Creating an economic balanced scorecard

The economy is measured using three main criteria, inflation, growth and unemployment rate. However, for many years now, experts have argued that some of these measures are flawed. They explained that growth is the wrong paradigm because a) earth resources are depleting at a fast rate b) current measures of growth tend to measure good and bad growth equally. For example, growth from people buying more sports equipment and growth from more people getting sick and using more medical services are on equal footing. I agree with these shortcomings, still, in the rest of the article I want to highlight deficiencies in the inflation measure and provide an alternative for measurement.

Whenever the economic reports come out, they state that inflation was X%, but how is this number calculated? It turns out that it is based on calculating the change in price of a basket of goods. Alas, this basket of goods only covers less than half of what the average American spends money on. Specifically, it excludes healthcare and housing, combined accounting for around 46% of the economy and both increasing at 10-15% range per year. So if around half of what the average American spends money on inflates at such a high rate, there is no way on earth that real inflation numbers are just 2%. It is possible that real inflation is even worse because for some Americans another 7-8% of their income will go towards either their education or their kid’s education; higher education is more than four times as expensive as it was thirty years ago. Thus, it seems the current way of calculating inflation is flawed.

So what is the “correct” way of measuring the economy? For starters, adjust inflation measure to reflect “real” inflation. Second, if you want to keep some of the inflation paradigm, then one can borrow the idea of creating a balanced scorecard. In business, a balanced scorecard insures that a company did not measure short-term profits, but measured…focus was not only short term and financial performance.  Of course, the balanced scorecard is not without its flaws. Namely, the fact that it morphed into a plethora of things measured and where measurement took so much effort that it created a diversion from the original intent of focused performance. Moreover, a lot of the measures used in corporations were subjective and not properly quantified. 

In any case, what I am proposing is a scorecard that includes the above traditional economic measures, but also things like total waste (measures using the inverse of recycling rate in the US), and poverty rate. Poverty is never reported in economic reports, as unemployment is considered more important. This, however, is flawed logic, it does not matter if people have a job if they continue to be poor. It is often said that what you measure drives your action; reporting poverty rates might spur action towards dealing with poverty. Also, hearing the poverty rate every month, or quarter along with the economic report creates focused attention on the issue, instead of hearing about it once a year. After all, the economy is not an end of itself, as government erroneously sometimes thinks.

John Cullin suggested that we make our tools and in turn our tools make us. This is true in the case of the economy; everything in the US has become in service to the economy.  In fact we do not really need to work for 40 hrs a week, but the real reason we do it is to keep the economy going. Maybe if we measured the economy differently, we would be reshaping our tool, and then, maybe, our tool would shape us into something new. 

How to feed 9 Billion people?

How to feed 9 Billion people?

It is projected that there might be over 9 Billion people on the planet by 2050. The question is often asked: how will we feed them if we are already using up 1.3 earths? To answer this question, I want to focus on three ideas:  optimizing diet, reducing food waste, and eliminating carb addiction and over eating.

According to fao.org, the food wasted in rich countries is equivalent to the entire food production of sub-Saharan Africa. If half of this food is saved it would be sufficient to alleviate hunger in Africa even when accounting for population growth for the next 30 years. Countries like France have enacted laws that prohibit supermarkets from throwing away good produce. However, there is a long way to go when it comes to individual behavior. American culture is wasteful. It is not uncommon to see people (actors) throw away perfectly good food in commercials or TV shows. It is even very likely to see this in real life; I have seen a store in Seattle (PCC) throw away a two hour old pizza into the compost bin instead of donating it or giving it away to customers for free. What further contributes this problem is that a good number of Americans lack the meal planning skills to prevent food in their fridge from going bad. I have heard the sentiment that it is hard to cook for one person because it is wasteful. However, this is a copout. I have managed to have under 1% food waste rate, while cooking for one person, 5 years in a raw.  Forgive the rant here, but the point here is that reducing food waste in rich countries by 50% is very doable if habits and cultural values change.

The second avenue for feeding the growing population is reducing red meat consumption. I single out red meat because it takes up a lot agricultural land, is a major contributor to global warming, consumes large amounts of water for its production, and is a contributor to poor health. Red meat includes pork, lamb, and beef. Of those three beef is the largest offender. If beef consumption is reduced to half its current levels in the US, that would free up 4 times more resources that can go towards food production in general, or more specifically towards poultry production. Chickens, not only have a much higher feed conversion, and produce no methane, but also take a much shorter time to raise and use very little water. Imagine there were 3 times as many chickens to feed the world than there are today, wouldn’t this feed the extra 2 billion people who will be here in the next 30 years? The naysayers might consider this an unreasonable proposal, but the facts point to the opposite conclusion: red meat consumption has gone down over the last 20 years. Moreover, Italians eat half as much beef as Americans; if they can do it, Americans can do it. Finally, Americans do not know their history and assume that red meat eating at these levels is the way things have always been. However, meat eating was somewhat of a luxury until factory farming started. In fact, beef consumption was 50% lower in the later 30s than when it peaked in the 70s.

I am not naïve here and do realized that meat consumptions in the developing countries is on the rise too. If the developing countries follow the West in their diet change, then it would be disastrous for the world. Nevertheless, what I am proposing is not, no beef, or red meat, but instead red meat accounting for no more than 20% of the meat consumption. It means, that these countries would have to find a symbol of success other than eating red meat on a regular basis. They would have to challenge their own social norms, something easier said than done, given the all bombardment of advertising by McDonald and Burger King telling them that eating burgers will make them happy.

The third and final idea is related to reducing food consumption in the US, thereby freeing up resources that can go towards feeding the poor in the US and the growing world population in the next thirty years There are two aspects to this: 1) Americans eat 30% more calories than they need. 2) Related to # 1, Americans are addicted to carbs, thus they eat more than they need. For the first aspect, one solution might be forced portion control. I know this idea will not be popular because Americans do not like the government to tell them what to do, but imagine no bottomless mimosas, no bottomless buckets of popcorn, no 20oz coffee or soda cups. Again, people are ignorant of history, but a regular coffee was an 8-10oz coffee in the early 90s, then thanks to Starbucks, 12oz replaced 8oz as the standard. As for sugar addiction, I remember when I used to be on a low fat diet, eating white pasta and bread, and putting three spoons of sugar in my coffee. I was hungry all the time and used to eat almost twice much as I do today. Once I got rid of the sugar and refined carbs, my constant hunger was gone. Imagine if every American got rid of the bad carbs, they would need to eat way less.

       It might be that these ideas do not fully answer how to feed the extra two billion people, but they do get us half of the way there.  Moreover, they require very little in the way of financial investment or technology. Instead, they reply on humans making very different choices than the ones they are making today. Of course, we all want a technological fix that does not require us to change our habits and cultural values, however, given the failure of innovation after innovation (read GMOs and glyphosate possibly being cancerous), it might be the case that changing values and habits might be our only choice. 

The problem with walkability!!!!!

I “love” my neighborhood, I am a 12 minutes walk to the café where I write my PhD dissertation. I am 10 minutes away from Safeway and 14 minutes away from Fred Meyer. The bus comes every 15, almost until midnight and it takes around 30minutes to get to downtown. The walkability score is 81. Great!!!! Not so fast. What is wrong with this picture is that if I has a job this would be problematic. Enter the self-sufficient neighborhood.

Walkability is great concept, but assumes the reliance on either walking or using public transport to get to work (when the public transport score is added to walkability), but if I had a job, which I will have when I finish my PhD, then I will probably have to get on public transportation or drive to get to work. Not a unique experience as most Americans still commute to work. What is wrong here is that the majority of office work is located in downtown areas. The current trend of mixed-use buildings, at least in Seattle (where I live), tends to focus on having ground level shops and restaurants and does not take into consideration office space. Perhaps an extension of the idea of walkability, a self-sufficient neighborhood would entail that there will be office space in most neighborhoods. People would not only be able to run their errands while walking, but it would be possible for them to walk to work. If over the next 15 years, a third of the US population worked in their neighborhood that would reduce CO2 emissions tremendously. Moreover, it would contribute to their health, as sitting in traffic is one of the most stressful experiences.  In fact, that is when/where many people get their heart attacks.

Human knowledge is not doubling every two years!!!!

It is often suggested that human knowledge is doubling every two or three years. I want to challenge this suggestion based on my knowledge in the fields of leadership, change, organization development and innovation.

I had a chance to review (an unpublished literature review) over sixty articles covering the concept of leadership for creativity and innovation. I covered the time period 2007-2014. What struck me was that articles prior to 2008 were riddled with methodological problems: they lacked controls, the measurement instruments (surveys) were claimed to be valid, when, in my professional opinion, they were not, and there was no real conceptual clarity. Thus, when we say the number studies has quadrupled since the field started in the early 80s, that is meaningless, because the quality of the studies was very lacking.

Another area where I contest the notion that knowledge has doubled is related to book publication. It is often cited that there are 300000 published every year. However, a much smaller portion is new knowledge in the form of nonfiction books. A closer examination of this sub-genre will show that there is only a small amount of new stuff under the sun. For example, an author publishes six books, but four are variations on the same theme. As a result, we do not really have six times more knowledge, but maybe something like two and a half.

Another salient problem is proliferation of concepts. What I mean by this is that several authors writing about the “same” concept independently not knowing that other authors have talked about the “same” subject. Often the other authors have a different academic background, and use different labels for the same phenomena. For example, the concept of wicked/tame problems (originally from urban planning), adaptive and technical challenges (Leadership studies), and critical/routine decisions( leadership studies). All of these are very similar, but perhaps slightly different phenomena. Thus the claims for a significant increase in knowledge is not warranted.

Some suggest that knowledge is doubling based on the increase in internet traffic; however, this is very misleading. For starters, porn, and cat videos which account for 80% of web traffic do not contribute any new knowledge. Second, a 4K video, while using four times more bandwidth when compared with a 1080p counterpart produces little additional knowledge.

Data is doubling every two years, but information is not. What would it take to truly double knowledge? First, making sure that the studies do not become routinized. In other words, making a concentrated efforts to think outside the box and make truly original contributions that matter. Second, going outside “our” field to make sure that we do not reinvent the wheel, only in this case using our own jargon. Third, making sure that we are actually measuring knowledge and information and not data. Data can be counted in bits, but knowledge has to be measured using other means.