MIT to pioneer science of innovation — Irving Wladawsky-Berger

MIT Sloan Visiting Lecturer Irving Wladawsky-Berger

MIT Sloan Visiting Lecturer Irving Wladawsky-Berger

From The Wall Street Journal

“Innovation – identified by MIT economist and Nobel laureate Robert Solow as the driver of long-term, sustainable economic growth and prosperity – has been a hallmark of the Massachusetts Institute of Technology since its inception.” Thus starts The MIT Innovation Initiative: Sustaining and Extending a Legacy of Innovation, the preliminary report of a yearlong effort to define the innovation needed to address some of the world’s most challenging problems. Released earlier this month, the report was developed by the MIT Innovation Initiative, launched a year ago by MIT President Rafael Reif.

I found the report quite interesting, both because I’ve been closely involved with innovation activities through a great part of my career, and because since 2005 I’ve been affiliated with MIT. Beyond MIT, the report should be of value to anyone interested in the growing importance of innovation to institutions, economies and societies around the world.

A decade ago I was part of the National Innovation Initiative, a major effort convened by the Council on Competitiveness to develop a U.S. innovation agenda. Its final report Innovate America: Thriving in a World of Challenge and Change, was released in December of 2004. The report did an excellent job in explaining the role innovation plays in U.S. competitiveness. It included more than 60 detailed recommendations in three major areas: talent, investment and infrastructure.

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What does nuclear power cost? Old plants dispel easy answers — John Parsons

ParsonsjpegFrom The Conversation

What is the economic cost of nuclear power? That turns out to be a very difficult question to answer.

The United States and other countries have plentiful experience building and operating nuclear power plants. Currently 438 nuclear reactors with a combined capacity of 379,000 megawatts generate more than 10% of the total electricity used worldwide.

The US has the largest fleet, with 99 reactors generating almost 20% of US electricity. France has the second-largest, with 58 reactors producing 77% of its electricity. The Chinese fleet of 27 reactors generates under 3% of its electricity.

Nevertheless, there is great uncertainty about the cost of building new plants. The existing fleet in the US and most developed countries is very old, dating back to a period of intense growth in the 1960s and 1970s. In the US, the most recent construction permit for an operating reactor was issued in 1978, although completion work on a couple of stalled projects and “uprates” – capital refurbishment that increases capacity – have occurred at a number of units.

New construction fell off in other developed countries, too. The few additions made since 1990 were mostly in Japan, Korea, Eastern Europe, Russia and China.

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VW needs massive marketing campaign to regain consumer trust – and survive — Neal Hartman

MIT Sloan Senior Lecturer Neal Hartman

MIT Sloan Senior Lecturer Neal Hartman

From The Conversation

Over the years, we’ve seen quite a few scandals in the automotive industry. However, the recent one at Volkswagen sets the bar at a whole new level. This isn’t your garden variety crisis involving a mechanical or safety issue.

While many of those (think Toyota and accelerator pedals) have been huge, the VW scandal involves years of deception to the public, and there are currently more questions than answers. It’s not unreasonable to ask if VW can survive this. In the weeks and months ahead, it faces a raft of questions that will greatly influence its fate.

Public trust

The company has recalled 11 million diesel cars worldwide, but what is the actual solution? The company will remove the software that cheated on emissions tests, but can it make the cars perform as promised during actual driving conditions? If not, how will it adjust its marketing message about those cars? As for the environment, what will it do about the revelation that those cars produced as much as 40 times the allowed amount of nitrogen oxide, a pollutant linked to asthma and other respiratory problems?

Other companies will have to address questions related to this crisis too. For example, automotive manufacturers of diesel cars face the prospect of random emissions audits to ensure they don’t have similarly deceptive software installed. Those companies are surely wondering if the public mistrust of VW is contagious and will spread to all diesel cars. If so, then the diesel industry could also experience fallout.

Perhaps the biggest question – and one that must be addressed head-on for the sake of long-term survival – is whether VW will be able to rebuild public trust. After all, the deception at VW apparently went on for six years. That is remarkable!

Everyone is now asking what happened. How could this level of deception have existed for so long, much less at a German company known for its attention to detail, skilled engineering and commitment to the environment?

Read the full post at The Conversation.

Neal Hartman is a Senior Lecturer in Managerial Communication at the MIT Sloan School of Management.

How small businesses can fend off hackers — Lou Shipley

MIT Sloan Lecturer Lou Shipley

MIT Sloan Lecturer Lou Shipley

From The Wall Street Journal

If you wanted to hack a business, which one would you pick: A Fortune 500 company with a large digital-security budget and a team dedicated to protecting its cyberassets? Or a small enterprise that doesn’t employ a single IT security specialist? Of course hackers are equal-opportunity criminals, but you get my point.

Security breaches at big companies such as J.P. Morgan, Sony and Home Depotdominate the headlines, but safety measures are crucial for organizations of all shapes and sizes. According to the 2012 Verizon Data Breach Report, 71% of cyberattacks occur at businesses with fewer than 100 employees. The average cost of a data breach for those small businesses is $36,000.

We can no longer assume that hackers are solitary figures sitting in basements fiddling with their laptops. They may be members of organized-crime groups or employed by nation states, and they have resources that can destabilize entire companies and countries. These hackers constantly look for Internet vulnerabilities. They break through firewalls, infect machines, and use phishing schemes to gain access through emails to people’s passwords and Social Security numbers. They can then leverage weaknesses in applications to cause a database to output its contents.

So what can the owner of a small business do to defend himself? Here are some tips.

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Why the Internet did not kill RadioShack — Andrey Malenko

MIT Sloan Asst. Prof. Andrey Malenko

From Fortune

We’ve seen the downfall of many bricks and mortar stores over the last decade, including Borders, Circuit City, and most recently, RadioShack — to name just a few. As e-commerce continues to rise, it’s seemingly becoming more difficult for traditional stores to stay in business.

It’s true that online shopping has significantly grown over the last 10 years. Even in the last year, we’ve seen a noticeable uptick. According to the U.S. Census, total e-commerce sales for 2014 in the U.S. were estimated at $304.9 billion, which is a 15.4% increase from 2013. However, plenty of bricks and mortar stores are still healthy. Is it fair to blame e-commerce for every store closing and bankruptcy?

As a U.S. bankruptcy judge on Tuesday said he would approve a plan by the electronics retailer to sell 1,740 of its stores to the Standard General hedge fund and exit bankruptcy, it’s worth taking a closer look at why RadioShack failed. E-commerce wasn’t the only culprit. One big mistake involved poor strategic decisions over its financials. Feeling undervalued, the retailer bought back $400 million in stock in 2010 when its net profit was $206 million. It did something similar in 2011 when its net profit had declined to $72 million and it did another buy back for $113 million. In the end, it spent more than $500 million trying to push up the stock price.

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