In prior decades, hiring an external firm to do something that was an internal function would have looked mostly like outsourcing: hire a company to provide the same service more cheaply, often by through geographical labor price differences. Now, however, an increasing amount of that work is done by subscription to a software-as-a-service and similar products.

Slightly longer post, as this is working through a bigger picture I’ve been thinking about for the last week. There is a puzzle in the US: unemployment is low and wages are rising, but so is joblessness and alternative (and much less employee friendly) working structures. From looking at various explanations, several of the same factors seem to come up, resulting in pressure on long-term planning. I’ve tried to capture some of that in the note below:

There were some headlines recently along the lines of “Economists who predicted the gig economy say it never happened’. Timothy Taylor has a succinct summary of the work that prompted that on his blog, along with some other research from the Boston Fed. He concludes:

I just finished the excellent Capitalism without Capital, which covers the rise of investment in intangible assets such as knowledge and brand, rather than tangible assets like machines.  

Worker Monitoring

Timothy Taylor has a great summary of Santiago Levy’s Under-Rewarded Efforts, a book about the lack of productivity growth in Mexico. One of the core points is that the social welfare system drew a big distinction between salaried and non-salaried workers, which failed to account for the incentives that would create:

Bradley Tusk’s fun book The Fixer describes some of the political fights he took on. One was for Handy, a gig economy house cleaning and services market place. Handy wanted to pay into a portable benefits plan, but avoid pushing it’s contractors into employee status, and avoiding that triggered a fight with unions (particularly 32BJ in New York).

I realised that the distinction I drew yesterday between reshaping the economy and reshaping businesses is better described by Joel Mokyr’s terms macroinvention and microinvention. 

Fred Wilson posted a (relatively long for him) blog entry about, roughly, whether billionaires are immoral, and the current progressive agenda.

Marx famously described a varied world of work, which he viewed as a better one: