Productivity Innovation and Friction in the Economy

This productivity dispersion—in combination with declining growth rates—points toward explanations of the slowdown that involve a breakdown in the diffusion of productivity among firms.

By now, the slowdown in productivity growth in the United States and other high-income countries is a well-known and much lamented trend. A slightly less appreciated aspect of productivity growth is that the slowdown has been accompanied by an increase in dispersion, or inequality, of labor productivity across firms. This trend is not restricted to the U.S. economy. The Organisation for Economic Cooperation and Development has identified it as a problem for most high-income economies. This productivity dispersion—in combination with declining growth rates—points toward explanations of the slowdown that involve a breakdown in the diffusion of productivity among firms.

In a new paper for a National Bureau of Economic Research conference, four economists—Lucia Foster and Cheryl Grim of the U.S. Census Bureau and John Haltiwanger and Zoltan Wolf of the University of Maryland—look at what happens to productivity after new firms enter a market due to a new innovation. 

Image: Foster Grim Haltiwanger Wolf 2017

Source: World Economics Forum

China Telecom begins construction on massive Cloud datacenter

Fixed and mobile operator China Telecom broke ground today on its new cloud computing datacentre in China’s Guizhou Province in the southwest. When completed, the new facility will be one of the largest in the world.
In July this year the telco signed a framework agreement with the local government in a bid to build out the new cloud computing facility. The China Telecom Cloud Computing Guizhou Information Park will cover an area of approximately 33.3 hectares (330,000 m2) and is located near the provincial capital of Guiyang.

The project is expected to cost a total of 7bn yuan ($1.14bn USD). An initial investment of 4bn yuan will cover the first phase of the project, which is expected to include the build out of eight datacentres, one power generation centre, and two support centres.

Business Cloud News

Vodafone India-Idea Cellular Merger To Create India’s Largest Telecom Operator

Idea Cellular Ltd. agreed to merge Vodafone Plc’s Indian unit with itself to create the country’s largest mobile services operator in a competitive market disrupted by Mukesh Ambani-led Reliance Jio Infocomm Ltd.’s free services.
Vodafone will hold 45.1 percent of the merged entity, while Idea Cellular’s promoter, Kumar Mangalam Birla-led Aditya Birla Group, will hold 26 percent, according to a filing to stock exchanges.

Both Vodafone and Idea Cellular brands will continue, Vodafone Group Chief Executive Officer Vittorio Colao said in a press conference.

The combined entity will have a revenue market share of 41 percent, ahead of Bharti Airtel Ltd. (33 percent), and an annual revenue of over Rs 81,500 crore, according to data compiled by BloombergQuint.

Bloomber link

Will Democracy Survive Big Data and Artificial Intelligence?

We are in the middle of a technological upheaval that will transform the way society is organized. We must make the right decisions now.


Great article: Will Democracy Survive Big Data and Artificial Intelligence?

By Dirk Helbing, Bruno S. Frey, Gerd Gigerenzer, Ernst Hafen, Michael Hagner, Yvonne Hofstetter, Jeroen van den Hoven, Roberto V. Zicari, Andrej Zwitter on February 25, 2017