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G100 Network Notebook | April 2013

Can Corporate Learning Be Reinvented? Sal Khan and Google at G100

As you will learn, Sal Khan has done more to revolutionize online learning than any other American figure. The Khan Academy now has 6 million users a month who view Sal Khan’s instructional, 10-minute videos on anything from algebra to basic computer programming. He will be joined by Erica Fox, who directs Google’s employee learning programs.

When I spoke to Khan last week, he said he believes that the future of workplace learning is also undergoing a revolution. “Why do we assume workers have to leave their desk in order to learn new skills?” he asked. Khan has already set up a website with Bank of America to improve financial literacy, BetterMoneyHabits.com. Perhaps our meeting will plant the seeds of a future experiment in how companies train their workers.

eBay’s John Donahoe at G100

eBay CEO John Donahoe has become not only one of the most admired leaders in technology, he has stepped up as a feisty spokesman against the imminent Internet sales tax. His case against the sales tax – and why it benefits Amazon, not others – is compelling:

This isn’t a debate pitting the Internet against Main Street. This is about big retailers, like Amazon, trying to undermine small online businesses. Amazon supports the bill, while at the same time it negotiates local tax exemptions across the country where it builds warehouses. Small businesses don’t have that kind of bargaining power.

Poland’s Foreign Minister on Economic Reform

Superb interview in Foreign Affairs with Poland Foreign Minister Radek Sikorski, who touches on the euro crisis, geopolitics, and reform. Sikorski is an unapologetic and refreshing capitalist at a time when so much of official Europe remains in shared sacrifice. Some samples:

We should be austere in one particular way – towards our overblown public sectors. We should do what Latvia did, sacking 30% of bureaucrats and cutting the wages of the rest.

There really isn’t a ‘third way’ between a command economy and the free market. By delaying reform, you just get stuck in the middle, with crony capitalism and corruption.

Singapore to Eclipse Switzerland

Earlier this month, Singapore Prime Minister Lee Hsien Loong joined more than 30 CEOs for a private G100 Network dinner in New York. While the Prime Minister acknowledged that other nations – Malaysia, the Philippines, and Thailand – are all trying to woo Western business, he described many of the ways his country intends to remain the most competitive hub of global commerce.

It appears to be working. According to research by London-based Wealth Advisor, Singapore will overtake Switzerland as the world’s private wealth management center:

Singapore is the fastest growing wealth center in the world, with $550 billion in assets under management – up from $50 billion in 2000. About $450 billion of that is offshore. Switzerland has $2.8 trillion in assets under management, with $2.1 trillion of that coming from offshore wealth. Switzerland accounts for 34 percent of the $8.15 trillion in total global wealth. Yet [Singapore] could overtake Switzerland in offshore assets under management by 2020. Swiss offshore assets could fall below $2 trillion by 2016, while Singapore’s assets could more than quadruple by then.

The Emerging Industry of Workforce Science

Earlier this month, Harvard’s Tom Davenport explained why the data scientist will be “the sexiest job of the 21st century.” Every company, he argued, will be using data and analytics to understand how it operates – including how to think about talent management. A recent article in the New York Times points out that Big Data is challenging even some of the most embedded assumptions about employees:

Employers often avoid hiring candidates with a history of job-hopping or those who have been unemployed for a while. The past is prologue, companies assume. There’s one problem, though: the data show that it isn’t so. An applicant’s work history is not a good predictor of future results.

The Backlash Against High Tech’s Immigration Push

For years, Silicon Valley led the call to expand immigration opportunities for foreign skilled workers. Yet, now, just as a serious conversation about immigration reform is emerging, a backlash has started. Nick Cohen of The Guardian, previewing an argument that immigrant opponents will make, says that Mark Zuckerberg and “cool capitalists” are not contributing to job growth:

The high-tech, borderless future Zuckerberg promises seems of no use to the majority of people. Unlike previous technological revolutions, the web destroys old jobs…without adding enough new ones. … If you look at how hierarchical and unequal western societies are presently, you might reasonably suspect that Zuckerberg and his contemporaries will just widen the already dizzying chasm between the rich and the rest.

Energy, Business, and Geopolitics:

This month, Foreign Affairs offers a sobering look at pollution in China that illustrates how the country’s unrestrained push for economic development threatens global health and regional stability. Scholar Michael Vandenbergh estimates “a new coal-powered electric plant large enough to serve a city the size of Dallas opens in China every seven to ten days.”

Dan Yergin thinks China’s demand for energy will be central to global affairs – and the US economy. Here are some relevant excerpts from his recent conversation with The Wall Street Journal:

There was much heightened concern about energy security in China in the middle of the last decade; now there’s much more self-confidence in their ability to buy what they need, a bigger appreciation of a flexible global market. But China clearly intends to have a bigger presence on the world stage; it is participating in antipiracy efforts off the coast of Somalia.

In some ways, China will become a partner – it will come to have a role in the security of the flow of energy. This can go on a very constructive, cooperative fashion, or it can go on in a fashion which creates greater risk. This is going to be one of the major focuses of the U.S.-China relationship.

Margaret Thatcher’s “Dissenters”

Amid the many things written in the wake of Margaret Thatcher’s passing earlier this month, The Economist sets out some of the clearest signs of her accomplishments:

The inflation rate fell from a high of 27% in 1975 to 2.4% in 1986. The number of working days lost to strikes fell from 29m in 1979 to 2m in 1986. The top rate of tax fell from 83% to 40%.

Elsewhere, The Institute for Economic Affairs reminds us that 364 British economists signed an “open letter” in The Times opposing the prime minister’s 1981 macroeconomic policy. Many of those dissenters now rank among major players in public life, such as the Governor of the Bank of England and another member of the Bank of England’s Monetary Policy Committee. A longer study of why so many economists got it wrong, and what they have said since, can be found here.

Regulation Ahead

Americans spend 9.14 billion hours annually on government paperwork, according to President Obama’s former regulatory czar Cass Sunstein, author of Simpler: The Future of Government. Sunstein argues that the Treasury Department is responsible for nearly 75 percent of the total paperwork burden. He urges Congress to start simplifying the tax code.

Meanwhile, David Brooks writes that the new health care law is already creating chaos for business:

Insurance companies are trying to put out new products, but they don’t know what federal parameters they have to meet. Small businesses are angry because the provisions that benefited them have been put on the back burner. Health care systems are highly frustrated. They can’t plan without a road map. Senator Max Baucus, one of the authors of the law, says he sees a “huge train wreck” coming.

Spring Reading

Harvard Business School’s Robert Steven Kaplan, who used to head Goldman Sach’s internal leadership program, has a second book on what makes people great leaders and performers: What You’re Really Meant to Do.