PBT Consulting

EUROZONE UNEMPLOYMENT RATE HIT 11.8% IN NOV 2012, WAS 12% IN FEB 2013, AND 23.9% OF EUROZONE YOUTH ARE STILL UNEMPLOYED

Scene of unemployed workers outside a Spanish unemployment office in Madrid in December 2012 (Click Image To Enlarge) 

The eurozone unemployment rate has hit a record high at 11.8% in November 2012 with 18.8 million people out of jobs according to Eurostat and youth unemployment at a new high of 24.4%.

The eurozone unemployment rate rose to 11.8% in November 2012 - the highest rate on record according to official figures out today.

Up from 11.7% in October, the latest figure has caused some concern in the eurozone. Graeme Wearden wrote on October 31, 2012:

"Today's unemployment data rather takes the shine off recent claims that the eurozone crisis is over. The immediate threat to the single currency has receded, but politicians and policymakers still face an ailing economy. Initiatives such as a banking union or the ECB's bond-buying programme may hold the eurozone together, but they don't deliver the hope of immediate growth."

Once again the highest rate was seen in Spain at 26.6% followed by Greece at 26% (recorded for September 2012). According to Eurostat, the unemployment rate increased in 18 of the EU member states, fell in seven and remained stable in both Denmark and Hungary.

Unemployment rates vary slightly between the EA 17 (European nations adopting the EURO as their currency) and the EU 27 or European Union.

EA 17 and EU 27 Unemployment Rates - 2000 through Q1 2012 - EuroStat (Click Image To Enlarge)

The latest figures from Eurostat, the statistical office of the European Union, also show the EU27 unemployment rate stood at 10.7% in November, stable compared with the previous month.

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Eurostat figures also show youth unemployment and the latest figures suggest the situation has got worse. The youth unemployment rate for November 2012 was 23.7% in the EU, up from 22.2% in November 2011.

The eurozone recorded a youth unemployment rate of 24.4%, up from 24.2% the previous month. Greece and Spain reported the highest rates at 57.6% (September 2012) and 56.5% respectively.

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Germany, Austria and the Netherlands had the lowest youth unemployment rates at 8.1%, 9% and 9.7% respectively.

The latest release shows that 26.06m people in the whole European Union were unemployed in November 2012 - an increase of 154,000 people on the previous month. Compared with November 2011, unemployment has risen by 2.012m.

Despite the latest release displaying the November 2012 seasonally adjusted rates for most EU countries, there are still some gaps. The latest recorded figures for Greece are from September 2012.

Austria and Luxembourg had the lowest unemployment rates at 4.5% and 5.1% respectively. Germany (5.4%) and the Netherlands (5.6%) also recorded low rates of unemployment.

The table below shows the seasonally adjusted unemployment rates by country and month. There is also a table showing youth unemployment by country. Breakdowns by gender can be found in our downloadable spreadsheet. What can you do with this data?

Eurozone Unemployment Rate Hits Record High in February 2013

Unemployment rose to a record high of 12 percent in February 2013 in the Eurozone, according to the latest data released by the EU's official statistics agency.

The Belgium-based Eurostat said on Tuesday that some 19.07 million people in the 17-member currency bloc are looking for jobs, up by 1.01 percent from the same month last year.

Laszlo Andor, a spokeswoman for EU Employment Commissioner, said.

"Such unacceptably high levels of unemployment are a tragedy for Europe.  The EU has to mobilise all available resources to create jobs...young people in particular need help."

The figures and a weak manufacturing sector report added to the gloom after data earlier this year had encouraged some hope the European economy might finally have touched bottom.

Analysts suggested Tuesday's reports pointed instead to worse to come, with the jobless queues likely to grow as the debt crisis continues to sap the economy.

Youth Unemployment

The highest unemployment rates in February 2013 were found in Spain with 26.3 percent and neighbour Portugal, on 17.5 percent.

Greece was put at it 26.4 percent but this figure is for December, the latest available.

The lowest rates were 4.8 percent in Austria and 5.4 percent in Germany, Europe's biggest economy.

With youth unemployment a huge cause of concern, Eurostat said that the jobless rate for under-25s ran at 23.9 percent in the Eurozone and 23.5 percent in the EU.

Among the countries with the highest youth jobless levels, Spain was on 55.7 percent, followed by Portugal on 38.2 percent and Italy with 37.8 percent.

Greece was the highest with 58.4 percent but this was also for December.

In the United States, the youth unemployment rates for teens (16-19 yrs) and young adults (20-24 yrs) are at historical highs, peaking at 26.75% for teens and 17.5% for young adults in early 2009 as a result of the Great Recession.  

U.S. Unemployment Rates - Teens (16-19 yrs), Young Adults (20-24 yrs) and Adults (25+ yrs) - 1948 through 2012 - Bureau of Labor Statistics (Click Image To Enlarge)

According to the Bureau of Labor Statistis, the youth (ages 16-24 yrs) unemployment rate stood at 16.2% at the end of March 2013.  This is more than double the U.S. unemployment rate.  By contrast, the Eurozone youth unemployment rate was 23.9% -- +47.5% higher than the U.S.

When you breakdown the U.S. unemployment rate by age and race, it is obvious that Hispanic and Black youth are having a difficult time finding employment.

U.S. Unemployment Rates - Teens, Young Adults and Adults Over 25 yrs - By Age and Race - March 2013 - Bureau of Labor Statistics (Click Image To Enlarge)

Howard Archer of IHS Global Insight said the figures marked a "dismal landmark" at 12 percent -- already very close to the official EU 2013 forecast of 12.2 percent.

COMMENTARY:   As you can readily see, although the U.S. unemployment rate as of March 2013 was 7.6%.  At the height of the Great Recession, the official U.S. unemployment rate exceeded 10%.  If you factor in individuals who gave up looking for work and under-employed individuals (part-time workers and temps) the U.S. unemployment rate was 22%.  

Three Measurements of U.S. Unemployment Rates - Official, Official+Workers No Looking For Work, and Official+Workers Not Looking For Work+Underemployed Workers - 1994 through April 2009 - BLS  (Click Image To Enlarge)

In a blog post dated November 6, 2011, I prepared a detailed analysis of the U.S. unemployment rate, and I explained the three key factors as to why the unemployment rate will continue to remain high, and why no President, not even Barack Obama, is likely to do much about it.   I believe that the Eurozone is in a similar fix.

To put things into perspective, the present Eurozone unemployment rate of 12% is probably closer to 25% when you factor in individuals who gave up looking for work and under-employed individuals (part-time workers and temps).  As a resu;t of these horrific unemployment statistics, the Eurozone is suffering through a recession similar to what the U.S. experienced just recently.  

Courtesy of an article dated October 31, 2012 appearing in The Guardian and an article dated April 2, 2013 appearing in Aljezeera and an article dated April 5, 2013 appearing in Center For Amerian Progress 

WEALTH INQUALITY IN AMERICA: ACTUAL DISTRIBUTION OF WEALTH IN THE U.S. IS MINDBOGGLING COMPARED TO WHAT IS IDEAL

This motion graphic is on the distribution of wealth in America, highlighting both the inequality and the difference between our perception of inequality and the actual numbers. The reality is often not what we think it is.

Wealth Inequality in America infographic

 

COMMENTARY:    If you think capitalism is working, then you have to look at the above video infographic of America's distribution of wealth.  We are basically a nation of paupers with a middle class that is being squeezed as never before.  If the idea was to lower wages to the point where it is difficult to make an honest living or buy luxuries or even own a home, then capitalism is definitely not working.  When you have this type of wealth distribution inequality, you are really asking for problems.  We used to be a nation of consumers, but  if the above trend continues, you have to ask yourself, who is going to buy what we produce?  No wonder employment is high, employers got used to not hiring people following the slow recovery after the Great Recession. Now they are about to find out that there are simply not enough buyers for what we produce. With the potential for even smaller consumption of goods and services, we could be at a tipping point leading to another recession.

Courtesy of an infographic designed by Visual.ly

INFOGRAPHIC: WHY YOUR COMPANY ISN'T GROWING AND HOW TO ACHIEVE SUSTAINABLE CORPORATE GROWTH

 

At the “When Growth Stalls” website, the Web home of the book by Steve McKee, there is a confidential self-diagnosis survey available to business professionals who want to get a sense of how their company is doing. McKee Wallwork Cleveland collected over 1,000 responses from these executives and recently took a closer look at the results. The results are staggering.

It’s not about the economy. The research shows that many struggling companies are suffering for reasons of their own making so McKee Wallwork Cleveland prepared this fun infographic to summarize the not-so-enjoyable internal dynamics that struggling companies must find a way to overcome.

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COMMENTARY:    It is important that management not only understand what corporate growth is, but what drives growth and how to manage that growth effectively for longterm sustainability and predictability.   Let's look at the 6W's of corporate growth: why, what, where, when, and HoW.

6W's of Sustainable Corporate Growth (Click Image To Enlarge)

Know Why

What is the real purpose of your business? Your company needs profits to live, but profits are not what the business is for.  The objectives are to provide value to the population and to make the community better.

When this vision is lost then we lose sense of purpose, the feeling of belonging, the sight of why we work, and why our business exists.  Start a business when you have a passion for something and want to create something that you can be proud of. Inspire yourself and your people with a clear vision. Define shared values and let values rule. Achieve your sustainable competitive advantage by continuously developing existing and creating new resources and capabilities in
response to rapidly changing market conditions. Focus on strengthening your distinctive capabilities – leadership, teamwork, processes, tacit knowledge, etc. – which cannot be replicated by competitors.

Know What

Finding the right balance in your business will help you refine your goals and hasten you towards them. Organizations prosper by achieving strategy through balancing the four major factors or perspectives: Financial; Customer; Process; and Growth.

Build Your Sustainable Competitive Advantage

Sustainable competitive advantage is the prolonged benefit of implementing some unique value-creating strategy based on unique combination of internal organizational resources and capabilities that cannot be replicated by competitors.   Sustainable competitive advantage allows the maintenance and improvement of your enterprise's competitive position in the market.  It is an advantage that enables your business to survive against its competition over a long period of time.

Know Where

Remember the old joke about the car mechanic who’s called in after every other mechanic failed? He listens to the engine for a few minutes, then hauls off and gives it a big swift kick in a certain strategic spot. Lo and behold, the engine starts humming like a kitten. The mechanic turns around, gives the car owner his bill for $400. The owner is flabbergasted and demands an itemized breakdown and explanation.

The bill says... '$1 for my time, and $399 for knowing where to kick.'

Know When

Timing is everything. You have to know not only how to make a move, but when. “The value of actions lies in their timing,”  said Lao Tzu. Customer value derives from timely delivery. Change is unavoidable, but if you can anticipate it and understand business cycles, you can ride with change instead of being run over.

Know Who

According to Lee Iacocca, "In the end, all management can be reduced to three words: people, product, and profits. People come first." Your corporate vision is worthless, strategies powerless and shared values are corrupt without the right people to execute.

Know How

Manage processes, not people. Focus not on what they do, but on how they do it. Establish a synergistic enterprise-wide and an end-to-end (cross-departmental, and often, cross-company) coordination of work activities that create and deliver
ultimate value to customers.

Sustainable Growth Rate

According to  Profit Impact of Marketing Strategy or PIMS an important lever of business success is growth.  Among 37 variables, growth is mentioned as one of the most important variables for success: market share, market growth, marketing expense to sales ratio or a strong market position.

The question how much growth is sustainable is answered by two concepts with different perspectives:

• The Sustainable Growth Rate (SGR) concept by Robert C. Higgins, describes optimal growth from a financial perspective assuming a given strategy with clear defined financial frame conditions/ limitations. Sustainable growth is defined as the annual percentage of increase in sales that is consistent with a defined financial policy (target debt to equity ratio, target dividend payout ratio, target profit margin, target ratio of total assets to net sales). This concept provides a comprehensive financial framework and formula for case/ company specific SGR calculations.
• The Optimal Growth concept by Martin Handschuh, Hannes Lösch, Björn Heyden et al. assesses sustainable growth from a total shareholder return creation and profitability perspective - independent of a given strategy, business model and/ or financial frame condition. This concept is based on statistical long-term assessments and is enriched by case examples. It provides an orientation frame for case/ company specific mid- to long-term growth target setting.

Sustainable Growth Rate (SGR) Formula

The sustainable growth rate according to Robert C. Higgins is the maximum growth rate a company can achieve consistent with the firm`s established financial policy. Basically, it is calculated as:

SGR = (pm*(1-d)*(1+L)) / (T-(pm*(1-d)*(1+L)))  where:

• pm is the existing and target profit margin
• d is the target dividend payout ratio
• L is the target total debt to equity ratio
• T is the ratio of total assets to sales

In order to grow faster, the company would have to invest more equity capital, increase its financial leverage or increase the target profit margin.

The sustainable growth rate model assumes several simplifications such as depreciation is sufficient to maintain the value of existing assets, the profit margin remains stable (also for new businesses), the proportion of assets and sales remains stable (also for new businesses) and the company maintains its current capital structure and dividend payout policy. The sustainable growth rate model has implications for valuation models, as for instance the Gordon model and other discounted cash flow models require a growth estimate that can be sustained for many years. The sustainable growth rate can be a check if business plans are reasonable.

Optimal Growth Rates

Optimal Growth from a shareholder value reation and profitability perspective according to Martin Handschuh, Hannes Lösch and Björn Heyden is the growth rate which assures sustainable company development – considering the long-term relationship between revenue growth, total shareholder value creation and profitability. Assessment basis: The work is based on assessments on the performance of more than 3500 stock-listed companies with an initial revenue of greater 250 million Euro globally and across industries over a period of 12 years from 1997 till 2009. Due to this long time period, the authors consider their findings as to a large extent independent of specific economic cycles.

Relationship Between Revenue Growth, Total Shareholder Value Creation and Profitability

In the long-term and across industries, total shareholder value creation (stock price development plus dividend payments) rises steadily with increasing revenue growth rates. The more long-term revenue growth companies realize, the more investors appreciate this and the more they get rewarded.

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Return on Assets (ROA), Return on Sales (ROS) and Return on Equity (ROE) do rise with increasing revenue growth up to 10 to 25% and then fall with further increasing revenue growth rates.

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Also the combined ROX-index (average of ROA, ROS and ROE) shows rises with increasing growth rates to a broad maximum in the range of 10 to 25% revenue growth per year and falls towards higher growth rates.

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The authors attribute the continuous profitability increase towards the maximum of two effects:

1. Profitability drives growth: Companies with substantial profitability have the opportunity to invest more in additional growth.
2. Growth drives profitability: Substantial growth may be a driver for additional profitability, e.g. by higher attractiveness for high performing young professionals, higher employee motivation, higher attractiveness for business partners as well as higher self-confidence.

Beyond the profitability maximum extra efforts to handle additional growth – e.g. based on integrating new staff in large dimensions and handling culture and quality - do rise sharply and reduce overall profitability.

The combination of the patterns of revenue growth, total shareholder value creation and profitability indicates three growth zones:

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• Low Return: Low profitability and low value generation below 10% per year
• Long-term Sweet-Spot: Solid value generation and highest on average profitability in the revenue growth interval from 10% to 25% per year
• High Speed: Even higher total shareholder value generation however in combination with lower profitability beyond 25% per year

Growth rates of the assessed companies are widely independent of initial company size/ market share which is in alignment with Gibrath`s law. Gibrat's law, sometimes called Gibrat's rule of proportionate growth is a rule defined by Robert Gibrat (1904–1980) stating that the size of a firm and its growth rate are independent. Independent of industry consolidation and industry growth rate, companies in many industries with growth rates in the range of 10 to 25% revenue growth p.a. have both, higher total shareholder value generation as well as profitability than their slower growing peers.

Base Strategies and Growth Moves

These findings do suggest two base strategies for companies:

• For companies (e.g. in established markets like central Europe and USA) with low single digit growth rates: Consider acceleration of growth given the fact that TSR and profitability are higher in the sweet-spot
• For companies (e.g. in fast growing regional markets like China with India and/ or rapidly growing industry segments) with growth rates beyond 25%: Consider best ways to “digest”/ and to stabilize rapid growth and ensure a “soft landing” should market growth come to a sudden stop

How To Achieve Long-Term Growth in the Sweet-Spot and Beyond

The authors have identified a set of preconditions and levers to achieve long-term growth in their defined sweet-spot and beyond:

Preconditions

• Generating a common understanding regarding growth and profit ambitions among the management team as a prerequisite for aligned and coordinated strategy development and implementation
• Understanding relevant markets (current or future promising markets). Generating market foresight when identifying and assessing growth initiatives, e.g. megatrends and scenario analyses, segment specific benchmarking and in depth assessments, market demand projections

Levers and strategy

• Applying formulas for rapid growth, e.g. maxing out the number of relevant customers, maxing out the share of wallet and lifecycle potentials, continuous innovation, killer offerings, network based growth, M&A/buy-and-build driven growth, franchising proven business concepts, pyramid-like network expansion and managing value networks
• Defining the growth strategy as a portfolio of best suited growth initiatives considering a multidimensional set of criteria, e.g. ease of implementation, growth and profit impact, expected risk vs. return, cash flow stability
• Making growth happen: Strategy and corresponding culture must be addressed in a consistent way, e.g. creating the case for growth, clearly defining and communicating vision and strategy as well as actively developing and energizing the organization.

Criticism

As described the sustainable growth rate (SGR) concept by Robert C. Higgins is based on several assumptions such as constant profit margin, constant debt to equity ratio or constant asset to sales ratio. Therefore, general applicability of SGR concept in cases where these parameters are not stable is limited.

The Optimal Growth concept by Martin Handschuh, Hannes Lösch, Björn Heyden et al. has no restrictions to certain strategies or business model and is therefore more flexible in its applicability. However, as a broad framework, it only provides an orientation for case/company specific mid- to long-term growth target setting. Additional company and market specific considerations, e.g. market growth, growth culture, appetite for change, are required to come up with the optimal growth rate of a specific company.

Additionally, considering the increasing criticism of excessive growth and shareholder value orientation by philosophers, economists and also managers, e.g. Stéphane Hessel, Kenneth Boulding, Jack Welch (nowadays), one might expect that investors` investment criteria might also change in the future. This may lead to changes in the relationship of revenue growth rates and total shareholder value creation. Regular reviews of the optimal growth assessments may be used as an indicator for the development of stock markets` appetite for rapid growth.

Courtesy of an article dated December 13, 2012 appearing in SmartBlog on Leadership and an artile by 1000Ventures.com and Sustainable Growth Rate by Wikipedia.com

FACEBOOK HUGE TIME SUCK FOR BUSINESS, 1/3 OF WORKERS VISIT NON-WORK SITES DURING WORK, COSTS U.S. ECONOMY $785 BIL

 

Facebook Inc. (NASDAQ:FB) is a drain on the U.S. economy. 

No, we’re not talking about Facebook’s IPO fiasco earlier this year and the subsequent stock price meltdown. It’s bigger than that.

Facebook is worst offender among the many Internet distractions keeping workers from getting things done in the office.

Most workers stop what they are doing several times an hour to respond to messages from friends and co-workers on social media like Facebook and Twitter, browse the Internet, and check and respond to e-mail.

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And once distracted, it takes time for a worker to get back to the task at hand – one study put the average disruption at 23 minutes.

All those interruptions add up to a massive expense for businesses and the U.S. economy.

Facebook Costs Us Billions

A study in 2005 by Basex Inc. estimated that Internet distractions to “knowledge workers” (managers, professionals and office staff) added up to over two hours per day and cost the U.S. economy$588 billion.

Using the Basex formula, Money Morning has calculated that Internet distractions will bleed a stunning $785 billion from the U.S. economy in 2012 – nearly 5% of the $15.8 trillion gross domestic prouct (GDP).

Noted the Basex report.

“Whether sitting at a desk in the office, in a conference room, in one’s home office, or at a client’s, the likelihood of being able to complete a task (what many call “work’) without interruption is near nil.” 

Last year research firm uSamp conducted a survey on work distractions for social email software maker harmon.ie that found 45% of IT employees couldn’t even work for 15 minutes without getting interrupted by something.

Assuming an average IT salary of $30 an hour and just one hour of time wasted each day, uSamp calculated a loss of $10,375 to the employer in lost productivity.

Facebook the Biggest Culprit

Another survey, conducted this year by Salary.com, showed just how deep the problem of wasted time on the job runs in the American workplace.  Their survey revealed the following:

• 64% or nearly two-thirds visit non-work related websites every day while at work. 
• 29% admitted spending 1-2 hours a week on personal websites.  
• 21% admitted to wasting 2-5 hours each week.

As for what workers are doing on the Internet the survey revealed:

• 41% said they were going on Facebook. 
• 37% said they visited LinkedIn. 
• 49% or nearly half used work time to hunt for another job.

These online activities of American workers while at work can cost companies more than lost time. 

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Other popular Internet distractions included:

• Google+ (28%)
• Amazon (25%)
• CNN (20%)
• YouTube (13%)

Many companies try to curb Internet distractions by blocking sites like Facebook and Twitter, but with limited success. People just use their smartphones instead.

Tudor Aw, KPMG’s European head of Technology, told Salary.com.

“Executives may be naïve in thinking that banned access to social networks eliminates employee use.  Indeed, the survey shows that by restricting or blocking access, many employees tend to move their activity to their own personal devices which are often less secure and completely unmonitored.”

In some of the surveys, employees said spending work time on Internet distractions provided much needed breaks that made them overall better workers. Maybe so, but any time spent on Facebook on the job is time that no work is getting accomplished.

Yaacov Cohen, co-founder and CEO of harmon.ie, said of the survey he commissioned. 

“Information technology that was designed at least in part to save time is actually doing precisely the opposite.  For all of us, it’s time to take back the Internet and find ways to control our digital addiction.”

COMMENTARY:    

How Employers Feel About Social Networks

According to the following infographic, researched and developed by PayScale, the higher-ups are really not too keen on the social media movement at large, especially when it involves giving social media freedom to employees within the company. And the fear of negative information keeps employers running for a tight leash. Only half of companies have a formal social media policy, and 42% of companies surveyed nix all forms of social media activity at work. In the employers’ eyes, social media should be exclusively reserved for carefully managed brand promotion and professionally handled social recruiting.

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Mobile Devices Driving Social Networking In The Workplace

According to Facebook's Q3 2012 earnings report, the social network now has 1.007 billion monthly active users, of which 604 million or 60% use mobile devices to access the site.

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So even though over 40% of employers surveyed by Scale block or prohibit Facebook while at work, the adoption of mobile devices to access the internet and social networks, has done little to stop social networking while at work.   In fact, if you look at the following graph, the number of minutes spent on social networks each month exploded from 27 billion minutes in June 2008 to over 70 billion minutes by the end of June 2011.  With the phenomenal growth in mobile devices, it would not be surprising if the number of minutes has doubled by the end of October 2012.

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By mid-May 2012, Facebook had reached 901 million active users, but the number of time spent on the social giant stood at 393 minutes per year.   This is more than twice the other major social networks combined. 

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Courtesy of an article dated November 9, 2012 appearing in Market Daily News and an article date June 10, 2012 appearing in Mashable

HOW RISING WAGES IN CHINA, AND IMPROVEMENTS IN INDUSTRIAL ROBOTS, COULD MAKE APPLE BRING THE JOBS BACK HOME

 

Dexterous robots that can assemble high-tech electronics finally begin to come of age

When Apple comes home—and it will happen sooner than anyone, even Apple, would ever imagine—we’ll need to thank the triumvirate of rising wages overseas, automation and robots, especially robots.

Rising wages and automation alone might make Apple move to India or Africa, but not re-shore itself stateside. The robot, however, holds the automation key.

It takes five days and 325 steps to assemble an IPad

The 325 steps and five assembly days needed to bring an iPad to life are in the hands of 300,000 Chinese workers at Foxconn’s Longhua factory. It’s those 300,000 pairs of assembly hands that robots will replace.

Jamie Wang, a Taipei-based analyst for the research firm Gartner, sees lots of human hands going over to robots. A robot can be operated non-stop 160 hours a week, which would easily replace two to four workers. Such highly structured and predictable tasks are well suited to automation, he says. 

However, Wang stresses that such automation requires lots of infrastructure work just to get ready to install the robots. For Foxconn, it’ll be awhile, even if Terry Guo, chairman of Taiwan’s Hon Hai, still believes that his firm’s Foxconn division will soon have a million robots ready to take over. In fact, Gou may be waiting for a very long time for reasons that have nothing to do with technology.

Maintaining a harmonious society

David Wolf, a Beijing-based strategic communications and IT analyst, thinks he knows what may hold up robot adoption in many Chinese factories: worker harmony.  He says.  

“With the Chinese economy slowing down, it is politically inadvisable to talk too much about replacing people with robots.”

Creating jobs is many times more important for China than a great leap forward in efficiency. Wang Mengshu, deputy chief engineer at China Railway Tunnel Group, says that labor-saving equipment isn’t always used even when it’s available.  He says.  

“If all the new tunnels were built with the advanced equipment, that would trim the need for the employment of about six million migrant workers.  In certain fields we don’t want to have fast development in China, in order to solve the national employment problem.”

Harmony is the key. Mao Zedong promised his people freedom from foreign subjugation, the end of famine, universal education and jobs. He delivered on all of them, which the reigning Politburo won’t destabilize. No one wants Mengshu’s six million migrant workers howling about their pink slips.

The coming age of dexterous robots

With the U.S. as efficient as China, but doing it with 10% of China’s workforce, a window of opportunity is open for the U.S. to automate with robots, re-shore manufacturing and still make heady profits.

When Apple comes home it’ll be greeted by dexterous robots capable of assembling electronics. ABB’s Frida (see video below) and others of her ilk are great recent advances but are still bumblers when it comes to assembling small- and micro-scale electronic devices. However, the way forward—one that’s very nearby—shimmers in Frida’s reflection.

 

Vivek Wadhwa, writing in a recent article in Forbes, sees it all near at hand and ready to spring.

“Even if the Chinese automate their factories with AI-powered robots and manufacture 3D printers, it will no longer make sense to ship raw materials all the way to China to have them assembled into finished products and shipped back to the U.S. Manufacturing will once again become a local industry with products being manufactured near raw materials or markets.”

All thanks to legions of dexterous robots.

A treasure trove for the parts industry

There’s a gold mine there for millions of U.S jobs as well. During the five days and 325 steps that go into assembling an iPad, hundreds of parts are pushed into each iPad skeleton. For example, Samsung will sell Apple $12B in iPad parts in 2012. In addition, the workers wearing surgical masks at Foxconn also install parts from NAND, Toshiba, Elpida, Avago Technologies, Triquint Semiconductor, Fairchild, Qualcomm, Broadcom, ARM Holding, and LG Electronics. Some or all of these suppliers might also pack up their robots and move a bit closer to Apple’s U.S. manufacturing facilities.

Robots seem to be doing what the combined brainpower and political clout of the entire U.S Congress and two Presidents couldn’t do for America, namely, create jobs and initiate the greatest repatriation of manufacturing back to the U.S. in the country’s history.

Of course, many will not take such a re-shoring to America without their own plan to profit from such an exodus. The Financial Times sent their Sarah Mishkin to speak with engineers in Taipei who are trying to develop a new breed of robot that can handle the intricate operations of manufacturing high tech-products. Her video report:

 

COMMENTARY:    U.S. manufacturing is finally beginning to come home. GE, Boeing, Caterpillar, Ford, Master Lock and Coleman have moved operations back to domestic factories over the last two years, and more could join the trend.

One of the key reasons why U.S. manufacturers are returning home from China and other Far East countries is the robot.   A nimbler, smarter, modular, multi-tasking-capable generation of robots is on the rise and learning to do all sorts of new tricks principally in manufacturing and supply chains.

Robots are even getting quite adept at toiling side-by-side with their human makers, which has catapulted their kind from the obscurity of punching out automobiles and working in foundries to all sorts of human-robot interaction (HRI). Many of the new capabilities were on display at this year’s AUTOMATICA tradeshow in Munich, Germany, but even there only the tip of the iceberg of new- and next-gen robotics was exhibited. 

Of course, the robot has lots of help on its side. China’s GDP is expected to grow just over 8% this year, which is the slowest growth China has seen in years. A report from the Boston Consulting Group (BCG), Made in America, Again: Why Manufacturing Will Return to the U.S., cites other mitigating factors like higher Chinese factory wages, soaring electricity costs, the increasing need to provide goods to a rising Chinese middle class, and the constraints of U.S. firms trying to coordinate operations thousands of miles from home. The report predicts that by 2015 certain kinds of production will be just as cheap in the U.S. as in China (cited were car parts, construction equipment and appliances).

U.S. Industrial Robotics Boom

According to new statistics released by the Robotic Industries Association (RIA), North American robotics companies sold more industrial robots in the second quarter of 2012 than any previous quarter in history.

• Q2 2012 vs Q2 2011 - A total of 5,556 robots valued at $403.1 million were sold to North American companies, a jump of 14% in units and 28% in dollars over the same quarter in 2011.  
• YTD Q2 2012 vs YTD Q2 2011 - Orders in the first half of 2012 totaled 10,652 robots valued at $747 million, increases of 20% in units and 29% in dollars over the same period last year.

Jeff Burnstein, President of RIA says.  

“Obviously, we’re thrilled about the great results so far this year.  The strong sales reflect increased demand for robotics in industries such as automotive, plastics & rubber, and metals.  However, as the economy slows, it’s not clear that these numbers will remain as strong heading forward.”

Industrial robotic orders by industry category were as follows:  

• Spot welding robots - used primarily in automotive solutions, jumped 68% in the first half of 2012.  
• Coating & dispensing - (+42%), 
• Arc welding - (+20%), 
• Assembly - (+19%).  
• Material removal orders - A smaller application area, rose 364 percent.

Automotive related orders accounted for 65% of units and 64% of dollars in the first half of 2012.  This represents sharp gains of 44% in units and 56% in dollars over the opening half of 2011.

Burnstein explained.  

“It’s great that the auto related numbers continue to post huge gains, but as we know, automotive industry purchases are cyclical.  However, we were disappointed to see non-automotive related orders fall eight percent in units and one percent in dollars in the first half of the year, with even sharper declines in the second quarter alone.”

RIA estimates that some 220,000 robots are now used in the United States, placing the US second only to Japan in robot use.

China Takes The Lead in Worldwide Industrial Robots

According to the International Federation of Robotics (IFR), there will be an estimated 1.3 million industrial robots installed worldwide by the end of 2012.   Asian countries, led by China, will have an estimated 575,000 industrial robots installed by the end of 2012.   Asian countries are expected to continue to lead in the total number of industrial robots installed, reaching 700,000 industrial robots installed by the end of 2014.      

 Click Image To Enlarge

Foxconn International To Install One Million Industrial Robots

In a blog post dated October 15, 2011, Foxconn International, the exclusive Chinese manufacturer of Apple's iPhone and iPad, facing higher labor costs, overtime, worker lawsuits, and possible unionization, announced that it plans to install one million industrial robots by 2014.   Foxconn plans on installing 300,000 industrial robots by the end of 2012.   

If Hon Hai Precision, the parent of Foxconn International, goes through with its plan to install one million industrial robots, it is doing so in order to keep the Apple account over there and improve its profit margins, which have been cut paper thin by Apple's constant and brutal demands for lower prices to produce the iPhone and iPad.  In a blog post dated January 31, 2012,  I commented on Hon Hai Precision's profit margins when compared to Apple (see below graph).  

Click Image To Enlarge  

For the above reasons, I really question the wisdom of Apple transferring production of its magical devices from China or other Asian countries because Apple has it pretty good overseas.  For its part, Apple has been severely criticized for looking the other way or completely disregarding the industrial pollution on a massive scale, that its Chinese vendors have caused in China.  Apple was subsequently pressured to force its Chinese vendors to implement stringent pollution prevention measures.  If it were to transfer this production to the U.S. it would be required to comply with even tougher pollution prevention regulations, and I don't think it is willing to do this.  Apple would also be hit with some pretty hefty plant and equipment capital expenditures.  Furthermore, Apple has $40 billion in cash deposited in foreign banks, which are free of U.S. income taxes, and it would lose part of that tax benefit by moving jobs back to the U.S.  Not going to happen.  Tim Cook is too smart.  Apple's profits and stockholders come first over people and U.S. jobs.  There I said it.  Sue me if you disagree.   

Courtesy of an article dated August 11, 2012 appearing in Robotics Business Review and an article dated June 10, 2012 appearing in Robotics Business Review and an article dated July 26, 2012 appearing in Robotics Industry Association

LINKEDIN REPORTS STELLAR Q1 2012 REVENUES AND EARNINGS, BEATS ANALYSTS ESTIMATES, LNKD STOCK JUMPS TO NEW 2012 HIGH

Professional social network LinkedIn (LNKD) just released Q1 earnings and here are the highlights of their earnings call:  

• Revenue - Q1 2012 revenue was $188.5 million, an increase of 101% compared to $93.9 million in the first quarter of 2011. 
• Net Income - Q1 2012 net income was $5 million, compared to net income of $2.1 million for the first quarter 2011, in increase of 140%. 
• Non-GAAP EPS - Q1 2012 non-GAAP earnings per share was $0.15.  Analysts expected earnings of  $0.09 cents per share, with quarterly revenue in at $179 million. 
• Registered Members - LinkedIn now has 161 million members, adding 15 million members over the past quarter.  The company is seeing the fastest growth in Latin America, Asia Pacific and Europe.   

Clearly, the company blew past Wall Street expectations.  Revenue for the second quarter of 2012 is projected to range between $210 million to $215 million.

Jeff Weiner, CEO of LinkedIn said. 

“LinkedIn’s solid performance in the first quarter built on the company’s momentum in 2011.  We saw strength across all key metrics from member signups and engagement to significant revenue growth across our three product lines.”

LinkedIn says this is the seventh consecutive quarter of revenue growth for the company.

Mr. Weiner reported LinkedIn revenues by source as follows:  

• Hiring Solutions Products - Totaled $102.6 million, an increase of 121% compared to the first quarter of 2011. Hiring Solutions revenue represented 54% of total revenue in the first quarter of 2012, compared to 49% in the first quarter of 2011. 
• Marketing Solutions Products - Totaled $48.0 million, an increase of 73% compared to the first quarter of 2011.  Marketing Solutions revenue represented 26% of total revenue in the first quarter of 2012, compared to 30% in the first quarter of 2011.  
• Premium Subscriptions Products - Totaled $37.9 million, an increase of 91% compared to the first quarter of 2011. Premium Subscriptions represented 20% of total revenue in the first quarter of 2012, compared to 21% of revenue in the first quarter of 2011.

Mr. Weiner reported LinkedIn revenues by geographical source were follows:  

• U.S. Revenues - Revenue from the U.S. totaled $120.8 million, and represented 64% of total revenue in the first quarter of 2012. 
• International Revenues - Revenue from international markets totaled $67.6 million, and represented 36% of total revenue in the first quarter of 2012.

For LinkedIn, it’s been nearly a year since the company’s IPO in May of 2011. And the company has been steadily increasing revenue and profits. In Q4 of 2011, LinkedIn doubled revenue and increased profit, surpassing Wall Street expectations. And the company is currently valued at over $11 billion.

From the product iteration standpoint, Q1 was a slightly slower quarter for the network.

In March, LinkedIn introduced a new version of People You May Know. LinkedIn also launched an embeddable “Follow” button that companies can add to their websites. And LinkedIn made the acquisition of contact manager Rapportive official.

Last week, the company debuted its iPad app, which was a key step in the company’s mobile strategy.

The company will refresh many of its pillar products this year. LinkedIn is expected to have 5.3 billion professional searches in 2012.

Mobile continues to be the fast growing product for LinkedIn.

COMMENTARY:     That's what I call a very impressive Q1 2012 earnings call, but I didn't feel this way until now.  

Right after LinkedIn had its IPO in May 2011, many social media analysts believed that its incredible market valuation was not justified and that its price earnings multiple was ridiculous.  It took a beating from both social media experts and Wall Street experts who thought it represented evidence of a tech bubble.

LinkedIn was of tremendous interest to me because it is the third largest U.S. social network after Facebook and Twitter, and it was the first major social media IPO, and how their IPO performed would set the standard for how future social media IPO's would be valued.  

My blog post dated May 23, 2011 is Part I of a 9-Part series analyzing the LinkedIn IPO from just about every conceivable angle.  Ever since that time, I have been waiting for LinkedIn's growth and revenues to hit a brick wall, but this has been to no avail.  

In hindsight, you cannot treat LinkedIn like other social networks.  The company does not rely on the ad-supported revenue model for its sole source of revenues.  The majority of its revenues are derived from hiring solution products (54%)  and premium subscriptions (20%).  Combined this represents 74% of total revenues during Q1 2012.  Facebook on the otherhand generates 89% of its revenues from advertising.  The remaining 11% is from sales of virtual goods from social games. Twitter relies on advertising for 100% of its revenues.  Both of those social giants are likely to be drastically affected by a slowdown in online advertising. 

Social media is still in the "experimental stage," and advertisers are taking a wait and see attitude towards social, using it mostly to connect and engage with their fans and build brand awareness, rather than as a big revenue source.  In fact, most social networks are having a real problem producing a quantifiable ROI on social media advertising for their brand customers.  This issue could have a bearing on how Wall Street and Main Street value Facebook when it has its IPO on May 18, 2012.

LinkedIn has obviously benefited substantially from the boom in technology jobs.  However, any softness in the U.S. economy, especially a slowdown in the nation's job growth, or a slowdown in the world economy, particularly in the Eurozone and Asiatic Pacific, could negatively impact LinkedIn's hiring solutions products and marketing products (advertising) revenues.  

The U.K. has already dipped back into recession again, and the debt problems in the Eurozone are of major concern.  Unemployment still remains high and GDP growth is stagnant in the Eurozone.

China is showing signs of a slowdown as well, and this could affect LinkedIn's expansion in that area of the world.  For this reason, I would be cautious about LinkedIn's revenues and earnings over the next six to nine months.  LinkedIn's stock (NYSE:LNKD) is now trading at its highest level during 2012, so caution should be exercised.

LinkedIn (NYSE:LNKD) stock price as of 10:55 a.m., Friday, May 4, 2012 (Click Image To Enlarge)

UPDATE:  LinkedIn to acquire SlideShare

LinkedIn announced on Thursday, May 3, 2012, that it plans to buy SlideShare for $119 million.

It will be 45% cash and 55% stock.

SlideShare allows users to upload documents to the web and have them embedded all over the place.

How does it fit at LinkedIn? Here's what CEO Jeff Weiner said in a press release explaining the move:

"Presentations are one of the main ways in which professionals capture and share their experiences and knowledge, which in turn helps shape their professional identity.  These presentations also enable professionals to discover new connections and gain the insights they need to become more productive and successful in their careers, aligning perfectly with LinkedIn's mission and helping us deliver even more value for our members. We're very excited to welcome the SlideShare team to LinkedIn."

It's a great outcome for the founders of SlideShare, Rashmi Sinha, Jonathan Boutelle, and Amit Ranjan. It's also a nice exit for Venrock, which was the institutional investor in the company and had a 15X return.

If you’re scratching your head on just why LinkedIn would spend all that dough on SlideShare, Eloqua offers five big reasons.

1. It’s Like Pinterest for Business - We’re all hearing about Pinterest lately, the visually sticky social network for sharing your favorite links to things like wedding plans, Etsy projects and, yes, even content marketing. What makes Pinterest compelling is the way it strips sharing down to visuals.   Well, SlideShare is kind of like Pinterest for business. You can’t narrate your slides when you upload them so you have to lean on your ability to speak through imagery and a conservative amount of text. It forces professionals to get a message across in a highly visual way, and as a result it’s grabbed about 29 million unique visitors. Those are decent stats for PowerPoint presentations. 
2. It Makes LinkedIn More Engaging - While LinkedIn started out essentially as the combo of an online resume and rolodex, it’s tried a variety of tactics to make the site itself more sticky by getting people to share content. LinkedIn would love nothing more than to have its members treat it like the Facebook of career-related content.  (Pop quiz: How often do you check your Facebook newsfeed? Now, how often do you check your LinkedIn “newsfeed”?)   SlideShare gives LinkedIn an incredible content-sharing platform. We’ll have to watch how the two products get integrated, but I bet LinkedIn finds a way to get people to spend more time on site as a result of this acquisition.
3. The C-Level Loves It - LinkedIn not only likes to talk about the number of members it has (161 million, by the way), but also the make-up of that membership. Nearly all the companies listed on the Fortune 500 are represented.  So it’s only natural that LinkedIn covets SlideShare’s influence on the C-level. According to a recent DemandGen Report article, SlideShare gets 40% more traffic from C-level executives than LinkedIn. That kind of organic prestige is hard to buy – but LinkedIn just did.
4. It Inserts LinkedIn Into the Lead Management Process - LinkedIn has won over the hearts and minds of recruiters and job-seekers, but embedding social into the lead management process is more complicated. But for businesses, especially for B2B marketing, SlideShare is a natural tool for delivering leads.  SlideShare’s lead capturing product, which allows users to embed forms for collecting a lead’s data, brings a well-established method for capturing prospect data to LinkedIn. Combined with LinkedIn social sign-on, the SlideShare purchase could increase LinkedIn’s presence in the sales and marketing lead management process.
5. It Fits Right In with the Rapportive Buy - Just over a month ago, LinkedIn bought Rapportive, a startup that created a Gmail plug-in that ties a person’s email address to their social accounts. So if you email me on Gmail, I can see your LinkedIn profile name, Facebook name and Twitter handle and ask to connect all without leaving my email.  Buying SlideShare fits right in with this strategy. LinkedIn can effectively extends its reach to all the other accounts, including email, associated with a professional’s social identity. Content is shared today through a variety of means, it’s shared on social channels (LinkedIn, Facebook, Twitter), it’s found through search (SlideShare is great for this) and we still send it through email. LinkedIn is finding a way to stretch itself across all these platforms.

I am a regular user of SlideShare, and its acquisition by LinkedIn will definitely increase stickiness. However, just how much tangible revenue the SlideShare acquisition will generate remains to be seen.   If you haven't already done so, LinkedIn provides a widget so that you can embed SlideShare presentations right into your LinkedIn profile page, something I do all the time.  

Courtesy of an article dated May 3, 2012 appearing in TechCrunch and an article dated May 3, 2012 appearing in Business Insider and an article dated May 3, 2012 appearing in Eloqua

TECH EMPLOYERS ASKING JOB HUNTERS FOR THEIR FACEBOOK PASSWORDS, AND 1 IN 5 ARE REJECTING JOB APPLICANTS OVER THEIR SM POSTS

Social media profiles are a great way to network and promote yourself, both personally and professionally, but they are also a great way to sabotage yourself with stupid, incriminating content.

And indeed, it turns out that one out of five technology firms has rejected a job applicant because of something they included on their social media profile, according to the 2012 annual technology market survey conducted by Eurocom Worldwide and its associated agencies.

This finding is especially remarkable because a previous wave of the study found that only around 40% of the tech executives surveyed were even looking at profiles of job applicants at all. While that number has probably increased, the fact remains that a large proportion of executives who look at social media profiles are finding something they don’t like.

Mads Christensen, Network Director at Eurocom Worldwide, offered a summary of the findings which makes me want to climb in bed, turn the lights out, and pull the covers over my head forever:

“The 21st century human is learning that every action leaves an indelible digital trail. In the years ahead many of us will be challenged by what we are making public in various social forums today.”

More positively for social media, the Eurocom survey also found that 49% of tech executives said they plan to increase spending on social media in the next year. Of course, social media is still haunted by the unresolved question of ROI, as 57% of surveys said they are still unable to measure the impact of social media spending.

COMMENTARY:  For quite a while I have been warning my readers about professional social media snooping firms like Social Intelligence Corporation, a firm that makes a living investigating what job applicatioins say and post online, especially on social networks like Facebook and Twitter and reporting their findings to employers who hire them.  Social Intelligence Corporation does this legally and there is not much you can do about it.  

Besides verifying prior employment, many employer's are now conducting background checks, credit checks, drug tests, and now social media investigations.  Many will require job applications to sign an authorization giving them this authority.  If you haven't already done so, I urge you to read my previous blog posts dated October 3, 2010, February 3, 2012 and March 8, 2012.   

Now we find that employers have been asking their employees and new job applications to provide them with the password to their social media accounts on Facebook, Twitter and others.  This is the straw that broke the camels back, because it is going far overboard in violating our privacy.   Non-profit organizations like the American Civil Liberties Union (ACLU.org), PrivacyRights.org and BackgroundCheck.org believe that employers have gone too far so have collaborated in designing the following Social Networking Bill of Rights.

 Click Image To Enlarge

Due to The Great Recession and a slow recovering U.S. economy, jobs in some part of America are very hard to comeby, and employers have become very selective, are using selective and discriminatory hiring practices like requiring that you already be gainfully employed to even apply for a job, others are discriminating on the basis of age and getting away with it, and now they believe that they can legally violate our privacy by asking for our social network passwords.  Well, I am here to tell you that they can't.  So no matter how great that new company is, how great the new job is, or how much money they throw at you, if they ask you to give up the passwords to your social networks watchout.  You tell them from me:  "No!!"  In fact, you tell them "Fuck No!!"  It's none of their business and an invasion of your privacy.  I would also report the incident to the ACLU and PrivacyRights.org.

Facebook agrees with me on the subject of  releasing your social network password to employers. On March 23, 2012, here's what Erin Egan, Facebook Chief Privacy Officer said about the new practice by some employers to ask employees and new job applications for their social network account passwords:

"In recent months, we’ve seen a distressing increase in reports of employers or others seeking to gain inappropriate access to people’s Facebook profiles or private information. This practice undermines the privacy expectations and the security of both the user and the user’s friends. It also potentially exposes the employer who seeks this access to unanticipated legal liability."

"The most alarming of these practices is the reported incidents of employers asking prospective or actual employees to reveal their passwords.  If you are a Facebook user, you should never have to share your password, let anyone access your account, or do anything that might jeopardize the security of your account or violate the privacy of your friends.  We have worked really hard at Facebook to give you the tools to control who sees your information."

"As a user, you shouldn’t be forced to share your private information and communications just to get a job.  And as the friend of a user, you shouldn’t have to worry that your private information or communications will be revealed to someone you don’t know and didn’t intend to share with just because that user is looking for a job.  That’s why we’ve made it a violation of Facebook’s  Statement of Rights and Responsibilities to share or solicit a Facebook password."

"We don’t think employers should be asking prospective employees to provide their passwords because we don’t think it’s the right thing to do.  But it also may cause problems for the employers that they are not anticipating.  For example, if an employer sees on Facebook that someone is a member of a protected group (e.g. over a certain age, etc.) that employer may open themselves up to claims of discrimination if they don’t hire that person." 

"Employers also may not have the proper policies and training for reviewers to handle private information.  If they don’t—and actually, even if they do—the employer may assume liability for the protection of the information they have seen or for knowing what responsibilities may arise based on different types of information (e.g. if the information suggests the commission of a crime)."

"Facebook takes your privacy seriously.  We’ll take action to protect the privacy and security of our users, whether by engaging policymakers or, where appropriate, by initiating legal action, including by shutting down applications that abuse their privileges."

"While we will continue to do our part, it is important that everyone on Facebook understands they have a right to keep their password to themselves, and we will do our best to protect that right."

-- Erin Egan, Chief Privacy Officer, Policy

While I am on the subject of privacy.  I highly recommend that you NOT use company computers to access your personal email or social network accounts or do any web surfing (unless the latter is required in your job performance).  IT departments have been known to track your online behaviors while at work.  Many employees have been fired over this.  About 40% of employers now ban social networking from the workplace even if you are using your smartphone, and if you post something derogatory about them on your social network, you are just asking for problems. Remember, unless you have an employment contract, in most states you are an at-will employee, and can be fired for any reason.   

Courtesy of an article dated March 19, 2012 appearing in MediaPost Publications The Social Graf    and an article dated March 20, 2012 appearing in MediaPost Publications The Social Graf

GIRLS ARE SMARTER THAN BOYS WHEN THEY ARE YOUNGER. BUT WHY DON'T THEY PURSUE MORE CAREERS IN MATH AND SCIENCE?

IF GIRLS HAVE SLIGHTLY HIGHER IQS AND GET BETTER GRADES, WHY ARE THEIR NUMBERS DISPROPORTIONATELY LOW IN MATH AND SCIENCE CAREERS?

I still remember learning in grade school that men were better at math and science, and women were better at English and art. The teacher (who was a woman), presented the information as a general fact--noting that these were just loose guidelines that could differ from person to person--and I didn’t question it for a second. You know, until I grew up a bit and realized the very premise was preposterous.

But as this infographic (which is really a narrative of sorts) shows us, it’s not enough to right the wrongs of gender perception when people grow older, the damage has already been done.

Click Image To Enlarge

A lot of these facts are likely nuggets you’ve heard before, like girls performing worse on tests when they are required to mark their gender. But seeing each factoid lined up in pseudo-chronological order, from a grade schooler to a professional, it seems inevitable that women don’t stake their place in industries already dominated by men.

The picture is incomplete, of course. We don’t see how the comparative self-esteem of men evolves over the same time. But it’s safe to say that, when only 16% of students in engineering classes are women, we’re doing something wrong--especially when we can all benefit from some fresh perspective.

Twenty years or so after that day in grade school, I’m a writer and my wife is a scientist. I guess that, given these gender-professional norms, you could make a joke about who wears the pants in my family. But it could never offend either of us. No matter what we do, she’ll still be smarter than me anyway.

COMMENTARY:    These are alarming statistics.  Makes you wonder what is the underlying cause of the loss of self-esteem among females.  Perhaps it could be that women simply do not care to pursue careers requiring too much math and science.  There are fewer of those type of jobs, and many of them are in academia or technology centers like Silicon Valley, and they very often do not pay very much, than jobs in the private sector.   Whatever the reason, it makes you wonder if the math and science "gap" that economists talk about and reasons why American universities are producing fewer engineers than China, Europe and India per capita is because of that gender gap in math and science.  

In a blog post dated September 29, 2011, the U.S. is producing more science and engineer graduates (undergrad and graduate) in 2008 than they did in 1998.  However, the state of science and engineering in the U.S. is still strong, yet the nation's lead is shrinking, according to the latest report from the National Science Board.  Based on a wide range of data - from R&D spending to higher-education trends in science and engineering fields - the group's Science and Engineering Indicators 2010 report suggests that U.S. dominance of world science and engineering has deteriorated significantly in recent years, due in large part to rapidly increasing capabilities in China and other Asian economies.

However, U.S. high-technology employers have given our educational system a bad rap, claiming that we don't produce sufficient science and engineering students to fill their employment requirements.  They always seem to bitch about the limitation on H1B visas.  We have already outsourced nearly 20 million jobs overseas, and employers are trying to do the same thing by importing more science and engineers at lower wages.  I remember a "60 Minutes" documentary about why they hire foreign engineers.  They claim they are smarter.  I think that's bullshit.  The real reason is economic--they are cheaper.  U.S. employers are using the H1B visa as a gimick to reduce overall science and engineering wages.   I say, hire American, keep those jobs here, and provide incentives for U.S. students to pursue science and math courses. 

It appears that the shortage of females in careers requiring science and math is not strictly a U.S. problem.   A similar problem exists in India, a bastian of math and science graduates, and important source of software engineers for Silicon Valley.   In fact,  the percentage of females studying science, engineering/technology and medicine are in the low teens when compared to their Indian male counterparts.   Only 15.8% and 16.5% of India's graduate and doctoral candidates are female respectively.   It would not surprise me that similar numbers exist in Japan, a very male dominated society, but I don't have the data.    If anybody does, post it in the blog.   

Courtesy of an article dated March 21, 2012 appearing in Fast Company Design

STUDY: FACEBOOK BEING USED BY EMPLOYERS TO SELECT WORKERS AND THE SOCIAL MEDIA SNOOPING FIRMS THEY USE

Employers already know it’s a good idea to check job candidates’ Facebook pages to make sure there aren’t any horrible red flags there. The reddest flags for most employers seem to be drugs, drinking, badmouthing former employers, and lying about one’s qualifications. But there’s another good reason for checking out a candidate’s Facebook page before inviting them in for an interview: it may be a fairly accurate reflection of how good they’ll be at the job.

That’s the conclusion in a study published in the Journal of Applied Social Psychology last month. The researchers hired HR types to rate hundreds of college students’ Facebook pages according to how employable they seemed.

One of the study author’s, Don Kluemper, of Northern Illinois University says. 

“We asked them to form impressions of a candidate based solely on their Facebook page.”

This involved looking at what was publicly available on those pages (photos, status updates, and conversations with friends) and then assigning each person a score for a number of qualities important to being a good employee, such as their degree of emotionally stability, conscientiousness, extroversion, intellectual curiosity and agreeableness. (In other words, will they flip out on you, care about completing tasks, be fun to work with, be creative in problem solving, and be willing to kiss up when necessary?) The review took about five to ten minutes per profile.

Six months later, the researchers got in touch with their guinea pigs’ employers to ask about their job performances. Unfortunately, of the over 500 guinea pigs, just 56 of the employers responded. So the sample is small, but the researchers found a strong correlation between those employers’ reviews and the employability predictions they had made based on folks’ profile pages.

I asked Kluemper about the “personality red flags” that their reviewers looked for. He was a little vague but said that a person with obvious mood swings, who is overly emotional in their postings would not be an attractive candidate. Meanwhile, a person with a lot of Facebook friends who takes a lot of crazy photos would be rated as extroverted and friendly — which are attractive qualities in a candidate.

Key takeaway for hiring employers: The Facebook page is the first interview; if you don’t like a person there, you probably won’t like working with them. The bad news for employers, though, who are hoping to take the Facebook shortcut Kluemper said.

“So many more profiles are restricted in what the public can access.” 

Given the small sample size for that first study, I was more impressed by the second. In the second study, the researchers did a similar assessment of students’ Facebook selves and also had the students take personality and IQ tests. Then, instead of following up with employers, they turned to students’ transcripts.  Kluemper says.  

“We were able to better predict a student’s academic success based on their Facebook page than on the cognitive tests.” 

(Most universities claim they don’t stalk applicants on social networking sites during the admissions process. Maybe they should?)

Of course, there are some legal questions to think about before jumping into someone’s Facebook page. Employers can discriminate against potential employees who seem like bummers based on their Wall postings and interests, but will get into trouble if what the Facebook user has said about their religious views affects the hiring process.

COMMENTARY:  For quite a while I have been warning my readers about the dangers of posting or saying offensive things on Facebook, Twitter and other social networks.   Unless you make your Facebook or Twitter page private, you are an open book, and whatever you post on your social network page, could come back to haunt you, no matter how qualified you may be for the job.  

The addition of Facebook's Timeline is going to be a goldmine for employers because it makes it much easier for an employer to dig up dirt you may have long forgotten about.  If you've said some derogatory things about an opposing political party or candidate, a former employer or co-worker, or even an ex-girlfriend or spouse, even the boss' favorite sports team, this can be viewed very negatively by employers.

Law enforcement organizations and government agencies like the FBI, NSA and the CIA are actively involved and working closely with many of the major social networks to conduct investigations, gather evidence and track down criminals and terrorists.  Much of this investigation and data gathering is done under the auspices of the Patriot Act in the interest of national security, so in special circumstances they may not be required to obtain a subpoena to access your private Facebook or Twitter account. The former Director of the CIA testified before a U.S. Senate subcommittee about the billions Facebook had saved the agency. The director said with a smile on his face,

"After years of secretly monitoring the public, we were astounded that so many people would willingly publicize where they lived, their religious and political views, alphabetize a list of all their friends' personal email addresses, phone numbers, hundreds of photos of themselves, and even status updates of what they were doing moment-to-moment.  It is truly a dream come true for the CIA."

Here, checkout the YouTube video yourself.

   

To assist employers in their hiring decisions, many employers are now using what I call "professional social media snooping" firms to scour the internet to find out what you say and post online, particularly on social networks like Facebook, Twitter, and others.  In a blog post dated October 3, 2010, I profiled Social Intelligence Corporation, one of these social media snoopers, and at that time called it a "creepy startup" and "truly scary" company.  

Apparently consumers hurt by this companies activities filed complaints with the Federal Trade Commission (FTC), claiming they were in violation of the Federal Credit Reporting Act (FCRA) of 1996, 2004 with amendments there to.

On May 9, 2011, the Federal Trade Commission ruled on behalf of Social Intelligence Corp claiming that they were not in violation of the Federal Credit Reporting Act.  This effectively gave Social Intellignece Corporation the legality to provide social media consumer reports to employers conducting background checks on prospective employees.

On February 3, 2012, I told you about the growing trend by employers to use social media snooping firms to help employers screen employees through their social media behaviors. It's not just a U.S. trend, employers all over the world are now using social media snooping firms.  More than half of my readers are from countries outside the U.S., so you should be aware of this.  

 

According to Social Intelligence Corp. CEO Max Drucker, the company focuses on screening social media profiles for the usual suspects -- racist remarks, sexually explicit content, pictures with guns, knives, or other weapons, and other illegal behavior (think bongs).

There are some limits on how employers may use archived social media content, however. Under the Fair Credit Reporting Act, companies are required to tell prospective employees (or, say, credit applicants) that they are going to perform background check and obtain their permission to do so. Employers are also required by law to tell the applicant about any damaging information they find online.

The majority of my readers probably have nothing to worry about, but if you have a previous felony conviction, been fired for cause, previously lost your job due to a layoff, and you voiced your anger online, you have a lot to risk.  By some estimates, as many as 40% of longterm unemployed may be in limbo and simply unemployable because of their online social media behaviors.   Social media snooping firms have already expanded into the insurance industry.   Their reports could cause you to lose your health or life insurance coverage or prevent you from obtaining insurance coverage.  If you have any experience or information about the activities of these snoopers, post it on my blog, or shoot me an email.   I have a feeling we have just scratched the surface.                            

Courtesy of an article dated March 5, 2012 appearing in Forbes 

 

HOW WOMEN ARE RESHAPING THE NEW AMERICAN MARKETPLACE, THE ECONOMY, SHARING RECOMMENDATIONS AND DECISION-MAKING IMPORTANT FACTORS

People are often surprised to learn how frequently Affluent consumers use coupons and other forms of discounts. Our latest barometer, conducted in late January 2012, again revealed relatively strong interest in coupons of all types, along with widespread and frequent use. Among Affluents, defined here as the 58.5 million adults living in households with at least $100,000 in annual household income, we found that:

• 71% use paper coupons once a month or more; 47% do so at least once a week
• 54% use online coupons once a month or more; 23% do so at least once a week
• 58% have gotten some kind of “deal of the day” offer, most commonly from Groupon (46%) or LivingSocial (25%), but with significant numbers (5-12%) trying new or more niche-oriented offerings such as those from Amazon, Google, GiltGroup, and Woot.

Just as telling: coupon interest and usage shows little or no drop-off if we examine more elite financial groups, such as those with $250,000+ in household income, or those with $1+ million in assets. The fact is that a strong value-orientation and “love of the deal” are felt widely and strongly among Affluents; they are deep-seated elements of the consumer psyche that were intensified, not created, by the long-running economic downturn. Today’s “deal of the day” and group coupons further boost interest by tapping into additional hot-buttons – the desire for novelty, and the quest to be “in the know” – that add cutting-edge angles to long-standing promotional tactics.

Although interest in discounts cuts across many traditional demographic groups, and reaches well into the upper economic strata, there is a very clear gender difference: women outpace men by 10-20 percentage points on most measures of coupon use. In some ways, the prevalence of coupons across both genders (but led by women) may reflect a broader and more fundamental change in the marketplace, and in society more generally: the continued ascension of women into leadership roles – in the family, in the marketplace, and in society more generally.

That’s a conclusion supported by “Women, Power & Money,” an on-going survey of women we conducted and commissioned jointly by Fleishman-Hillard and Hearst Magazines. The first wave of the study, conducted in pre-recession 2008, set out to examine “today’s successful woman,” and found that virtually all American women consider themselves successful, and have defined success on their own terms; moreover, the study concluded that she had become the de facto CEO, COO, CFO and CPO of most American households.

Wave Four of the study, released last month and titled “Game Changers: Women Defining the New American Marketplace,”* found her impact has grown even more profound, concluding:

“Her influence within the family, and in broader circles as well, has led to an amplification of her preferences – in a very real sense, her preferences have become the de facto defining preferences for today’s marketplace.”

Several factors have converged to shape these trends, creating a perfect storm of environmental conditions that favor marketplace approaches more characteristic of women:

• A persistent economic downturn, favoring value-orientation, frugality, pragmatic expectations from brands, cautious investing decisions, and a willingness to delay gratification.
• The proliferation of information and choice in the marketplace, favoring thoughtful, considered, and researched purchasing decisions.
• The emergence of social media, which expands one’s sphere of influence, and has shaped the attitude that one can and should express opinions (women are more likely than men, for example, to be a friend/fan of a product or company on Facebook).

On a tactical level, these trends have made the market ripe for coupons and discounts, across genders and income groups. More profoundly, they have fostered a fundamental shift in marketplace values, and marketplace power.

* “Game Changers: Women Defining the New American Marketplace” from Fleishman Hillard and Hearst Magazines represents the fourth wave of the ongoing study: "Women, Power & Money." It can be downloaded here.

COMMENTARY:  

The Economy As At The Core of Female Consumer Behaviors

According to "Women, Power & Money," a survey by marketing research firm Fleishman Hillard, The economy is by far today's female consumer's greatest concern, and this concern continues to weigh heavily on her mind, and her shopping decisions.  Economic concerns have intensified her decidedly utilitarian approach to the marketplace. She seeks value, quality, performance, and above all, substance.  She generally prefers a solid “good” choice over a more expensive “great”choice.  In many cases, she researches purchases thoroughly, and applies complex, category‐specific decision rules in making marketplace choices. And again, her influence within the family, and in broader circles as well, has led to an amplification of her preferences – in a very real sense, her preferences have become the de facto defining preferences for today’s marketplace.  

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The economic stress that has taken a foothold after the Great Recession has affected how female consumers shop.  Here's what women said about how the economy has affected their spending behavior:  

• 75%+ said:  “I shop differently now than I did before the recession.”
• 71%+ said:  “Life is more complex today than it was before the recession.”
• 58%+ said: “Financially, I am worse off now than I was before the  recession started.”

Her Leadership Style: From “It’s all on ME” to “Leading the TEAM”

Clearly today’s woman remains the agenda setter in most American households. She is the family visionary who keeps the big picture in mind,while also plotting the day‐to‐day course for the household and those who live in it. But her leadership style is less about doing‐it‐all herself and being Ms.Independence. Instead, it is a more collaborative and thoughtful approach, one in which she leads the team (at home and away) in developing and executing the agenda. She readily shares both the decision‐making responsibility, and the credit that goes along with it.  

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Women as Media: Expanding Social Circles through Receiving,Broadcasting, Influencing

There’s no denying the impact of online social networks on the female consumer, but it is important to put their impact into context. Her online social networking represents only a portion of what she does online, and of course, what she does online is only a portion of her life. Reading and posting product reviews are more common activities than marketplace‐related activities on social networking sites.  Moreover, in‐person communications – in social gatherings, at work, in retail contexts – remain by far the most widely used methods for communication and influence.

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Improving Lives for Self and Others: The Positive Nature of Her Influence and Communications

Reaching out to others and adding more social elements to her decision‐making is not a sign of insecurity or ducking responsibility. She certainly feels confident and empowered in the marketplace; 71% agree, “Today, I feel confident in my being a trusted source of information to others.” She feels smart and ultimately acts based on her own judgment. Rather, her decision‐making style is information‐oriented, and friends, family and other trusted sources have become among the most influential sources of information that she seeks out.  It is not so much about safety in numbers – rather, it is theexpectation that collaboration will result in a better decision, for herself andthose she connects with.

Her primary reasons for sharing opinions (online and offline) – center around sharing positive experiences, seeing others benefit, and spreading the word about something they feel passionate about. Relatively few are focused on warning others about poor products or services, and only 5% say “it’s what everyone is doing these days.” (Interestingly, men are more likely than women to share product or service recommendations because they are confident that their recommendations are “the right way  to go.”)

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Her Marketplace Needs and Brand Preferences Skew  Practical, Functional

When asked to list the brands women admire across a variety of categories, the brands named most consistently tended to be “solid,” but not necessarily spectacular.  Across a dozen categories, American women were asked to list the brands they admire, and to describe in their own words why they admire those particular brands.  The most cited automotive brands, for example, were Ford, Chevrolet, Honda and Toyota – traditional “luxury” auto brands ranked far down the list. The same admiration of good, if not great, brands emerges across categories. Olay and Cover Girl. Old Navy and Macy’s. Tylenol and SC Johnson. Kraft and General Mills.  

Her practical marketplace approach also underscores why she admires particular brands. Across virtually every category, good and quality are the terms she uses most, with price typically close behind. Certainly there are some nuances by category – she wants health from food brands, style from fashion brands, innovation from technology companies, service from hotels, beautiful designs from jewelry, and effectiveness from over‐the‐counter drugs. But good quality at a good price (in other words, value) is generally her top consideration. (See below; font size indicates frequency of mention).

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Sharing Recommendations Differs Among Generational Categories

The tremendous sway that recommendations have on behavior, for example, skews modestly by generation, but in the big picture, is a key marketplace theme across age groups. As shown in the table below, Millennial women are more likely to agree that recommendations from others can be comforting, and to have made specific marketplace choices based on recommendations; however, more than two‐thirds of Senior women agree with these sentiments as well.  

In other respects, however, the tremendous diversity of the women’s marketplace is apparent. Millennial women more frequently broadcast information and make recommendations, and fully half point to online social networking sites as facilitating their shopping decisions. Millennial women bring a different approach to shopping more generally – displaying a more unabashed enjoyment of shopping both online and offline, and paying greater attention to celebrities. (interestingly, Millennial women are also most likely to describe themselves as “stressed” or “exhausted,” while self‐descriptors such as “caring,” “family‐focused” and “optimistic” are lowest among Millennialsand increase with age).

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Judging from the Fleishman Hillard study, the aftereffects of the Great Recession as created the Era of the Frugal Consumer.  The sharing of information and making recommendations about products and brands through different channels, both online and offline, have become vital in the buying decision.  When affluent consumers making $100K+ are also looking for deals and resorting to clipping coupons, you know frugality is here to stay.

As for myself, I much prefer that my female partner maintain the family budget and do most of the shopping.  Keep me as far away as possible from shopping malls.  I'll shop for groceries to help out, but it's not on the top of my priorities.  I definitely want to be "in" on major purchases, and this matches the findings of the study.  

These days it is very important to take control of your household expenses, knowing where the money is coming from, and how it's being spent.  Establishing a family budget begins with the essentials--things you absolutely need to buy or spend on, and keeping luxuries and discretionary items to a minimum. 

Courtesy of an article dated February 15, 2012 appearing in MediaPost Publications Engage:Affluent