Cut the working week to a maximum of 20 hours, urge top economists - Heather Stewart via The Observer

If we were rational about the new world of work, we would accept the idea that people should work less, since productivity has climbed so much in the past few decades. But will that be accepted doctrine of Western countries? Can we shift to a 20 hour work week?

Heather Stewart via The Observer

A thinktank, the New Economics Foundation (NEF), which has organised the [recent London] event with the Centre for Analysis of Social Exclusion at the London School of Economics, argues that if everyone worked fewer hours – say, 20 or so a week – there would be more jobs to go round, employees could spend more time with their families and energy-hungry excess consumption would be curbed. Anna Coote, of NEF, said: “There’s a great disequilibrium between people who have got too much paid work, and those who have got too little or none.”

She argued that we need to think again about what constitutes economic success, and whether aiming to boost Britain’s GDP growth rate should be the government’s first priority: “Are we just living to work, and working to earn, and earning to consume? There’s no evidence that if you have shorter working hours as the norm, you have a less successful economy: quite the reverse.” She cited Germany and the Netherlands.

Robert Skidelsky, the Keynesian economist, who has written a forthcoming book with his son, Edward, entitled How Much Is Enough?, argued that rapid technological change means that even when the downturn is over there will be fewer jobs to go around in the years ahead. “The civilised answer should be work-sharing. The government should legislate a maximum working week.”

People would be able to spend more time in community activities and growing their own food, for example.

However, the inherently Calvinist mindset that animates much of the policy discussion around unemployment and the inequitable distribution of income will likely block productive course of action around new work models. The answer will lie in more people dropping out, adopting a freelance lifestyle, and dialing down their consumption: a bottom-up adoption of slow, no-growth lifestyle.

(Source: underpaidgenius)

Why Black Market Entrepreneurs Matter to the World Economy - Robert Capps via Wired

Robert Neuwith thinks 2/3 of the world’s workers will be part of ‘street economies’, operating in the gray or black markets.

Robert Capps via Wired

Not many people think of shantytowns, illegal street vendors, and unlicensed roadside hawkers as major economic players. But according to journalist Robert Neuwirth, that’s exactly what they’ve become. In his new book, Stealth of Nations: The Global Rise of the Informal Economy, Neuwirth points out that small, illegal, off-the-books businesses collectively account for trillions of dollars in commerce and employ fully half the world’s workers. Further, he says, these enterprises are critical sources of entrepreneurialism, innovation, and self-reliance. And the globe’s gray and black markets have grown during the international recession, adding jobs, increasing sales, and improving the lives of hundreds of millions. It’s time, Neuwirth says, for the developed world to wake up to what those who are working in the shadows of globalization have to offer.

Using the French term débrouillard — hustler — Neuwirth talks about System D:

Wired: The sheer scale of System D is mind-blowing.

Neuwirth: Yeah. If you think of System D as having a collective GDP, it would be on the order of $10 trillion a year. That’s a very rough calculation, which is almost certainly on the low side. If System D were a country, it would have the second-largest economy on earth, after the United States.

Wired: And it’s growing?

Neuwirth: Absolutely. In most developing countries, it’s the only part of the economy that is growing. It has been growing every year for the past two decades while the legal economy has kind of stagnated.

Wired: Why?

Neuwirth: Because it’s based purely on unfettered entrepreneurialism. Law-abiding companies in the developing world often have to work through all sorts of red tape and corruption. The System D enterprises avoid all that. It’s also an economy based on providing things that the mass of people can afford—not on high prices and large profit margins. It grows simply because people have to keep consuming—they have to keep eating, they have to keep clothing themselves. And that’s unaffected by global downturns and upturns.

Wired: Why should we care?

Neuwirth: Half the workers of the world are part of System D. By 2020, that will be up to two-thirds. So, we’re talking about the majority of the people on the planet. In simple pragmatic terms, we’ve got to care about that.

And the growth of the grey economies is being fueled by urbanism: as migrants move into denser larger cities, the easiest path to employment is often self-employment in the street economy. And large companies — P&G, for example — are increasingly finding ways to move product into these street distribution networks to capture market share cheaply.

And with so much entrepreneurial energy, the underground economies are a real source of innovation:

Wired: You also say that System D is a source of innovation.

Neuwirth: That’s true. Chinese phones were the first to offer dual-SIM-card capability, for example. It was a reaction to a need that wasn’t being met by the formal market. In many countries of the developing world, different mobile companies have the best service in different regions. So, if you’re in the big city but your mom is out in the country and your brother is in another city, you might need separate services to talk to both of them. With a dual-card phone, you can keep two SIM cards in your handset and switch services as easily as you answer call-waiting. There’s a big market for that, and the System D entrepreneurs figured this out long before the legit world did. Nokia makes one now, but the underground Chinese manufacturers had them back in 2007.

Wired: So System D companies can move faster than more formal businesses.

Neuwirth: System D merchants are the ones figuring out what people need. As I said, it’s these merchants who go to China and place the orders. Chinese manufacturers didn’t figure out that a dual-SIM-card phone would be a really good thing. Some folks from Africa and elsewhere said, “Hey, this would be a popular product. We want it.” And the Chinese were happy to make it.

Wired: Merchants drive the innovation?

Neuwirth: Yes. I’ll give you another example. In many places in Africa, there’s no municipal water system. You have to buy drinking water. In West Africa, System D came up with something called Pure Water, which is water in a baggie that’s filled and sealed by a special machine. You get half a liter of water for a minimal price on the street. This has become the way that people throughout West Africa get their drinking water. System D entrepreneurs produce it, and System D hawkers sell it. Together they’ve created a new kind of product that serves a vital need, and they make money doing it. The government in Nigeria even figured out a way to work with the unlicensed Pure Water companies to monitor the purity of their water without forcing them to get registered or regulated or to pay taxes. Every baggie now has a stamp showing it’s been approved by the Nigerian equivalent of the US Food and Drug Administration.

Innovation not just in consumer products, but as the Pure Water example shows, innovation in areas where government’s social policies fail because of lack of infrastructure or funding.

This is a great example of ambient innovation — societal, bottom-up, and distributed — taking place outside of large corporations, academic research, or government agencies. This is innovation happening at the edge

(Source: underpaidgenius)

"Tectonic Shifts" in Employment

gravity7:

The United States faces a protracted unemployment crisis: 6.3 million fewer Americans have jobs than was true at the end of 2007. And yet the country’s economic output is higher today than it was before the financial crisis. Where did the jobs go? Several factors, including outsourcing, help explain the state of the labor market, but fast-advancing, IT-driven automation might be playing the biggest role.