Reviewing the role of jobs in economic development

If you want to know the most vital ingredients to economic development, look at the indicators used by economists in measuring economic growth. The problem is that most of these formalized metrics and indicators are dominantly quantitative; which means that they are principally  concerned with numbers and statistics and not with the quality of those indicators that are needed to ensure development.

One economic indicator that is rarely discussed in a qualitative and in-depth manner is a country’s employment level or the level of job production. In the World Bank’s 2013 World Development Report on Jobs, the global institution aims to answer the crucial questions policy makers, government authorities, and even privaentities must answer to keep up with the ever-changing challenge of job creation and sustenance.

The report stresses how much of a country’s or economy’s employment status is dependent on the private sector, which provides most of the jobs. However, the report also underscores the fact that the state has a role to play in the creation of jobs and in making the business environment conducive for sustainable and productive jobs.

Another important fact that the report pointed out is that the kind of jobs that would be truly productive, beneficial, and sustainable depends upon the context and specific needs of each country. For example, agrarian economies have different needs than primarily urban or industrialized countries. This is why there is no single “magic formula” to an effective labour and employment policy.

Again, as with most of my blog articles, I would like to look into how technology has changed the landscape of jobs and employment. One obvious aspect is that the internet has created a myriad of new jobs and, not to mention, bizarre job titles. In fact, this article (You’re a What?! Decoding Today’s Job Titles  ( a-what-decoding-todays- job-titles/) from The Daily Muse points out that the influx of several

industries towards the online realm has created job titles such as “Community Manager” or “User Experience (UX) Professional” – titles that, several decades ago, would sound alien and trivial. This, in effect, shows another facet of technology’s growing influence in development discourse. It has decentralized the burden of development from one or a selected few of industries or professions and branched it out to several different functions that all contribute to growth and innovation. This phenomenon of specialization then paves the way for more people, even those in the entry level or in the lower rungs of the organizational ladder, to foster and develop skills that are best fit to their line of work.

Another important point that the World Development Report makes is that a huge chunk of today’s jobs exists outside the labour market. That is, a lot of working people nowadays are not in a formal employer-employee relationship. In fact, figures cited in the report say that while 1.6 billion people work for a wage or salary, nearly as many, namely 1.5 billion, are working in farming and self employment, domains that are usually not considered part of the labour market.

What these insights tell us is that jobs, like everything else in this fickle world, change alongside the changing assets and needs of different countries. What is essential for policy makers and employers (or businesses) is to keep their decisions and policies in line with what their particular economic context really needs, and not just merely follow the trends that proved to be effective in other business environments.

Knut Nylænde, an investor by profession, is an avid follower of contemporary issues in economics, development, and culture. Currently based in the bustling city of Oslo in Norway, Knut is the founder and CEO of Moxie AS, a global and dynamic investments firm.

The shaky making of economic policies

When markets are wrong and fail, governments step in and correct them – is that so? Or, the other way around; when governments make a mess of things; markets tend to find their own ways to correct them. Absolutely not! But many seem to believe that such relations exist between markets and governments’ actions in the making and shaping of economic policies.

As usual, reality is much more complex than most of us are able to grasp. Even economists and other analysts of public affairs tend to take for granted that there exist a sort of permanent confrontation between governments and markets. Two camps can be spotted; one which believes that markets are prone to failures, and that governments emerge to correct such failures, and another which believe that markets perform well and that governments often make errors, and thereby represent the problem and not the solution in the effort to make things work smoothly.

I once read a book by Alan S. Blinder, a renowned American economist, where the author explained “Murphy’s Law” in economy. It reads: “Economists have the least influence on policy where they know the most and are most agreed; they have the most influence on policy where they know the least and disagree most vehemently.”.

When we add the following platonic observation by Herbert Stein, who had more than 50 years of experience as an economist in Washington DC and as an advisor to Presidents Nixon and Ford before he died in 1999: “Economists do not know very much about the economy; other people, including the politicians who make economic policy, know even less”, we may better understand why things go very wrong from time to time in the economic and financial sphere.

A little piece of comfort lies in what has been known as “Herb Stein’s Law”: “If something can’t go on forever, it won’t.”. So, let us keep our necks straight and high and do the best we can in order to keep our own economic universes ship shape, however small they are in the larger context. Economists and politicians are no better in dealing with their economic universes, however spooky that sounds.

Knut Harald Nylænde is a Norwegian businessman and investor. He participates from time to time in public discussions about management and financial issues as well as about political issues.

The modernisation of fairy tales

Most European regions are rich with folklore dating back to the “beginning of times”. These stories are a key element in most traditions, reflecting the kind of moral and ideological foundations local cultures are rooted in. In the early 19 th century, two German brothers took these bits of folklore and weaved them into well-loved classics that would soon be generally known as fairytales. Today, in 2013, the tales spun by the Brothers Grimm a couple of centuries ago, live on. Almost everyone in the current generation grew up listening to bedtime stories or watching Disney adaptations of classic fairytale stories such as Cinderella, Snow White, and The Little Mermaid. Among adults, however, there has emerged a trend and thereby a market of classic folk stories with a “modern twist”. As a matter of fact, in the past three years, Hollywood has churned out several notable fairytale-themed commercial films such as Red Riding Hood, Tim Burton’s Alice in Wonderland, Black Swan, and the recent Snow White and the Huntsman.

While this topic may seem petty and trivial at face value, such “childish” tales are actually rich with underlying social commentary and insights about the standards during the period of  their authorship. For instance, the Grimm brothers’ original story versions are often criticized for their overtly violent and graphic content (the more popular Disney versions are subdued); but some scholars attribute this element to the traditions of their time (i.e. people during that time place very high regard on discipline). Furthermore, other literary experts argue that most of these folktales are highly didactic and were intended to inculcate the moral standards of those times in children. The aforementioned obsession of giving classic tales a “modern twist”, therefore, offers insight in the modern human psyche and how moral and cultural standards have evolved over the years.

One remarkable thing about modern fairy tale renditions is that they are often dark. For instance, Guillermo del Toro’s Pan’s Labyrinth, loosely based on mythical folklore, has been acclaimed by critics as one of the best ‘dark fantasy’ films of its time. The more recent films such as those listed above (Red Riding Hood, Alice in Wonderland, Black Swan, Snow White and the Huntsman) also exhibit the same dark theme, peppered with copious amounts of violence and sensuality. My theory is that these fairytale renditions are representative of the current generation’s heightened awareness of danger. For one, a notable difference between these “darker” fairytales and their predecessors is that modern fairytale characters appear to have a greater sense of agency than earlier versions. While most of the more traditional versions feature an innocent, helpless protagonist who is unexpectedly attacked by an “evil witch” of some sort and is rescued by a higher and more able being, modern adaptations make use of characters that have a higher sense of control and power over their lives. The protagonists are often presented with their own darker sides, and they eventually overcome the story’s conflict by help of their own devices. I think this is highly representative of how the modern man is aware of the evil he is exposed to, but at the same time she is equipped with a strong sense of will and capability to survive.

This then opens the age-old debate about the validity of interpretation. If a modern version or “re-imagining” of a literary piece diverts largely from the original text;is it thereby disparaging the intended meaning of the text? Is there really such a thing as an accurate interpretation of literature? How does one identify the “real meaning” of a story? These are only some of the questions that have divided the field of literature into numerous different schools and camps.

Entering into this debate would require an entire article of its own, but notwithstanding the many different opinions with regard to literary interpretation, one thing is clear: a literary product (traditional or modern) can speak volumes about the cultural context in which it is produced. This is why it was so essential for literature scholars to study and dissect the classic folk tales of the Grimm brothers, and it should be equally imperative to cultural experts of today to explore how dark, modern, fairytale adaptations reflect the nature of the current world.

Knut Harald Nylænde is the founder and CEO of Moxie AS, an investments group based in Oslo. He has a keen interest in the relationships existing between culture and business.

The language of politics

Politics is primarily a battle of ideologies. CNN’s Jon Avlon has even called it an “ideological bloodsport”. A politician’s “power”, or authority, is drawn from the office she or he is holding at any given time, and, of course, from the amount of people that the politician in question has persuaded to side with her or him. The job of politicians is to sell ideas, and what better way to do this than through, preferably, well composed messages presented by a smooth and easy understandable language?

Because language is a common tool, an everyday practice and experience for everybody; still, people often forget how powerful (and equally dangerous) it can be – especially in the mouth of politicians. Sadly, not all politicians are trained to come up with well founded policies and to stand by their parties’ principles. They are also adept at articulating those policies and principles in such a way that would persuade other people to believe the same. And the unfortunate part is that these linguistic techniques-turned-ideological tools are too subtle to be noticed by the general public.

Case in point: a recent article from The Economist describes the linguistic nuances that differentiate the Republicans from the Democrats, thus defining the dynamics of US politics. The article’s main thesis is that today, “Republicans use words more skilfully to win political battles”, by using shorter and more concrete terms. The piece then cited the following examples to support its claim:

When arguing about abortion, Republicans favour “life” (evocative) while Democrats talk about “choice” (abstract). Republicans talk about “taxes” and “spending” while Democrats want to raise “revenue” for “investment”. George W. Bush had the “Patriot Act”, whereas Mr. Obama has a “Patient Protection and Affordable Care Act”. The former is an awful law that is hard to oppose; the latter an awful mouthful that is hard to remember.

Another defining feature of political language, the article points out, is its penchant for euphemism (e.g. using “collateral damage” to mean “killing people accidentally”). As pointed out earlier, what’s alarming is that the electorate often do not notice these things. Unless you’re a linguist or a communications expert, chances are that such political jargon will only sound like empty buzzwords devoid of significance. But the truth is that these words and statements do matter. They actually mean something – and most will be surprised to know that the meanings are significantly different from what they sound. The worst part is that this sort of political language is often being used to brainwash and persuade people at the guise of “feeding them information”. As the George Orwell quote goes, “political language is designed to make lies sound truthful and murder respectable, and to give an appearance of solidity to pure wind”.

Knut Harald Nylaende runs Moxie AS, an investment firm in Norway. He has been working as a financial and business professional for more than 20 years, and is now a respected name in the field of investments. He runs several blogs, and writes regularly about business, politics, culture, and technology.

The Google revolution

What would the world have been like without Google? It shouldn’t be too difficult to answer this question, taken into consideration that the company has been around for only less than 20 years.

But really, what would life be like without Google? Most people will find it hard to imagine, considering how much of our daily tasks are now aided by different tools offered by Google – Google Search, Mail, Drive, Docs, Maps, Reader, among others.

I was led to ponder on this question when The Economist, on its Free Exchange blog, posted a commentary about Google’s announcement of shutting down Google Reader, a tool that has become essential for a great number of users, particularly writers. This led the author to contemplate on how Google has significantly changed the world. This, I think, is a fact that no one at this point would dare challenge.

One of the most salient points of the article is how facts and issues are becoming less mentally committing, and that connecting things to memory has become less of a priority as “Googling” (searching a term on Google) is a far easier and more convenient way to search for necessary information.

Have we really entered a Google-dominated era? Has Google rendered human work and intelligence less significant? Tell me what you think under comments’ below.

Knut Harald Nylænde, Chief Executive Officer of Moxie AS, is a tour de force in the Norwegian financial sector. With degrees from Norway’s best business schools and more than 20 years of experience in the industry, Knut is known as an excellent business development consultant and investor.

The ‘Flynn Effect’

Human intelligence has been a subject of extensive debate for a long time in the academic and medical fields, as well as in everyday conversations. One name stands out, however, having made waves in recent discussions about the state of human intelligence: James Flynn. Flynn is best known for the phenomenon named after him: the “Flynn effect”, in which the intelligence of the world’s general population has been significantly soaring since the 1930’s until present.

In most of Flynn’s writings (most remarkably in his latest book Are We Getting Smarter?), however, he chooses not to go too deeply into the element of gender in relation to people’s IQ. On the other hand, a more recent study by Jonathan Wai, Martha Putallaz and Matthew Makel of Duke University brings light to this oft-shunned aspect of intelligence research. The paper concurs with the Flynn effect, and says that it is especially applied to the “smartest” part of the population (that is, the proportion of those with exceptional IQ has been steadily increasing over the past few decades). Moreover, the study also reveals that the ratio between brainy men and women has been levelling out as the number of exceptionally intelligent females catches up with that of males.

Another of Flynn’s most interesting points which I would like to highlight here is his theory that the reason behind this increase in human intelligence is the fact that the world is getting more complex, thus requiring more from humans in order to understand and get a grip of it.

John Naughton, in his review of Flynn’s Are We Getting Smarter?, explains Flynn’s theory in this way: “he thinks, for example, that the reason IQ scores have been rising is a reflection of the fact that the world in which we live and work has become steadily more complex. In that sense, the brain is like a muscle: it improves with use”.

This, in my own opinion, is a breath of fresh air. For a generation that seems to be too reliant on technology, it is refreshing and heartening to know that the complexity brought about by modernity has positive consequences as well. However, all of these research findings lead us to the simple question: What is intelligence, actually, in the first place? Is the concept of an “Intelligence Quotient” and standardized IQ tests appropriate metrics of an individual’s intelligence? Most importantly, are our current perceptions of intelligence relevant and adequately representative of humans’ diversity?

It may be impossible to find ultimate answers to these questions – there seems to be no axiom for this research area – but they are all important things to ponder on nonetheless. For the time being, what is most essential is to realize the full potential of the Flynn effect and continue to innovate ways to keep this intelligence boom at a steady pace. After all, geniuses may not be the only valuable members of society, but it sure doesn’t hurt to have a handful of them for the next generation.

Knut Harald Nylænde is an Oslo-based businessman who is largely interested in business, politics, culture, and defence. He holds degrees from two of Norway’s reputable business schools, the Norwegian School of Economics (NHH) and the BI Norwegian Business School.

The digital divide

The fast advancement of information and communication technologies (ICTs) has made it easier and simpler to access services such as health, education, commerce, and finance, online. By use of smartphones, computers and the internet, one can apply for a health card, learn from experts in math, shop, and settle utility bills without leaving the house. ICTs are instrumental in a development perspective as well, as they basically enable us to connect and communicate with the world, to get equal opportunities, compete globally, and learn from others.

Certainly, technology in general continues to make our lives better, as we have enough money for taking it into use. But what about those who can’t afford it? And right now, the gap is not brought about by differences in income alone, but also by factors like literacy, age, gender, and geographic location, factors which prevent people on the other end of the divide from enjoying the benefits that ICTs bring.

Economy. Wealth is something that can never be distributed evenly among countries across the globe; there will always be a few who are richer than the greater majority who work for them.

Unfortunately, this is one of the biggest obstacles in gaining access to ICTs, and even more saddening is the reality that it leads to other problems like lack of electricity and literacy, to name a few.

Economic performance is typically an indicator of a country’s subscription to ICTs. That is, there are more people who have access to ICTs in a developed country than in a developing one. But if you think about it, what is a computer’s relevance in an underdeveloped nation where there are persistent power supply problems and where a lot of people do not know how to read?

Naturally, these countries and their citizens are left behind due to their inability to cope with new technology precisely because they are not equipped with the facility to do so. Hence, they do not get the chance to participate in the digital world.

Age. The capacity of people to adapt to technology sometimes also depends on their age. On the one hand, the youth are usually the early adapters as they learn new technology easily.

They are positive towards ICTs largely because they grew up with it. On the other hand, older people are said to be laggards or slow learners since they easily get frustrated and give up studying newer forms of ICTs. For this reason, youngsters tend to participate more in the global learning and, consequently, reap its benefits.

Gender. The digital divide is also apparent in regions where gender equality is not exercised. In places where women are still regarded as an inferior gender, women are deprived not only of education, suffrage, and employment, but also of information, among other things. Thus, women do not have the technical skills to use it effectively, even if they are not prohibited from using ICTs,.

Geographic location. One’s geographic location can be a barrier to ICT access as well. Given that communication infrastructure is commonly weaker in rural areas, internet connectivity is normally slower or more limited the farther away from the city.

Governments also play a vital role in terms of allowing ICT access to people. In North Korea, for example, the population in general has long been forbidden from using ICTs and the few who are in use had to be authorized by the government. This is why there is no questioning why North Koreans are very much left out in this digital age. According to an article in the Wall Street Journal, however, some areas have already been granted access, especially the ones near theborder to China where internet connection can be detected. Nonetheless, we’ll see that a government’s openness to ICTs has bearing on a nation’s capacity to level with other countries

taking part in the global information exchange, and ultimately, its attitude towards embracing development.

Knut Harald Nylænde is the manager behind Moxie AS, one of Oslo’s growing investment firms. He was trained in the country’s most reputable business schools and has also worked as a State Authorized Public Accountant in the past.

The BRICS countries to found its own development bank

The BRICS nations, consisting of Brazil, Russia, India, China, and South Africa, have been exemplifying remarkable performance since they began cementing their relations, and they still continue to put the world in awe as they take on ambitious plans for the future. In their latest summit, completing their first cycle of summits, country leaders talked about having closer ties with developing nations, about the success of their efforts versus those of the richest of the nations, and – not least important – about the establishment of their own institutions, particularly the establishment of a development bank, among others.

In his speech in Durban, Russia’s President Vladimir Putin reported that “the common annual economic growth rate in 2012 constituted 4%, in contrast to the 0.7% of the [biggest] seven financial countries”. Representing more than 40 % of the world’s population and 17 % of the world trade, Chinese President Xi Jinping sees the potential of BRICS development as “infinite”,and should, in his opinion, be used more effectively in trade, investment, and industrial andtechnical cooperation. This would be made more feasible with the construction of the development bank.

The BRICS development bank would be the first formal institution of the group and its greatest undertaking yet, if founded. As of today, decisions have not been finalized, however, and the group will need to assemble again to further discuss the details of the said proposal (i.e., where it should be based, how much capital it should be granted for management, and what currency the bank should use), according to and The Presidents of the BRICS countries are positive that the formation of a new development bank would contribute greatly to the fast advancement of their nations, with infrastructure and development projects as its main objectives and expenditures. Moreover, it will help BRICS countries’ economies cooperate with “other emerging markets and developing countries in the future”, South African President Jacob Zuma said.

However, many experts have been sceptical about the proposal and bombarded the political leaders with questions and negative comments such as; the BRICS countries do not have much in common and enough mutual goals to sustain a shared institution that would function effectively as a counterweight to the west; it will be a rival to the world bank, and probably not be stable enough to rival the world bank; the bank might be dominated by China; and so on.

Some have come up with educated guesses to answer these questions, yet others have succumbed to their own assumptions and conclusions.

Despite these, there are optimists who support the formation of a BRICS development bank.

The Guardian says that the BRICS countries actually share a lot in terms of experience and development model, and those that were able and willing to resist the neo-liberal development model developed faster. Historically, there have also been various groups that emerged successfully, regardless of their differences, thus making the success of a new development bank not farfetched at all, rather quite possible.

On posing a challenge to the World Bank, South African finance minister Pravin Gordhan stated that “certain parts of the world are still over-represented” even after years of promises to give the global South more voting power in the IMF and the World Bank. And now that the BRICS have earned the reputation of being a counterweight to the West, we know that this might be a case of schadenfreude and that some people are to blame for their actions should the BRICS development bank emerge as a challenge to Western supremacy.

Sources: western-supremacy

Knut Harald Nylænde is the Chief Executive Officer of the Moxie Group, an Oslo-based group of investment firms. Knut keeps himself and his business circle updated with the latest business trends through his blog posts.

That good old thing that remains

We live in a time when reading in print is almost passé, where books are merely paperweights on tables, and notebooks are reduced to the four-cornered leafy object we can sift through. The changes which science have brought around have made us, humans, almost oblivious to traditional ways of acquiring knowledge and nearly ignorant of the instruments which our forefathers used to thrive amidst relentless brain brawls and intellectual atrophies.

Of the things our race has effaced, though not completely, books are, by far, the most undeserving of such rampant discrimination. Most people live through their existence sparsely infected by the thoughts of great minds, thoughts that are inscribed in pages,  recollections unfazed by time, magically woven by strokes of poetic ingenuity. They have every chance of devouring ideas, of expanding the horizons left bounded by social norms and the rigidities ironed by superficial ideals, and yet they are achieving nothing, – books remain untouched like stale food feasted by a swarm of flies.

This is not always the case, though, as some countries have proven that their people still have affinity with the printed word and that their youth is still compelled with stories told at night, with magic lamps, golden eggs, and gargantuan beasts.

In Norway, for example, the children’s book industry is at its peak as Norwegian publishers report a high increase in sales, the highest score in the past few years. According to them, Norwegian children’s books have become their foremost export with almost 186 book titles for children and youth sold abroad. 1

This international success is not only brought by classics such as Karius and Baktus by Torbjørn Egner, but also by new and emerging authors. New titles are also in demand and are proving their grip in the foreign reading market. 2

Add to that, several Norwegian picture books have also satisfied the taste of the canon and managed to captivate international award-giving bodies. For one, Garmanns sommer by Stian Hole bagged the Children’s Book of the Year award in the U.S. in 2009.

“Most of our sales are to the Nordic countries, but Germany, France and South-Korea are also important markets to us,” says Kristin Weholt from Cappelen Damm publishing house.

When asked what makes Norwegian books highly in demand in the international market, Hakon Kolmannskog, publishing chief at Samlaget publishing house, says that it all boils down to quality. “Norwegian books for children and youth have a very high quality. We can see that we have been rewarded for investing in good books for children and youth over a long period of time,” Kolmannskog explains.

1 Julie Ryland. Norwegian Children’s Books are in High Demand Abroad. The Norway Post. 04 April 2013. childrens-books- are-high- in-demand-abroad Accessed 16 April 2013.

2 Ibid.

This proves that there are still existing societies in which books are treated with high regards and authors are not socially debased and unjustly compensated. It shows that not all culture is veering towards all what modernity can offer. It shows that sometimes the most important can be found when there’s courage among people to remain respectful to tradition and quality from where we’ve stood, to recognize that some things, like books, can never be eradicated no matter how modernized and fast-paced this world has become.

Knut Harald Nylænde runs the investment group he founded, Moxie AS. He also does management consulting, business development, and has recently taken interest in blogging.

Rethinking outsourcing and offshoring for businesses

Over the past decade, multinational companies have been engaging the practices of outsourcing and offshoring of business operations. A special report by Tamzin Booth for The Economist says that today, however, a lot of companies are rethinking their offshoring and outsourcing strategies.

In the article entitled Here, there and everywhere, Booth claims that there are three reasons why the offshoring approach is losing its charm among rich-world businesses.

But before anything else, it is important to demarcate between outsourcing and offshoring – two terms that are often used interchangeably, and incorrectly, at that. Outsourcing is simply the process of sending work to be done outside the company to another firm in the same or a foreign country; while offshoring is sending work from one country to another, either to the company’s branch in another country or to another firm.

According to the article, the first reason behind this drop in outsourcing and offshoring among American and European companies is the fact that the global labour arbitrage that has existed for the past few decades has gone away (or been reduced). The term “global labour arbitrage” was used to refer to the big gap in labour costs and wage rates between the rich world and the developing world.

Another reason is that this labour arbitrage of sorts simply does not matter so much anymore. This because the great increase in industrial automation has rendered the difference in labour costs insignificantly and therefore with less impact.

The third reason is that because of differences in the way operations are made in offshore firms, the “savings” that companies supposed they would make by hiring low-cost employees do not materialise.

One good example cited in the article is the case of General Motors, which decided to bring previously outsourced processes back to their own house. The reason behind this, Booth explains is that in outsourcing, the focus is on “running things just as they are” or simply getting the job done, as opposed to innovating and improving the current and traditional practices. However, what General Motors wants is new and innovative ideas, something that Booth says is much better done in-house.

Another case used in the report is that of Lenovo’s. The tech company has decided to restore its PC-manufacturing aspect back to the United States in an effort to personalize and customize its services by moving closer to its primary market. And the thing is that the labour cost cap is not that big, like it was before, because the company now has more automation in its US factories.

Additionally, Booth reveals that a great number of call centres (which, for a long time, flooded developing countries with English-speaking workers, such as India and the Philippines) have moved back to rich world markets. While call centres and other services are still widely outsourced in different countries, some research firms predict that outsourcing of services will stop entirely by 2022.

This issue may not seem relevant for small and mid-sized businesses as it is for multinationals; but it speaks so much about the fleeting nature of “business trends” and the sheer importance of innovation and constant change for all businesses. Furthermore, aside from examining the impacts of such practices on big businesses, it is also worthwhile to ask: how does this affect the economy and employment levels in developing countries wherein business processes were previously outsourced?

Knut Harald Nylænde is the CEO and founder of the Moxie Group, an investments firm based in Oslo. Founded in 1999, Moxie is an investment and advisory company engaged in different industries such as company funds security, technology, trade, commerce, consulting services, real estate investment and business development.