I usually take Saturday morning to catch up with the news since it is a nice way to relax while keeping updated. Since being in Denmark, Danish news are obviously part of the menu.
The relevant news to me can be summarized this way: In Denmark unemployment nearly doubled in one year (numbers confirming what people know about the crisis), bankruptcies are skyrocketing and the government is worried about jobs among young people and will consequently dump 1 Billion DKK to facilitate 5000 interships by 2010.
I know that Denmark is quite liberal/capitalist about businesses, that the Social Security system (public+private) is supporting lots of unemployed people during this phase and that this may only last some time (whatever “some” means)… [1] I also believe that the current numbers (6% unemployment rate) are not sound, as they will change quickly
Even so, I believe that 1 Billion could be better used. Assuming there are 10% for running costs (not sure how (in)efficient public services actually are) that’s an incentive of 180,000 DKK per employee. This incentive only lasts the timeframe of one internship if the company is not interested in renewing the contract with the intern [2].
The current governmental plans are partially done to protect some issues regarding compulsory interships in some academical degrees. Even so, what if this money could be spent on early-stage innovation? Young people can have low burning rates when starting a new business (personal expenses and commitments are lower) and this money could help a team of 2-3 entrepreneurs sustain a small business for 1/2 years. For the sake of reasoning what if that money could generate 1 or 2 thousand lightweight, agile and money-sensitive companies? Which impact would that have in a 3-5 year time frame, even assuming conservatively that only 10% would be a sound success? This would certainly result in long-lasting effect with the creation of even more jobs and a very reasonable economic impact.
I am not arguing for high risk ventures. I am trying to contextualize this into concepts like Services, where companies can start generating income faster. The truth is that 1Billion DKK, put in the hands of some early stage investors, would generate a lot more return.
When I was in Portugal it was common knowledge that crisis situations (like companies closing down) would tend to create a spike on the creation of small local companies as people move to create their own jobs (specially relevant in countries where the economy is not able to re-absorb those people). What Denmark could do now was to create that same business creating effect. This crisis doesn’t have the same meaning as it does in less dynamic economies but by doing so the Danish government would artificially create the same conditions that can generate small businesses , with a very relevant impact.
I can think of different areas where new business initiatives are needed in Denmark: If you travel and see the price disproportion between different goods (not tourist prices but normal day-to-day prices) or the things that Denmark doesn’t have, you’ll get some ideas…. The web is full of opportunities, not only for IT geeks…
Footnotes
[1] I actually think that this is mostly over and people are now watching to see: my feeling is that Q4 2009/ Q1 2010 will see the beginning of the rebound.
[2] It would be nice to know in detail some stats about “intern turnover rates”, ie if they statistically continue in the company of it the company will get another intern to replace it (being cheaper)
Visualization became a hot topic on the web recently. This is a nice visualization on how Americans are spending their money.
It was a nice finding to complement some current reading on buying behaviour (“How customers think” and “Why customers buy things they dont need”). It’s macro vs personal behaviour (two somewhat opposite sides of spending) but interesting nevertheless.
Transportation accounts for 17,6%
Time to rethink modern life? Does commuting make sense? Could economic incentives to companies strongly address it? Why do companies in Silicon Valley have to be mostly in Palo Alto for instance leaving employees with communting or high housing costs for instance? I keep recalling from my old commuting days that 2 hours in traffic per day is 10h/week (one more day of work)… One of the advantages of moving to Copenhagen was exactly this (even if i had my bike stolen recently).
Housing is 34,1%, of which 20% is for shelter only
Wow, not a surprise but makes you think if it could be different? I’m average here.
Source: VisualEconomics
Have you ever seen yourself wondering… “What if?…” ?
WHAT IF’s”, and “WHY’s” make you think and question things not because they are necessarily wrong but because they might sometimes be and setting for the first reasonable option will never produce optimum results… It’s the minimum denominator of choice… The easy is good enough… Well, not for some.
“What If’ers” dont go along with the Paretto’s rule which says that 80% of results are driven by 20% of the initial efforts. “What if’ers” thrieve to fight for the 100%, because 80 is not enough. It’s hard, it takes some time, it may be painful, but it produces results that others won’t.
It also allows you to dream. “What if something cool happen?” Well, worst case scenario, it wont but then what? Everything would stay as it was before anyway and your attitude will use it to leverage your drive to succeed in the future… without ever quiting in favor of the easy way.
Just because you can dream, and because you can fight for what you dream and believe in.
Muhamed Yunus, from Flickr (CC)
Recently on the news was the interesting idea about funding entrepreneurs entry into the States. This idea is being led by Paul Graham, a big name in the Valley and the head behind YCombinator’s innovative approach for micro VC funding [1].
But the idea may not be a good one. Why? ‘MOTIVATION’.
The idea
The idea behind is that the American government should create visas for entrepreneurs like they do for student visas, which would feed existing startups with the best brains available in the world. There would be an approval process like in the case of student visas. You can read more in his blog. This initiative is included in WhiteHouse2 [2].
While most of the Valley WoW’d his idea, i will try to reason some issues it may raise. It may help shedding some thinking on the downsides, to make the idea even stronger if it goes ahead.
Motivation is a huge issue
The idea seem to fail on motivation behind the involved parties motivation. The benefiting startups would do it based on cost per competence basis, therefore downgrading potential American candidates just because they are more expensive. But for me the most important is the target group. They are again treated like the ones applying trough the Green Card lottery, a system already in place that handles immigration issues in a Lotto-like way (need not to explain why this is devious to say the least).
Maybe Mr. Muhammad Yunus [3] would agree with me. The Bank of the Poor sustains it model in people’s motivation while joining micro-credit, namely: survival, peer-pressure and the consequent honor attached to the respect for the loan and circumstances involving it. There is a reason why most of the borrowers are Women.
In Mr Graham’s case, motivation is mainly working in the States followed by the related to working in a startup environment (not as big motivation as going to the States for less priviledged people). This would probably happen at lower conditions than the job market average (expected due to the power differences of visa holder and boss and the reason behind the idea itself) .
Summing up
Motivations that are not basic on Maslow’s hierarchy of needs will tend to discrepancies and an inneficient process. Consequences can be diverse and easy to imagine: use the Visa to entry The States only, escape for a better paid job ASAP after,…
A must read
Everybody should read Banker of the poor by Muhammad Yunus. It is an inspiring case of Humanity, a Business case and a eye-opener for what’s out there, behind our “pink and perfect little world”. To me it also contains an underlaying manifest of respect for Women’s role in society (present and future).
Notes
[1]If you like entrepreneurship and web concept innovation, you should know Paul Graham and YCombinator’s, inovative VC model. Briefly they invest small amounts in garage-like entrepreneurs (usually very young people) alognside with knowledge sharing and influence.
[2] WhiteHouse2 is a great and innovative idea itself, an effort by the new Obama administration to open legislation needs to the people by leveraging the power of Crowd-Sourcing
[3] Muhammad Yunus won the Nobel Peace Prize in 2006 for his efforts on erradicating poverty trough Microfinancing
