Headline from CNN Money: “New Yahoo CEO Mayer is Pregnant”
- 1992: The title of a male CEO’s speech that was reprinted in the Christian Science Monitor: “A Pregnant CEO: In Whose Lifetime?” (Implying the unlikelihood.)
- 2012: From Marissa Mayer, new Yahoo CEO: Demonstrating no concern that she was pregnant, the Yahoo Board, ”…showed their evolved thinking.”
- From The Atlantic: “What will be really, really fantastic is when someone like Mayer can be a pregnant CEO–rather than, you know, A Pregnant CEO.
- From writer, Rebecca Traister: ”It is great that Marissa Mayer is pregnant, but the intensity of reaction is slightly depressing. Kind of as if they’d hired a yeti.”
In 1980, there were no female CEOs in the Fortune 100 list.
As of July 17, 2012, there were 20 female CEOs in the Fortune 500 list. Here are the top 10, the firm, the Fortune rank:
- Meg Whitman (HP #10);
- Virginia Rometty (IBM #19);
- Patricia A Woertz (Archer Daniels Midland Company #28);
- Indra Nooyi (Pepsico, Inc. #41)
- Angela F. Braly (WellPoint, Inc. #45)
- Irene B. Rosenfeld (Kraft Foods Inc. #50)
- Ellen J. Kullman (DuPont #72)
- Carol M. Meyrowitz (The TJX Companies, Inc. #125)
- Ursula M. Burns (Xerox Corporation #127)
- Sheri S. McCoy (Avon Products Inc. #234)
Where does all of this take us?
To optimizing all human capital…
“In general, the best clue to a nation’s growth and development potential is the status and role of women.” (from Harvard’s David Landes, The Wealth and Poverty of Nations, p. 413).
Catalyst is a good source for female CEO info, this NBER paper discusses the changing face of all CEOs, and here is the CS Monitor speech from 1992 on the dearth of female executives.
For more on Marissa Mayer, to get to know Yahoo’s new CEO, this list of 11 facts about her was fun to read and here is an Atlantic article and one from Salon.
We spray “OFF!” for insect protection, divers use shark repellent, and now, Google has purchased Motorola to resist patent trolls.
Described in an NPR This American Life podcast, patent trolls purchase multiple patents with the intent of suing any firm that ventures close to its tech rights. Because the way to fight patent trolls is to amass your own trove, the NY Times explains that Google sought Motorola for its (more than) 17,000 patents. Discussing the acquisition, a Wired blogger, uses the wonderful title: “Google + Motorola=Android Patent Troll Repellent.”
In this previous post, you can see Apple’s approach to patents.
The Economic Lesson
According to retired Harvard scholar David Landes, individual ambition, entrepreneurship, intelligence, luck, and an ongoing stream of new tools and technology fuel economic growth through technological progress. Our patent system usually nurtures the development of new technology. It is dysfunctional, though, when used for patent trolling.
I recommend Dr. Landes’s book, The Wealth and Poverty of Nations: Why Are Some Nations Rich and Others So Poor?
An Economic Question: Citing the 4 GDP components that follow, explain how new technology fuels economic growth.
- business investment
- consumer spending
- government spending
- net exports
What if you had just 1 minute to sell your business idea? According to Marketplace.org, your “elevator pitch” would need, 1) to state the problem you are solving; 2) to explain why your solution will have marketplace success; 3) to present a “catchy” thought at the end.
Or, more specifically, this winning video for Clear Ear says, 1) earwax is a problem for 35 million Americans; 2) our earwax remedy is faster, safer, easier than the traditional spray water in the ear method; 3) so, we will help the 350 million people worldwide with earwax problems. The Clear Ear team from MIT and Stanford won $2,000.
On May 11, at the MIT finale, Sanergy, a sanitation start-up, won the $100,000 grand prize. You can see their business idea here and other MIT finalists here.
The Economic Lesson
Economist Joseph Schumpeter (1883-1950) tells us that innovation leads to a “paradox of progress” that he called “creative destruction.” In The Wealth and Poverty of Nations, Harvard’s David Landes discusses the impact of 5 early inventions (pp. 45-59): the water wheel; eyeglasses; the mechanical clock; printing; gunpowder.
An Economic Question: To raise the money you would have needed to manufacture one of the innovations cited by Dr. Landes, create a 1 minute elevator pitch.
Giving a grade of “One Pinocchio,” the Washington Post assessed the accuracy of President Obama’s February 7, 2011 speech to the U.S. Chamber of Commerce.
Most interesting, though, were the topics on which he focused. Yes, President Obama said the U.S. has the most labor productivity when, according to the Bureau of Labor Statistics (BLS), Norway does. And, for education, he said we had the best universities although actually U.S. News ranks the U.K.’s University of Cambridge first. And finally, he said we had the freest markets but according to the Index of Economic Freedom we are #9.
Still though, statistics are complicated. I am sure that we could find other numbers to support his conclusions. The key is that he looked at the right stuff.
The Economic Lesson
Focusing on productivity, education, and the market, President Obama took us to the basics of economic growth. Of course, in order to grow, we need to produce more per worker hour. And how can we grow? We need to develop our human capital. Only then can we innovate. And finally, through the market, individuals have the freedom to pursue their self-interest and start businesses with the new ideas they create.
In The Wealth and Poverty of Nations, Harvard professor David Landes tells us that physical capital that includes tools and machines, and human capital which involves education, entrepreneurship, and health, are most crucial for economic growth. Physical and human capital provide the highest return on investment (ROI).
Looking at a paper by law school professor Herwig Schlunk reminded me that attending law school is similar to inventing a new machine. Both require an initial investment, both take several years to complete, and both will generate a private and social return. Also, they both result in capital creation.
Dr. Schlunk’s paper focused on three hypothetical law students: Also Ran, Solid Performer, and Hot Prospect. Looking at ROI (return on investment) with opportunity cost, borrowing costs, and future income as important considerations for each prototype, the professor concluded that law school for most might not be a wise investment.
Wearing economic lenses, Dr. Schlunk sees evidence of costs all students applying to all schools might consider.
The Economic Life
Rather like a recipe, land, labor and capital are the ingredients we use to make all of our goods and services. While all three are important, capital plays a special role. In his recent book, The Wealth and Poverty of Nations, Harvard professor David Landes explained why certain nations have experienced an increasingly better standard of living while others have stagnated. Looking at the variables he cites, physical capital which includes tools and machines, and human capital which involves education, entrepreneurship, and health, are most crucial for economic growth. Physical and human capital provide the highest ROIs.