Sunday, March 28, 2010

Chicago Mayor's Innovation Answers: Better Schools, Fewer Wars

You may think you know Chicago Mayor Richard Daley pretty well after reading his recent profile in the New Yorker by Evan Osnos, a former colleague at the Chicago Tribune. But even after more than 20 years in office—and even longer in the media—Daley can still surprise, as I found out during a private lunch with him. The lunch capped the latest Chicago Innovation Awards and provided the winners, profiled here on businessweek.com last fall, a chance to tell their stories individually to the mayor. I was there as one of the judges.

Most of the talk was on innovation, naturally. But as we sat at a large rectangular table in an anteroom in Daley's City Hall office for more than an hour, Daley leaned back in his chair to launch into monologues against the wars in Iraq and Afghanistan and the failure of public schools—Chicago's included—to adequately train kids today in technology, math, and science. Among the education fixes Daley said he's contemplating: a fifth year of high school and elite math and science academies for Chicago's brainiest students. He also praised for-profit schools.

Daley had surprised me just the day before the March 26 luncheon. I had seen him at an event at the CME Group, where he met the media to talk up the jobs and technology that the futures-trading giant has created. In the middle of a standard pro-business speech, Daley seemed to have a Tea Party moment. He scolded government for raising taxes and boosting its payroll, saying such moves put too much burden on the private sector and probably don't really help much anyway. Later, I asked him whether his remarks were aimed at President Barack Obama. No, he answered. But he added that the federal stimulus measures had succeeded only in creating jobs in Washington and not in the rest of the nation, where people are still hurting.

At the lunch, Daley seemed most interested in a couple of inventions by firefighters. One helps crews battle high-rise fires by enabling them to attach a pipe to the building's exterior to pump in water from the floor below. The second is essentially a giant shop-vac that quickly sucks away debris to help rescue victims of cave-ins. But he was also intrigued by dot-com startups such as Everyblock.com, Groupon, and Visible Vote. What more could the city do, he asked, to promote more innovation and entrepreneurship? The winners suggested city sponsorship of tech and scientific conferences. Daley, in turn, pushed education as a way to supply employers with the talent they need.

Too many students are graduating high school knowing too little about technology, math, and science, Daley said. Even bright kids come out with too few skills because they get held behind by the rest of the class, he said. Chicago, he said, should have career-tracked schools where nerds wouldn't be ostracized. Daley also related anecdotes about students who scam the system by obtaining Pell Grants to go to community college but then take just one class year after year, spending the rest of their stipends on whatever. (For-profit schools aren't scam-free, as this report in Bloomberg BusinessWeek showed.)

Endless wars are undermining America's competitiveness, too, he said. The reason the country doesn't have enough money for better schools or job retaining, he went on, is that it is spending hundreds of billions a year on war. This isn't what the U.S. should stand for, he added. He also wondered where the public outrage is. Back when his father was Chicago's mayor, he recalled, thousands of people would routinely take to the streets to protest the Vietnam War. Nowadays, he said, there are no demonstrations—people shrug off war and say if enlistees want to go off and risk their lives, well, that's their choice.

He also said he could never talk like that in Washington, or he'd be branded as being politically incorrect.

As we stood in line to help ourselves to the food, I asked Daley what he thought of the New Yorker profile. He said he thought it was fair and that Osnos didn't seem to have it out for him like the local media. Way to go, Evan.

Friday, March 12, 2010

BusinessWeek NEXT blog

Everything prior to this post is extracted from BusinessWeek's NEXT blog.

Debate: Who's the Most Innovative Company of 2010?

Posted by: Michael Arndt on March 08, 2010

We’re a month away from publishing our Most Innovative Companies ranking for 2010, dear readers. Let’s see if your opinion matches those in our survey of top-level execs around the globe. Who do you think will top this year’s list? And who do you think actually deserves to be No. 1? Also, name a newcomer that has earned a slot in the Top 25.

To refresh your memory, here’s 2009’s list. I’ve put an asterisk after companies that were honored in our first ranking, in 2005. The 2010 ranking comes out on April 8.

1. Apple*
2. Google*
3. Toyota Motor*
4. Microsoft*
5. Nintendo
6. IBM*
7. Hewlett-Packard
8. Research in Motion*
9. Nokia*
10. Wal-Mart Stores*
11. Amazon.com*
12. Procter & Gamble*
13. Tata
14. Sony*
15. Reliance Industries
16. Samsung Electronics*
17. General Electric*
18. Volkswagen
19. McDonald’s
20. BMW*
21. Walt Disney
22. Honda Motors
23. AT&T
24. Coca-Cola
25. Vodafone

U.S. Loses Innovation Crown to ... Iceland

Posted by: Michael Arndt on March 03, 2010

Once upon a time—actually it was just last year—the U.S. was the world innovation champion, according to an annual report by INSEAD and the Confederation of Indian Industry. In this year’s study, the nation slumps to 11th place. Perhaps even more surprising is the new No. 1: Iceland.

Soumitra Dutta, an INSEAD professor of business and technology, who oversaw the survey, theorizes that the rankings show that, as in so much else, size matters. But in this case it’s the smaller the better.

He tells me that having easy access to a big marketplace still makes it easier for innovators to profit from their inventions. Would the iPod or the iPhone have been such big hits if Apple had been based in, say, Iceland? But the Internet is turning the entire world into one big market, to which everyone everywhere has access, he says. Also, it appears that smaller, homogeneous countries can unite to support policies, institutions, and infrastructure that promote innovation—in the developed world, at least.

Size certainly makes a difference in the 2010 Global Innovation Index report. The most-populous land in the Top 10 is the Netherlands, with 16.4 million people. It finishes in eighth place. Several of the biggest nations in the developed world cluster just below the U.S. Japan is 13, with Britain at 14, and Germany at 16. Of the so-called BRIC giants in emerging markets, China comes out best, at 43. Trailing are India (56), Russia (64), and Brazil (68).

This year’s report, financed by Canon India and released on March 3, evaluates 132 countries. Researchers used data from a number of sources, including the World Economic Forum, the World Bank, and the UN, to gauge innovation inputs—things such as education and business climate—as well as outputs to quantify scientific and creative advances.

The U.S. drops out of the Top 10 because it isn’t sufficiently providing many of the inputs or what the study calls “pillars of innovation.” It ranks 22 in political environment and 21 in regulatory environment. It ranks 22 in K-12 education, 22 in technology infrastructure, and 24 in exports and employment. “The U.S. is unable to create a coherent public agenda,” Dutta tells me on the phone from India.

So where does the U.S. score best? In market and business sophistication, which includes access to capital and openness to foreign competition and where it rises to second and third.

Iceland, by comparison, falls below the U.S. in market and business sophistication—no surprise, says the report, given the complete collapse of Iceland’s banking industry. But it outshines the U.S. in education and infrastructure. Iceland comes in fourth overall, for instance, in per capita mobile phone subscribers. Its general infrastructure is the world’s best.

Here’s the Top 10, with 2009’s rankings in parentheses:

1. Iceland (20)
2. Sweden (3)
3. Hong Kong (12)
4. Switzerland (7)
5. Denmark (8)
6. Finland (13)
7. Singapore (5)
8. Netherlands (10)
9. New Zealand (27)
10. Norway (14)

Advice—and a Pop Quiz—from Chef Charlie Trotter

Posted by: Michael Arndt on February 01, 2010

If celebrity chef Charlie Trotter loves anything as much as fine dining, it’s parlor games. I got to crash a class trip to his flagship restaurant in Chicago by a group of some 100 MBA students at Northwestern University’s Kellogg School of Management, plus their marketing instructor, Andrew Razeghi. For $100 a pop, they took over the entire restaurant for a four-course dinner (with wine pairings) and inspiration and advice from Chef Trotter, as his staff calls him.

As he went from room to room to dispense his philosophy and answer questions, he teased and taunted the students with quotes, offering a free dinner for two to anyone who could name the source. No one in my room won.

Now you can play along in the office or at home. I’m listing the quotes here—plus one ringer—with the answers at the bottom. In between, I’ll pass along a few of Trotter’s insights. (Sorry, no free dinner prizes.)

1.”Goodnight, ding, ding, ding, ding.”

2. “Do you wish to be great? Then begin by being.”

3. “Make voyages. Attempt them. There’s nothing else.”

4. “Say, was I in here last night and did I spend a $20 bill?”

5. “When the going gets weird, the weird turn pro.”

6. “I’m all about making money. It’s the greatest thing, because it means you get money to spend.”

Here’s Trotter’s quick course on entrepreneurship: Trotter opened his first restaurant 23 years ago. But he claimed he’s never worked a day in his life. Instead, he’s been doing only what he wants—and for himself. “Never work for anybody,” he told his guests. “Only work for you.” He also told them it’s OK, and even smart, to appropriate ideas from whomever you want. But you then must make them your own.

He also urged the MBA students to take a flier. “You’ve got to go do stuff. Be bold. Be ballsy. Too many people are chicken shit. Go do something for five years. You’re young. You can always play it safe later.” Their role model, he said, should be the title character in Werner Herzog’s movie Fitzcarraldo, who madly attempts to haul a riverboat over a mountain in Peru to exploit an inaccessible rubber grove. “It’s a metaphor for what all of you want to do.”

And the answers are:

1. Monty Python

2. St. Augustine

3. Tennessee Williams

4. W.C. Fields

5. Hunter S. Thompson

6. Charlie Trotter

Calatrava Dances onto a New Stage

Posted by: Michael Arndt on February 02, 2010

Last May, Santiago Calatrava unveiled his revised plans for a train station at the site of the World Trade Center in New York. It won’t be completed until 2012, if then. The $3.2 billion project is, nonetheless, still moving ahead, unlike his residential tower that was to be New York’s third-tallest building until it was canceled in 2008. One Calatrava project will be finished before then, however, and it’s for sure: He is designing five sets for the New York City Ballet’sspring season.

He will unveil his stage designs on April 29. The first will be for a new ballet choreographed by Benjamin Millepied (yes, that’s his real name) at the Lincoln Center of the Performing Arts on May 22.

Calatrava sees the work as an honor. He is only the second celebrity architect commissioned by the NYC Ballet to create stage sets. The first was Philip Johnson in 1981. It may also be a sign of the times for him and other “starchitects” who find they have a lot more idle hours these days.

Calatrava is far from jobless, of course. In addition to his transportation hub for a new World Trade Center, he was awarded a project last June to draw up a master plan for a new campus of the University of South Florida Polytechnic as well as a $45 million education building to anchor the site. He’s also working, in fits and starts, on the first of three bridges to span the Trinity River in Dallas.

But his setbacks have been as big as his brand. They include the now-canceled Chicago Spire, which at 2,000 feet would have been the tallest building in the Western Hemisphere and today is nothing more than a hole in the ground.

Calatrava doesn’t want to talk about his business, his spokeswomen tell me. Instead, he prefers to talk about the big picture, about how many great buildings were constructed in hard times. He says we could be in a similar spot today, if people are courageous. Meantime, if you want to check out his latest designs in the U.S., your best option is to go to the NYC Ballet.

On Boeing, Innovation, Competition, and Job Cuts

Posted by: Michael Arndt on February 19, 2010

What’s that old saying, actions speak louder than words? Boeing Chairman and CEO James McNerney stepped onto the soapbox on Feb. 19 to decry the quality of U.S. education, warning that the nation is producing too few STEM graduates—science, technology, engineering, and math—to compete against China, India, and “places in the Middle East.” Borrowing a term, he added in a speech in Chicago to alumni of Northwestern University’s Kellogg School of Management that the U.S. faces an “innovation deficit.”

After McNerney finished his remarks, in which he also challenged the Obama Administration to grant investment tax breaks and push harder for more free trade pacts, I got an email news alert that Boeing had sent layoff notices to another 1,000 employees. And guess what sorts of workers the company is firing? Four out of five are STEM workers in the aircraft maker’s engineering, operations, and technology unit. They’re the latest in a series of layoffs that will exceed 10,000, according to the company.

A Boeing spokesman confirmed the news report. He also told me that me that the new cuts come primarily in IT support. But he said that while these workers are no longer needed, Boeing is continuing to hire STEM-skilled applicants in R&D, and in the U.S.

In his speech, McNerney said: “We face a global skill shortage. The problem is growing acute in the U.S. We face a skill shortage, not a labor shortage.” There may be 1,000 Boeing employees who could come up with a way to solve that problem.