China, the innovation dragon – Simon Johnson and Jonathan Ruane

MIT Sloan Professor Simon Johnson

From Project Syndicate

China has achieved much since 1978, when Deng Xiaoping initiated the transition to a market economy. In terms of headline economic progress, the pace of China’s transformation over the past 40 years is unprecedented. The country’s GDP grew by nearly 10% per year on average, while reshaping global trade patterns and becoming the second-largest economy in the world. This success lifted 800 million people out of poverty, and the mortality rate of children under five years old was halved between 2006 and 2015.

The question now is whether China, well positioned to become the world’s innovation leader, will realize that opportunity in 2018 or soon after.

China’s transformation has been underpinned by an unprecedented manufacturing boom. In 2016, China shipped more than $2 trillion worth of goods around the world, 13% of total global exports. It has also pursued economic modernization through massive infrastructure investment, including bridges, airports, roads, energy, and telecoms. In less than a decade, China built the world’s largest bullet train system, surpassing 22,000 kilometers (13,670 miles) in July 2017. Annual consumption is expected to rise by nearly $2 trillion by 2021, equivalent to adding another consumer market the size of Germany to the global economy.

Earlier this month, Apple CEO Tim Cook declared that, “China stopped being a low-labor-cost country many years ago, and that is not the reason to come to China.” The country’s manufacturing strengths now lie in its advanced production know-how and strong supply-chain networks. Understandably, China’s leadership wants to increase productivity and continue to move further up the value chain.

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Paul Osterman: 'Moneyball' lessons for the economy

From USA Today

In the book (and now film) Moneyball, general manager Billy Beane transforms the Oakland Athletics by recognizing that overlooked players contribute value to a team. He overturns conventional wisdom, indeed upends baseball’s domination by wealthier teams,by using data to measure performance. What he learns can also apply to the economic challenges we face today.

When people think and write about what leads to economic success, they too often focus only on the most visible, highly paid players. In the case of the economy, it is the CEOs. The business press is full of praise for celebrity leaders such as Jack Welch and Steve Jobs. But even when the CEO is not movie-star famous, stories about whether a firm will succeed or fail usually focus on the personality and actions of the person at the top.

 

Read the full column in USA Today 

Paul Osterman is a professor at the MIT School of Management and co-author of Good Jobs America: Making Work Better For Everyone

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Obama and jobs — focus on quality, not just numbers

MIT Sloan Prof. Paul Osterman

President Obama’s job plan has triggered lots of talk if not action. With the economy struggling, any conversation about job creation is good news. But from the President on down, we sometimes pay too much attention to the number of jobs being produced and not nearly enough attention to the quality of those jobs.

In Good Jobs America: Making Work Better for Everyone (Russell Sage Foundation), a book co-authored by me and Beth Shulman being released this month, we document how a very large percentage of American adults today work in jobs that pay at levels below what is needed for a decent standard of living.

The main focus of our book is to show how bad jobs can be made into good ones. We show that education is a necessary but not sufficient element in the solution, that the persistence of low wage work cannot be laid at the door of immigration, and that it is possible to improve job quality without negatively impacting economic growth.

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