Some intangibles are priceless

For those of you who are baseball fans, you know that Yankee shortstop Derek Jeter got his 3000th career hit on Saturday. For those of you who aren’t baseball fans, let me assure you that this is big deal. In fact, no New York Yankee has ever done it. It happen to be a home run, giving some lucky fan the chance to grab the ball as it bounced around the stands. The luck fan was a guy by the name of Christian Lopez.
So, what does the holder of such a piece of valuable memorabilia do. Well according to Jason Gay’s column in the Wall Street Journal, you have 4 option — sell it, return it, keep it or throw it back on the field. Lopez choose to give it back to Jeter. And the fans loved it — Jeter being especially respected in New York (which says a lot). As Gay noted in his column:

Surely, there will be moments when Lopez wonders if he did the correct thing–if it was smart to be so sentimental in a sports era that often feels money-driven and cold.
But right now, Lopez is beloved. And as Derek Jeter knows after 17 years, you can’t put a price on that.

I agree — sometimes intangibles are truely priceless.

June employment

Are we seeing an economy that has essentially stalled? The news from BLS this morning’s on the employment situation is not good:

Nonfarm payroll employment was essentially unchanged in June (+18,000), and the unemployment rate was little changed at 9.2 percent, the U.S. Bureau of Labor Statistics reported today. Employment in most major private-sector industries changed little over the month. Government employment continued to trend down.

Economist had expected between 105,000 and 125,000 new jobs. Likewise,the number of involuntary underemployed remained essentially unchanged (see chart below). Clearly, for all the other news about how well companies are doing, we are seeing a classic job-less recovery — something that is becoming all too familiar in this new economic structure.
Involuntaryunderemployed-0611.gif

Why information on worker re-training is important – and what we should do with it

Data and information is the life blood of the I-Cubed Economy. Yet, in the Federal government data collection is often treated as a lonely step-child. When Congress looks to cut, studies and data are one of the first things to go. Now comes a perfect example of why such actions are penny-wise-and-pound-foolish — in today’s Wall Street Journal (Jobs Study Is Too Late for Debate on Trade).
Congress is currently debating new trade agreements with Colombia, South Korea and Panama. A key element in the discussions is continued funding of the Trade Adjustment Assistance (TAA) program. As well all know, there are benefits and costs to such trade agreements. Like it or not, companies are exposed to increased competition and workers displaced. The TAA program is meant to buffer the negative effects of trade agreements. Yet, the debate on the program is flying blind. As the Journal reports, “The lack of up-to-date government data on how effective the $1 billion-a-year program is at helping the unemployed find well-paying work has hobbled efforts to identify and make improvements.” Specifically, a study by the Labor Department originally due in 2007 will be ready at the end of the year — after the debate is over.
I can’t say that budget cuts to research and statistical analysis have directly caused the delays in the study. But there has been a pattern over the decades of “cut-research-first.”
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There may be a bit of hope in this situation, however. I have long advocated for a broader overhaul of our working training programs. There are two problems. First is the fragmented nature of the programs. TAA is a perfect example. It only covers those who can get certified that their unemployment was due to trade agreements. That is a narrow class of workers who need re-training due to economic shifts. This lead to the situation I encountered back in my Senate staff days where auto workers were eligible for TAA assistance because of increased auto imports, but the guys who drove the auto delivery rigs (taking the cars to the dealers) were not (even though their jobs were directly tied to domestic production as well).
The rationale is that the government should pay for re-training for unemployment caused by government actions (i.e. trade agreements). That is an outmoded view in an economy where human capital is one of the most important ingredients to economic prosperity. And we have gradually been expanding worker re-training — but is a piecemeal fashion. We need a better overall training policy.
Second, the system is focused on re-training. We need a system that continually upgrades worker skills so they stay competitive and don’t lose their jobs in the first place. We know that preventative medicine is better and more economical than waiting for illness to strike. Our training system needs a big dose of the preventative mindset.
Maybe the release of the Labor Department study will help turn attention to the broader issue once the narrow trade debate has worked itself out. I like to remain optimistic.

Knowledge is the World Bank's greatest asset.

Many think of the World Bank as a solely financial establishment — making loans and grants for projects in developing countries. Yet, the real strength of the Bank lies in the combination of money and knowledge. In fact, the knowledge part may ultimately be the more important. And part of that knowledge is in the form of data — which World Bank President Robert Zoellick is opening up. As the New York Times (World Bank Is Opening Its Treasure Chest of Data) reports:

Long regarded as a windowless ivory tower, the World Bank is opening its vast vault of information. True, the bank still lends roughly $170 billion annually. But it is increasingly competing for influence and power with Wall Street, national governments and smaller regional development banks, who have as much or more money to offer. It is no longer the only game in town.
And so Mr. Zoellick, 57, is wielding knowledge — lots of it. For more than a year, the bank has been releasing its prized data sets, currently giving public access to more than 7,000 that were previously available only to some 140,000 subscribers — mostly governments and researchers, who pay to gain access to it.
Those data sets contain all sorts of information about the developing world, whether workaday economic statistics — gross domestic product, consumer price inflation and the like — or arcana like how many women are breast-feeding their children in rural Peru.
It is a trove unlike anything else in the world, and, it turns out, highly valuable. For whatever its accuracy or biases, this data essentially defines the economic reality of billions of people and is used in making policies and decisions that have an enormous impact on their lives.

Of course, as the story points out, this is not necessarily a new strategy. Former Bank President James D. Wolfensohn tried positioning the Bank as a “Knowledge Bank”. Both he and Zoellick have clearly understood that the Bank’s intangible assets are just as important, if not more so, than its financial assets. The challenge they both faced however is getting the Bank to understand the difference between these assets. Knowledge assets are often times most valuable when they are shared — especially when the organizations mission is based on using that knowledge to help others. But trying to move such a large organization in the direction of creating a culture of sharing is difficult. This latest action of opening the databases appears to be next step in that ongoing process. And a clear recognition by the Bank leadership of the importance of managing its intangible assets toward fulfilling the organization’s mission of “inclusive and sustainable globalization.”

Failout from the Nortel patent auction?

The battle for Nortel’s patent portfolio is over (see NYTimes and WSJ). The Canadian telecommunications company fell into bankruptcy and the trustees began selling of assets — specifically selling off various business units. Recognizing that Nortel’s patent portfolio of 6000 patents constituted a stand-alone asset, they set up a patent auction. The winner, announced yesterday, is was a consortium of Apple, Microsoft, Research in Motion, Sony, Ericsson and EMC. Losers in the bidding were Google and Intel. The price tag: $4.5 billion. And that was for a portfolio that most observers believe will be used for defensive purposes.
Over at the IAM blog, Joff Wild has a good take on what this might mean for the relationship between companies and investors:

Nortel investors, on the other hand, will look at all of this and weep. How could the company’s board failed to have seen the potential in the patent portfolio that it owned? I don’t know if it is possible, but if it is surely some kind of action based on negligence or complete incompetence is going to be taken. Though in the end, I suppose, if investors had taken any notice of IP themselves, perhaps they could have asked a few questions that may have alerted senior management to issues that they were ignoring.

Maybe, just maybe, Joff is right and this will raise the issue of IP value — and one hopes the broader issue of intangible asset management — to the level of the Board of Directors. But I agree it will take an investor lawsuit to get people’s attention. So we will see.