18 of the Top 20 Tech Companies Are in the Western U.S. and Eastern China. Can Anywhere Else Catch Up?

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Today’s digital world is organized around two centers of gravity: the U.S. West Coast and the east coast of China. These gold coasts are home to nine of the top 10, and 18 of the top 20, internet companies, as measured by market capitalization. The leading companies in online search, social media, and e-commerce are all based in one or the other of these two regions. But as the digital revolution continues to spark widespread disruption in other industries — automotive, financial services, health care, and retail — who will win? As other nations consider their own stakes in the game, and as incumbents engage with digital disruption, will the two centers of gravity hold, or will the gains be more widely distributed?

A Concentration of Wealth, Value, and Power

By default, the two gold coasts have a self-sustaining edge: They have accumulated massive value, wealth, and power through the

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When Innovation and Capital Go Global: On CFIUS & FIRRMA

We’re struggling as a country to maintain our long-standing global leadership in technological innovation. Twenty years ago, the U.S. accounted for 90% of global venture capital; that number has fallen to 53%. Today, the U.S. market cap of publicly traded …

The Element of Surprise Is a Bad Strategy for a Trade War

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anucha sirivisansuwan/Getty Images

On the campaign trail, presidential candidate Donald Trump often slammed American leaders for publicly telegraphing their ISIS strategy. “Whatever happened to the element of surprise, OK? We announce we’re going after Mosul,” he said during the last debate with his opponent. “I have been reading about going after Mosul now for about — how long is it, Hillary, three months? These people have all left. They’ve all left. The element of surprise.”

President Trump is now deploying the “element of surprise” in his trade war strategy – and in particular how he is imposing tariffs on China. There is no question that China poses unique challenges to the trading system that the American government must address. But the problem is with Trump’s approach – it is catching American businesses wrong-footed.

After all, the United States has long pushed the world to accept a system where protection

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Continue reading "The Element of Surprise Is a Bad Strategy for a Trade War"

The Element of Surprise Is a Bad Strategy for a Trade War

apr18-16-867786188-anucha-sirivisansuwan
anucha sirivisansuwan/Getty Images

On the campaign trail, presidential candidate Donald Trump often slammed American leaders for publicly telegraphing their ISIS strategy. “Whatever happened to the element of surprise, OK? We announce we’re going after Mosul,” he said during the last debate with his opponent. “I have been reading about going after Mosul now for about — how long is it, Hillary, three months? These people have all left. They’ve all left. The element of surprise.”

President Trump is now deploying the “element of surprise” in his trade war strategy – and in particular how he is imposing tariffs on China. There is no question that China poses unique challenges to the trading system that the American government must address. But the problem is with Trump’s approach – it is catching American businesses wrong-footed.

After all, the United States has long pushed the world to accept a system where protection

W180413_BOWN_USIMPORTS_v2
Continue reading "The Element of Surprise Is a Bad Strategy for a Trade War"

a16z Podcast: What to Know about GDPR

GDPR (General Data Protection Regulation) is top of mind for many. Given concern around data breaches, this regulation was finally approved two years ago by the EU Parliament after four years of preparation and debate and goes into enforcement …

GDPR and the End of the Internet’s Grand Bargain

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andrew nguyen/hbr staff/dan gold/unsplash

In May the European Union’s General Data Protection Regulation goes into effect, two years after passage by the European Parliament. This radical new privacy law, which covers any business that processes information about EU residents, will dramatically affect the way data is collected, stored, and used, including for U.S. companies doing business abroad.

In the U.S., lawmakers are now circling waters bloodied by revelations regarding potential abuse of Facebook’s social media data, with CEO Mark Zuckerberg scheduled to testify on Capitol Hill this week about the “use and protection of user data.” Facebook’s woes, following continued reports of major data breaches at other leading companies, have amplified calls for GDPR-like legislation in the U.S.

A Refresher on GDPR

For now, GDPR, which replaces previous EU mandates on data collection and use, differs significantly from U.S. law, pushing the two regions further

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Funding Friday: NYC Says Enough Rally

A group of high school students in NYC are doing a gun safety rally in Washington Square Park on April 20th and are funding the rally on our portfolio company, GoFundMe.

The campaign is called NYC Says Enough and you can back it here.

I don’t know these students, but one of them reached out to me via email and I asked him a bunch of questions which he answered to my satisfaction.

So I backed the project this morning and am now sharing it with all of you.

I am closing comments today because I don’t want this post to turn into an acrimonious gun safety debate.

Here Are All the Reasons It’s a Bad Idea to Let a Few Tech Companies Monopolize Our Data

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James Graham/Getty Images

“It’s no good fighting an election campaign on the facts,” Cambridge Analytica’s managing director told an undercover reporter, “because actually it’s all about emotion.” To target U.S. voters and appeal to their hopes, neuroses, and fears, the political consulting firm needed to train its algorithm to predict and map personality traits. That required lots of personal data. So, to build these psychographic profiles, Cambridge Analytica enlisted a Cambridge University professor, whose app collected data on about 50 million Facebook users and their friends. Facebook, at that time, allowed app developers to collect this personal data. Facebook argued that Cambridge Analytica and the professor violated its data polices. But this was not the first time its policies were violated. Nor is it likely to be the last.

This scandal came on the heels of Russia’s using Facebook, Google, and Twitter “to sow discord in the U.S. political system,

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Research: Legal Marijuana and Gay Marriage Have Been Good for U.S. Innovation

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Kenneth andersson for hbr

Many countries and regions declare that they want to develop their own Silicon Valley and be a hub for innovation. The page for Technology Centers on Wikipedia, for example, lists no fewer than 90 places that have billed themselves as “Silicon This” or “That Valley”, hoping to emulate the Valley’s success in generating innovation. It is usually followed by a variety of policy initiatives, such as R&D tax credits, public grants for innovation, public procurement of innovation, grand innovation challenges, and support for intellectual property rights. Yet, few regions have managed to achieve the levels of innovation as seen in Silicon Valley. Why? We argue they have overlooked an important set of policies altogether. Pretty much all policy measures target the economic incentives to innovate. Instead, our research shows that social policies matter just as much — if not more.

Innovation, while an economic activity, is

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Continue reading "Research: Legal Marijuana and Gay Marriage Have Been Good for U.S. Innovation"

Research: Legal Marijuana and Gay Marriage Have Been Good for U.S. Innovation

mar18-23-Andersson-innovation
Kenneth andersson for hbr

Many countries and regions declare that they want to develop their own Silicon Valley and be a hub for innovation. The page for Technology Centers on Wikipedia, for example, lists no fewer than 90 places that have billed themselves as “Silicon This” or “That Valley”, hoping to emulate the Valley’s success in generating innovation. It is usually followed by a variety of policy initiatives, such as R&D tax credits, public grants for innovation, public procurement of innovation, grand innovation challenges, and support for intellectual property rights. Yet, few regions have managed to achieve the levels of innovation as seen in Silicon Valley. Why? We argue they have overlooked an important set of policies altogether. Pretty much all policy measures target the economic incentives to innovate. Instead, our research shows that social policies matter just as much — if not more.

Innovation, while an economic activity, is

W180314_VAKILI_SOCIALLYLIBERAL
Continue reading "Research: Legal Marijuana and Gay Marriage Have Been Good for U.S. Innovation"

The Economics of Why Companies Don’t Fix Their Toxic Cultures

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naqiewei/Getty Images

Over the last decade, industries, academics, and the public sector have turned their focus toward culture and ethics in response to the financial crisis as well as misconduct at a broad range of corporations. But what role does culture play in corporate misconduct, and why do these problematic cultures persist?

My perspective and approach to misconduct risk are influenced by my work as a bank supervisor, and by my background and training as an economist. In my view, bank supervision must include attention to the culture at financial firms, not just to their financial safety and soundness. The justification for this attention comes from relatively simple economics. By thinking of a company’s culture as a form of investment subject to market failures, we can better understand why companies sometimes tolerate misconduct, and why they can’t always fix it on their own. Though my experience is in the financial

Continue reading "The Economics of Why Companies Don’t Fix Their Toxic Cultures"

The Economics of Why Companies Don’t Fix Their Toxic Cultures

mar18-22-908871120-naqiewei
naqiewei/Getty Images

Over the last decade, industries, academics, and the public sector have turned their focus toward culture and ethics in response to the financial crisis as well as misconduct at a broad range of corporations. But what role does culture play in corporate misconduct, and why do these problematic cultures persist?

My perspective and approach to misconduct risk are influenced by my work as a bank supervisor, and by my background and training as an economist. In my view, bank supervision must include attention to the culture at financial firms, not just to their financial safety and soundness. The justification for this attention comes from relatively simple economics. By thinking of a company’s culture as a form of investment subject to market failures, we can better understand why companies sometimes tolerate misconduct, and why they can’t always fix it on their own. Though my experience is in the financial

Continue reading "The Economics of Why Companies Don’t Fix Their Toxic Cultures"

The AT&T/Time Warner Trial

Trump’s Justice Department goes to court this week to block the merger of AT&T and Time Warner on “anti-competition concerns.”

Like most of the things that come out of this administration, this is a joke.

HBO has 54 million subscribers and spent $2bn on new content last year.

My friend Pat Keane tweeted this out last month:

And what about Amazon? With 80mm global Prime subscribers, they are maybe the biggest threat of them all

This trial is a joke. A waste of taxpayers money. All because our loser President hates CNN. Ugh.

What If Companies Were Required to Tell Workers What Their Colleagues Earn?

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Most workers don’t probably know how much their colleagues make, and likely don’t know how much their counterparts at other companies are paid, either. This lack of transparency may be keeping millions of Americans from earning higher paychecks.

There is limited evidence on the impacts of wage transparency on middle-class wages, largely because there are few examples of transparent wages in the U.S. labor market. American experiments with wage transparency have primarily come through two avenues: disclosure of salaries for public-sector workers and for highly compensated executives.

These select instances aside, many workers have no idea about their relative pay. Part of the problem is that when it comes to knowing what their counterparts earn, private-sector workers have few reliable resources. Public data often lack sufficient detail to make for a useful comparison, and wages are rarely published by companies. And social stigma and workplace polices often

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Why the Pharmaceutical Industry is Booming in Japan – SPONSOR CONTENT FROM THE GOVERNMENT OF JAPAN

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Older people need more medicine. That rule of life is no secret to pharmaceutical companies across the globe. Many also realize that Japan’s rapidly aging population presents a unique business opportunity. Japan remains the world’s second-biggest pharmaceuticals market, behind only the United States and China. The Japanese market also is expected to grow annually. The lessons learned there will be critical as the population grows older in many other markets.

To address the needs of Japan’s aging population, the government is responding is easing several life science regulations and accelerating approval of innovative new drugs in a campaign to promote current pharma companies, both domestic and foreign, and to attract new companies to the Japanese market. The changes are all

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