter: What's in Your Wallet? The Future of Cash (2011-33, 10/24/2011) Social complexity. Richard Wilkinson: How economic inequality harms societies. More Jobs Predicted for Machines, Not People" P2P-driven fall in transaction costs and the coming Micro-Ownership Revolution.

Skills shortages is a global problem. Changing the World through Crowdsourcing « What’s the cause of the Great Recession: debt or a fall of profit? Detroit as the exemplar of the Next Revolution. Umair Haque: at the heart of the eudaimonic life and economy stands meaningful and impactful engagement. Moving from a sharing to a solidarity economy. Gar Alperovitz on Reforming the Corporation for a New Economy. Bangkok Flooding Has Taken 25% Of The World's Hard Disk Manufacturing Capacity Offline. Energy: Friend or Enemy? by William D. Nordhaus. Huntsman's Warning on 'Too Big to Fail' Nouriel Roubini's Global EconoMonitor » Full Analysis: The Instability of Inequality. Growth through scarcity? How do we achieve a True Cost Economy? Hybrid Wisdom Labs Launches A Speedy, Scalable Engine For Visualizing Customer Insight.

Social hacking, not just technological hacking. The Singularity and the economy.