Bogus Comparison Between Detroit In 1990 And Silicon Valley In 2012

from the apples-and-tomatoes dept

I've seen a few folks discussing a slide that was apparently part of a SXSW presentation, comparing Detroit in 1990 vs. Silicon Valley in 2012, with the crux of the argument being that while Silicon Valley has created plenty of value, it hasn't created jobs like Detroit did. Here's one version I saw from WSJ columnist Geoffrey Fowler:

Silicon Valley has created a lot of value, but not very many jobs. Compare the "big 3" in Detroit vs SV #SXSW pic.twitter.com/XMNx9zX3yU

— Geoffrey Fowler (@geoffreyfowler) March 8, 2014

This false comparison has led some to suggest that somehow Detroit in 1990 was better for the economy than Silicon Valley in 2012. But knowing a fair bit about both industries, that's an absurd and misleading comparison on multiple levels. First off, the employees: not all "job creation" comes directly from the big companies at the center of an industry. And, yes, there was a large ecosystem around the "big three" in Detroit that employed many other people, but the "multiplier effect" of jobs created by the internet by 2012, as compared to jobs created thanks to Detroit by 1990 is quite different. Part of the wonders of the internet is that it has enabled all sorts of new kinds of jobs, companies and careers that wouldn't have been possible before. If you summed up the entirety of direct and indirect job creation from the two industries, I'd bet a strong likelihood that the internet has had a much greater impact.

Not only that, but the type and quality of the jobs created by Silicon Valley today are likely to be much better than the grunt factory work that dominated Detroit. The internet has given more people control over their own jobs and careers, as opposed to becoming just a cog in the automaking machine, that left few options for employees in that industry. Furthermore, by 1990, Detroit was already in decline, its heyday having come decades earlier. By 1990, Detroit had been seriously eroded by competition from abroad (largely Japanese, but also from Germany and elsewhere), and we were talking about giant companies that were slow to react and change, and whose large employee bases were actually a lot more of a liability in innovating and keeping up with the times.

We've discussed in the past the paradox of job creation, highlighting that innovative companies often look like they're "destroying" jobs, because they take down lumbering, slow, legacy industries that have failed to innovate, but that employ tons of people in inefficient and often unnecessary jobs. Upfront, that looks like a job loss, but the innovation often creates new opportunities, new efficiencies and different (and frequently) better job options. There are some very real concerns for those who are not able or qualified to make the shift from one to the other -- and that's something that needs to be addressed. But to simply compare these two cases as if they were apples and oranges is horribly misguided.

Filed Under: detroit, innovation, jobs, silicon valley

Detroit Police Commander Emails Female Officers' Measurements To Entire Police Force

from the just-Detroit-being-Detroit,-I-suppose dept

An unfortunate and cautionary tale of inappropriate data "leakage" has emerged from Detroit (itself an unfortunate and cautionary tale). The lessons here are many, but one of the first is ALWAYS CHECK EVERY PAGE OF YOUR ATTACHMENT BEFORE FORWARDING TO THE ENTIRE MAILING LIST.

Police sources said about three weeks ago, Commander Dwayne Love was asked to notify the officers that their bullet proof vests were ready to be picked up. So he forwarded an email to the commanders, who then forwarded it to the supervisors, who then forwarded it to the officers.

White claimed Love didn't know the weight, height and bra cup sizes of the women were included on the attached Excel spreadsheet until it was too late.

The personal information was on the third page of the spreadsheet, something Love failed to notice before he forwarded the information. Apparently, everyone else in the chain of command failed to notice it as well. Or ignored it. Long story short, nearly every officer in the Detroit police department had access to the measurements of nearly every female officer on the force.

As is to be expected, certain officers decided to misuse this information.

[S]everal female officers, who say they have faced ridicule from fellow officers, with the help of their union are filing two grievances against the department and one complaint with EOC. Even if Love made an innocent mistake, the damage they feel has already been done.

There's one lesson: no matter what standard certain people are supposed to hold themselves to, there's always several who will willingly let that standard slip.

But there's a larger lesson here as well. The anonymous tipster who sent this in included the following statement with the submission.

Nice article to link to when you need an example of just how "professional" officers can be when they have access to sensitive/personal information.

First off, members of the police department weren't even professional enough to handle their own data without abusing the details that fell into their hands.

Now, extrapolate.

Thousands of police departments across the nation have access to the personal details of millions of citizens, including everything coughed up in order to get a driver's license. Add to that the information gathered by thousands of CCTV cameras, license plate scanners, red light cams, etc. and you've got a ton of data, most of it unrelated to any criminal activity, just laying around waiting for a "bad apple" to root through it for his or her own nefarious ends.

Extrapolate further.

Our nation's intelligence agencies have also gathered tons of data on Americans, much of it under dubious readings and interpretations of standing laws and elastically-defined words like "relevant." When we complain, the defenders explain that it is all handled very carefully and the agencies themselves take extraordinary safeguards against abuse of the gathered data.

But let's all be honest with each other. Every single one of these agencies hires from the human race, and the human race is stocked all too well with people prone to abusing the power and information under their control.

Rather than craft strict rules on the care and disposal of "non-relevant" information, these agencies tends towards amassing the data carelessly and holding it indefinitely. There are exceptions, of course, but the general feeling is grab it and hold it. Just in case.

So, you see the problem. Data is collected and left in the hands of humans. But we're expected to believe abuse is such a rarity that considering stricter safeguards or collection limitations is laughable.

When we see that a single police department can't even handled a botched internal email without finding itself on the receiving end of harassment claims, it doesn't give us much hope for larger data collections held by larger agencies, especially those with previous abuses on their rap sheets.

Filed Under: abuse, detroit, police, privacy

That Was Fast: New Detroit Newspaper Lasted An Entire Week Before Shutting Down

from the not-much-planning-there,-eh? dept

A few weeks ago, some publishing industry veterans announced plans to start a new daily newspaper in Detroit, a city that has seen its daily newspapers significantly scale back the production of the paper product. This resulted in some reasonable confusion over how the plan could possibly make sense. There was little indication of a plan to do anything different to try to offer a better product. Instead, it looked like just an attempt to jump in with a product not particularly different than the ones that had already stumbled in the same market -- but without the brand recognition or built up loyalty. So, it should come as little surprise that the new paper appears to have folded after just a single week of operation, though the publishers insist it's just a temporary "bump" due to (merely) a lack of advertising, distribution or timely printing operations. Seems like there are some kinks to work out.

Filed Under: detroit, newspapers

Evidence Not Necessary: Detroit Prosecutor Positive That Violent Video Games Cause Crime

from the please-don't-provide-any-evidence dept

There are plenty of folks who like to blame violent video games for crime despite a lack of any real proof. As has been pointed out time and time again, just as violent video games have become more popular, incidents of violent crime keep dropping. Obviously, there may be other factors involved, but if it were true that violent video games resulted in more violent crimes, then it at least suggests there's one heck of an additional variable that not only compensates for this increased desire for violence, but pushes the stats even further in the other direction. And, certainly, while there are some researchers who insist that studies have shown that violent video games lead to violence, every time you look at the details of those studies, you realize that the data doesn't support the claims.

Still, some people react to the issue from an emotional, rather than logical, point of view. This is human nature, so it's not that surprising. However, when someone's job is a gov't prosecutor, you might think she would recognize the importance of real evidence before making statements. Not so for Wayne County, Michigan (which covers Detroit) prosecutor, Kym Worthy. In an interview with Wired, Worthy notes that evidence is meaningless to her on this issue: "No one can convince me that there isn't a link between some of the gory, gritty, horrendous crime that we've been seeing in the past few years, particularly in the 18-25 year old group, [and] these games." Apparently any evidence to the contrary are just "'silly' arguments made to justify a 'billion-dollar industry based on the most violent of scenarios.'" Even better, Worthy wonders why kids can't just go play football instead of playing video games. So why is it that virtual violence encourages more violence, but actual violence in the form of football doesn't?

Filed Under: detroit, kym worthy, video games, violent video games

Noncompete Agreements Are The DRM Of Human Capital

from the bad-news-all-around dept

Over the weekend, venture capitalist Bijan Sabet kicked off an interesting discussion by saying that he doesn't believe in noncompete agreements and suggesting, anecdotally, why he thinks that they do more harm than good. Venture capitalist Fred Wilson responded by disagreeing and suggesting that noncompetes do more good than harm. This is a topic that I've become deeply familiar with recently, for some research I've been working on. My interest in the specifics of noncompetes was kicked off by a small part of David Levine and Michele Boldrin's book Against Intellectual Monopoly, where they discuss how the lack of noncompetes helped Silicon Valley grow. This lead me to a lot of research on the topic, some of which I thought it would be worth bringing up, as the discussion has become so heated -- with almost all of it focused on anecdotal points, rather than actual research. Some of this research was for a separate project I am working on, but with so much interest in the topic, I thought it would be worth a detailed post.

Much of this discussion kicked off with AnnaLee Saxenian's 1994 book Regional Advantage that tries to understand why Silicon Valley developed into the high tech hub it is today, while Boston's Route 128 failed to follow the same path -- even though both were considered at about the same level in the 1970s. Saxenian finds that the single biggest difference in the two regions was the ability of employees to move from firm to firm in Silicon Valley. That factor, ahead of many others, caused Silicon Valley to take off, while the lack of mobility in Boston caused its tech companies to stagnate and make them unable to compete against more nimble Silicon Valley firms. Saxenian claims that the difference in mobility was simply due to "cultural" differences between the east coast and the west coast. However, the impact was massive. The frequent job changes helped speed up the process of innovation, as ideas flowed more freely, allowing ideas to quickly change and grow and build upon other ideas leading to faster and better innovation. In contrast, employees in Boston stuck with their firms. The firms grew bigger, but slowly, and new ideas didn't flow nearly as easily. There was less direct competition from firm to firm, so firms were able to rest on their laurels rather than increasing their own pace of innovation.

Ronald Gilson found this to be interesting, and followed it up with his own research suggesting that that it had much less to do with cultural reasons and much more to do with the legal differences between the two places, specifically: California does not enforce noncompetes, while Massachusetts does. Gilson looks at a few of the other possible explanations for the difference and shows how they're all lacking, leaving the difference in noncompetes as being the key difference between the two regions in terms of the flow of information and ideas leading to new innovations. He also explains the history of non-enforcement in California, showing that it was mostly an accident of history more than anything done on purpose.

The problem with all of this research was that none of it really showed how much more mobile employees were in California than elsewhere, so that job fell to some researchers from the Federal Reserve and the National Bureau of Economic Research, who produced some data to back up the findings of Saxenian and Gilson in their report Job Hopping in Silicon Valley. Their data showed that, indeed, there was much greater mobility in Silicon Valley than elsewhere. Their research further backed up Gilson's suggestion that it was noncompetes that made the difference by showing that other high tech communities in California outside of Silicon Valley also showed greater job mobility -- suggesting it was a California-wide phenomenon.

Finally, to make the case even more compelling, some researchers from Harvard Business School put out some research earlier this year that not only compared the situation in Silicon Valley to Boston, but added a third natural experiment in Michigan. You see, Michigan used to not enforce noncompetes, but in 1985, Michigan inadvertently began allowing noncompetes to be enforced again. The research showed that immediately following the change, mobility of inventors in Michigan decreased noticeably, slowing the spread of certain ideas. Their research found that "The networks of small companies so crucial to Silicon Valley's growth would be less likely to develop in regions that enforce noncompetes."

Noncompetes Are The DRM Of Human Capital

In order to understand how this makes sense, just think of noncompetes as the "DRM" of human capital. Just as DRM tries to restrict the spread of content, a noncompete seeks to restrict the spread of a human's ideas for a particular industry within the labor arena. Both concepts are based on the faulty assumption that doing so "protects" the original creator or company -- but in both cases this is incorrect. What it actually does is set up an artificial barrier, limiting the overall potential of a market. It may not be easy to see that from the position of the content creator or company management (or investors). It's natural to want to "protect," but it's actually quite damaging.

We're already seeing this in the recording industry, of course. The desire to protect has actually limited the market size of other avenues for the music industry to make money. It's held back the ability to use music as a promotional good to build up the overall market for other tangible goods. In the same way, noncompetes limit the market size of the industry where those noncompetes are enforced. It holds back the ability of firms to innovate. Innovation is an ongoing process -- and the fuel of that process is the continual spread of ideas that allows multiple parties to build on those ideas, try different approaches and seek better solutions. While it may seem scary to a firm that supposedly "risks" losing some of its top employees to direct competitors, that's not necessarily the best way to look at this. What it does is force companies to keep on innovating and keep trying to come up with newer, better solutions to top those competitors. At the same time, that free flow of ideas means that the companies in the space have more fuel with which to attack the problem, rather than quarantining those ideas off in separate bins that can't be connected.

While it may seem easier to "protect" your ideas and your people, what you really end up doing is blocking off your own access to many of the ideas that you need to continue to innovate. You limit the vital mix of ideas to build not just decent products, but great products. Just as DRM has helped to destroy the record labels when competing against more nimble, more open technology -- noncompetes destroy businesses when competing against more nimble, more open technology clusters.

Filed Under: boston, detroit, drm, noncompetes, silicon valley