Warren is correct that public companies in the U.S. calculate income under (at least) two different sets of rules.
First, there are Generally Accepted Accounting Principles (GAAP) written by the Financial Accounting Standards Board (FASB). These rules are meant to reflect the economic performance of the business so that shareholders, among others, can evaluate the firm and its management.
Second, corporations calculate profits according to the Internal Revenue Code, created by Congress, to determine taxable income. The Internal Revenue Code is meant to raise revenue for the government, and in some cases, to change the ways companies behave — encouraging investment and research and development (R&D), for example.
MIT Sloan Distinguished Professor of Management JoAnne Yates
From The Washington Post
Over the past few years, world politics have been governed by a backlash against globalization. From the Brexit mess in Britain to restrictive immigration policies and tariffs in the United States and elsewhere, global economic integration is under assault.
But such integration offers many benefits: a greater variety of less expensive goods, greater opportunities for travel and cultural exchange, a more cosmopolitan world. In this climate, nongovernmental entities may be crucial to preserving them.
Thankfully, engineers have spent the past century building just such international bodies, because they believed that economic integration must remain above politics. These organizations have long set voluntary standards to ensure integration even when the political winds blow against them. This conception of global business standards will be crucial in the years to come as we struggle to preserve the benefits of cohesive systems for international trade, even as politicians battle over how interconnected they want to be.
It is ironic that the British should find themselves in the Brexit mess, because it was British engineers who created the first of the national standards bodies. Their project, a forerunner of today’s British Standards Institution (BSI), was a product of the expansive British Empire. It was founded in 1901 to ensure that industrial products and transportation networks within the United Kingdom and across its empire would be compatible with one another. Although some government representatives were included in its processes, the engineers leading the effort believed such standards should be voluntary, not government-mandated.
Last fall, S&P cut the rating on South Africa’s sovereign debt from investment grade to junk status, and Moody’s began a formal review to consider a parallel downgrade. Late on Friday, March 23, however, Moody’s reaffirmed South Africa’s investment-grade status and changed its outlook to stable.
This has significant implications for emerging-markets investors. Moody’s decision constitutes a strong vote of confidence in the rapid-fire actions by the country’s new president, Cyril Ramaphosa. As Moody’s explained: “The confirmation of South Africa’s rating represents Moody’s view that the previous weakening of South African institutions will gradually reverse under a more transparent and predictable policy framework.”
We agree with Moody’s decision to support the governmental initiatives taken by Ramaphosa — an unique politician with historic trade union roots and extensive experience as a company executive. He is quickly building the foundation for a better investment environment in South Africa, although he imminently faces the extremely difficult challenge of land reform.
Here is a brief chronology: On December 17, 2017, Rampaphosa won a closely contested election to head the African National Congress (ANC), the dominant political party in South Africa. Then, on February 15, Rampaphosa was elected the president of South Africa, replacing Jacob Zuma. On March 16, national prosecutors filed a criminal suit again Zuma, including charges of corruption, money laundering and racketeering. Read More »
MIT Sloan Visiting Scholar and Fellow, Initiative on the Digital Economy, Geoffrey Parker
From MIT SMR Custom Studio
Like established companies in many industries, incumbent players in the staffing and recruitment sector are encountering a competitive landscape transformed by platform businesses.
New platforms that have sprung up to connect companies with workers include online freelance marketplaces such as Fiverr, TaskRabbit, and Wonolo. While Facebook and Google are seeking a cut of recruitment advertising revenue, Microsoft-owned LinkedIn is challenging staffing firms by offering job listings and recruiter services fueled by well-maintained data. With its emphasis on professional networking, LinkedIn gives users motivation to maintain current information about their credentials, providing a rich view of where they fit into the economy and the jobs they’re qualified for.
To develop their capabilities in a platform economy, traditional staffing enterprises need to make better use of their own valuable data assets. Based on what they know and capture about both their customers’ workforce needs and job candidates’ qualifications, what new revenue streams can they create? For example, they might use in-depth knowledge of an employer’s resource needs to create road maps for workforce skills development that will generate value for that organization. When training and education providers participate in the ecosystem, staffing companies would generate revenue via recommendations that are implemented.
Using data effectively is key to efficiently matching supply and demand, the core of any platform strategy. With more and higher quality data, a company does a better job of facilitating that match. However, many traditional enterprises are not leveraging data from across the whole business, and their analytics capabilities are designed to optimize current, not future, business models.
MIT Sloan Visiting Lecturer Irving Wladawsky-Berger
From Wall Street Journal
Between the never-ending stream of news linking bad actors to social networks and studies documenting society’s growing smartphone addiction, it seems almost wrong today to think that technology can — ahem — help make the world a better place.
That’s why I am thankful for the annual Inclusive Innovative Challenge, hosted by MIT’s Initiative on the Digital Economy. Launched in 2016, the IIC seeks out and awards entrepreneurs that are leveraging technology advances to reinvent the future of work. That’s right. There remains, even in this news cycle, firms committed to tapping technology’s ability to connect–and not divide–people and build–and not threaten–jobs and other economic activities.
Or, as the challenge organizers put it:
“The IIC believes that Inclusive Innovation is an economic and moral imperative, and that the key question of our era isn’t what technology is going to do to our economy and society, but what we will do with technology. By identifying and promoting the powerful global community of future of work visionaries, the IIC proactively accelerates the technology-driven solutions enabling greater economic opportunity for working people around the world facing the challenge of rapidly advancing digital progress.”