The future of set-top boxes

Two recent news items on set-top boxes:
1) The Federal Communications Commission has proposed a new regulation that would force cable companies to allow customers to provide their own set-top box.  Today most cable customers pay about $10 per month per box.  The FCC argues that once companies can compete for customer's business, costs will fall and consumers will be better off buying instead of renting boxes.
2) Comcast, the largest cable provider, has come up with a new program that will allow owners of recent models of smart TVs to have full access to Comcast programming without using a cable box.  

Looks like Comcast is The Road Runner and the FCC is Wile E. Coyote! Beep beep!

Professional MBAs take 1st place

Kudos to Professional Jenkins MBAs Pierre Marcella and Graham Ransom who took 1st place yesterday in the Poole College of Management's 8th Annual Leadership and Innovation Showcase.  Teaming with College of Design student Sunny Su, Marcella and Ransom have developed a smart coffee device that can roast, grind AND brew coffee.  Buyers will be able to save a lot of money by doing their own roasting, plus they will get a much tastier brew.

Their project comes from MBA 555 Product Innovation Lab, a course that has been very well received over the years including recognition from Forbes as one of the ten most innovative MBA courses.

Marcella and Ransom will both graduate by the end of the year and they plan to turn their project into a business.  They already have a working prototype.  Looking for a great investment opportunity?

Kudos also to the second place finishers full-time Jenkins MBAs Dana Magliola and Lindsay Schilleman for their research project that measured the size and economic impact of North Carolina's supply chain.

Fuqua prof's secrets to time management

Business schools do a great job training their MBAs to handle big picture items such as strategizing and execution items such as budgeting (especially if they can be performed on spreadsheets).  I can safely say that MBA programs totally ignore a critical skill everyone needs to have to be successful: personal time management.

One book I found helpful is David Allen's Getting Things Done.  But who has time to read a 300 page book?

Luckily Fuqua's Dan Ariely has an opinion piece on Observer.com that will rescue many minutes each day for you.  Needless to say, meetings and email are on Ariely's list.

On living standards

Over the last few months, we have frequently heard politicians (and a real estate tycoon) claim that living standards have not increased over the last 20+ years.  That conclusion is based on comparing the rate of growth of wages (or weekly earnings) to the inflation rate.

Let me illustrate: average wages were $4.96 per hour in March 1976 and were 4.31 times higher ($21.37) in March 2016.  The Consumer Price Index increased by a factor of 4.13.  So the gain in wages after inflation turns out to be quite modest (4 percent over 40 years).

Here's the rub: there are well known problems with estimating average wages and inflation.  For instance, the composition of the work force has changed tremendously; today there are more women and immigrants than 40 years ago and more service and fewer manufacturing jobs.  Also the mix of goods changes a lot; no one bought iPads in 1976 and no one buys typewriter ribbons today.

Another way of looking at the living standards question is to compare consumption patterns.  For instance, one can compare housing, food consumption, and car ownership patterns.  If this shows the same 4 percent growth over 40 years then the Labor Department numbers hold up.

Yesterday's WSJ reported on airline travel.  If we were to time travel back to 1971, 49% of the adult population in the US had flown at least once in their lifetimes; today more than 80% have flown.  If you slice the data to look just at who flew last year, 45% flew in 2015 compared to 21% in 1971.  This is not broken down between business and leisure travel, but the overall implication is that living standards in this dimension have increased.

Of course air travel is a small share of overall spending in today's economy and comparisons of other goods and services undoubtedly will point in the other direction.  Economists use data on total spending rather than physical units consumed, making it hard to separate price and quantity changes. More basic research into consumption of goods and services that can be measured accurately would shed light on this issue.

How big is the gig labor market?

The internet has enabled online transactions for real time services between service customers and providers.  You can reserve an overnight stay in someone's home or apartment.  You can get a ride to work in someone's car.  You can get a voiceover narration performed by someone in the Czech Republic.

The gig economy provides new options for workers to make money when they want and how they want while providing customers with more choice.   But it also undercuts existing business models.  Licensed cab owners are less than fond of Uber; hotels are hardly enamored with Airbnb.  Also because Uber drivers are independent contractors, there is no guarantee of a minimum hourly wage and they are unable to organize into unions (as if unions could organize any private sector workers anyway).

With all the headlines, my colleagues Larry Katz at Harvard and Alan Krueger at Princeton set out to measure the size of the gig labor market.  The results, as reported in WSJ: a mere 0.5% of workers were engaged in a typical week.  Uber accounts for two-thirds of this modest number.

Wave of the future?  We would do well to suspend judgment.