viernes, 31 de agosto de 2012

J.A. Schumpeter (desde su biografía - 16)


“Turning from the simplicity and purported certainty of Marx’s economic utopia, Schumpeter poses his own deceptively guileless question and answer: “Can capitalism survive? No. I do not think that it can.”

The argument that follows this memorable beginning to the second part of Capitalism, Socialism and Democracy is complex, closely reasoned, and filled with historical detail. The assertion itself is very carefully hedged, in numerous passages. Schumpeter’s real purpose is not to prophesy capitalism’s downfall but to explain how it works. He is at pains to demonstrate why capitalism has been a very good thing –and then to underscore its fragility.


He begins his argument by demonstrating that modern industrial capitalism has produced the greatest per capita output of goods ever recorded. And, in direct contravention of the Marxian forecast that worker’s share of income will steadily fall, Schumpeter repeats that “relative shares have substantially changed in favor of the lower income groups.” Regardless of subjective assessments by popular writers and literary intellectuals, statistics show that the average worker, under “an avalanche of consumer’s goods,” has a better material existence that ever before. In other words, “the capitalist process, not by coincidence but by virtue of its mechanism, progressively raises the standard of life of the masses.”


And one major way in which Schumpeter upended Marx was in his treatment of the controversial question of monopoly. Writing in the 1930S and early 1940S –a time of mounting public anger over industrial concentration –Schumpeter emphasized that enormous improvements in the lives of common people had “evolved during the period of relatively unfettered ‘big business.’” Far from diminishing the benefits consumers derived from the workings of the capitalist engine, business of gran size had increased them.

In explaining how this happened, Schumpeter introduces his famous term “creative destruction”: “The opening up of new markets, foreign or domestic, and the organizational development from the craft shop and factory to such concerns as U.S. Steel illustrate the same process of industrial mutation –if I may use that biological term- that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism. It is what capitalism consists in and what every capitalist concern has got to live in.””

jueves, 30 de agosto de 2012

J.A. Schumpeter (desde su biografía - 15)


““Capitalist evolution spells disturbance,” Schumpeter emphasizes again and again. “Capitalism is essentially a process of (endogenous) [sic] economic change.” In the absence of change, “capitalist society cannot exist.” If the capitalist engine stalls, the economic system will disintegrate. And the key that starts the engine and keeps it running is innovation: “Without innovations, no entrepreneurs; without entrepreneurial achievement, no capitalist returns and no capitalist propulsion. The atmosphere of industrial revolutions -of ‘progress'- is the only one in which capitalism can survive.” Hence there must be constant change, generated from within. “In this sense,” Schumpeter concludes, “stabilized capitalism is a contradiction in terms.””

miércoles, 29 de agosto de 2012

J.A. Schumpeter (desde su biografía - 14)


“In describing the industrial revolution –and in probing the nature of change, which is the heart of his thesis- Schumpeter draws sharp distinctions between inventors and entrepreneurs, and between inventions and innovations: “The making of the invention and the carrying out of the corresponding innovation are, economically and sociologically, two entirely different things.” Often the two interact, but they are never the same, and innovations are usually more important than inventions.

The career of Richard Arkwright (1732-1792) exemplifies these distinctions especially well. Arkwright was an inventor, but –much more critically- an innovating entrepreneur. Before he developed his machines, which spun cotton faster and produced stronger thread, weavers had problems in blending cotton thread with linen fibers, which come from flax. But Arkwright’s innovations, including his own emergent factory system, soon began to revolutionize the industry. Other industrialists paid him handsome fees for the use of his patented machines, and he operated several factories himself. Before long, he became very rich and received a knighthood. In Schumpeter’s terms, Arkwright was a New Man organizing a New Firm and reaping a high entrepreneurial Profit.

Arkwright’s multiple innovations and skills in organizing the whole system far surpassed the significance of his inventions alone. “Doing the thing,” as Schumpeter puts it –“the actual setting up of new production functions- is a distinct phenomenon.” The falling domino of one innovation topples the next domino, in an endless series radiating in all directions. “We readily see how every step conditions other steps –yarn and cloth, for instance, alternating in offering new demand to each other and in running up against bottlenecks, the removal of which then makes the next achievement.”

Necessity may be the mother of invention, but it does not automatically produce innovation. New men operating new firms –such as Richard Arkwright in textiles, Josiah Wedgwood in pottery, James Watt and Matthew Boulton in steam engines, and many others –had to “do the thing.” In silks and woolens, which had previously dominated the British textile market, the necessary action was not taken. Both industries should have been reorganized during the 1700S. Yet as Schumpeter points out, “The rich and well-established woolen industry lagged behind, right into the thirties of the nineteenth century. It accepted progress under pressure [from cotton] and was drawn along by the more active younger sister.” The silk industry held its own but did not expand. Meanwhile, production of cotton textiles simply exploded, yielding billions of yards of fabric for export to Britain’s markets all over the world.

Eventually, after many decades of prosperity, the cotton industry itself drifted into torpor. British firms prospered so handsomely that they had little incentive to innovate further. They held to traditional mule-spinning, turning their backs on the vastly superior ring-spinning technique. And they recoiled from the commonsense idea of having the same company spin thread and weave cloth. For about 150 years after the breakthroughs of Hargreaves, Cartwright, and Arkwright, thousands of family-owned companies specialized in only one or two steps in the long process of production and were very slow to innovate. The industry declined because of “the presence of many small or medium-size firms which were inefficient but unencumbered [with debt] and could muddle indefinitely.” Schumpeter notes that “the hand jenny and the hand loom persisted for the greater part of the period and even toward the end of it there seem to have been firms which used not only antiquated power machinery, but no power machinery at all.

Meanwhile, the Americans had innovated as early as the 1830S, integrating spinning with weaving under one roof, in giant factories. Toward the end of the nineteenth century, the British began to lose ground to more efficient firms in the United States and Europe, and by the time they finally modernized their factories, it was too late. Both the rise and decline of the British cotton textile industry demonstrated Schumpeter’s argument almost perfectly. Britain’s most important industry had neglected the organizational innovations so important in Schumpeter’s scheme. For this entrepreneurial negligence, the cotton textile industry paid a grievous price, particularly in the twentieth century.”

martes, 28 de agosto de 2012

J.A. Schumpeter (desde su biografía - 13)


“But the shift did not come easily. A major theme of Business Cycles is the extreme difficulty of changing traditional ways of doing things. More than most analysts, Schumpeter emphasized that the destructive part of creative destruction has always been quite real, and he stressed that those whose interests are being destroyed will fight hard to preserve their culture and status. In Britain and elsewhere, small-scale craftsmen and their guilds had esteemed artistry, community, and tradition over low prices, increased output, and expanded exports. These predilections went back for centuries, and the only way to change them was through overwhelming economic defeat.

Entrenched interests fought tenaciously against mechanization and the factory system. Unlike the Prussian inventor of a ribbon-weaving loom, who was put to death in 1579 by order of the Danzig municipal authority, “Entrepreneurs were not necessarily strangled,” but “they were not infrequently in danger of their lives.” Craft guilds in Britain invoked medieval laws to prevent both outsiders and their own members from using innovative methods. They petitioned for regulations outlawing factories and particular mechanical devices. Schumpeter cites the Weavers Act of 1555 and a “royal proclamation which in 1624 directed that a new machine for the manufacture of needles be destroyed.” And regardless of what the law might allow at a particular time, craftsmen themselves continually smashed the new machines.

In response, British entrepreneurs often moved their factories out of guild-dominated towns. Operating in the countryside, they could proceed without the fetters of official repression and with the advantage of cheaper labor –although even here, in the new outputs, innovators had to “fix things” with local authorities. Yet, whatever the obstacles, in certain industries they were almost sure to win in the long term. Large-scale factory production offered more jobs for workers, cheaper goods for consumers, a richer tax base for governments, and a dominant foreign-trade position for Britain. In London, “the political world wavered in its attitude and motivation,” but soon business interest became a major force in politics; and by the eighteenth century, Parliament had largely submitted.”

lunes, 27 de agosto de 2012

J.A. Schumpeter (desde su biografía - 12)


“Thus, a new firm’s intrusion into an existing industry always entails “warring with an ‘old’ sphere,” which tries to prohibit, discredit, or otherwise restrict the advantage afforded to the new firm by its innovation. But whatever may happen in a particular case, every entrepreneur´s high profit is temporary, because competitors will copy the innovation, causing market prices to fall. This sequence of cutting prices, which Schumpeter calls “competing down,” is observable in all industries except those protected by government monopoly. Competing down may take several years and is often hard for contemporaries to se. But one way or another, competing down always happens, and it is why Schumpeter seldom worried about price-fixing by monopolies, other than those sponsored or propped up by governments (as many firms had been in the Austro-Hungarian Empire).

Having laid out his basic model of capitalist behavior, Schumpeter proceeds to deluge the reader with historical examples. He begins with the origins of the factory system in Britain, the first major nation to industrialize. In the late 1500S, he writes, a few British entrepreneurs systematically cut their productions costs so that they could reduce their selling prices. Lower prices stimulated demand and enabled producers to manufacture in larger volume and to distribute their products more widely. Over the long term, the new factory system flourished beyond the dreams of its proponents. It gathered large numbers of workers into one place, set uniform standards for quality, and divided production into separate steps performed by specialists –al under the discipline of the clock. [Nota al pie:] “Schumpeter does not give it sufficient emphasis, but the use of the clock was a vital innovation in successive industrial revolutions. Rather than using sun time and toiling sporadically at home, workers gathered in one place and labored together under a rigid schedule. Even outside the factory, the clock changed the way people thought about life in general."

Schumpeter was careful to point out that the factory system introduced more efficient production even into “old industries” such as textiles. The shift from home spinning and weaving to mechanized production of cloth was so profound that it launched the first industrial revolution (1760-1840). Consumer’s demand for affordable factory-made cloth turned out to be almost unlimited. Men could now have not just one or two shirts and pairs of pants but sis o seven; women, not just a few dresses and blouses but many. And –very significantly- the new cotton clothing could be washed frequently unlike woolens.

The factory system modernized many other existing industries. In iron and steel, bigger furnaces facilitated “production on a large scale of standardized intermediate goods, such as ingots, sheets, rods, and wire.” Factories increased he output of a wide range of products: metalwork made of copper and brass, paper made in mills “driven by water wheels… potteries, sugar refineries… glass, soap, and gunpowder factories, and salt-boiling establishments.” Factories triggered a new era in British economic life, raising the overall standard of living and bringing fortunes for entrepreneurs.”

viernes, 24 de agosto de 2012

El Job To Be Done de SER un EMPRESARIO :-)

Desde el mismo artículo de ayer

"S+B: That’s a great segue. When you launched in 2002, the economic climate was challenging at best. What impact did that have?
McCARTHY: It was a tough economy, and it was just after 9/11, which added uncertainty. It was also a time that tech investors still refer to as the “nuclear winter”: After the dot-com boom had gone bust, the exuberance and enthusiasm vanished. Goldstar’s cofounders, Robert Graff and Rich Webster, and I had been working in e-commerce for several years. We believed that whether there were going to be crazy IPOs or frothy valuations from investors or not, the only direction that actual Internet usage could go was up, and up fast. We had this idea that the ticketing business was perfect for e-commerce. There was expiring inventory, but with the Internet and e-mail and the ability to customize, we knew we could reach a lot of people.

On the one hand, the easy money wasn’t there. It would have been really difficult to raise money for a consumer concept at that time. On the other hand, the recession cleared the field for us, in a way. There wasn’t a ton of competition. It gave us a couple of years to build momentum.

In a time like that, if you say, “I’m going to start a business,” a lot of people around you will reply, “Wouldn’t it make more sense to just play it safe, get a job in a big company, and wait this out?” From my point of view, however, a recession is often the perfect time to start a business, depending on what you have in mind. It was a disadvantage in that generally everybody was a little more pessimistic, but recessions also create a lot of disruption, and they kill off some weaker businesses that are doing things in an outmoded way — and that creates all kinds of opportunities."

jueves, 23 de agosto de 2012

Just a very good example of a nice completed Job-To-Be-Done :-)

Aquí el doc completo desde Strategy+Business, titulado: "Lessons from the E-Commerce Wars. Entrepreneur Jim McCarthy on why online innovations succeed — or fail."


"S+B: So what drives your decisions about growth?

McCARTHY: Innovation is really only innovation if it serves a need that customers have or gives them something they want. Our job is not to find buyers for our tickets, it’s to find tickets for our buyers. Our innovation process revolves around evaluating what we’re doing for our members and then figuring out what we’re not doing as well as we could be. Sometimes those kinds of innovations are really simple and other times they’re more technical. But they always start with the customer.

For example, early in our business, we started sending out an e-mail to buyers after the event they purchased tickets for had happened, to see how it went. We were the first company I know of to do this. We wanted to make sure that people were having a good experience, and if there were problems, we wanted to get that feedback. It was a very simple innovation, but it was new and it helped us add value for the customer.

We have more complicated innovations, like our “Sit with Friends” feature. One of the issues people encounter when they want to go to an event with friends is that one person needs to buy all the tickets so the group can sit together. Otherwise there are no guarantees. We built “Sit with Friends” to solve that problem. If you buy a ticket from us, we provide a link at the end of the process that you can then send to friends. When those people buy tickets through that link, your seats are automatically grouped together. That was an innovation that came out of talking to our customers about their frustrations. For us, innovation is a constant process of saying, What are we doing to help improve the member experience?"

Second extract:

"We know that people like to go to live entertainment more than they actually go to live entertainment. The “science” behind what we do is figuring out why, and then trying to break down those barriers. One of the mistakes that many of our potential competitors make is thinking that price is the single barrier, when in reality it’s one of several (and not the most important). We use algorithmic solutions to take into account what events our members have looked at, what they’ve attended, and what they have said about these events. We analyze how they respond to e-mail, what kinds of offers work for them, what kind of information they are searching for. Their behavior begins to tell us more about them, and hopefully we’re adjusting with each new insight. People don’t always know what they like until they see it. There are some things they know they want, but there are other things they’re open to the discovery of. That’s what we try to find out."

miércoles, 22 de agosto de 2012

J.A. Schumpeter (desde su biografía - 11)


“Schumpeter next turns his attention to the main protagonist of the system, the entrepreneur (or “New Man”) and to the entrepreneur’s necessary companion, “Profit.” He concedes that in some situations it is hard to identify the entrepreneur. In the real world of business, “nobody ever is an entrepreneur all the time, and nobody can ever be only an entrepreneur.” Particularly in large firms, the entrepreneur often not only innovates but also carries out day-to-day management.

For any given innovation, the entrepreneur “may, but need not, be the person who furnishes the capital.” Of all economic systems, capitalism alone enables people to become entrepreneurs before they possess the necessary funds to found an enterprise. In the end, “it is leadership rather than ownership that matters.” The failure of both the classical economist and Karl Marx “to visualize clearly entrepreneurial activity as a distinct function sui generis” –a distinction Schumpeter himself always underscored- was a crucial flaw in their analysis of capitalism.

The prior possession of money makes it easier to become an entrepreneur, of course, and successful ones usually become wealthy. But the historical record shows unmistakably that, in the countries Schumpeter is discussing, entrepreneurs come from all income groups and social classes. “Risk bearing is no part of the entrepreneurial function. It is the capitalist who bears the risk. The entrepreneur does so only to the extent to which… he is also capitalist, but qua entrepreneur he loses other people’s money.”

Having staked out the distinctive role of the entrepreneur, Schumpeter identifies entrepreneurial profit as the prime motivator –“the premium put upon successful innovation.” When other participants in the same industry see the new level of high profit, they quickly try to imitate the innovation. The entrepreneur tries to preserve his high profit for as long as possible, through patents, further innovation, secret processes, and advertising –each move an act of “aggression directed against actual and would-be competitors.” These are forms of what Schumpeter would famously call “creative destruction” in Capitalism, Socialism and Democracy.”

martes, 21 de agosto de 2012

J.A. Schumpeter (desde su biografía - 10)


“The core of Business Cycles is its copious detail about the flowering of business systems in Britain, Germany and especially the United States. Schumpeter focuses on companies in five industries that led economic development: cotton textiles, railroads, steel, automobiles, and electric power. He also emphasizes three institutional innovations crucial to the rise of capitalism: the factory, the corporation, and the modern financial system.

He begins by setting firth a general theory of capitalist evolution that comes near to being an allegory. In his model, recurring “Innovation” propels the economy, which exists in a state of constant tumult. “New Men” or “Entrepreneurs,” operating within “New Firms,” drive innovation. (Like many other writers of the time, Schumpeter capitalizes some of his key terms.) All companies react “adaptively” to change, but creative “responses” come only from innovative acts by entrepreneurs. Their innovations can take many forms: for example, “the case of a new commodity,” “a new form of organization such as a merger,” and “the opening up of new markets.” Innovating firms do not arise evenly throughout the economy. Instead, groups of these firms emerge just after an organizational or technological breakthrough in a particular industry –either in that same industry or in others allied to it.

Meanwhile, powerful elements of society resist major innovations, because they tend to wreak havoc on existing arrangements. As a result, “the history of capitalism is studded with violent bursts and catastrophes.” It is no gentle process of adjustment but something “more like a series of explosions.” The building of a railroad where none had existed, for example, “upsets all conditions of location, all cost calculations, all production functions within its radius of influence.” Innovation, then, is very much a doubled-bladed sword.”

viernes, 17 de agosto de 2012

J.A. Schumpeter (desde su biografía - 9)


“As Schumpeter became ever more absorbed in his work, he paid increasing attention to history as the key to understanding not only capitalism but economic life in general. This shift is clear in the three big books he wrote during the 1930S and 1940S: Business Cycles, which appeared in 1939; Capitalism, Socialism and Democracy, in 1942; and History of Economic Analysis, issued posthumously in 1954. All together, the three total about two million words.


Schumpeter’s final book is also primarily a work of history, as its title suggests. In the mammoth volume, he covers the intellectual history of his discipline over the space of more than two thousand years, and in the process he delves deeply into the sociology of knowledge in general. The renowned economist Jacob Viner described Schumpeter’s History of Economic Analysis as “by a wide margin, the most constructive, the most original, the most learned, and the most brilliant contribution to the history of the analytical phases of our discipline which has ever been made.” It remains so to this day.

Toward the end of his life, Schumpeter issued a remarkable credo about the primacy of history. Of the three basic buildings blocks of economics –Theory, statistics, and history- he wrote that the last “is by far the most important.”

[Schumpeter:] I wish to state right now that if, starting my work in economics afresh, I were told I could study only one of the three but could have my choice, it would be economic history that I should choose. And this on three grounds. First, the subject matter of economics is essentially a unique process in historic time. Nobody can hope to understand the economic phenomena of any, including the present, epoch who has not an adequate command of historical facts and an adequate amount of historical sense or of what may be described as historical experience. Second, the historical report cannot be purely economic but must inevitably reflect also “institutional” facts that are not purely economic: therefore it affords the best method for understanding how economic and non-economic facts are related to one another and how the various social sciences should be related to one another. Third, it is, I believe, the fact that most of the fundamental errors currently committed in economic analysis are due to lack of historical experience more often than to any other shortcoming of the economist’s equipment.”

jueves, 16 de agosto de 2012

J.A. Schumpeter (desde su biografía - 8)


“What about entire countries? Is it possible to identify a coherent Schumpeterian program for national economic growth? Are there particular patterns of tax, fiscal, monetary, and employment policies? Did Schumpeter ever specify political measures for the systematic promotion of national economic health?

The answer is yes. He never became a policy-obsessed economist like Ricardo, Marx, or Keynes. Nor did he denounce governmental activism with the passion of his fellow Austrian Friedrich von Hayek or the American Milton Friedman. Nor he did serve as a frequent adviser to politicians, as thousands of other economists have done –including his own Nobel Prize-winning students Paul Samuelson and James Tobin.
Nevertheless, there is plenty of evidence about the policies Schumpeter favored, and it comes mainly from two sources: his tenure as Austria’s finance minister and the dozens of articles on public policy that he wrote during his years in Bonn.

The evidence for the results of policies Schumpeter favored is circumstantial –but so many factors affect a nation’s economic performance that the same is true for almost any set of policies. During the twentieth century, the line of evidence from Schumpeterian ideas to policies to outcomes is perhaps clearest in the high-performing East Asian economies of the late twentieth century, especially Japan, Korea, Taiwan, and Singapore. In Japan, during the period between the departure of the American occupation forces in 1952 and the oil shock of 1973, policy-makers adopted many of his suggestions quite closely. There was an extraordinary emphasis on saving and investment, a broad range of innovation across many industries, and a tremendous outburst of entrepreneurship in new companies such as Sony, Sanyo, and Honda. During those years Japan achieved the highest sustained economic growth of any major country in the history of the world.”

miércoles, 15 de agosto de 2012

Más innovatividad... desde India

"Awaaz entrepreneur focuses on the scope of the Indian Laundry business; we feature success stories like Quick Clean and Village Laundry Services who have paved an innovative way into the business. Scott Anthony explains the scope of establishing such a business and factors you need to keep in mind before you launch business set up."

jueves, 9 de agosto de 2012

A L I M E N T A N D O la innovatividad

Aquí desde Knowledge@Wharton: "At Shell, a Grassroots Effort Aims to Nourish Innovation Via Meditation"

Extracto introductorio:

"Mandar Apte, a chemical engineer, has worked at Shell for 12 years. He is part of the energy giant's GameChanger program, whose mission is to provide seed funding and guidance to cutting-edge ideas and foster a culture of innovation. Apte is also the founder of a staff-led initiative called Empower, which uses breathing and meditation exercises sourced from the International Association for Human Valuesto nurture personal creativity and inter-personal skills. So far, some 2,000 employees at Shell offices in the U.S., U.K., the Netherlands and the UAE have gone through modules that are part of the Empower program. In a conversation with Knowledge@Wharton, Apte discusses the impact that Empower has had on him and his colleagues and his hopes for its future."


NOTA: GameChanger es uno de los programas de empresa (Shell) para la transformación hacia la innovación más exitosos de todos los tiempos.


A L I M E N T A N D O la innovatividad

miércoles, 8 de agosto de 2012

Pricing and innovation

Excelente ejemplo del más grande reto que debe enfrentar todo emprendedor innovador (juzgar anticipadamente a su realización, el VALOR de la misma), aquí en Knowledge@Wharton: "High-speed Railways: Worth Their Hefty Price Tag?"

Extracto introductorio:

"Imagine riding from Philadelphia to New York in only 37 minutes, or from Boston to Washington, D.C., in just three hours on a cutting-edge, high-speed transportation network linking every major city in the Northeast -- essentially, a rail-centric economic "mega-region."

Those are just some of the promises behind Amtrak's ambitious new high-speed rail proposal for the Northeast Corridor -- the railway stretch between Boston and Washington D.C. Under the plan, the aging, crowded infrastructure of the region's existing rail system would be replaced by a network on par with the most advanced systems in the world. According to Amtrak, the project -- which would be completed by 2040 -- would ensure the economic viability of the region for decades to come, cementing its status as one of the most important business districts in the United States..."

lunes, 6 de agosto de 2012

Ahorro e Innovación

1. Uno ahorra y no gasta en principio, por ejemplo, para gastar más adelante en grande.

2. O uno ahorra para no gastar lo ahorrado, y tener r e n t i c a s.

3. O uno ahorra, y luego arriesga todo lo ahorrado, emprendiendo para cambiar r a d i c a l m e n t e, su futuro y el de otros.

Como se puede observar, el emprendedor innovador, lo arriesga todo, dos veces, el pasado y el futuro :-)