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Fabius Maximus

Two things:

A minor point -- You might confused the frequence of observations with the long-term nature of the cycles being measured. Think of a daily temperature used to measure climate shifts.

More important -- Two large shifts might explain might explain much of the shifts you describe. First globalization, esp combined with a loss of US competitiveness vs. new competitors. Second, compositional changes in the US economy. Esp the shifts from manufacturing to services, and the increased role of goods & services not exposed to foreign competition.

Hemant Puthli

Interesting concepts and constructs, and I admire the ability to pursue a project of this sort for a year (given the rate of change of priorities these days - is that part of the shift index?)

I was wondering ... hasn't the very definition of corporate performance started to change, over the last few years? In your post here you seemed to have used RoA as the metric of performance. There could be others, all broadly synonymous, but my comment is not about those - the traditional definition of a company's performance has always involved (purely) financial gain for the (purely) financial investor.

These days, however, there seems to be a drive to include social and environmental contribution as additional measures of corporate performance (often referred to as the "triple bottom line"). Is this a shift? or a fad?

How would the shift index look if performance were to be defined and understood differently? Indeed, how might company performance itself look if investors required their companies to contribute in additional ways (over and above giving them good returns).

Aurelia Masterson

I think this is an excellent idea--statistics are needing a change. Plus, in much of the world these changes are far from happening, but, hopefully, will happen. So it would be great if they could have something to look at.

But does this exclude or possibly deny changes that don't follow this curve? I hope that it's not taken as dogma by these 3rd world countries assuming that they will go the same way. But it's not on you guys of they don't. I'm interested in seeing where this is going to go.

Charlie Pinto

John, I was very impressed with the Shift Index! Big companies are losing ground to smaller, more agile and innovative companies. These companies are able to connect with consumers and tell their story in a way that large corporations can't even begin to imagine. In essence, the toppled companies fall from the "top". The CEOs fail to adopt change (as the newspaper industry failed to do years ago and the TV industry is in the midst of) and board members fail to acknowledge a change in "the game." The social web has created the new business and CEOs who are striving to survive are calling upon Gen Y's to mentor them.

Michael H Goldhaber


I think the data you point to, especially the flow of income to creative talent, is consistent with my view that we are headed to anew kind of attention-based economy. For more on this see www.goldhaber.org, and for how businesses can do best in the meantime see mhgoldhaber.com.

Best, M.

Simon Cast

Very interesting work John. It is certainly useful to see research into something I've seen and been thinking about for a while.

Interestingly, I think one outcome of the shift is that the economy of scale are shifting quite significantly to the point that many large companies are afflicted by dis-economies which I think is a cause of a lot of the ROA and precarious leadership positions of many businesses.

As business go for marketshare and scale they suddenly become unviable quickly. Which raises two interesting points:
1) Large marketshare becomes self-defeating
2) Today's current large companies are going to have to get much smaller to remain competitive

Ian Wilson

The link to the report seems to be broken?

Very interesting and engaging perspective. I see conceptual / structural connections with the perspectives of Umair Haque (at Harvard Business).

This framework seems to give structure to those ideas if I see the parallels correctly. Is his work something you think about at all?

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