In 2007, Michigan Governor Jennifer Granholm launched the No Worker Left Behind (NWLB) Initiative, which provides up to $10,000 over two years for any unemployed or underemployed worker seeking education or training that leads to a high-growth job in the state. In its first eighteen months of the program more than 60,000 workers entered some form of skills training, and 72 percent of those completing training have been able to obtain or retain employment, despite the fact that, as of September 2009, there were ten unemployed individuals for every job opening in the state.

Additionally, more than 1,000 firms across the state—primarily in the manufacturing and health care sectors —were able to avert layoffs and revitalize their businesses through job retention training, which helped nearly 17,000 workers get the skills they needed to keep their jobs with these firms. Perhaps most importantly, 77 percent of participants still in training were in long-term training programs (more than one year), meaning that they have the time to develop skills and earn industry-recognized credentials that can lead to good family-supporting jobs, rather than settling for the first low-wage job opportunity that comes along.
Based on these promising outcomes, Governor Granholm recently announced that NWLB will continue as Michigan’s permanent workforce development policy.

From a November 6, 2009 article in the Wall Street Journal:

According to the Census Bureau, nearly all net job creation in the U.S. since 1980 occurred in firms less than five years old. A Kauffman Foundation report released yesterday shows that as recently as 2007, two-thirds of the jobs created were in such firms. Put more starkly, without new businesses, job creation in the American economy would have been negative for many years.

From a 2005 report by The Nielsen Company:

By enabling entrepreneurs to start a business online and immediately reach a market of 157.3 million registered users worldwide, eBay has become the best place to start, grow and operate a small business.

Harvard Business School professor Clayton Christensen is the originator of the canonical Model of Disruptive Innovation, and a co-author of the 2008 book Disrupting Class: How Disruptive Innovation Will Change the Way the World Learns. From Disrupting Class:

Students need customized pathways and paces to learn.

…The second [phase of the disruption of standardized education] will be the emergence of a user network, whose analogues in other industries would be eBay…

From The Flat World and Education: How America’s Commitment to Equity Will Determine Our Future, a forthcoming 2010 book by Stanford professor and Obama education adviser Linda Darling-Hammond:

21st-century schools should integrate new technologies for learning and create personalized structures for supporting students.

Stanford economist Paul Romer is the originator of New Growth Theory, which updates growth economics for the information age. From Romer’s entry on Economic Growth in the 2007 edition of The Concise Encyclopedia of Economics:

“The country that takes the lead in the twenty-first century will be the one that implements an innovation that more effectively supports the production of new ideas in the private sector.”

“Perhaps the most important ideas of all are…ideas about how to support the production and transmission of other ideas…North Americans invented the modern research university…As national markets for talent and education merge into unified global markets, opportunities for…innovation will surely emerge.”

From The Mystery of Economic Growth, a 2004 book by Harvard economist Elhanan Helpman:

Interest in growth theory abruptly revived…in the 1980s. The two key papers were by Romer (1986) and Lucas (1988).

…Romer (1990) also initiated the second wave of research on the “new” growth theory.

…A more detailed study of the U.S. economy is provided by Jones (2002). He found that between 1950 and 1993 improvements in educational attainments, which amounted to an increase of four years of schooling on average, explain about 30 percent of growth of output per hour. The remaining 70 percent is attributable to the rise in the stock of ideas that was produced in the United States, France, West Germany, the United Kingdom, and Japan.

In ‘1.0′ CE markets, sellers of worker (re-)training are likely to earn most of the profits.

From a May 20, 2004 article in The Economist:

“There has been a huge swing to custom programmes,” says Fiona van Haeringen of IESE, who attended a recent annual conference of business-education providers in America…Looking to this year, most saw growth coming mainly from customised education.

From Seeing What’s Next: Using the Theories of Innovation to Predict Industry Change, a 2004 book co-authored by Christensen:

Modular, customizable corporate training has an advantage that interdependent M.B.A. programs can’t match — a product specifically designed for each employee’s needs.

…In contrast to the leading schools’ integrated structure, the on-the-job management education industry is a disintegrated one. Hundreds of specialized firms develop materials, others design courses, and others produce and teach them.

No other region of the world — or, more precisely, no other integrated set of regions — comes close to matching the quantity and quality of America’s post-secondary educators.

From The World Is Flat, a 2005 best-seller by Thomas Friedman:

America has 4,000 colleges and universities…the rest of the world have 7,768.

Sean Gallagher, a senior analyst at Eduventures:

U.S. education is perceived worldwide as the gold standard in higher education.

The advent of popular CE markets is likely to create opportunities that said educators will want to pursue, as many of America’s other subject-matter experts almost certainly will.

From the December 11, 2006 issue of Business Week:

Megastudy has built a booming business by tapping into the anxieties of parents such as Kim. The [Korean] cram school company burst onto the scene in 2000, offering videotaped lectures online. Today its Web site lists 2,000 courses.

…Megastudy’s meteoric rise owes much to its popular lecturers. Son has signed up top talent by offering a 23% cut of online sales of videos — a deal that earned one English teacher $2 million last year.

As demand for CE increases across more and more segments of the education market, it is likely that more and more CE talent will be based in America.

From Clusters of Innovations: Regional Foundations of U.S. Competitiveness, a 2001 report published by the Council on Competitiveness:

Regional economies are the building blocks of U.S. competitiveness. The nation’s ability to produce high-value products and services depends on the creation and strengthening of regional clusters of industries that become hubs of innovation…These clusters enhance productivity and spur innovation by bringing together technology, information, specialized talent, competing companies, academic institutions, and other organizations. Close proximity, and the accompanying tight linkages, yield better market insights, more refined research agendas, larger pools of specialized talent, and faster deployment of new knowledge.

From an article in the October 7, 2006 edition of The Economist:

You might have thought that the advent of the Internet would have eroded the connection between place and talent. In fact, the opposite is happening. Bright people gather in university cities such as Boston and San Francisco, or in technology hubs such as Austin, Texas, or Redmond, Washington, or in rural idylls such as Camden, Maine, and Jackson Hole, Wyoming. They cluster together because they feed off each other’s intellect. Christopher Berry, of the University of Chicago, and Edward Glaeser, of Harvard, have studied the distribution of human capital across American cities. They found that in 1970 about 11% of people over 25 had a college degree, and they were fairly evenly distributed throughout the country. Since then the proportion of Americans with college degrees has more than doubled, but the distribution has become much more uneven.

So, again, online markets for CE that become popular in America can be expected to catalyze the creation of many jobs for U.S. residents.

Better still, providers of these markets can be expected to end the reign of America’s kleptobankers.

Understanding why starts with knowing about the so-called “problem of collective action.”

In their 2006 textbook, International Economics (7th ed.), Paul Krugman and Maurice Obstfeld define the problem:

While it is in the interests of the group as a whole to press for favorable policies, it is not in any individual’s interest to do so.

Krugman and Obstfeld continue:

In a now famous book [The Logic of Collective Action], economist Mancur Olson pointed out that…the problem of collective action can best be overcome when a group is small (so that each individual reaps a significant share of the benefits of favorable policies) and/or well-organized.

The group must have the means to buy changes of policy.

Krugman and Obstfeld, summarizing canonical research findings:

Politicians are, indeed, for sale.

Successful entrepreneurs in a given industry are the small group who have the motive and means to buy policy changes that disadvantage the industry’s old guard.

From The Innovator’s Prescription, a 2009 book co-authored by Clayton Christensen:

Regulations ultimately change in reaction to [disruptive] innovators’ success in those markets.

From elsewhere in the book:

Those disruptors that successfully dismantled the regulations that stood in their way succeeded by circumventing the regulation — by innovating in a disruptive market that was beyond the regulators’ reach or was peripheral to their vision.

For a banking entrepreneur, a peripheral market that is ideal to disrupt is one wherein:

• the act of consuming makes customers (more) creditworthy
• a lot of money can be made directly (i.e., independent of banking)

Creditworthiness correlates positively with educational attainment. Moreover, education is big business, and CE is disruptive to standardized education.

For a banking entrepreneur, the ideal niche to occupy in the CE industry is provider of a popular online market.

Providers of these markets can expect to increase profits dramatically by:

1. introducing a loan program for CE consumers
2. making the popularity of the company’s market and loan program mutually reinforcing (e.g., a borrower who performs well as a student is rewarded with a lower interest rate)
3. becoming a bank, as a means of increasing the amount of money the company can lend
4. introducing other loan programs and financial services that complement the market (e.g., loans to small businesses, so more jobs are available to CE consumers)

The business model of these banks, then, will center on facilitating genuine wealth creation.

So, again, providers of CE markets that become popular in the U.S. can be expected to buy changes of regulation that outlaw kleptobanking in America.

How, then, to expedite the advent of CE markets that are popular in the U.S.?

One obvious possibility: “jobs stimulus” that subsidizes American consumers and producers of CE, and American providers of CE markets.

A case for such stimulus that expands on this article is detailed at OpportuniTV.com.

Excerpts:

“From NurtureShock: New Thinking About Children, a 2009 book that appeared on the New York Times bestseller list for two months:

“When a child gets to choose, they presumably choose activities they’re motivated to do [says Dr. Silvia Bunge, a neuroscientist at the University of California at Berkeley]. Motivation is crucial. Motivation is experienced in the brain as the release of dopamine. It’s not released like other neurotransmitters, into the synapses, but rather it’s sort of spritzed onto large areas of the brain, which enhances the signaling of neurons.” The motivated brain, literally, operates better, signals faster.”

“From The Sandbox Investment — The Preschool Movement and Kids-First Politics, a 2007 book by David Kirp, a professor of public policy at the University of California at Berkeley:

The Seventeenth Congressional District [in Texas]…is among the most lopsidedly Republican in the nation…But in the race for a seat in the U.S. House of Representatives that same year [2004], a Democrat named Chet Edwards bucked long odds and won, running 37 percent ahead of the national ticket.

…Edwards’s opponent [was] Texas state legislator Arlene Wohlgemuth…The conservative establishment went all out to get her elected.

…What undid her were the cuts she’d inflicted on the budget of the Children’s Health Insurance Program, generally known as CHIP — 150,000 youngsters removed from the rolls, half a million denied any dental and eye care, all in the name of lean government. “Children were never my primary concern,” she said. It was a remark she grew to regret.

…According to the exit polls, 11 percent of the voters — enough to swing the election — said that Wohlgemuth’s record on children had made up their minds. A quarter of those who supported Edwards said they were thinking foremost of children.”

In particular, this stimulus can expedite the introduction of particular online markets. These markets will provide new and improved ways to showcase and earn money from expertise. Dynamics in these markets can be expected to output prices and other information that will be key inputs to the process of popularizing a CE market. For details, see the Jobs Quickly page of OpportuniTV.com.

How, then, to alert policymakers to the above information?

Consider joining the below-introduced Facebook group, and inviting friends to join. To confirm your intuition regarding how these steps can help, visit the 2 Steps page of OpportuniTV.com.

The Facebook group:

Customized-education $timulus = jobs, kids’ physical brains improved, etc.

Group Description:

We want “jobs stimulus” in the U.S. that subsidizes American consumers and producers of customized education, and American operators of associated online markets.

One reason:

A child’s brain “literally operates better, signals faster” when the child’s education is customized (source: Nutureshock, a 2009 book that appeared on the best-sellers list of the New York Times for two months).

About guest author Frank Ruscica:

Set out to become a comedy writer, recognized the need to develop a comic persona, settled on an approach for doing so. A byproduct of taking said approach: a business plan for establishing a popular online market for CE. The plan has been praised by analysts at Microsoft, Amazon.com and top venture capital firm Draper Fisher Jurvetson? The plan is adapted and expanded on at OpportuniTV.com.

[British PM Gordon] Brown also said he wanted to build up Britain’s universities. “There are 1,000 universities being built in India and we want to be part of this educational export. I think that education will be perhaps our biggest export in 20 years’ time,” he told the Financial Times.

My submission (with supporting info): Advocate for ‘jobs stimulus’ that subsidizes consumers and producers of customized education, and operators of associated online markets.

Predictable?

You can comment and/or vote at the site.

To learn about Zero Hedge, see this feature story from the September 27, 2009 issue of New York magazine.

UPDATE (2/15/10): Part two is online at ZH.

UPDATE (2/26/10): ZH is one of “Ten Wall Street Blogs You Need to Bookmark Now,” according to a February 25, 2010 article on the website of the Wall Street Journal.

A fantastic post about disrupting education.

Rolling Stone reporter Matt Taibbi “calls out” a comment I left on his blog. The comment excerpts from this blog entry of mine.

From After the Frat, a blog:

A brilliant idea by Frank Ruscica about how to finally get out of this economic quagmire.

A fusion of the internet and higher education, arguably America’s two greatest assets, to create affordable, customized, and high quality education for everybody. This would accelerate the growth of a young and extremely profitable industry while teaching the skills required to aggressively compete in the data driven global economy.

WOW.

Check it out, http://www.opportunitv.com/

This was not a public service announcement. I am not getting paid for this. I actually think its a great idea.

Whew!

Earlier reviews can be seen in footnote [1] of the Introduction page.

A recent OECD report found that for every year the average schooling level of the population is raised, there is a corresponding increase of 3.7% in long-term economic growth.

Thus the new industrial organizational model. It’s built around small pieces, loosely joined. Companies are small, virtual, and informal. Most participants are not employees. They form and re-form on the fly, driven by ability and need rather than affiliation and obligation. It doesn’t matter who the best people work for; if the project is interesting enough, the best people will find it.

…Although it’s shrinking, America’s manufacturing economy is still the world’s largest. But China’s growing production sector is predicted to take the number one spot in 2015, according to IHS Global Insight, an economic-forecasting firm. Not all US manufacturing is shrinking, however — just the large part. A Pease Group survey of small manufacturers (less than $25 million in annual sales) shows that most expect to grow this year, many by double digits. Indeed, analysts expect almost all new manufacturing jobs in the US will come from small companies.

More from the article:

For a lens into the new world of open-access factories in China, check out Alibaba .com, the largest aggregator of the country’s manufacturers, products, and capabilities. Just search on the site (in English), find some companies producing more or less what you’re looking to make, and then use instant messaging to ask them if they can manufacture what you want. Alibaba’s IM can translate between Chinese and English in real time, so each person can communicate using their native language. Typically, responses come in minutes: We can’t make that; we can make that and here’s how to order it; we already make something quite like that and here’s what it costs.

Alibaba’s chair, Jack Ma, calls this “C to B” — consumer to business. It’s a new avenue of trade and one ideally suited for the micro-entrepreneur of the DIY movement. “If we can encourage companies to do more small, cross-border transactions, the profits can be higher, because they are unique, non-commodity goods,” Ma says. Since its founding in 1999, Alibaba has become a $12 billion company with 45 million registered users worldwide. Its $1.7 billion initial public offering on the Hong Kong Stock Exchange in 2007 was the biggest tech debut since Google. Over the past three years, Ma says, more than 1.1 million jobs have been created in China by companies doing ecommerce across Alibaba’s platforms.

This trend is playing out in many countries, but it’s happening fastest in China. One reason is the same cultural dynamism that led to the rise of shanzhai industries. The term shanzhai, which derives from the Chinese word for bandit, usually refers to the thriving business of making knockoffs of electronic products, or as Shanzai.com more generously puts it, “a vendor, who operates a business without observing the traditional rules or practices often resulting in innovative and unusual products or business models.” But those same vendors are increasingly driving the manufacturing side of the maker revolution by being fast and flexible enough to work with micro-entrepreneurs. The rise of shanzhai business practices “suggests a new approach to economic recovery as well, one based on small companies well networked with each other,” observes Tom Igoe, a core developer of the open source Arduino computing platform. “What happens when that approach hits the manufacturing world? We’re about to find out.”

From earlier in the article:

Here’s the history of two decades in one sentence: If the past 10 years have been about discovering post-institutional social models on the Web, then the next 10 years will be about applying them to the real world.

This story is about the next 10 years.

Transformative change happens when industries democratize, when they’re ripped from the sole domain of companies, governments, and other institutions and handed over to regular folks. The Internet democratized publishing, broadcasting, and communications, and the consequence was a massive increase in the range of both participation and participants in everything digital — the long tail of bits.

Now the same is happening to manufacturing — the long tail of things.

The tools of factory production, from electronics assembly to 3-D printing, are now available to individuals, in batches as small as a single unit. Anybody with an idea and a little expertise can set assembly lines in China into motion with nothing more than some keystrokes on their laptop. A few days later, a prototype will be at their door, and once it all checks out, they can push a few more buttons and be in full production, making hundreds, thousands, or more. They can become a virtual micro-factory, able to design and sell goods without any infrastructure or even inventory; products can be assembled and drop-shipped by contractors who serve hundreds of such customers simultaneously.

Today, micro-factories make everything from cars to bike components to bespoke furniture in any design you can imagine. The collective potential of a million garage tinkerers is about to be unleashed on the global markets, as ideas go straight into production, no financing or tooling required. “Three guys with laptops” used to describe a Web startup. Now it describes a hardware company, too.

“Hardware is becoming much more like software,” as MIT professor Eric von Hippel puts it. That’s not just because there’s so much software in hardware these days, with products becoming little more than intellectual property wrapped in commodity materials, whether it’s the code that drives the off-the-shelf chips in gadgets or the 3-D design files that drive manufacturing. It’s also because of the availability of common platforms, easy-to-use tools, Web-based collaboration, and Internet distribution.

We’ve seen this picture before: It’s what happens just before monolithic industries fragment in the face of countless small entrants, from the music industry to newspapers. Lower the barriers to entry and the crowd pours in.

The academic way to put this is that global supply chains have become scale-free, able to serve the small as well as the large, the garage inventor and Sony. This change is driven by two forces. First, the explosion in cheap and powerful prototyping tools, which have become easier to use by non-engineers. And second, the economic crisis has triggered an extraordinary shift in the business practices of (mostly) Chinese factories, which have become increasingly flexible, Web-centric, and open to custom work (where the volumes are lower but the margins higher).

The result has allowed online innovation to extend to the real world. As Cory Doctorow puts it in his new book, Makers, “The days of companies with names like ‘General Electric’ and ‘General Mills’ and ‘General Motors’ are over. The money on the table is like krill: a billion little entrepreneurial opportunities that can be discovered and exploited by smart, creative people.”

A garage renaissance is spilling over into such phenomena as the booming Maker Faires and local “hackerspaces.” Peer production, open source, crowdsourcing, user-generated content — all these digital trends have begun to play out in the world of atoms, too. The Web was just the proof of concept. Now the revolution hits the real world.

VERY interesting…

From a January 28, 2010 entry on the Economix blog of the NY Times:

The big ocean of blue represents the portion of the unemployed who have lost their jobs, with the lighter blue section showing those whose jobs are gone permanently.

There are multiple ways to explain why permanent job-losers represent a higher share of the unemployed this time around. Maybe, as others have suggested, many of the jobs gained in the boom years were built on phantom wealth. Or maybe the culprit is a corollary of Moore’s Law, the idea of exponential advances in technology over time. That might suggest that innovation and automation displace more and more workers by the time each recession rolls around.

Whatever the underlying cause, the result is disconcerting: compared with previous recessions, many more of the employment gains in this recovery will have to come from new jobs.

That is much easier said than done.

Workers whose entire occupations — not just the previous payroll positions they held — are disappearing (think: auto workers) will need to start over and find a new career path. But the new skills they will need take a long time to acquire.

What’s more, in addition to obtaining new degrees or training, some workers may need to move to new places in order to start a different career. But sharp declines in housing prices, plus high loan-to-value ratios on many mortgages before the downturn, will make that transition harder. Homeowners who are “underwater” — that is, who owe more in mortgage payments than their house is actually worth — may not be able to sell their house for enough money to enable them to buy a home in a new area.

There is a page on the program’s web site where you can leave a comment about my proposal:

http://dmlcompetition.net/pligg/story.php?title=571

Good fun…

Businesses with fewer than 20 employees account for 90 percent of all U.S. firms and are responsible for more than 97 percent of all new jobs, according to a new report by the Small Business Administration.