Feeds:
Posts
Comments

Posts Tagged ‘World ecomony’

Recently I have read an interesting article: Peggy Noonan On Steve Jobs And Why Big Companies Die by Steve Denning which I highly recommend.

However while I agree with the main Steve Jobs and author’s  idea that quality of an underlying product is of paramount importance for long term well-being  of a business, I don’t think that this is the whole story. There are examples of demise or near-demise of great companies for reasons that have nothing to do with quality of their products.

Couple of examples. A recent announcement of AMR/American Airlines bankruptcy. Their products (flights) are on a par with the industry. What caused them to go into bankruptcy is an unsustainable financial model.

More personally sad example for me was a demise of Digital Equipment Corporation since I used their computers and loved them (I still have fond memories of them).  It might be all but forgotten name by now, but in 60s-70s-80s it was a major player in IT industry rivaling IBM. In a way it was a company very similar to Apple. DEC was created by two engineers – Ken Olsen and Harlan Anderson. Ken Olsen who was a great visionary and a great business leader similar to Steve Jobs, led the company through almost all its life. The company had great products (computers of PDP and VAX series), but sadly its leadership underestimated importance of emerging PC market…  All that remains of this great company after a series on M&A ended up as a part of HP.

Another story may be a near-demise of Ford company when another great engineer and great business leader Henry Ford  failed to recognize that Model T times were gone.

Therefore I disagree with both Steve (Jobs and Dunning). All three facets of business (product, finance, marketing/sales) are equally important. Neglecting any of them – that’s what kills great companies. Sounds much less sensational than the article’s conclusion, but agrees better with facts.

Advertisements

Read Full Post »

United States Department of Labor published recently an interesting document Occupational Outlook Handbook, 2010-11 Edition.  One of the chapters of the document  gives an insight at what IT skills will be in demand on US job market in 2011-2018.

The chapter talks about computer software engineers and computer programmers.  It defines two types of software engineers:

  • Computer application software engineers
  • Computer systems software engineers

Based on the definitions given by the document the former are roughly equal software application architects and tech leads/senior developers (those who design a code) while latter are equal to software enterprise  architects who define IT infrastructure and software operation engineers who deploy and maintain applications. Computer programmers as defined by the document are just coders without design functions.

There were 514K computer application software engineers, 394K computer systems software engineers and 428K computer programmers in the USA in 2008.

Employment of computer software engineers is expected to increase by 31% between 2008 and 2018 which is much faster than the average for all occupations.  31% growth in jobs within 10 years  is actually exceptional one by any measure. I knew the demand has been growing, but the magnitude is much bigger than I was thinking.

Employment of computer programmers is expected to decline by 3% between 2008 and 2018 (I did not expect this). The document mentions “advances in programming languages and tools, the growing ability of users to write and implement their own programs, and the offshore outsourcing” as the main reasons for the decline. This means that decline in quantity of computer programmers jobs is likely to be a local US effect which is not applicable globally; if computer programmers occupation declines due to outsourcing, those jobs going abroad do increase computer programmers occupation somewhere else, right?

But the fast growth of demand for computer software engineers is likely a global effect. World needs more and more of increasingly complex software.

This means in my opinion that professionals employed in one of roles classified as computer software engineers by the document may enjoy the best career prospects.  Something to think about if you work in IT 🙂

Read Full Post »

Reading news and articles on Euro zone debt crisis like e.g. this one, reminds me of a very good book I read couple of years ago: Lords of Finance: The Bankers Who Broke the World by Liaquat Ahamed. It talks about how the world came to the great economical crisis of 1928-1934.

This is quite interesting book in itself, but I would not write this post if it doesn’t resonate so well with the current events.

Mr Ahamed makes a point that the crisis was   “… the direct result of a series of misjudgments by economic policy makers, some made back in the 1920s, others after the first crises in – by any measure the most dramatic sequence of collective blunders ever made by financial officials” (p.501).

While listing the mistakes, the author says “… the second fundamental error of economic policy in the 1920s: the decision to take the world back onto the gold standard” (p.502).

Clinging to the gold standard deprived world economies of flexibility necessary to deal with consequences of huge debts accumulated by European countries as a result of WW I.

Getting out of the gold standard was a critical pre-requisite for resolving the crisis: “Breaking with the dead hand of the gold standard was the key to economic revival. Britain did so in 1930 and began to recover that year. The United States followed in March 1933 and that proved to be the low point in its depression. France hung to its link with gold for the longest. In 1935 Clement Moret was fired as governor of the Banque de France for resisting government measures to utilize its gold reserves to expand credit. Only in the following year did France finally abandon the gold standard. It was thus the last of the major economies to emerge from depression” (p.477).

Well, I should stop here, otherwise I could cite a good deal of Mr Ahamed book 🙂 which I highly recommend for reading.

Why I think it is relevant to the current events? Euro is in effect a sort of the same gold standard for countries that use it. They are all bound to the same exchange rate which prevents some of them (e.g. Greece, Ireland, Portugal, Italy) from using devaluation of their currencies as a way to adjust their debt and their economies.

The story teaches us lessons, but unfortunately we rarely learn them. If the folks who created euro read Mr Ahamed book, they might have understood that it is impossible to jump over a ravine in two steps. They either should have went far further and established along with a single common currency strict use of the same single common economic and budget policies across all euro zone or they should have not introduced the common currency at all.

Unfortunately they didn’t. And as current events show they still believe that Europe must stick to euro (a sort of modern gold standard). Without the euro removed, the European debt crisis is not going to be resolved any time soon, it is likely going to get much worse before the crisis is going to be resolved.

If Mr Ahamed is right in his analysis of the crisis of 1928-1934, the things do not look nice at the moment. Given the size of European economies, the crisis may achieve a cataclysmic scale. All current efforts to stop the crisis are similar to trying to stop a tectonic rift from widening by pouring concrete into it. Very expensive and utterly futile attempt.

Are we heading to a new Great Depression?

I do hope I’m absolutely wrong…

Read Full Post »