Harvard Business School

Diego Comin: Entrepreneurship, Technology and Economic Development

Editor’s Note: Diego Comin is an Associate Professor of Business Administration at HBS since 2007. He received his B.A. in Economics in 1995 from the University Pompeu Fabra, Barcelona, Spain and his PhD in Economics from Harvard University in 2000. Between 2000 and 2007, Comin has been Assistant Professor of Economics at New York University. He is also Research Fellow at the Center for Economic policy Research and Faculty Research Fellow in the National Bureau of Economic Research’s Economic Fluctuations and Growth Program. Comin has also been fellow for the INET and Gates foundations and consultant for the World Bank, IMF, Federal Reserve Bank of New York, Citibank, and the Economic and Social Research Institute (ESRI) of the government of Japan.

You can read his full bio from here. To learn more about his research, ideas and knowledge, check out this this this and this.

eTalk’s Niaz Uddin has interviewed Diego Comin recently to gain insights about entrepreneurship, technology and economic development which is given below.

Niaz: Dear Diego, thank you so much for joining us in the midst of your busy schedule. We are very thrilled and honored to have you at eTalks.

Comin: The pleasure is mine.

Niaz: You’ve received your bachelor degree in Economics in 1995 from Pompeu Fabra University, Barcelona, Spain and PhD degree also in Economics from Harvard University in 2000. Between 2000 and 2007, you were the Assistant Professor of Economics at New York University. And you have been Associate Professor of Business Administration at HBS since 2007. You’re also an honorable Research Fellow at the Center for Economic policy Research and Faculty Research Fellow in the National Bureau of Economic Research’s Economic Fluctuations and Growth Program. At the very beginning of our interview can you please tell us something about ‘Entrepreneurial Economics’?

Comin: Entrepreneurial economics is the area of economics that studies the causes and consequences of entrepreneurship.

Niaz: How would you define the connection and contribution of economists and entrepreneurs in the entrepreneurial economics to accelerate economic growth?

Comin: Often, when entrepreneurs found new companies they tend to utilize new technologies in production accelerating their diffusion. In other instances, new technologies are created to develop and commercialize new technologies. Hence, entrepreneurship may foster economic growth both by contributing to the creation and to the diffusion of new technologies.

Niaz: You’ve been working for so long with primitive technology dataset. What does actually the primitive technology dataset measures?

Comin: I should refer the reader to my paper with Erik Gong and Will Easterly “Was the Wealth of Nations Determined in 1000BC?” at the American Economic Journal: Macroeconomics (July, 2010). Basically, it measures whether certain significant technologies were present in the geographic areas that correspond to modern-day countries long time ago. For example, printing presses in 1500 AD.

Niaz: Can you please share your knowledge with us about Primitive Technology?

Comin: There are basically three key findings. First, cross-country differences in technology adoption were very large in the distant past (i.e., 1500 AD, 0 and 1000BC). Second, past levels of technology are highly correlated to current levels of technology. In particular, the levels of technology of our ancestors in 1500AD predict 50% of current cross-country differences in productivity or technology. Finally, the reason for this humongous persistence is that some technological knowledge associated with the adoption of historical technologies helps adopt current technologies.

Niaz: Can you please tell us about the diffusion of technology?

Comin: The moment technologies are invented, in principle they are ready for people around the world to use. However, most people and companies do not use them right away. Technology diffusion is the field that studies how and why technologies are adopted the way they are.

Niaz: What are the factors that affect the shape of the diffusion of technology?

Comin: There are several factors that may affect the shape of diffusion curves. How long ago a technology first arrived to a country, the level of income and its evolution, how intensively the technology is eventually used in the country, the rate of improvement of the technology and the productivity gains associated to these improvements, the potential complementarities of one technology with others, and the diffusion of technology in neighboring countries.

Niaz: Your research consists on studying the process of technological change and technology diffusion both across countries and over time. As you know, cutting edge technology, super innovation and evaluation of social media have been changing everything. We are in the golden era of Digitalization. Economy is also transforming to Digital Economy. Can you please tell us about Digital Economy? What has changed and what’s new in this digital economy?

Comin: The digital economy lowers the costs of transferring information. And by making information cheap it reduces the costs of bringing new technologies to all the corners of the world. However, it is important to be aware that the reduction in the costs of transferring information precedes (by a lot) the digital economy. One advantage of having direct measures of technology that span 200 years is that one can uncover long-term trends that are not obvious to the naked eye. When looking at my data, I observe that the acceleration in the speed of diffusion of technologies started with the industrial revolution and it has been unraveling smoothly since then.

Niaz: Things are not happening in the same ways all over the world. Digital Divide, Broadband Connection, Availability of Technology, Lacking of Knowledge and some other constraints have been putting under developed, developing and poor countries behind. How large is cross-country differences in technology adoption? How can underdeveloped, developing and poor countries take optimum advantage of digitalization?

Comin: That question raises an interesting point. Though technologies are more readily available in all countries than 100 or 200 years ago, the gap in the intensity or use (or penetration rates) that we observe between rich and poor countries has widened. (Marti Mestieri and I document that in a recent paper “If Technology Has Arrived Everywhere, Why has Income Diverged?” NBER wp#19010.) It is not easy to explain why this has been the case but it seems that the super low cost of transmitting information are not sufficient for a large number of potential users to know how to apply new technologies (in developing countries). Information is not the same as Knowledge.

Niaz: In near future, I hope we won’t have that much difference in our online and offline life. At the same time, we have started to live a life that is more likely science fiction. Living such an exciting era what do you think about the future of digital economy?

Comin: It seems safe to conjecture that in the future (and probably in the present too) the constraint will not be information but our ability to do something with it. I guess that the challenge for the digital economy will be to help on that front.

Niaz: What are you economic advice to young entrepreneurs, startups founders and CEOs? What are the things they should always keep in mind to grow and excel with their startups?

Comin: I think it is important to be always aware of what’s the core of the company; the area/activity where the company is really great. And always evaluate how actions or strategies affect/complement the core.

Niaz: Any last comment?

Comin: Both as a fundamental driver as well as a manifestation of other drivers, technology is key for the economy and society.

Niaz: Dear Diego, thank you so much for sharing us your invaluable ideas knowledge and insights. We are wishing you very good luck for all of your future endeavors.

Comin: Thanks very much. I also wish you good luck with eTalks.

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Further Reading:

1. Philip Kotler on  Marketing for Better World

2. F. M. Scherer on Industrial Economy, Digital Economy and Innovation

3. Stephen Walt on Global Development

4. Robert Stavins on Environmental Economics

Horace Dediu: Asymco, Apple and Future of Computing

Editor’s Note: Horace Dediu, one of the most well respected watchers of the mobile industry, and Apple in particular, is the founder and author of the market intelligence site Asymco.com. He is also an independent analyst and adviser to telecom incumbents and entrants on mobile platform strategy. Fortune Magazine declared him as the “King of Apple Analysts“.

Horace has eight years of experience as an industry analyst and business development manager at Nokia, preceded by six years of software development and management in a startup environment, two years of IT management and five years of computer science research in an industrial laboratory. As a business analyst he has a proven track record of achieving/exceeding predictive goals and objectives. He has been a resource for Bloomberg, The Financial Times, The Economist, Forbes and has been cited over 350,000 times.

Dediu also writes for the Harvard Business Review Blog. Recently he was interviewed by Forbes. He is often interviewed by other news sources as an Apple expert.

Horace has an MBA from Harvard Business School and MS Engineering from Tufts University. To learn more about his work please visit Asymco.com. You can also find him on Twitter, LinkedIn and Wikipedia.

eTalk’s Niaz Uddin has interviewed Horace Dediu recently to gain insights about Asymco, Apple and Future of Computing which is given below.

Niaz: Dear Horace, thank you so much for joining us in the midst of your busy schedule. We are very honored and thrilled to have you at eTalks. At the beginning of our interview, can you please tell us more about Asymco?

Horace: Asymco is a web site where I write what I think and where people respond through comments. The idea is very simple and I find it useful because I received over 40,000 comments, something which would be hard to obtain through any other way of writing. Of course what matters is to have good comments, but good comments come if you have interesting things to say and you say them in a way that encourage discussion.  The other aspect of Asymco is that the audience is mostly self-selected. They have not been enticed to visit via any incentives other than their interest in the material. That makes the audience more valuable to me than one which comes by way of being herded from another place.

Niaz: What do you do as an independent consultant and analyst? What is your future plan? And where will be position of Asymco after 10 years?

Horace: I read a lot and write a little. I have no future plans and could not presume to guess what Asymco will be in 10 years. I could not have predicted where it is now so my ability to make predictions on this topic is zero.

Niaz: You’ve declared as the “King of Apple Analysts” by Fortune Magazine.  What does make you very passionate about Apple?

Horace: Apple is an interesting company to study because its success comes from being a serial disruptor. This is a very rare type of success formula. I am trying to “reverse engineer” its operating model and I hope that such a model is one which others might learn from if they were to emulate it. The trouble is that very few others seem to want to emulate Apple. Why that is also an interesting question.

Niaz:  You’ve been resource for Bloomberg, The Financial Times, The Economist, Forbes and have been cited over 350,000 times. You’ve been analyzing Apple’s business strategy and predicting their financials for long time.   So many people in the industry now believe that Apple has lost its image. Fundamentally, Apple is a company that was built to innovate and to make great products. What do you think about the current performance of the company? Do you think apple has lost its image that it has created over the years as a center of innovation and building excellent products?

Horace: I cannot comment on how Apple’s image is measured by people in the industry. I have been listening to commentary on Apple for about a decade and I have never seen any change in pattern. The company has always been perceived as a failure by a majority of observers. With respect to its products, I also do not see a change in the pattern established over the last decade.

Niaz: What’s your evaluation on the performance of Apple CEO Tim Cook? Do you think he is a visionary leader? Will he be able to keep running Apple as the way it should be run?

Horace: I think Tim Cook is the best CEO Apple ever had. During the period of Steve Jobs as CEO, Tim Cook was doing the work which might be considered CEO and Jobs was head of product, culture and many other details. The Jobsian approach of micromanagement is the antithesis of sustainable organizational management. The only reason Apple survived was that Jobs outsourced operations to Cook. Regarding Vision: Vision is not a function that needs to reside in one person and it depends greatly on the process for decision making and the organizational structure. Apple’s functional structure means that vision is developed through a coordinated weekly process. It’s a constant refinement of many ideas rather than a single target that’s set once.

Niaz: As you know, the biggest change in the history of iOS is iOS7. Apple has also launched iPhone 5C and 5S on Sept 10th event. As far as I believe iPhone 5S is the next big thing that will be the door of opportunities for the future of mobile computing, gaming, personal cloud and so on and on. What is your take on iOS 7, iPhone 5C and iPhone 5S?

Horace: The iPhone is maturing nicely and it seems to be entering a new phase of later adoption. It’s now clear to me that after 7 iterations, the iPhone business model is a part of a larger transition in how Apple is building a multi-modal platform with iOS. iOS has turned out to be a very flexible idea which is being adapted to many usage contexts. It is however only one piece of a far larger puzzle where services, devices, and ecosystems are inter-dependent.

Niaz: Over the last 12 months, Google Android devices have outsold iOS by about 3 to 1. There are now perhaps 775m-800m ‘official’ Android devices in use, versus perhaps 415m iOS devices. This is without counting sales of the Amazon Kindle Fire or the (very) many Android devices sold in China that are not connected to Google services – these may be a further 150-200m active devices now (or more). So, the Android install base is more than double the size of iOS. If you look just at phones, there are may be 250m iPhones in use and perhaps 700m ‘official’ Android phones alone.  How do you see iOS vs. Android war? Is android is a threat for iOS (directly or indirectly)? Who is actually winning?

Horace: Those numbers are not exact. The numbers I use are: Google has reported 1 billion activations and Apple cited 700 million iOS devices will be sold by October with iTunes accounts (as a proxy of usage) totaling about 650 million. I consider both of these to be great performances especially since they happened in less than 7 years–a type of growth that is unprecedented even when considering many products which were free to use like Facebook. 700 million unit volume of sales, often under supply constraints, with an exceptionally high margins of near 40% is nothing short of amazing.  That does not detract from Android however. Android has turned out to be a force which destroyed many businesses: Nokia, RIM, HTC, Microsoft. However, iOS has been contributing to this disruption as well. Android is a low-end approach and iOS is a high-end/new market approach. Both have squeezed almost all other platforms out of the industry. Android is a threat to iOS but it’s one of many. A few years ago the threat to Apple was Windows, or some iPod killer or many others long forgotten. Apple does not win by eliminating competition. It wins by creating new markets or re-defining the basis of competition where, at least initially, there is no competition.

Niaz: Are you optimist about the future success of Apple? Like after 10 years and then 20 years?

Horace: Let me put it this way: if there were no Apple then somebody will have to invent an Apple to do the same thing Apple does. In that sense I’m optimistic that there will be an Apple in some way in perpetuity.

Niaz: This is an interesting month. We have already seen so many things and we are also going to see so many things in this month. The company valuation from 2007 to today: Microsoft is down -1.5%; Nokia is down -82%; RIMM is down -78%; Apple is up +507%. In this situation what do you think about Microsoft-Nokia deal? And how should tech industry look at this deal?

Horace: The deal says more about Microsoft than about Nokia. Microsoft decided that they need to become an integrated hardware/software/services company and to organize itself functionally. This is an abdication of its role as the supplier of software modules to a complex value chain. To make such a huge concession says that we are really far into a new era. The problem for Microsoft is that it’s not clear that it can function as a completely new organism, especially one without any leader on the horizon.

Niaz: Can you please tell us about wearable technologies? How big is the market of wearable technology? What are the challenges for Apple to be the best player in the field of wearable technology?

Horace: The market for wearable technologies is very small, almost immeasurably small which is why it’s such an exciting area. It’s like a vast new continent with nobody living on it. There are challenges but they can be solved by having a development process that is guided by an understanding of what users need and how to deliver a workable solution. These were the same challenges in developing smartphones which were easy to use and making them affordable to many people. The answer is in an integrated approach to development.

Niaz: What will be the next big innovation from Apple?

Horace: I have no idea but it’s likely to involve refining new user interaction methods. Similar to the breakthroughs that came from the use of a mouse, a scroll wheel and a touch screen. It means making computers better at gleaning our intentions without our getting involved in explaining them.

Niaz: What do you think about the future of computing? What will be the most exciting and big thing in tech?

Horace: See above, new interaction methods.

Niaz: Will Apple, Google and Samsung be the major player for the future of computing? Or we can hope to see some new faces?

Horace: I am fairly sure Samsung will not be because they have not yet grafted software and services to their operating structure. I would give Amazon a higher probability in being a successful platform alternative.

Niaz: In 2011 you’ve written a blog post ‘Steve Jobs’ Ultimate Lesson for Companies’ on Harvard Business Review Blog and you have cited ‘A leader should aspire to do more. A leader should claim to have left a legacy not just on their company but on all companies.’ As you know Google, Amazon, Samsung, Facebook … all have learnt lifetime lessons from Steve Jobs. What do you think about the impact that Steve Jobs have created?

Horace: He led by example and like all great leaders sacrificed much as a way to inspire others to follow him. He also spent time in the wilderness and chose asceticism. This gave him authority. Many historical figures had the same quality. The problem is that few business leaders have it but I don’t see why they shouldn’t.

Niaz: Do you think it is possible to disrupt Google? How?

Horace: That’s easy. Google relies on keeping too many secrets. Giving away all that it holds dear will cause its business model to change. Let me put it this way: Google beat Microsoft because it developed and gave away that which Microsoft kept dear: source code to operating systems. (Microsoft finds it impossible to react unless it sells hardware–not easily done in volume and at a high premium.) Now turn the discussion around and ask what Google holds dear. The answer is the data which every consumer has to give. It’s now given freely in exchange for a service. But if that data were brokered by the user directly to the advertiser then Google has nothing to sell. For this to happen there must be a revolution in both the perception of what users give up when they use online services and in the ability of advertisers to act on their own to understand the mind of the consumer. If a consumer can become a free agent and an advertiser can do analytics then the economics of the internet (i.e. global information systems) will pivot yet again. Maybe Google will be flexible enough to pivot along but it will be a different company.

Niaz: Dear Horace, thank you once again for giving us time and sharing us your invaluable ideas, insights as well as knowledge. We are wishing you very good luck for all of your upcoming endeavors.

Horace: Thank you for having me.

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Further Reading:

1. James Allworth on Disruptive Innovation

2. Viktor Mayer-Schönberger on Big Data Revolution

3. Gerd Leonhard on Big Data and the Future of Media, Marketing and Technology

4. Brian Keegan on Big Data

5. Irving Wladawsky-Berger on Evolution of Technology and Innovation

6. Ely Kahn on Big Data, Startup and Entrepreneurship

7. danah boyd on Future of Technology and Social Media

Gautam Mukunda: Leadership

Editor’s Note: Gautam Mukunda is an Assistant Professor in the Organizational Behavior Unit of Harvard Business School.  He was the National Science Foundation Synthetic Biology ERC Postdoctoral Fellow resident at the Massachusetts Institute of Technology’s Center for International Studies.  He received his PhD from MIT in Political Science and an A.B. in Government from Harvard, magna cum laude.  His research focuses on leadership, international relations, and the social and political implications of technological change.  His first book, “Indispensable: When Leaders Really Matter,” was published in September 2012 by Harvard Business Review Press.

eTalk’s Niaz Uddin has interviewed Gautam Mukunda recently to gain his ideas and insights about Leadership which is given below.

Niaz: Dear Gautam, thank you so much for giving me time in the midst of your busy schedule. I believe we will be able to find some interesting facts about leadership today. You studied at Harvard University and Massachusetts Institute of Technology.  At the same time, you have been working with giant companies as well as advising nonprofit organizations. As an assistant professor, you have been teaching ‘Leadership’ at Harvard Business School. Recently you’ve published your book ‘Indispensable: When Leaders Really Matter’. At the very beginning of our interview, can you please tell us about how do you see ‘leaders’?

Gautam: You’re welcome. And I am happy to be here. So when I study leader, I study basically anyone with the possession of power in an organization. I would say about the people particularly at the top of the organization. By having their office and by being at the top of the organization, they are the leaders. So when I look at in my book and in my other research  about the question ‘When does it really matter who the person at the top of the organization is’ or ‘What is the circumstances when it’s important that it was this person and not one of the other people who might possibly have the job’.

Niaz: That’s really impressive. So how do you define leadership?

Gautam: I would say, in an essence, leadership is what leaders do. It could be anything. For my work, in some sense it doesn’t matter. So leadership is just anything leaders do as part of their job descriptions. More broadly in other people research, there is a distinction between leadership and management. Management is kind of the process of the organization and taking care of the certain things and leadership is more of the emotional side of the organization like inspiration, culture and that kind of things.

Niaz: I have read your book ‘Indispensable: When Leaders Really Matter’. But those who are not familiar with your book, can you please tell us briefly about your book?

Gautam: Sure. So my book proposes an explanation as to when the individual leaders really make a big difference in the behavior or performance of an organization. The book is essentially a way to answer this question ‘When an individual leader matters’ or more broadly to answer sort of traditional debating question ‘Individual leaders make history or it really about larger social forces or individual leaders don’t matter’.

Niaz: What are your new findings in your book?

Gautam: So my book says, in most of the time, leadership is all about larger social forces. Most of the time individual leaders don’t matters.  But sometimes under very clearly identifiable circumstances, individual leaders can matter a great deal.

Niaz: What is most significant: Nurturing Leadership for Years or  Hiring Rock Stars.

Gautam: So in general it is almost always better to nurture leadership for long term within the organization. The people who work within the organization are the people are well known to you. You understand them and know their performance. Organization that are successful for long periods of time, are successful in part because they consistently able to develop and nurture leadership within the organization. They don’t need outsider. The companies that are successful for long time always tend to bring insider. Even though they don’t get Steve Jobs but they never just get a complete failure.

Niaz: Suppose you have been in business for 20 years, how will you hire a CEO for your billion dollars company?

Gautam: So the first question I would want to ask is whether I want someone from inside of the company or from outside of the company. Because it’s very different such of things. If you want someone from inside of the company there is relatively low risk choice because s/he is someone you know very well. So if your company is doing well and it’s in pretty good shape, you probably want someone from inside of the company. But if your company struggling or there is a major change in the market or something happening that cause you to think about trouble and you don’t have any one inside of the company with right approach then you have to start looking outside of the company. And when you are doing that then there are a variety of things you have to think that I have described in my book. May be the most important thing is that you have to realize that in general there is little chance of getting someone who is good at all of the skills sets needed to lead the organization. People have different skills sets at the same time organizations need different skills sets. So, Instead of looking for the best leader, what you really need to look for the right leaders.

Niaz: What sort of advices do you have for youth in becoming successful leaders?

Gautam: I would say that the most consistently successful leaders are people who do have many qualities. May be the one hardest and you need to work deliberately to cultivate is they are intellectually open. They draw on resources, concepts and ideas from a wide variety of areas. And they are not only open to other sorts of ideas but also the possibilities  they might be wrong, and they think very seriously and very constructively about how to recognize when they are wrong and how to learn from their mistakes and what to do about it. If I were giving sort of advice to people who are trying to develop leadership skills and to become a leader I would say read broadly, think broadly, engage in a wide variety of activity and do it with a learning orientation.Do it as someone who is consciously thinking about what am I am learning here that tells me that these are the things I knew I believed, isn’t true.

Niaz: Finally, are leaders made by history, or do they make it?

Gautam: Yah!That’s of course the topic of my book. And the answer is most of the time leaders are made by history. But sometimes, when a leader gets power, who hasn’t been thoroughly evaluated by the system, before they get power, is a little bit of unknown or a little bit of a surprise that person has the potential to do things radically different that no one else would do. And those people can really make history.

Niaz: Thank you so much for your time. And all the best wishes for your all upcoming projects.

Gautam: You are welcome. Good luck to you Niaz.

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Further Reading:

1. Jeff Haden on Pursuing Excellence

2. Daniel Pink on To Sell is Human

3. Barry Schwartz on Wisdom and Happiness

4. Derek Sivers on  Entrepreneurship, CD Baby and Wood Egg

5. Peter Klein on Entrepreneurship, Economics and Education

6. Naeem Zafar on Entrepreneurship for the Better World