Monday, December 27, 2010

The Individual Producer

Welcome back to Sensical Gibberish. I'm back with more gibberish and hope to post once a month going forward. To follow-up on my last post on the once quaint tradition of doling out gold Rolex's upon retirement, I'd like to develop the thought a little deeper: The Individual Producer.

Advances in technology along with the myriad of issues facing today's labor force are allowing (forcing) individuals to become productive. Quick example -- at one point in time if a journalist wanted to get their voice heard it entailed looking for a job at major newspaper and using that outlet to disseminate their work. Now, that same journalist can start blogging in a matter of minutes, distribute using social mediums, and generate income using advertising and subscriptions.

The theme: forget the days when individuals had to rely on large entities with deep pockets and technological know-how as portals to reach and acquire customers. The return to production is something I have been thinking about for a long time. Today someone passed this article on to me: How E-Books Are Changing the Economics of Writing. It demonstrates how technology is providing individuals amazing tools to harness their abilities.

The article quote from J. A. Konrath caught my attention:
"I have an acquaintance who is a New York Times bestseller," he notes. "She got a great advance. But I'm on track to earn $200,000 this year on e-books alone, and the e-book market is still in its infancy. If she'd kept the rights and self-published her e-book, I bet she would have earned more money in three years on her own than she will with her publisher."
There you have it. Technology is making it attractive for individuals to move away from big firm dependence and give it a shot on their own. As the article points out, there are some hurdles that face all individual producers (in this case self-published e-book authors) such as marketing and distribution to name a couple. Of course, when aren't there problems with a new business model?

I have faith in two things. One, entrepreneurs will continue to come along and enhance the individual producer ecosystem by providing individuals the tools to market, distribute, and solve any other future hurdles (think as a strong ecosystem for small artists and producers). Two, technology will continue to make it easier for individual producers to create and distribute whatever they are good at. I'm talking broad spectrum; from investing advice to farming -- harnessing any act using technology. It can only get more interesting and I'm excited to see whats next.

Saturday, May 8, 2010

Gold Rolex?

The monthly US employment report was released yesterday (Friday May 7th) and two internals continue to catch my attention. The first, U-6 measure of unemployment. Some regard U-6 as the true rate of unemployment as it accounts for the unemployed looking for work, those working part-time that would accept at full-time position, and finally those unemployed whom are discouraged and no longer looking for work. This broad unemployment measure is stubbornly high at 17.1%, resisting to come down even though we have now seen four months of positive jobs gains. The second internal, duration of unemployment continues to suggest the long-term unemployed are not finding new jobs. The average duration in weeks rose from 31.2 in March 2010 to 33.0 in April 2010. Seasonally adjusted, those unemployed for 27 weeks or more is 46% of the total 15.3 million jobless Americans.

These two statistics signal that the US unemployment situation is structural by nature. By defining unemployment as a structural issue, this means who lost jobs in the financial, insurance and real estate industries are now without the proper skills or opportunities to find new work. This will keep the unemployment rate stubbornly high.

What I would like to focus on is that new trends will be born out of such a structural problem, not the problem itself. Will work be redefined in such a way that Americans will be forced to occupy multiple jobs? Maybe these jobs will target productivity as opposed to the paper shifting industries which have become so prevalent over the last 30 years. At the same time, inadvertently such a shift would, in my mind, target the psychological multitasking nature of our society.

At one point in America's corporate history, employees with a certain duration of service to one company received a gold Rolex upon retirement, now they may receive a more productive fulfilling lifestyle.

Thursday, March 25, 2010

Where does all the dough go?

As the US bond market struggles to find a bid, it's time to ask where does all that money go once it has fled from the risk free asset known as US Treasuries. Conventional thought would say yield chasers find their way into various other bonds (i.e safer sovereign debt or US corporates) and/or dividend yielding equities.

But, what if unconventional is the way to go? What if that income producing capital finds its way into assets that do not produce any income, assets necessary for daily life such as oil and foods? Oh, and lets not forget gold and silver.

Tuesday, February 2, 2010

TV's and Automobiles

Post World War II a seismic shift within the American economy was taking hold. Two innovations forced this shift from what we knew as the industrial economy to a new vibrant economy based on the consumer. Televisions and automobiles made it possible for consumers (a new term at the time for the American population) to live a life of prosperity coupled with convenience.

The growth of the personal television took strength away from the manufacturers and placed the power in the hands of the Madison Avenue's of the world focusing on advertising and marketing products to consumers.

The implications of the automobile led to shifts in geography as suburbs in new parts the country became widely populated as convenient, cheap, and viable places to live. The quality of life for American's was booming unlike ever before. The television created a desire to buy goods and the automobile led to a means of transportation to buy those goods, thus the rise of malls and shopping centers.

Now it seems like the foundations of these two great innovations have peaked along with the economy they built. Cars are not as cheap as they once were and neither are the products we see on television. What future innovations and themes will spark the next growth phase in the American economy, as cars and TVs once achieved in the post WWII period?