(Thanks to Bob for an always thoughtful editorial. As I read David Eagleman‘s new textbook on the brain and delete anybody who has ideas I don’t like from my social media, Bob brings up some great points, but I don’t think we are a computer program simulation. We’re just on or off, black or white, positive or negative. Now quantum mechanics is something else. Until we know more about the universe, we’re just winging it. I’m praying for the scientists to figure it our before we make a boo-boo like the Egyptians, Easter Islanders, Mayans, etc. Those guys that couldn’t deal with climate change.)
By Robert Brooks, from FOUNDRY MANAGEMENT & TECHNOLOGY, June 2016
“Customization” simplifies things so that the world will seem to meet each of us on our terms. That doesn’t make us exceptional, and it doesn’t change the truth.
A constructed, programmed universe
Watch, and wait
Responsibility of being human
We select a channel, lower the volume, and check in occasionally to see what’s happening. At that moment, it doesn’t seem to matter if there is some artificial intelligence controlling the universe. Some of us might prefer that.
Visionary industrialist and omni-genius Elon Musk recently let forth his belief that all of us are all living within a constructed and programmed universe, powered by computers and guided by some form of intelligence. It’s a startling claim, even from one who seems to have a propensity to startle, but it’s also a remarkably familiar theory about the place of humanity in the universe. Allowing for obvious distinctions, 16th Century Calvinists had a similar view of the human condition, and it’s a beguiling argument now for anyone who wonders about the sources of knowledge, or who is challenged by all the vital and trivial information that connects us to each other, or stressed by the changes we sense happening to us and to the world around us
How could anyone not wonder about all this? Understanding and managing the universe we inhabit is the mission of humanity, and as a species we have made extraordinary progress in that effort. If we never seem to satisfy the initial curiosity it’s perhaps because each of us has a different starting point. I know where my understanding of the universe started, but lately I’ve begun to think we have altered it in some fundamental way.
We moved to new offices a few months ago and among of the improvements offered in our new ‘space’ are several large flat-screen monitors. Being somewhat recusant about new technology and the gadgets that go with it, these are not especially impressive to me but I am reminded by colleagues that we are professional communicators, and the screens allow us to conduct videoconferences, or to watch different informational or instructional programs. All true. Usually, though, the screens are showing a Web-only channel now offered by a traditional network news division. What’s on view doesn’t seem to be news as much as a looping review of political and financial commentary, dishing over and over again something some candidate or office holder has said or done in the past 12 hours. In form and content, it’s gossip, though I cannot state this categorically because the displays here usually are muted (we’re working, after all.)
The human and financial resources leveraged over decades to achieve all this are impressive by any standard, and I accept the practical value of such a connection, but I wonder why people seem to want that linkage available all the time. The office TV (sorry, that’s what it is) is not the only example; people keep smartphones and tablet devices in position so they can be informed at a glance, checking in to what they’ve missed. Others move about with the Bluetooth clipped in place for some immediate update, or they keep an IM or mail window open in the background, ready to receive. Similar arrangements are seen in homes, stores, on the street, in cars and planes, everywhere. Always.
Let me make clear that I am not discounting the value of data networks or intelligent systems, and I know that life as we know it now depends on machinery and information technology. At the risk of contradicting Musk though, I am reaffirming the central role of humanity in this universe: we built this complex of devices and systems, we filled it with information, and we can manage it if we accept the responsibility, even though we seem to be losing enthusiasm for that role.
True, the system is vast, and it grows ever more complex. What it reveals about our circumstances is often unwelcome or disturbing. Of course, it’s preferable to keep some distance, and let the system do whatever it’s designed to do. We select a channel, lower the volume, and check in occasionally to see what’s happening. At that moment, it doesn’t seem to matter if there is some artificial intelligence controlling the universe.
“Customization” — currently a craze in manufacturing as it has been in tech and consumer products for decades — allows us to simplify ideas and messages so that the universe will then seem to meet each of us on our individual terms. Then, there is no pressure to acknowledge facts or conditions we don’t find welcome, and we can choose to believe that makes us the center of it all. That doesn’t make it true.
The falsity may be found, as ever, in the temptation to see oneself as a distinct being able to subsist in that customized environment, rather than what we are: individuals charged with improving the civilization we have been provided.
AFTER SEVERAL YEARS OF GRADUAL PROGRESS, THE ECONOMIC STARS ARE ALIGNING IN FAVOR OF A MORE ROBUST COMMERCIAL ENVIRONMENT.
(The economy is booming, be sure you focus on the markets that are growing. Take Donald Trump’s advice, “Don’t get into an industry in decline.” Or don’t make the mistake we did, getting into Green Building Marketing right at the downturn. No problem, now we’re prepared. Chuck Lohre)
“WE EXPECT 2016 WILL BE A GOOD YEAR, WITH INCREASED consumer spending driving economic growth,” said Sophia Koropeckyj, managing director of industry economics at the research firm Moody’s Analytics. Why the sunny outlook? Economists point to a number of conditions favoring businesses: Higher employment, lower consumer debt, greater credit availability, and trimmed gasoline prices all lead to a more robust American economy. All should do their part to help en – courage stronger growth over the coming 12 months.
Performance in the retail sector is a critical driver for the American economy in general—and one in which economists see an improving picture in 2016. “We expect core retail sales to grow 5.5% in 2016,” said Scott Hoyt, senior director of consumer economics for Moody’s Analytics. That growth rate is notably faster than the 4.2% rate anticipated when 2015 sales are finally tallied. The 2015 experience was slightly better than the 3.9% growth of 2014. If Moody’s Analytics is accurate in its forecast, businesses can rejoice, as the anticipated rate is not that far off the roughly 6% increases retailers commonly enjoyed during the robust decade of the 1990s—as well as the period they fondly remember just prior to the Great Recession. What will drive the anticipated retail sales increase? Primarily higher wages, fueled by the growing number of people gainfully employed.
Businesses depend on a healthy economy to support strong sales. And one of the most important drivers of that is a robust housing construction sector that employs more people and generates more disposable income. “The ever-tightening market for new homes will likely spur stronger construction activity in 2016,” said Sophia Koropeckyj, managing director of industry economics at Moody’s Analytics. Indeed, housing starts are expected to rise 29.5% for the year, a considerable improvement over the 14.5% figure expected for 2015 when final numbers are tallied. (The rate for 2014 was 5.8%.) Why the spike in construction? According to Koropeckyj, the nation’s inventory of new homes has been falling steadily to the point where builders are now expected to perceive solid economic benefits in gearing up into higher production. The decline in inventory over the past year came about as builders held back from constructing new homes, concerned that consumer demand had not met expectations. That demand, in turn, was soft because, said Koropeckyj, “many young families saddled with mountains of student debt were opting to continue renting.” Granted, some conditions will have to be met before the housing rebound occurs. “The tightening housing market by itself does not guarantee a resumption of singlefamily construction,” noted Koropeckyj. “Household debt burdens will still have to fall significantly before buyers of new homes start to return to the market in strength. Even so, the U.S. recovery, with some outside help from low gasoline prices and consequently low inflation, is pulling that date forward.” The expected housing rebound should have a related effect: Home prices are expected to increase by only 2.9% in 2016, a deceleration of the 6.3% expected for 2015.
Of special importance to all businesses is the performance by one subset of the larger corporate world: manufacturers. Any growth in that sector has a dramatic effect on employment—and therefore on the economy in general—because manufacturing is heavily dependent on a skilled labor force. It seems that manufacturers are looking ahead to a 2016 that will match or exceed what has been a reasonably good 2015. “Conditions are positive but not robust or booming,” said Tom Palisin, executive director of the Manufacturers’ Association (mascpa.org). “Manufacturers are doing slightly better than they were a year ago. They are reporting low to moderate growth, solid orders, and a good backlog.” Low energy prices are favorable for the sector. Looking to 2016, Palisin said, “Members are cautiously optimistic.” A telling indicator of that optimism is a new initiative to bolster the workforce. “One significant change is a move by many companies to invest more in their training budgets,” said Palisin, adding that manufacturers are doing so in response to a number of conditions: an improving economy, several years of cost cutting that has led to a lean workforce, and a lack of available skilled talent combined with low unemployment. “Employers now seem more eager to retain the employees they have by investing in training of their existing workforce,” Palisin added. That will translate into higher salaries and still more disposable income in consumers’ wallets. Manufacturers will be helped by a growing availability of credit, which has loosened considerably since the tight years of the Great Recession. “Rates are low and banks are willing to invest,” said Palisin. “However, there has not been much demand for commercial loans because many companies have sufficient cash on hand to finance their growth needs.” Others, he said, have delayed capital investment due to economic uncertainty and a tough regulatory environment.
The most important contributing factor to a more robust marketplace, said Koropeckyj, is the growing health of the labor force. “Wage gains are now materializing across a number of industries and regions,” she said, noting that consumers will have more disposable cash to spend. Moody’s reported that unemployment fell to 5.1% in late 2015, a full percentage point decline over the level 12 months previous and a rate nearly identical to the 5% economists believe represents a condition of “full employment.” “While there is still slack in the labor market, it is declining quickly,” said Scott Hoyt, senior director of consumer economics for Moody’s Analytics. “At some point in 2016 the labor market should become tight, which should translate into faster growth in wages and consumer spending.” Indeed, Moody’s expects the nation to reach full employment by mid-2016 and the average unemployment rate during the fourth quarter of that year to be 4.8%. Gains in employment nationwide have helped create a population more confident of the future – and therefore more prone to spend. “Consumers have been feeling reasonably well,” said Walter Simson, principal of Ventor Consulting. Economists expect consumer confidence to continue to rise over the coming 12 months in response to a brighter employment picture.
A STRONGER ECONOMY
So just how good is “good” for 2016? That depends on how much consumers and businesses spend nationwide on goods and services. The faster the rise in that figure—the GDP—the healthier the economy. For 2016, Moody’s expects GDP to grow 3.25%. That’s considerably higher than the expected 2015 rate of 2.5%. The 2015 results, to be confirmed when the year’s sales numbers are tallied, were just slightly higher than 2014’s 2.43% growth rate. One big driver of the rise in GDP is expected to be an improving performance by large employers. Businesses of all sizes benefit when major corporations rack up healthy profits. Good earnings stimulate business expansion and an attendant investment in buildings and equipment. That generates still more business for suppliers, along with more employment and disposable income for consumers. In this area, again, the future looks rosy. “Corporate profit growth is expected to accelerate some 9.2% through 2016,” said Koropeckyj. That’s a considerable improvement over the results for 2015, when profits actually declined slightly as a result of the strong dollar (which weakened exports) and a decrease in energy revenues following a drop in commodity prices. Why the rebound? Moody’s is looking to a recovery in global economies, along with a diminished drag from the dollar, to help turn things around. Several factors, though, could cause a delay. “Our narrative rests on the assumption that wages and productivity will rise in lockstep,” said Koropeckyj. “But this may not hold. Productivity growth has been weak, allowing even modest wage gains to push unit labor costs higher.” Wage growth is likely to grow faster than productivity, she added, noting, “This would further compress margins and lower the outlook for corporate profits.”
Challenges remain. Businesses should keep an eye out for further developments in lingering issues such as the softening of European and Chinese economies, a volatile American stock market, and political gridlock in Washington. “Businesses prefer stability and consistency,” said Tom Palisin, executive director of the Manufacturers’ Association (mascpa.org). “Right now, we have anything but that.” Even so, signs point to continuing marketplace strength. “We think the economy should weather the current uncertainties,” said Hoyt. “A lot of our optimism centers on the strength in the labor markets.” A healthy jobs picture, then, should make all the difference in 2016. “Early in the year businesses should watch what is happening with wages,” said Hoyt. “If the labor market tightens as expected, that will lead to higher wages and more consumer spending.”
Perry is a business journalist based in New York City and a three-time winner of the “Value to the Reader” award from the American Bar Association. Reach him at [email protected].
Social technology has revolutionized the way in which people interact and the social network phenomenon has invaded our lives in more ways than one. Many people in the corporate sector are beginning to recognize the benefits of sharing information instantaneously and are developing private social networking platforms for their employees to do so.
“We’re Death to the Stock Photo. A photo & inspiration haven for creatives crushing their path. From their license, “Under the license, you may display a DTTSP photo as you please, reproduce it, add it to a collection, and make adaptations of it. However, you may not distribute the photo—so don’t include it in any photo packs or give it out for others to use. That’s how we are able to run our business :). Displaying and reproducing the photo on physical or digital products that you distribute is fine.” We signed up for the weekly pack and will see how it goes. We didn’t find any construction shots. This was a nice image.
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