In this talk, James highlights how important the work of immigrants has been to the remarkably fast development of the COVID-19 vaccines, particularly the novel mRNA models at Moderna and Pfizer. He illustrates how brilliant and determined immigrants are helping to save the world from this horrifically deadly virus and the resulting pandemic. The talk allows the audience to reflect on and appreciate the incredibly important impact immigrants make to our innovation ecosystem and society at large. They will be even more vital to our nation’s resurgence as an epicenter of invention, entrepreneurship and progress. - This talk was given at a TEDx event using the TED conference format but independently organized by a local community.
Startup ecosystems are rapidly moving to the cloud and that transition will affect you, your colleagues, and your partners. Learn what the implications are for each of the community's participants and stakeholders including entrepreneurs, investors, academic institutions, governments, nonprofits, and corporations. James Barrood is among the primary leaders of the east coast's innovation ecosystem. Over the past 25 years, he has helped nurture the region’s entrepreneurial, innovation and technology communities. James currently leads Innovation+, a curated global community of engaged entrepreneurs and innovators. Recognized as a Power 100 List leader and a Top 100 Influencer for the past few years, James frequently speaks at regional and global conferences and serves on several boards. James is the editor of the book, Entrepreneurship, and Innovation: Global Insights from 24 Leaders and co-author of Lessons from the Great Recession. He holds an MBA from Texas A&M University and a BA in Economics from Rutgers University. This talk was given at a TEDx event using the TED conference format but independently organized by a local community.
- Spoke on AI: Eastern Caribbean Central Bank Conference (St. Kitts) + Philadelphia100 + VOICE&AI + Columbia + NJCU + Keynoted Hudson Expo
- Gave TEDx Talk on Ecosystems Moving to the Cloud; TBR Miami + TBR Jamaica
- Spoke at Davos, ACA Natl Investor Summit, Berlin ecosystem summit
- Judged Innovator Awards + Spoke at Afro Future Summit
- Keynoted Founder's Summit & Portugal Innovate Event
- Led corporate workshop on digitization/talent for Vistage
- Guest on Everyday AI pod, Grit Daily, Whiskey Hue, Nytro, Hosted, SBEdge, NYDLA and SBDC podcasts
- Gave TEDx Talk on Immigrant Innovation and COVID vaccines/treatments
I was walking around New York City recently and was struck by the number of retail vacancies in historically vibrant areas. Clearly, the COVID-19 pandemic had a negative effect on these commercial neighborhoods. In addition, the density of traffic formerly provided by office workers has not rebounded sufficiently due to remote work trends.
Many businesses could not survive without that important foot traffic when combined with staff shortages, higher wages, increased cost of goods/services due to inflation as well as higher rents. I couldn’t imagine how the stores that were still in business have survived as their profit margins have been squeezed dramatically.
This reality has affected many businesses across New Jersey as well. Aside from wealthy towns and unique community “metroburbs” like Bell Works in Holmdel, so many main streets, once bustling centers of commerce and community, are now facing an alarming increase in vacancies.
The vacancy issue stems from a convergence of factors. The digital age has ushered in e-commerce giants that have outmatched local retail in convenience and price. This trend started well over a decade ago and I recall noting it in a keynote I gave to my entrepreneurship center colleagues in 2012 at Georgetown. I urged them to help their local retail entrepreneurs confront the online competition which offered super convenient and quick delivery that would dramatically hurt businesses.
The pandemic has accelerated main street vacancies to unprecedented levels. Lockdowns and social distancing hit the retail sector hard, with businesses in densely populated areas like Newark and Paterson shuttering permanently. Small businesses, lacking the financial reserves of larger chains, have been particularly vulnerable.
What’s being lost
The implications are stark: lost jobs, diminished tax revenue, and eroding social cohesion. The closure of family-run businesses, which often serve as community anchors, contributes to a sense of urban blight and decreased community engagement.
Yet, resilience has been remarkable. In Jersey City, initiatives like the pedestrian plaza on Newark Avenue have breathed new life into the area, with outdoor dining and markets drawing crowds. Red Bank has leaned into its arts and culture scene to create a vibrant, engaging downtown that has weathered the storm better than most.
Montclair offers a beacon of hope, where a concerted effort to bolster local commerce with cultural events has kept the local economy robust. However, Atlantic City shows how a reliance on tourism can falter, with the pandemic highlighting the vulnerabilities of such economies.
There are ways to counter this trend.
What to do
First, subsidize small businesses to help them afford rents. The New Jersey Economic Development Authority has several new programs, some started during the pandemic, which have been very helpful to communities. In addition, local nonprofits like GNEC in Newark help with additional loan and education programs. However, more support is needed. Cities and towns themselves should also be creating a main street fund to complement other state initiatives. Corporate stakeholders can also help. For example, a novel program which helps restaurants is Audible’s Newark Working Kitchens which launched during the pandemic and continues today to support the community’s restaurants.
Second, create a more vibrant community with frequent events, entertainment and activities that attract local shoppers as well as nonlocal visitors. The addition of weekly or biweekly farmer’s markets also helps.
Third, local business and community leaders should encourage residents to shop more often as stakeholders committed to the vibrancy of the community. In addition, they can ask neighbors to support a main street Go Fund Me initiative.
The increase in main street vacancies is a multifaceted problem, compounded by the pandemic, but not without solutions. The experiences of New Jersey’s towns offer a microcosm of America’s broader challenge and the potential paths to revival. By fostering innovation, community spirit and supportive policies, the tide of closures can be turned, reinvigorating our towns and preserving the essence of our communal spaces.
Please do your part and support your local main street entrepreneurs. This Saturday is Small Business Saturday so please show up and thank them with your visits.
It took Facebook five years to reach 100 million users; TikTok did it in nine months. OpenAI’s ChatGPT? Two months. Adoption statistics don’t prove that generative artificial intelligence and large language models will be the next internet-level transformative technology, but it sure looks that way. Microsoft’s embedding AI in Bing search, Google’s rolling out Bard and generative AI is a shining bright spot in a tough venture capital environment.
From marketing to law to science, everyone’s talking about the implications. There’s plenty of worry about the future, but it’s leavened with the hope that AI might in fact expand human potential and promote human thriving if we can figure out the right ways to use and control it.
Nowhere is that conversation more urgent than in higher education. I was privileged to host presidents and provosts at my latest higher education salon, where we heard insights from a tech leader from Google’s Responsible AI division. The company has been wrestling with AI’s social impact for years, and foregrounded many of the questions educators are wrestling with: “What will it mean for our students if they can run to a chatbot and have everything they need generated for them? What will it mean for their intellectual development and capacity? What will it mean for creative disciplines if an AI system can write poetry, appear to reason, seem to have moral discussions, take stances on things?”
Enlightened educators point out that education always has had to evolve to accommodate both new technology and the broader challenges learners will face in their world, not their grandparents’ world. AI isn’t going anywhere, they say: It’s a fools’ errand to try to ban it, any more than math teachers succeeded in banning calculators. Instead, use it — and, if that means changing the way you teach, then go do that. For 2.6 million years, humans have used tools to magnify their abilities. These new tools can magnify our abilities to understand and change the world. Let’s help students use them that way.
As someone who has spent my career in and around both tech and higher education, this optimistic position appeals to me. But it won’t be easy. It can’t be done simply by talking about it, or by propounding high-minded principles and leaving it at that. In important respects, what AI requires of us is the precise opposite of what megatrends in higher education have been driving us toward.
Start with the most urgent issue for many instructors and schools: assessment. How do you evaluate students when ChatGPT can churn out perfectly serviceable 5-paragraph essays in seconds? Even the tech leader told us that, in the short term, universities may need to revert to in-person testing with pen and pencil (no matter that students can’t write by hand anymore!). This obviously suggests a reversal of the megatrend to scale education via ever more remote, online learning.
The creators of tools such as ChatGPT are trying to build in tools to flag auto-generated content —- just this week, OpenAI introduced AI Text Classifier — but they’re the first to admit these tools are imperfect and “game-able.” So, as Ian Bogost wrote in the Atlantic this week, that may mean more complex bureaucracy for instructors who must decide what to do if AI Text Classifier suggests a student “may” have stolen his work.
Beyond assessment, generative AI systems raise the broader issue of what we’re teaching, and how we’re teaching it. If an algorithm can earn a solid “B” on your assignments, maybe you need to reinvent your assignments — or even your curriculum? Should we be relying more on one-on-one assessments that probe individual learners’ depth of knowledge? What do humans need to learn now? What, in fact, makes us human, and different from generative AI systems?
New York Times columnist David Brooks recently suggested that we should be teaching learners how to develop a distinct personal voice that AI can’t mimic, stronger presentation skills, a “childlike talent for creativity,” comfort with unusual and unpredictable worldviews, empathy and situational awareness.
How much of that aligns with today’s increasingly tight focus on rapid career return on investment from higher education, as important as that may be? These are critical questions, and smart educators are raising them. But other smart educators are asking: If your institution’s business model now relies heavily on poorly paid, struggling adjuncts, who’ll do all that personal assessment, curriculum reinvention and deeper philosophizing about why we’re actually doing any of this? That work is desperately needed, but who’ll pay for it?
Tech always leads to new careers and specializations, and so it is with generative AI. For example, as we discussed, there will be prompt engineers — people who are paid to give input to AI systems that lead to the best possible responses. That may be a narrow specialty, comparable to the profession of search engine optimizer. But everyone will need to learn how to judge AI output — especially, given that today’s systems are stunningly good at confabulating completely fake facts and sources.
Innovative educators are already experimenting with “critical computing” instruction to help learners recognize these systems’ limits and potential biases. This is vital — but, again, not easy. Seven years after the explosion in concern about “fake news,” how many students really get strong education about how to evaluate online information? Not nearly enough.
As the executive pointed out, one positive “superpower” generative AI systems may have is the ability to deeply personalize education, targeting instruction at a learner’s precise level, and helping individuals overcome their specific obstacles to understanding, at scale. This is exciting — but, as edtech and AI companies seek to do this, they need to reflect 70 years of experience with technology-driven personalized learning (much of it disappointing). Once again, resource-strapped institutions will repeatedly be tempted to substitute AI for human contact, and, in an era where mental health is front-and-center, that would be a recipe for disaster.
In the future, some people are going to wield AI systems to accomplish truly great things — from folding proteins to serving customers to solving crucial social problems. The question is: how many people will get that privilege? Will our education system train just a few people to be overlords of AI algorithms, at elite institutions where they benefit from real human contact and great faculty? Will everyone else simply be guided and prodded and manipulated by those algorithms, both in their classrooms and after they graduate?
It falls to us to make those decisions. And, whether by action or inaction, we’re making them right now.
I was pleased to learn that dozens of new bills focused on regulating and deterring misinformation and deepfakes have been introduced so far this year at state houses across the country.
While Artificial intelligence (AI) has emerged as a powerful tool with great potential, the threats caused by the technology continue to evolve and intensify, demanding our vigilance in combating their adverse effects.
AI-generated misinformation has become increasingly common, posing grave risks to individuals and communities. Malicious actors leverage AI algorithms to create and disseminate false information at an unprecedented scale and speed. This misinformation fuels social unrest, manipulates public opinion, and incites violence, inflicting widespread harm on society.
One major concern is the weaponization of AI through AI-powered bots and social media manipulation. These automated accounts amplify misinformation, facilitating the spread of conspiracy theories, propaganda, and divisive narratives. Exploiting vulnerabilities in human psychology, they target individuals with tailored content that reinforces their existing beliefs, deepening societal divisions. I have written about the dangers of social media in the past; AI will exponentially increase the negative effects of social media.
Deepfakes, a branch of AI-driven technology, have gained notoriety due to their ability to deceive and manipulate. Deepfakes employ machine learning algorithms to create highly realistic synthetic media, such as videos or audio recordings, convincingly depicting individuals saying or doing things they never actually did. This technology poses a grave threat to public trust, personal privacy, and even national security.
The immediate implications of deepfakes are deeply concerning. Politicians can be portrayed as endorsing policies they never supported, and individuals can have their identities exploited for malicious purposes. Fabricated videos have the potential to damage reputations, incite violence, and undermine democratic processes. With the advancing AI capabilities, deepfakes are becoming increasingly difficult to detect, amplifying the potential harm they can cause.
As the father of two teenage girls, I’m terrified of the stark reality that they will be caused serious harm by bullies or unsavory actors. I was reminded by a video clip on social media alerting parents to the risk of voice cloning technology that can generate a fake ransom call and monetary demand. The effect was chilling especially when the only advice to protect against this tragic occurrence was to have safe words that are only known among the family (and not shared online in any way).
As AI technology progresses, the dangers associated with AI-related misinformation and deepfakes are likely to evolve and escalate. One looming risk is the convergence of AI with other cutting-edge technologies, such as virtual reality and augmented reality. This convergence could enable the creation of hyper-realistic simulations that blur the line between the digital world and reality, making it even more challenging to discern truth from fiction.
Moreover, the proliferation of AI-driven misinformation could undermine public trust in genuine media sources, leading to pervasive skepticism. The erosion of trust in traditional information channels would severely hinder societal progress, exacerbating divisions and impeding the functioning of democratic institutions.
Addressing the dangers of AI-related misinformation and deepfakes requires a multi-faceted approach. Firstly, there is a need for increased awareness and media literacy. Educating individuals about the existence and potential impact of AI-generated misinformation and deepfakes can empower them to critically evaluate information and discern fact from fiction. Indeed, this is such an important future skill that we are including a module on this in the new teen online summer course, Future Tech Experience.
Furthermore, technology companies and social media platforms must actively engage in developing robust detection mechanisms. Investing in advanced AI algorithms that can identify and flag deepfakes and automated misinformation campaigns is essential to prevent their proliferation. Collaboration between researchers, policymakers worldwide, and technology experts can help formulate effective strategies and regulations to mitigate the risks associated with AI-related threats.
Going forward, it is crucial to remain vigilant and take proactive measures to combat these threats. By promoting media literacy, fostering advanced detection technologies, and encouraging local, national and global collaboration, we can navigate the present dangers and mitigate future risks.
If COVID-19 gave us a momentary break from worrying about urban and road congestion, pollution levels or transportation-related climate emissions, that’s over: Travel on our overwhelmed roads has rebounded to pre-COVID levels. Mobility issues are troublesome in many places, but they’re worst where population is densest — i.e., here in New Jersey. It’s tough to be competitive if humans and stuff can’t move without friction and frustration.
Experience shows that the best regional transportation systems aren’t “one size fits all.” Fortunately, there’s an entrepreneurial renaissance in new transportation solutions that can offload many trips from conventional vehicles, reduce strain on local roads and even improve public health. E-bikes are at the heart of this transformation.
E-bikes provide varying levels of electric battery-assist to their users — helping them go farther, manage hills and stay on bikes later into their lives. Through much of the year, in much of New Jersey, for many trips, they’re an increasingly attractive alternative to hauling around a ton or two of metal and plastic.
How many trips might be substituted by e-bikes? Estimates vary, but federal research reports that the average U.S. household generates some 9.5 trips daily. Half are three miles or less, and half of those short trips are made by car, truck or SUV. Here in the state, 75% of us live less than five miles from a transit station, so e-bikes could also substitute for plenty of the “station car” rides our mass transit commuters use. Nascent cargo e-bike options will make it increasingly possible to ferry kids to school, or do your weekly grocery run. Bottom line: The potential to substitute zero-emission e-bikes for traditional vehicles is large, and it’s growing.
People are figuring this out: Grand View Research estimates about 23% annual growth in this space between 2022-2030.
Speaking personally, I recently had a great conversation with Vela Bikes‘ co-founder and CEO, Justin Kosmides, who runs his company out of Newlab at the Brooklyn Navy Yard, and recently relocated manufacturing from China to Detroit. I came away with a powerful realization of just how much excitement and innovation is percolating through America’s e-bike industry.
The elephant in the room is safety. Forward-looking New Jersey communities are working on making their local roads more welcoming to e-bike users, traditional cyclists and pedestrians — and they’re getting help to do it. Just this week, Gov. Phil Murphy announced $24 million in state grants to promote safe and affordable biking and walking in 56 towns and cities across the state.
Last year’s federal Bipartisan Infrastructure Law budgeted substantial new cash for improving bike and pedestrian safety, developing safe bikeway networks, creating safe routes to schools and innovating to improve bike safety in higher-traffic areas. Federal and state funds are jumpstarting great initiatives like the Essex-Hudson Greenway, which will transform an abandoned rail line into a bikeable state park stretching from Montclair to Jersey City and make safe bike commuting viable for thousands of New Jerseyans.
These resources, combined with technological innovation and changing attitudes, are making this a moment of enormous opportunity for building a better transportation system and a more pleasurable environment for all of us.
I’m eager for our localities and the state to build on and accelerate this progress. If your local government hasn’t yet bought into the Complete Streets paradigm for going beyond “car-only” transportation, I encourage them to do so. We might even consider experimenting with robust incentives similar to the enormously successful Denver program that recently welcomed nearly 5,000 more residents to e-biking, including many low-to-moderate income households who couldn’t have otherwise afforded it.
The point isn’t just to grow e-biking. It’s to get the most practical value out of our transportation infrastructure, move towards a low-carbon future that’s also affordable, and limit emissions that are hurting New Jerseyans right now. If there ever was a win-win, this is it.
It’s amazing how often immigrants are at the heart of the stories that represent America at its best: at its most hard-working, creative, entrepreneurial and hopeful. A month after the U.S. Open tennis tournament in Queens, I still can’t get over the passion and skill of Francis Tiafoe’s performance – and how his immigrant parents made it all possible.
If you haven’t seen any of the matches that made him a household name – including his defeat of Rafael Nadal – you owe it to yourself to take a look. And if you don’t know his family’s amazing story, you really should. Escaping from war-torn Sierra Leone in the 1990s, Tiafoe’s parents came separately to America – meeting, marrying and starting their family in Maryland. Tiafoe’s father worked multiple shifts as a day laborer helping to build the Junior Tennis Champions Center, and once construction was finished, his hard work earned him a permanent job as its live-in custodian. The family squeezed into a small apartment at the Center, and as they grew, Tiafoe and his twin brother started playing tennis with whatever equipment they could borrow. In exchange for still more work, Tiafoe’s father earned them formal lessons. The rest is history – written in grit, inspiration, talent and hard work.
Stories like Tiafoe’s resonate because so many Americans can tell similar stories about ancestors — I sure can. And because so many of our greatest innovators have been immigrants and their children — from Thomas Edison to Steve Jobs to many of the people most responsible for the COVID vaccines that have saved millions of lives.
James Barrood addresses the Hudson County Chamber of Commerce during the organization’s annual conference. “Stories like [Francis] Tiafoe’s resonate because so many Americans can tell similar stories about ancestors — I sure can,” Barrood writes. “And because so many of our greatest innovators have been immigrants and their children.”
I’m thinking of Katalin Karikó from the former Czechoslovakia, whose pioneering research helped pave the way for mRNA vaccines; and Alejandra Gurtman from Argentina, who is Pfizer’s vice president of vaccine clinical research and development; and Moderna co-founder Noubar Afeyan, from Lebanon. But I could also be thinking of hundreds of thousands of biotech professionals who are immigrants — fully one-third of the U.S. industry. (What would we do without them? Often, we’d die.) From Tiafoe to Karikó, there’s growing evidence that voluntary international migrants are self-selected for a psychological willingness to take risks and achieve more than they could where they were born. As researchers increasingly connect the dots, we see why:
- 44% of Fortune 500 companies were founded by immigrants or their children
- One-fifth of U.S. entrepreneurs are first-generation immigrants
- Immigrants have started more than 55% of startups worth over $1 billion
- Immigrant entrepreneurs create more jobs than non-immigrant entrepreneurs
So the question isn’t: Do immigrants renew and enrich America? They clearly do. As President Ronald Reagan put it in his farewell address, “Thanks to each wave of new arrivals … we’re a nation forever young, forever bursting with energy and new ideas, and always on the cutting edge, always leading the world to the next frontier. This quality is vital to our future … if we ever closed the door to new Americans, our leadership in the world would soon be lost.”
The real question is: How do we attract more innovative, entrepreneurial immigrants? Others have figured it out and are competing aggressively for talent on the move. In the U.K., if you’ve graduated from one of the world’s top universities, you’re eligible for a special two- or three-year visa even if you don’t have a job offer. Canada, with only one-tenth of the U.S. population, now welcomes nearly twice as many immigrants — and polling suggests that the percentage of Canadians who think there’s too much immigration is actually declining.
In the U.S., where legal immigration is down by three-fourths since 2016, we’ve tried many alternatives to welcoming more foreigners. We now make enormous investments in training and retraining – of students, of veterans, of the unemployed and underemployed. We must build on those investments, but we must also recognize that if we want more entrepreneurial vigor, they’re barely making a dent in the problem.
It’s time to get after it. At the local level, we need both policy and promotion to support entrepreneurial immigrants and make sure they know they’re welcome. (Remember “New Jersey and You: Perfect Together”? Perhaps it’s time for “New Jersey and Immigrants: Perfect Together”!) Nationally, we need more H-1B visas, targeted to accommodate both current and future demand. We need to keep more international students working productively here after they graduate. We need new startup visas for foreign entrepreneurs and easier green card processes for immigrants with STEM-related PhDs — provisions that were unfortunately dropped from the America COMPETES Act last summer, leading more talented foreigners to go elsewhere.
None of this is about “doing somebody else a favor.” It’s about a hard-nosed analysis of what will drive the most economic growth and vibrancy in America – and, at a time when the economy is at serious risk, what will create the most jobs, wealth and economic security for all of us.
We’re entering a new era of entrepreneurship, when battles for talent and capital will grow even more intense. After a week in Davos speaking to leaders from all over the planet, I’m convinced we need to up our game — as a nation, and specifically here in New Jersey.
I’ve long been concerned about immigration rules that keep great innovators outside the U.S., where even highly digitized companies and industries can’t take full advantage of all they offer. Even as brutal rhetoric has cooled at the top, world-class talent continues to ask if it’s welcome here. In my role connecting entrepreneurs, investors and talent, I often hear about outstanding people landing in Canada, the U.K. or elsewhere — people who would have gravitated towards America a decade ago.
Emerging issues are making it even tougher for great people to contribute and grow our economy. As Axios recently reported, some 200,000 children whose parents arrived on skilled worker visas are in danger of losing dependent status as they turn 21. Then, they’ll either have to somehow gain temporary status, or else leave the U.S., even if their parents are still legally working here.
Many are students whose families requested green cards for them years ago, but are still waiting in the immigration system’s overwhelmed queue. Some are trapped in a classic Catch-22: they can depart for ancestral homes they barely remember, apply for student visas from abroad and hope for the best. But their previous green card applications suggested an intent to immigrate — and that could disqualify them for student visas.
Do these rules make America more competitive? Consider: Right now, there are over 1.5 million job vacancy postings in computer professions — nearly 30 times as many openings as there are H-1B visa holders. Nearly two-third of the H-1Bs working in the U.S. hold at least a master’s degree. These are people we desperately need. If we’re driving them out, something needs to change.
Immigration of high-talent individuals is primarily a national issue. But tech entrepreneur and investor Jay Bhatti has a great idea for promoting immigrant startups here in New Jersey. Most people can’t remain in the U.S. if they don’t already have an employer sponsor. It’s hard for high-talent individuals to start a company or work at a startup, because most sponsors are large companies with extensive resources for making applications and navigating the immigration system.
What if the state became the employer of selected high-potential visa holders for a year to work on innovation — and, if something pops, they can create a startup here, with New Jersey earning equity? That’s the kind of creative thinking we need — and it could be a major win-win for everyone involved.
Of course, immigration isn’t the only competitiveness issue — and, when it comes to taxation and acquisition policies, New Jersey can make a real difference.
We’ve already come a long way. As New Jersey Institute of Technology professor of practice, innovation and entrepreneurship Suresh Kumar notes, Gov. Phil Murphy has deepened alignment between the private sector, government, educational institutions, nonprofits and other stakeholders — and that’s an absolute precondition for a great innovation ecosystem. But there’s more to do — and Kumar has some important recommendations that I support.
Some of these cost money. Others cost hardly any. Let’s start with those closest to “free.”
First, let’s identify and empower “connectors”: the people who know all key players and resources, and know how to navigate the system. They’re the glue that holds ecosystems together, and they tend to work quietly outside the spotlight. If we can give them better resources and tools, that’ll pay huge dividends.
Second, prioritize educating mayors and local legislators on the true economic impact of small business and high-growth startups. These create nearly all net new jobs — and that even includes startups that eventually fail. Many more localities should have economic development advisory boards seeking to promote entrepreneurship, clear away rules that no longer serve their purpose and become better service providers.
Third, to give founders more time to focus on customer delivery and building resilient business models, eliminate state tax filing requirements for Years 1 and 2 of startups that aren’t yet profitable, and make it easy for early-stage startups to file a consolidated return in Year 3.
Kumar also suggests two tweaks to tax and acquisition policies that may cost slightly more, but are targeted to deliver maximum ROI in supporting entrepreneurship and job growth:
- Incentivize large companies to buy at least 5% of their supplies from small businesses and startups, especially those owned by women and members of minority communities — and plan to increase this by 1% a year until it reaches 10% in 2028.
- Improve Year 1 tax breaks for founders, friends, family and angel investors, who assume the greatest risks in very early stage startups, and streamline documentation so it isn’t unnecessarily onerous.
To these, we’d share one more, from Jay Bhatti: Honor the federal Qualified Small Business Stock for state income tax exclusion, just as New York, Connecticut and many other states do. We’re at a competitive disadvantage when neighboring states allow QSBS for startups and we don’t: Bhatti said he knows three companies that wanted to move to New Jersey but stayed in New York because of QSBS. To attract the best U.S. citizen business founders, we need parity here.
As Kumar notes, none of this is rocket science, “But, to be effective, change has to be systemwide. And that calls for real leadership at all levels.” I couldn’t put it better — except to say, now is the time.
Many leaders sense that immigrant employees can help their organizations accelerate innovation — and their intuitions align with the evidence. A comprehensive study of one million+ inventors found that immigrants were substantially over-represented and created more valuable inventions than the median inventor, too. But immigrant success doesn’t just happen, and throwing the doors open to a more global workforce doesn’t guarantee it. Like everyone else, emerging immigrant leaders and innovators must be nurtured. Nurturing immigrants can present unique challenges, but it’s an eminently solvable problem.
ONBOARDING
Most organizations now recognize the critical role of onboarding to retention, productivity, and long-term success. Even so, only 12% of employees say their companies do onboarding well. But onboarding immigrants is even more challenging: These new employees may face jarring cultural adjustments both within and outside the organization, possibly along with their families. If assigning a “buddy” to new employees is a good idea for those born here, it’s an even better idea for immigrants.
Onboarding means explicitly communicating corporate culture and “walking the walk” from day one. But it also means modeling openness to the immigrant’s potential contributions to evolving your culture, not just their specialized technical or managerial expertise. As researchers Vandor and Franke suggest, cross-cultural experience helps teams develop diverse cognitive properties ranging from moral judgment to creativity, and it may help them recognize new business opportunities sooner. But that requires both “foreigners” and “natives” to engage in ways that are true to themselves — and this starts with onboarding, which increases their comfort in doing so.
Practical elements of onboarding (“How do I ask a benefits question?”) have an extra layer for immigrants: “Who can help me navigate the bewildering and pandemic-understaffed U.S. visa system? How do I stay within the law here?” Weaving these realities into the immigrant’s onboarding journey requires expertise and forethought. You may need outside consultants or legal resources, but don’t neglect the experiences of previous immigrants within your organization.
ENGAGEMENT
Long after onboarding, companies need to take extra steps to give immigrant employees an equal seat at the table, especially in remote working environments. As you do so, seek opportunities to embrace immigrants into your company and community. With leadership from immigrant employees themselves, look for comfortable and noncontrived ways to celebrate diverse cultures and holidays. Consider giving immigrant employees opportunities to represent you — both within communities and organizations where they’re already comfortable, and in the wider society.
MENTORSHIP
Beyond peer-level “buddies,” mentorship is important to everyone, especially immigrant employees who want to understand what it’ll take to grow in your company and may encounter ambiguous or awkward situations they need help interpreting. Consider providing a “second mentor” from the same region. If no such individual exists within your company, go beyond it to partners or trade associations.
Every employee deserves the best chance to succeed in an environment of welcome and respect. For immigrant employees, this can require even more intentionality and leadership. But the benefits to innovation and performance make this a powerfully compelling investment.
When it comes to innovation, you move forward – fast – or you fall by the wayside. When New Jersey unveiled its new Innovation Hub in New Brunswick last week, we made a powerful statement: we will invest to build on our strengths, not just skate on them. We will lead – and we’ll do it through smarter, better collaboration.
But last week’s announcements – the $665 million state investment, the new state-of-the-art Rutgers Robert Wood Johnson Medical School and Rutgers Translational Research facilities, and adjacent space for entrepreneurial organizations throughout the ecosystem – can’t be the end of the story. They open a finite window of opportunity. They help prepare us to compete. We still have to win.
Let’s talk first about how we got here – and offer a little credit where it’s due. New Jersey’s private sector has already built a vibrant biotech and pharmaceutical sector here. Eight of the world’s top 10 investors in pharma/biotech research operate here; so do over 400 smaller firms in the space, many of them pioneers and leaders.
Recently, we’ve benefited from the exodus of great people from New York City during the recent pandemic. And we’ve also experienced strong leadership and responsible stewardship by Gov. Phil Murphy throughout the COVID crisis. That has mattered. It’s increased the confidence of both companies and families considering relocating here. In an era where talent can increasingly work from anywhere, quality of life, amenities, education, infrastructure, diversity and culture are all more important than ever. New Jersey shines here, too – but, as the governor has recognized, these attributes also need to be treasured, honed and grown.
Within the technology sector, the state’s commitment to innovation and entrepreneurship has been consistently impressive, in terms of leadership, funding, and programs. Tim Sullivan at New Jersey Economic Development Authority and Jose Lozano at Choose NJ have been especially effective in helping to attract more growing companies. Case in point: HAX’s choice of Newark as home for a new, state-of-the-art $50 million facility where it will partner with founders and early-stage startups in industrial, health care and climate technology. Winning this accelerator against the world’s toughest competition was no small accomplishment. It happened thanks to them, the personal efforts of Gov. Murphy and the thoughtful leadership of one of the planet’s top investors, Sean O’Sullivan. This was collaboration as it’s meant to be.
The Innovation Hub announcements signal broader, deeper collaboration across New Jersey’s outstanding higher education community – both between schools within Rutgers, and with Princeton. That culminates years of hard work by leaders like Jonathan Holloway, Christopher Eisgruber, Brian Strom and Deborah Prentice at both great institutions. For far too long, silos and fiefdoms have been the reality in higher education. But wise and farsighted leaders have recognized that more cooperation and knowledge sharing are essential as we compete with Boston and with expanding biopharma innovation hubs in North Carolina Texas, and Southern California.
What’s next? As I’ve said, we’ve opened a finite window of opportunity. There’s more to do, and it won’t all be easy. We’ve made great strides creating new incentives for entrepreneurs, but now we must trim their taxes without compromising the services and amenities that attract great people to this state.
We need to execute crisply on the projects we’ve announced. We need to do everything necessary to transform all this new space into a thriving on-the-ground physical community of researchers and “commercializers” – and link it more tightly to the great private R&D organizations already operating here. We need to build on New Jersey’s traditional welcome for smart, hard-working immigrants, making sure that the world knows this is a great place for them to build a life and raise a family. My recent TEDx talk highlights that 1/3 of the biotech workforce are immigrants. In addition, we need to build on New Jersey’s strengths in K-12 education and promote greater STEM innovation there. That’s precisely what the Liberty Science Center is doing with last week’s exciting new announcement of the Edge Works incubation hub and a new world-class STEM academy that will link advanced learning, intensive mentorships, and work experience. Finally, and not least, we need to work fast. Arguably, we have a two-year window before lower-cost innovation hubs mature and begin luring away our best and brightest. Succeeding will require even stronger and more sustained leadership and collaboration by our political, business and nonprofit leaders. Smart, enlightened leadership isn’t something to take for granted these days. But from what I’m seeing, this generation of New Jersey’s leaders is up to the challenge – and that’s very good news.
Everyone knows the Silicon Valley model of startup ecosystems: regions worldwide have sought to replicate it ever since. But startup ecosystems are moving to the cloud, where community and resources can be sourced globally. This has powerful implications.
Some key success factors remain intact. Ecosystems still need a high density of entrepreneurs, investors and mentors; strong, engaged institutions of higher education; frequent activities; strong networks; and a generous culture of “giving back,” particularly from successful entrepreneurs. But, for key stakeholder communities, the shift to cloud-based startup ecosystems changes much else.
Entrepreneurs: They need a stronger focus on digital soft skills, each with evolving best practices. Are you actively learning how to build and lead virtual teams? Thinking about how remote pitches can be shorter, more dynamic, more effective as “stories”? Choosing virtual events more intentionally, setting goals for participation and assessing your performance? Crucially, in this remote, low-trust era, are you intentionally building trust through every interaction?
When talent can be anywhere, leadership becomes tougher. You need to select people who can thrive in virtual environments, where it’s harder to work around a key individual’s failings. And onboarding is more important, because there’s less in-person culture-building. Across the business, you need clearer expectations and greater accountability.
Investors: They are competing with more funding sources, locally and globally. To access the best deals early, you must work harder to clarify your competitive differentiators — and make sure they’re compelling to the entrepreneurs you target. Step up efforts to support entrepreneurs who move into your region but recognize that the era of investors living near their portfolio companies may be ending.
Five months into the pandemic, 86% of surveyed investors had already closed a deal “100% virtually.” You’ll need to evaluate new opportunities faster and more efficiently; and if geography matters less, being your sector’s smartest, most valuable money matters more.
Higher ed: COVID-19 and the cloud turned the world upside down. Institutions went remote almost overnight and faced new questions about their value when everyone looks like Zoom U. A robust entrepreneurial program can help you attract students, faculty and the community, and build robust networks that sustain you. It can also enable new funding streams through partnerships, tech transfer spinouts and licensing.
Nurture student entrepreneurship by linking it with broader digital ecosystems. By doing so, you widen networks of successful alumni who’ll pay it forward by helping you and your ecosystem succeed. Address diversity and inclusion by clearing paths for nascent entrepreneurs from local and national underserved communities as well as attracting immigrant talent from around the globe. Stand up more sandboxes, bootcamps and accelerators; and mix on-campus and online components in new ways. As you do all this, you build crucial digital soft skills, becoming more agile and collaborative throughout your institution — and beyond
Governments: They must still control costs. But being competitive isn’t just about tax rates. If it were, Denmark wouldn’t be one of the planet’s most entrepreneur-friendly nations. Look for other ways to give entrepreneurs flexibility to start, grow, exit, repeat and give back. Make it easier to leverage your resources on demand.
When people can work anywhere, they’ll work where they want to be. So, focus relentlessly on quality of life, as rising generations define it. That means schools, culture, diversity, inclusion, transportation, safety, amenities and innovation.
Established corporations: They always have been crucial to startup ecosystems — from HP in California to Bell Labs in New Jersey. They’re still important, but they must resist continuing temptations to reduce innovation funding. Many will face the challenge of balancing local investment with seeking opportunities in emerging innovation hubs. Both offer value, but, as workforces disperse, a company’s sense of being a key local stakeholder may further deteriorate.
Companies will need to be intentional about maintaining socially positive, productive relationships with valuable existing ecosystems, even as they seek virtual opportunities elsewhere.
Entrepreneurial ecosystems: In going virtual, they risk feeling more amorphous, so organizations that prioritize building active communities become even more crucial. These include nonprofits that link emerging entrepreneurs to mentors, advisers, funding and talent. But those organizations will also have to evolve — for instance, running smaller, more frequent events, and experimenting with hybrid digital/in-person offerings.
As ecosystems float free of geographies, deep, rich community grows ever more urgent. Cloud-based startup ecosystems help you access innovation worldwide, but you’ll only get what you put into them. They require more intentional effort — but it can pay off handsomely.
It’s now been five months since COVID-19 disrupted virtually every business on the planet, wreaking havoc with the lives, dreams, and security of billions of people. Much has changed forever, and each of us are trying to move forward in our own ways – physically, financially, emotionally. If we want a better future, we can’t build it all on our own: we’ll have it do it together. And that starts with understanding where we stand, and deciding to act.
The pandemic keeps accelerating trends that were already gathering force. Before COVID, over 1/3 of college and graduate students were already taking at least one course online. Today, thousands of colleges are being forced to reimagine themselves as at least partially online institutions. Globally, telemedicine was already growing at 16.8% CAGR; now millions of patients rely primarily on telehealth. After the overnight surge of work-at-home, companies quickly found that it could deliver substantial cost savings without compromising short-term productivity; now they are wrestling with some of the more complex implications.
Every crisis creates opportunities. Some companies, like Amazon, are sufficiently large, well-capitalized, and agile to leverage them at scale. But many small businesses are closing – taking with them the hard work, creativity, and community engagement we need more desperately than ever. Higher levels of government help for entrepreneurs, workers, and customers will likely be needed for years to come. That said, customers have different needs and desires now, and creative businesspeople can discover new ways to serve them.
As we more deeply understand the upsides and downsides of online health, education, and work, we need to start addressing gaps wherever digital interactions and experiences are falling short — and considering what they have now made possible. Crises often lead to profound innovations – economic, social, scientific. While our institutions haven’t all met the test of this crisis, many of us have found personal resilience we didn’t know we had. I think we’re ready to start making big and hopeful changes.
One of them is this: let’s do something, once and for all, about the soaring number of people left behind by the digital divide. None of us want to live in a society where millions of people who’ve spent their lives working hard in the analog are left bereft.
Measured by market cap, the rush to digital has been great for many tech companies. But the massive disconnect between those firms and the rest of society won’t be sustainable. Now is a moment for enlightened self-interest. If tech doesn’t take aggressive steps to address these disconnects, citizens and governments may redraw the playing field in ways it would rather avoid.
Let’s connect
How has your business responded and pivoted during this crisis? What’s worked? What hasn’t? How do you see the future taking shape? Please join me and a few leading entrepreneurs for an online panel discussion this Thursday, August 6th, at noon.Of course, that future will be led by today’s young people. Do you know any teenagers who might see themselves as entrepreneurs someday (or already are)? If so, give them a heads-up about the new Global Entrepreneurship Experience Virtual Teen Camp. Due to increased demand, an extra session was added, August 10 – 14th. It teaches life-changing skills they can use whatever they decide to do: skills for taking control of change instead of letting it control them. What could be more relevant than that?
James Barrood, Tech Council Ventures/Jumpstart Angels, April 30, 2020, Star-Ledger
The coronavirus pandemic is putting all of us to the test of a lifetime. We’re being tested as individuals. From our hospitals to our governments, our institutions are being tested. And so are our companies – none more fundamentally than the new “gig economy” platforms that promised a radically new and more flexible way of working.
Gig employers and their workers are playing a greater role than ever in keeping society functioning during this pandemic. The people who pack your grocery orders and deliver your takeout dinner are on the frontlines, working long hours and often putting their lives at risk. They deserve maximum protection and consideration – and the way gig platforms respond will go a long way toward determining whether this form of employment can really work equitably for people over the long term. I’m happy to say that I see progress – but I hope to see even more.
As a baseline, anyone working on a gig economy platform ought to get the masks and/or other personal protective equipment they need – consistently, in all locations, and with the right training, they need to use them effectively. So we’re pleased to hear that DoorDash has been distributing and promising to replenish hand sanitizers, gloves, and wipes for all their Dasher food delivery people and that it was recently able to buy 2 million consumer-grade face masks for them.
To protect both its own people and the community, gig platforms need to make sure they aren’t discouraging workers from staying home when they’re sick. Instacart, under pressure from its workers, took a step in the right direction by providing an accrued sick-pay benefit that’s usable as paid time off for absences due to illness or injury, and up to 14 days of extended pay for those diagnosed with COVID-19 or in required isolation or quarantine.
It’s also good news when gig platforms look for creative new ways to serve their communities and keep partners and customers afloat – whether it’s finding new types of delivery to offer, as Lyft has; launching pilot programs to provide temporary housing options for frontline healthcare workers, as Airbnb recently did; pledging 10,000,000 free rides and food deliveries to frontline healthcare workers and others in need, as Uber did; or finding ways to reduce commissions for struggling restaurants, as some food delivery companies have. They also need to be responsive in adjusting their offerings – as Lyft and Uber have in suspending shared rides and carpooling services.
The gig economy companies themselves aren’t the only ones with a responsibility to gig workers. For one thing, our governments do, too. Let’s put aside the thorny question of how gig employment ought to be classified. It’s been awful to watch gig workers struggle with ancient unemployment systems that weren’t set up to process their claims and face additional delays associated with waiting for federal Department of Labor guidelines on how those claims should be treated. In fact, according to a recent Fairleigh Dickinson University poll, 54% of those surveyed said part-time gig workers should have the freedom to remain independent contractors, this form of employment can really work equitably for people over the long term. while 24% said they favor mandatory reclassification of independent contractors as employees.
That’s why some companies, most notably Handy, have proposed more fulsome compensation programs for their workers. Handy’s five-point proposal should be the model as it sets forth job protections and a benefits plan that supports workers and sets clear responsibilities for the company. Handy’s proposal includes a portable benefits fund for gig workers, reclassification of independent contractors who work more than 25 hours a week on a single platform, at least a $15 minimum wage for all workers, a framework for worker representation, and mandated flexibility so workers can decide how, when, and where to work.
But we, too -- their customers -- have a responsibility. It starts with taking our own precautions to help those who serve us – wearing our own masks, washing our hands, taking advantage of contactless delivery, and scrupulously following whatever other steps the platform or health authorities may recommend. It involves putting ourselves in their shoes when we decide how to tip. And it involves advocating for them, to make sure their platforms do right by them – now, and in the future.
Nothing’s going to be the same after coronavirus. But if we act as we can and should, gig economy platforms can come out of these events as better companies, employers, and citizens. As can we all.
James Barrood, Tech Council Ventures/Jumpstart Angels, March 30, 2020, ROI-NJ
Businesses are getting hammered by the economic side of the COVID-19 pandemic. Small and midsized businesses are especially vulnerable, since they don’t possess the cash cushion or political pull of their enterprise cousins. A decade ago, after the financial collapse that led to the Great Recession, I edited a collection of ideas for small businesses struggling to survive in brutal economic times. Now’s a good time to revisit and update some of the ideas from “Lessons from the Great Recession” and complement them with some newer ideas from other sources.
Cash is inevitably king in a time like this, and many of our “Great Recession” contributors focused on understanding, managing and hanging on to the precious cash you have. Serial entrepreneur and author Camille Rose focused on the importance of planning — especially getting a crystal-clear understanding of current and impending expenses. I like Entrepreneur’s recent advice about building or updating your cash flow budget with lists of both fixed costs that must be paid to “keep the doors open” and variable costs that might be reduced — especially those that aren’t generating cash.
Inevitably, many small businesses will face the awful prospect of reducing payroll. Entrepreneur points out the importance of tailoring the right mix of approaches; for example, maybe there’s room for furloughing people or reducing hours and sharing the pain rather than outright terminations (which will lead to unemployment claims that might increase your future costs).
In “Lessons from the Great Recession,” Corporate Turnaround CEO Jerry Silberman pointed out the importance of — and opportunities available for — negotiating debt. We’re already seeing large national retailers starting to work with real estate firms to do so: Landlords might prefer to take lower rent while a store or office is closed than to see a tenant walk away from a lease or declare bankruptcy. You might be able to do likewise.
If debt may loom as an issue, planning sooner, more realistically and more proactively is the only solution. It’s crucial to know the full extent of your exposure and think strategically about who to negotiate with and what to offer. Silberman recommended budgeting what you can legitimately afford to pay each creditor, rather than responding reactively to the collector who makes the scariest threats, calls the most often, charges the highest interest or is easiest to settle with.
Speaking of cash, a massive $2 trillion federal relief program has been passed. Many small businesses are in the habit of staying away from government programs, fearful of the paperwork and hassle. But there’s likely to be enough here for small businesses that you ought to spend some time making sure you get what you deserve.
As Rose and other entrepreneurs pointed out a decade ago, planning in the face of coronavirus may also involve repositioning your products and services. Today, the most obvious example is the need to transform a sit-down restaurant into a takeout/delivery service, or to add online commerce to a business that never offered it before.
We’re seeing service businesses ranging from psychotherapists to schools to dance and yoga studios moving their services online, via tools like Zoom. If that’s part of your plan, look for tips on doing that more effectively, so you can use today’s tools (hardware and software) to capture as much of the in-person experience as possible.
Whether you change your offerings or not, staying in close communication with your customers will be crucial — and that means regular, appropriate and honest communication (that doesn’t presume your business is the most important issue in their lives right now). Invite your customers to tell you what they really need from you right now. It might be something you can deliver that you’d never even thought about.
One contributor to the book pointed out that tough times can be opportunities for low-cost business acquisitions. True then, that’s likely to be true now, too. Competitors or complementary businesses may be reconsidering whether they want to continue at all — whether because they can’t get financing or for many other reasons. They might be acquirable (or willing to sell a customer list) at extremely low cost. Of course, as attorney Andrew Sherman pointed out then, tough times don’t change the need for scrupulous due diligence, clarity about what you’re trying to accomplish, and careful deal structuring and negotiation.
There will be better times at the other end of the coronavirus crisis — and, as Rieva Lesonsky put it a decade ago in “Lessons,” now’s the time to start planning for the recovery. As Mark Cuban notes, now may be the perfect time to fix the business problems you were too busy to deal with in better times. If you’ve needed a new website, start planning and building it now. If you’ve been intending to move to a cloud-based accounting or human resources system, consider doing it now.
More broadly, whether strategy recommends changing your product/service mix, acquiring a competitor or anything else, focus on what you want your business to look like (and be ready to accomplish) when everybody can safely re-emerge and start spending again. Because they will. And, when they do, you’ll still be an entrepreneur: definitely wiser and, ideally, more innovative, too.
James Barrood, Tech Council Ventures/Jumpstart Angels, November 27, 2019, ROI-NJ
I took my 9-year-old daughter to see “Ford vs. Ferrari” last week. She’s an old soul with an affinity for sports cars and rock ’n’ roll. Of course, she likes hip-hop, too, and is proud to play “Old Town Road” as well as “Eleanor Rigby” on her new guitar.
This was her first adult movie and I thought it would be a great opportunity for her to learn about cars and auto industry history. I wanted her to see what real-life car racing was like, to contrast it with her video game experiences. But I also wanted her to learn something about innovation and ingenuity — and the freedom and empowerment it makes possible.
Many years ago, when I worked at Mercedes-Benz, I got to visit a pit lane at a European F1 race. It’s an experience I’ll never forget. She might not ever do that, or become the next Danica Patrick. But I want her to appreciate cars, and the independence afforded by driving one. When I see data showing fewer teenagers and young adults getting licenses and driving, I wonder: Might she never develop the desire to drive? Might she prefer to rely on autonomous vehicles and ride-sharing, so she can keep engaging with screens while she’s en route?
Even if fully autonomous vehicles eventually deliver safer outcomes in all conditions — and I deeply admire the innovators and investors who are steadily working to make that happen — I frankly hope she grows up loving to drive like I did. I’d love it if she comes to appreciate the thrill of controlling a powerful engine at speed.
Is that just nostalgia? Maybe it’s more: The way taking control of a powerful vehicle and owning the road remains a metaphor for taking control of the future and shaping it instead of simply letting it shape you.
The movie was fantastic, and it told a true story with — for Hollywood — surprisingly little deviation. Matt Damon and Christian Bale were brilliant, and the racing sequences were breathtaking. As for me, I was equally thrilled by getting to watch the Ford engineering team accomplish the impossible so quickly. Yes, they were incredibly well-funded — but, as far as I’m concerned, it was the hard-working and ingenious engineers who were the real stars.
Much like a startup, Ford’s diverse engineering team from Europe and the U.S. was running all-nighters to create an MVP (minimally viable product) in the form of the world’s fastest, most reliable race car. Anyone who follows racing knows how hard it is to overtake incumbent champions, even with a huge budget. What they achieved was truly extraordinary.
Their work also spawned innovations like novel testing equipment that ensured the endurance of the engines, transmission and suspension so the cars could race at redline for 3,000 miles for 24 hours straight at Le Mans. (If you want to know more about the history, check out this great “Top Gear” clip.)
The movie reflected passion, human dynamics and conflict, hard work, ingenuity, joy and tragedy. I´m certain it advanced my goal of educating and inspiring my daughter — about cars, and about innovation, too. Only time will tell — but, in the meantime, I plan to rent a V8 Mustang for a weekend in the spring and perhaps go see a race. (And, in 2021, just maybe an electric Mustang Mach-E GT.)
On my recent trip to Sweden, I saw the cashless society in action. By one estimate, only 1% of the Swedish economy now operates on bills and coins. That’s a tenth of the rate elsewhere in Europe, and one-eighth of the rate here. The New York Times says only about 1 in 10 Swedes paid for anything in cash last year, and I hardly recall seeing any of them while I was there.
For years, Sweden’s rush towards cashlessness has been heralded as a welcome and inevitable herald of the future everywhere. I wonder, though — and it appears I’m not alone. Hot on the heels of our neighbors in Philadelphia, New Jersey recently banned most brick-and-mortar retailers and restaurants from refusing to accept old-fashioned green Federal Reserve legal tender. (There are some sensible exceptions — for example, rent-a-car companies and parking garages.)
I’m sure there’s a bit of old-fashioned Luddism at work here: grumpiness with the march of progress, and all that. But there are also some eminently reasonable reasons why policymakers are pushing back against the death of cash.
Most obviously, requiring plastic tends to discriminate against lower-income people without credit cards or bank accounts. Even though there are fewer “unbanked” and “underbanked” Americans than five years ago, it’s still 5% and 18% of us, respectively, and that includes many millions who possess no credit cards, either. One key goal of the fintech revolution is to improve financial inclusion, and I’m proud that fintech firms have prioritized that. But, until fintech ushers in that new era, should paying customers be barred from stores or restaurants just because they don’t carry Mastercard, Visa, AmEx, or Discover?
Then, there’s privacy: one reason many people who could use plastic still prefer not to. Dare the financial services and technology industries tell people their information is absolutely safe with us? Dare we tell them they must contribute to the increasingly sophisticated profiles being built on them when they pay in ways that are easy to electronically link to them? Interestingly, I do recall a conversation with a Swedish marketing executive who was indeed worried about all the data collected and the extinction of privacy. She was certain America would never allow the same type of government surveillance.
We’re only beginning to have the privacy discussion we need to have in our society. Maybe we’ll decide the economist Kenneth Rogoff is right: we no longer want colossal numbers of $100 bills in circulation, where they promote a global underground economy of tax evasion, corruption, terrorism, and drug and human trafficking. But that’s different from telling ordinary people they can’t bring a twenty into Sweetgreen or Amazon Go — two chains that recently backed off plans to go completely cashless.
When digital or online financial systems go down — as happened to Visa throughout much of Europe for 12 hours in June 2018 — cash is the easy legacy fallback. What if it’s not there? What if it’s not there during a lengthy blackout, weather emergency or a sudden financial crisis?
If cash disappears, some Swedish officials wonder, would the state surrender its role as sovereign guarantor — replaced not by some decentralized or democratic force, but by commercial banks? Perhaps a central bank cryptocurrency might replace paper — eventually — but, do we begin to understand the implications?
I like what Sweden’s central bank governor Stefan Ingves told the Times: “it would be wrong to sit back with our arms crossed, doing nothing, and then just take note of the fact that cash has disappeared. You can’t turn back time, but you do have to find a way to deal with change.”
Put another way, cashlessness may be another example of how we need to be more thoughtful and intentional about our technologies — and the disruptions they create. Or our legislators will do it for us.
In tech, we live and breathe innovation and entrepreneurship. Tech-driven innovation, for all its challenges, keeps New Jersey’s economy thriving — and America’s. It means saving lives through new medicines and devices, empowering people to be more creative and independent, widening access to knowledge and culture. It’s crucial for reasons that go way beyond gross domestic product. But we rarely consider just how essential diversity and openness to foreigners are to tech innovation and entrepreneurship. We’d better — because these advantages are at risk
Immigrants establish 27.5% of new businesses in the United States: more than twice their percentage of the population. Here in New Jersey — and also New York — immigrants create more than 40% of new businesses. You may know the high-profile examples of immigrant entrepreneurs: Google’s Sergey Brin, Tesla’s Elon Musk, Intel’s Andrew Grove, eBay’s Pierre Omidyar. But what about Slack, Peloton, Affirm, Avant, CrowdStrike, JetSmarter, Warby Parker, WeWork, PayPal, LinkedIn? All founded or co-founded by immigrants.
Attitudes towards immigration shape nations’ ability to benefit from their entrepreneurship. While recent polls actually show Americans becoming more supportive of immigration, what foreigners see in law, regulation and official pronouncements tells a different story. As Stuart Anderson writes in Forbes, it’s become harder to hire or retain high-skilled foreigners, including international students in STEM disciplines.
The current presidential administration also has canceled a new startup visa program in its infancy, relegating foreign entrepreneurs to a short-term “parole status” process typically limited to those here on humanitarian relief missions. While America was doing that, Canada launched and expanded its own Entrepreneur Start-up Visa program, and made it easier to welcome foreign high-tech talent.
Canada’s openness to innovative foreigners is helping grow its tech sector more broadly. As Fast Company recently reported, Toronto now hosts North America’s fourth-largest group of tech workers. Since 2017, it’s added more tech jobs than Silicon Valley, Washington, D.C., New York City and Seattle combined. In just the past several months, Uber, Microsoft, Samsung, Intel and Shopify have all announced expansions there — and Canada’s openness is a key reason.
Research suggests that entrepreneurial individuals are likelier to migrate: they’re the people most prepared to overcome the fears and challenges associated with building something new in an unfamiliar environment. But, as Peter Vandor and Nikolaus Franke recently wrote in Harvard Business Review, something else may be at work, too. Their research suggests that cross-cultural experiences help entrepreneurs identify promising business ideas to borrow and adapt for new markets. (Dietrich Mateschitz visits Thailand, sees an inexpensive energy drink, returns home and invents Red Bull.)
The implication: Even companies that operate primarily within the U.S. can benefit from immigration, by continually leveraging the experiences and insights of colleagues born elsewhere — if given the chance.
America’s history reflects a constant tension between welcoming foreigners and keeping them out. That’s not new. Neither is the proclivity of immigrants to create new companies: AT&T and Pfizer were each created by 19th century immigrants. But, we’ve eventually had the confidence to recognize openness as one of America’s most valuable differentiators. The sooner we do so again — in both attitudes and public policy — the better off we’ll be.
When you’re traveling, and out of your normal environment, you tend to notice some things more clearly. They stand out against a different background. If you’re fortunate, you might take those new insights and observations back home with you. For example, I was recently in Scandinavia presenting to international colleagues from academia and industry about how we nurture a great innovation ecosystem in New Jersey. There, in the region that birthed Nokia, smartphones seemed even more ubiquitous to me than they did back home — and, with them, the pernicious digital bubbles they seem to promote everywhere.
I love tech; I’ve built my career helping tech entrepreneurs and leaders; tech has and will transform many lives for the better. But I think I’m with Katy Perry on this one (as referenced in her “Chained to the Rhythm” video). I’m getting increasingly concerned about the tendency for smartphones — or, for that matter, other devices or social arrangements — to isolate us from the human interaction homo sapiens evolved to depend upon.
In Scandinavia, everyone seemed to be wearing earbuds, and — perhaps this was merely my misimpression as a stranger — once those earbuds went on, interaction with other humans seemed an unacceptable intrusion. Of course, once I was resensitized to this not-exactly-new phenomenon, it was obvious that it wasn’t just the locals. Even in tour groups from the States, plenty of people seemed to prefer interacting with devices to their human companions. Shouldn’t travel be about communicating with people? What don’t you learn when you stick with your device at the expense of fellow humans on the journey?
Perhaps you’re thinking: Well, maybe people are communicating. Maybe they’re sending texts, sharing on social media. But that’s an awful narrow portal to engage other humans through. What don’t those forms of communication tell you about body language, about what people are really thinking and feeling, about their smell and touch?
Or maybe those earbud wearers are learning something from a podcast. That’s a great new tech-enabled medium that I love as much as anyone, but it’s still one-way, carefully curated to reflect individuals’ pre-existing interests, and largely missing the serendipity and (let’s face it) risk of face-to-face conversation.
And maybe there’s no human at all on the other end of the device. Increasingly, it’s just a bot or app, or the endlessly patient and cooperative (if not always competent) Alexa or Hey Google or Siri.
The data’s still controversial, to put it mildly: Perhaps this will all turn out to be just another moral panic, yet another example of how humans are way more adaptable than we thought. Maybe we’re learning to use punctuation and emojis to squeeze a tiny bit more of our humanity into our texts and posts.
But when you consider what sure looks like a mental health crisis amongst our youth, it doesn’t seem implausible that children who continually substitute screen time and tech-mediated communication for face-to-face interaction might not get enough social connection to thrive — or enough practice to succeed with complex adult human relationships. (We’re clearly doing a colossal social experiment. And, since we’re virtually all doing it, we’re largely missing the control groups scientists need to accurately assess the true effects.)
As machine learning makes digital assistants ever more capable of responding to emotional cues, and as specialized neural networking chips increasingly find their way into smartphones, more people may be perfectly happy to choose interactions with well-engineered algorithms over messy humans. (Maybe you know someone like that already.)
But Joni Mitchell may have gotten this one right years before Katy Perry was born: “You don’t know what you’ve got ’til it’s gone.”
I fear that what’s “gone” might be one another.
New Jersey’s citizens and technologists are justly proud of all that’s been invented here. Transistors and tetracycline, Teflon and traffic circles. Bar codes and batting cages. Incandescent light bulbs, steam locomotives, Valium, bubble wrap, LCDs, C++, and Unix. But here’s one you might not have known about: blockchain.
You thought blockchain was invented by the mysterious Satoshi Nakamoto, right? And people are still fighting about who Nakamoto is and where he (or she) came from. Well, they are — but, as Amy Whitaker pointed out in the Wall Street Journal, blockchain was actually invented at a Friendly’s ice cream parlor in Morristown.
“In 1990, the physicist Scott Stornetta had a eureka moment while getting ice cream with his family (there). He and his cryptographer colleague, Stuart Haber, had been thinking about the proliferation of digital files … and the ease with which files could be altered. They wondered how we might know for certain what was true about the past. What would prevent tampering with the historical record — and would it be possible to protect such information for future generations? Dr. Stornetta realized that the problem could be solved by decentralization: instead of a central record-keeper, the system could have many dispersed but interconnected copies of a shared ledger. The truth could never be typed over if there were too many linked ledgers to alter.”
Beginning in 1991, Stornetta and Haber published three of the seminal papers that “Nakamoto” would later quote in his own now-classic document introducing bitcoin and its decentralized blockchain. The system presented in Stornetta’s and Haber’s papers included most of the elements of modern blockchains, demonstrating how to establish a distributed consensus that made counterfeiting virtually impossible.
Why am I telling you this story, when you can read more detailed accounts in the Wall Street Journal and in Vice’s Motherboard? Because it illuminates several points about technical innovation that matter powerfully to us in New Jersey right now.
Critical mass. When Stornetta had his epiphany, he and Haber worked at Bellcore, the Bell Labs spinoff that served the regional Bell operating companies. The two researchers were brought together in collaboration as part of New Jersey’s already-legendary ecosystem of innovation around networking and information technology.
A culture of entrepreneurship. While huge, well-funded research centers like Bellcore and Bell Labs have always differentiated New Jersey, so has entrepreneurship. Building on their great idea, Stornetta and Haber founded Surety, a company that built products to protect intellectual property, preserve digital evidence and prove the authenticity of electronic data.
The power of ideas. Surety still operates, but its ideas have had the biggest impact elsewhere, in different applications, ventures and markets — as great ideas so often do. (Stornetta recently observed that the early scientific literature surrounding blockchain still has ideas that could be mined for profit, if people would simply read them.)
The indispensability of smart investors with capital to invest. Nowadays, Stornetta himself is chief scientist at a private equity firm investing in blockchain startups. And, here in his old backyard, New Jersey and the surrounding region is the nation’s second-largest innovation hub by the metric of venture capital funding.
When it comes to funding, we’re in a good place that’s only getting better. Here in New Jersey, new funds keep coming online — including the New Jersey Tech Council’s second venture fund ($55 million), Tech Council Ventures, which has already made four investments, and our JumpStart Angel Network — 17 years old, and still growing.
One of the greatest things about the tech revolution is just how much fun it can be at its best. Right now, that fun is extending into places it never existed before, creating new industries and business models. (And it might even boost some legacy industries, too.)
We’ve heard plenty in recent years about gamification in business. And the field’s pioneers are increasingly learning from experience how to make it work — in other words, how to make it both effective and fun. But, thanks to four researchers from Brigham Young University, we’re now seeing evidence that shared electronic gameplay can promote collaboration and productivity even when teams are playing conventional games. And the improvements can be substantial.
Maybe that shouldn’t be a shock. As Ladders reports, BYU’s researchers pointed to ways in which video games help people maximize focus, reinforce repetition, promote trust and communication among people who didn’t previously know each other, and support the brain’s ability to remember and organize information. It would almost be more surprising if that didn’t improve productivity.
Those business benefits are the excuse I used recently when I permanently relocated our family’s Xbox to the Tech Council’s New Brunswick office — much to my daughters’ chagrin. But, then, they’re getting some authentic benefits from gamification, too. As creators and collaborators on “Roblox,” they’re building friendships through collaborative play they direct themselves, in appealing environments that actually do spark their imaginations. “Roblox” even gives them a gentle introduction to coding, with its kid-friendly tools for building new games. From all I can see, when they’re on “Roblox,” they’re having the positive experience you’d hope “social” would be.
We’re all familiar with the simulation elements of games, but many of us don’t realize how they can be used to build empathy by sharing the experiences of other human beings. Some of us encountered this first a couple of years ago with the profoundly moving game “ThatDragonCancer,” built by Ryan and Amy Green to share their family’s experience living through the life and death of their son Joel. More recently, as The New York Times reported, the game “Chinese Parents” has been helping Chinese youth and their parents understand each other better, by simulating the experience of raising a child from birth to college. Those players are experiencing the game as fun — but a very deep and connected form of fun.
With the kind of brain impact that videogames can clearly have, they might even be able to offer some clinical benefits. And we’re seeing companies attempt to program games that target specific cognitive systems, aiming to ameliorate ADHD and several other conditions. If that work continues to progress, games might soon complement or supplant existing therapies. And, of course, a videogame can be cost-effectively “administered” virtually anywhere.
Finally, as conventional sports face growing challenges and declining viewership, they just might be saved by the growth of online sports betting. That issue is getting plenty of attention in New Jersey, thanks to its recent legalization here.
We’ve all experienced plenty of negativity surrounding tech lately, some of it deserved. But wouldn’t it be great if — after all that — the future is fun?
While watching “Mary Poppins Returns” this past holiday, I couldn’t help but notice the Scrooge-like bank that was upending lives. I found myself wondering what types of companies will be the Scrooges of the future. Which ones will we lose trust in?
Enterprises, like all human institutions, operate on trust. When people trust them, they’re more willing to transact business and establish partnerships. They demand fewer safeguards, whether contractual, legal or regulatory. Transactions have less friction. It’s easier to attract customers, build brands, grow companies, attract and keep great employees, and successfully innovate.
But, as many of us know from personal experience, once trust is lost, it’s almost impossible to regain. American enterprise is in danger of reaching such a tipping point — and, as has so often been the case in recent decades, the tech industries that are responsible for so much economic creativity and dynamism are getting there first.
I think Jon Swartz had it right in his recent Barron’s piece: “Regaining Trust Is the No. 1 Issue for Tech in 2019.” Do you personally trust your social networks to treat your data with respect, and to avoid using it to manipulate you in ways you can’t understand? When you bring a smart speaker into your home, do you trust it — or are you simply reconciled to having to distrust its surveillance as the price of life in the 21st century?
For that matter, do you consistently trust companies to price their products fairly? Do you think artificial intelligence, Big Data and automation companies are doing enough to help society manage the impacts of their work — on employment, on inequality, on the ability of human beings to find meaning in their lives?
If you’re reading this, you’re probably in the tech industry, in business or both. If you’re hesitant to answer “yes” to some of these questions, imagine how outsiders are answering them. In tech, we’re on the frontlines of the trust crisis that’s emerging in American business — and, since we’re so high profile, our response will have outsized impact.
When polls report that Americans age 18-29 are more positive about socialism (51 percent) than capitalism (45 percent), that’s a red-lit fire engine siren blaring in our faces. As businesspeople, we’ll be making a fatal error if we interpret it as a sign that we need to spend more on public relations, or that millennials just don’t understand where prosperity comes from.
Truth is: We’re being told the current system is out of whack, and the fundamentals need to change. Free enterprise won’t be sustainable if people don’t trust individual enterprises, or no longer believe the system enables prosperity “for the many, not just the few.” Right or wrong, society won’t forever permit capitalists to be capitalists unless they respect a wider set of stakeholders — unless they earn and deserve trust.
Being trustworthy doesn’t mean a business can’t earn a fair profit or won’t look out for its own interests. It does, however, mean that customers, business partners and, ultimately, citizens shouldn’t constantly be worrying about how they’re being taken advantage of.
Increasingly, many of them do worry — and not without reason. If this trend continues, it’ll take us to places few of us want to go. Right now, we in the tech industry have more power to turn it around than almost anyone else. Let’s use it before we lose it.
I won’t lie. I wanted Amazon to recognize the extraordinary vitality so many of us are seeing in Newark, and choose the city’s impressive bid for the HQ2 project. Still, we at the New Jersey Tech Council are delighted to welcome Amazon to New York City, part of the regional ecosystem we represent and nurture.
Here in New Jersey, we know we’re at the center of a thriving community of tech companies, universities, colleges and investors that stretches from New York City to Philadelphia, and treats state lines as minor speed bumps. We know that, when we make the appropriate investments and public policy decisions, we benefit powerfully here in New Jersey — but the benefits spill over to the entire region. And we know the reverse is true, as well. When New York City attracts 25,000 jobs — many of them high-paid and technical — we will reap benefits, too.
Amazon will increasingly recognize what its Audible division already knows: New Jersey is an outstanding source for innovative, highly-educated people who are comfortable with change and know how to drive profits.
Based on Amazon’s track record, we expect it to bring new energy and dynamism to our region, offer new opportunities to New Jersey tech companies with outstanding products and services, and strengthen our entire regional tech ecosystem.
We know we’ll see more great people coming to our region from all over the planet. We’ll see them building their software engineering, cybersecurity, fintech and supply chain expertise in New Jersey’s colleges and universities. They’ll meet with entrepreneurs at our thriving incubators, accelerators and coworking spaces. They’ll wander our Shore and state parks, explore our diverse and beautiful communities, and discover our irresistible quality of life.
Yes, we’d rather have had all (or half) of HQ2 here. But, for New Jersey, the silver linings are multiple and considerable.
First, we’ll still gain significant economic benefits even as we put our massive pot of incentives back in our pockets. We can redeploy some of that cash strategically to make ourselves more attractive to other companies — and to our citizens who already live here.
As part of those efforts, we can focus on greater diversification across information technology, biotech and other innovation hotspots, building an entrepreneurial community that’s more resilient and less dependent on a few huge employers. As we do that, the expertise and relationships that Newark (and New Jersey) built in developing their Amazon proposal will pay major dividends.
Second, we won’t face the brunt of the pressure New York City will quickly face in terms of infrastructure, congestion, housing challenges and rapid gentrification. We’ll get a piece of the growth, but we’ll be able to manage it in a more orderly fashion.
This isn’t to say we don’t have infrastructure challenges of our own. Heaven knows, we do — and meeting those challenges will be crucial to attracting great people from Amazon or anywhere else.
Now that Amazon has made its choices, we have work to do — on infrastructure, economic development, education and beyond. If we play our cards right, we can drive substantial value from Amazon’s decision to locate in Long Island City, Queens. We can make the New Jersey region an even more vital venue for innovation. We can position ourselves for sustainable economic, cultural and societal success — not just for a few years, but for decades. Let’s get to it!
n. We can position ourselves for sustainable economic, cultural and societal success — not just for a few years, but for decades. Let’s get to it!
My 10-year-old daughter approached me on the playground last weekend, pointed to a younger boy and said, “He’s talking about ‘dumb girls.’” Like most parents do nowadays, I deliberated. Should I say something?
As I’ve pondered the moment, it was hard not to contemplate the discourse in our country regarding Judge Brett Kavanaugh and the #Metoo movement. Or the alarming statistic that roughly one-fourth of college females encounter unwanted sexual contact.
I’m still debating if I was right to stay quiet. Might that boy grow up to disrespect women? Could I have changed the course of his behavior just a bit by speaking out firmly (and risking a confrontation with his parents)?
Of course, my two daughters will need to contend with larger issues as they grow up. It seems likely that there will be greater awareness around sexual harassment in the future. That may translate to better-behaved males — hopefully. But then there’s the reality of the internet, which often encourages behavior that’s worse — more objectifying — not better. We all know a 12-year-old boy can access hard porn within seconds from his computer or phone, making yesterday’s stray copies of Playboy look downright quaint. That frankly terrifies me.
Issues like these don’t get solved by themselves. We need to find measured and thoughtful ways to address them.
So often, whenever our society strides forward and then stumbles back, technology is the means by which those shifts are accelerated, and the brakes removed. My younger daughter recently celebrated her 8th birthday at our local bowling alley, where it was hard to miss the hunting video game that featured sexy women popping up on screen after the shooting ended. Bike racing games that should be perfectly playable by young women suddenly feature sexy finish-line ladies. This was no adults-only bar, and whenever I’ve been there, the players have mostly been young kids — learning uncomfortable gender ideals every bit as much as cycling skills.
I’ve written to the alley owner to see if there’s a G-rated version, but I think I know the answer. I suspect what’s required is a campaign to persuade the game manufacturers — and suddenly we’re uncomfortably close to my tech industry.
I remain hopeful that the growing numbers of women entering programming and computer science will help reduce the continued objectification of girls and women in gaming and beyond. Whatever ultimately happens with current or future Supreme Court nominations, I think the phrase “boys will be boys” is thankfully on its way out — whether it’s heard on a playground, at an unchaperoned high school party, on campus or in the executive suite.
I know we’ll be talking about issues like these at the Tech Council’s annual Women in Tech Conference. I’m very much looking forward to that.
Whenever new technologies have disrupted norms and made it harder to sustain those we still value, it’s taken time to find a new balance that reduces anti-social behavior and works for society. From sexually abusive games to online stalking to social media bullying, we face plenty of those issues right now.
Issues like these don’t get solved by themselves. We need to find measured and thoughtful ways to address them. You and me, not someone else. Sooner, not later. The good news is: we have before, and we can again.
The mainstream media has grown increasingly concerned about robotics and its potential impact on employment. As is often the case, there’s some hype at work: maybe a bit too much willingness to believe marketing materials, perhaps a bit of conflation with other technological advances. But the broader point is largely legitimate. In the coming years, at a pace that we can’t accurately predict, many millions of the remaining jobs that don’t require advanced education will disappear.
Already, factories run with far fewer people than they once did, and they are moving inexorably toward lights-out operation. Unexpected business pressures — spiking tariffs or minimum wages, growing customer demands, natural cyclical economic downturns — will force business owners toward greater automation. Once they get it working, they won’t rip it out to hire more humans.
Excluding Amazon’s immense warehouses and Whole Foods workforces (themselves subject to relentless automation), most “great companies” of our era run with far fewer employees than they once did. Even remarkable platform/ecosystem companies like Amazon and Facebook rarely throw off as many “good” middle-class jobs as, say, GM and Ford once did via aftermarket products, repair and so forth.
Here in the tech industries, robotics and machine learning are quintessential “interesting problems.” They’re intellectually exciting, and attract immense amounts of capital. Put bluntly, we’re the tip of the spear in accelerating technological unemployment. And, while broader societal and economic factors are absolutely at play, it’s now fair to say that much of what we do tends to accelerate oft-noted trends towards greater inequality, with a small number of winners and many more losers.
We tend to assume that free markets will solve the problem by creating new jobs we can’t even imagine yet. But, as Axios recently pointed out, it took 60 years for U.S. wages to recover after the first industrial-age automation kicked in around 1810. This was in an era in which the American economy grew rapidly and America moved towards greater prominence in the world economy. The winds were at our backs then. They aren’t now. And we don’t have that kind of time.
Not all will agree, but my view is that this gives us a special responsibility to help find and implement solutions. We have a lot at stake, even if we view the matter purely instrumentally.
Our companies depend mightily on open societies that welcome great ideas from anywhere. Most of us want to live in a reasonably humane and tolerant society, even if we differ on the details. But the perception of a radically unfair economy rigged against non-elites drives resentment and anger that makes this impossible.
You’ll sometimes hear the argument: “OK, this is coming, we need to solve it and the solution is a Universal Basic Income.” The government should simply hand everyone enough money to get by. This may indeed prove the best solution, but most cost estimates for UBI are staggering. Who’ll pay?
If that money comes from the bottom or middle of the economy, you’ve largely defeated the purpose. If it comes from the top, you’re talking about massive redistribution. The top income tax rate during the Eisenhower administration was roughly 90 percent. Is that what it will take? Perhaps, but where’s the political coalition for that?
Finding fulfilling work for newly-unemployed long-haul truck drivers or fast food workers has tended not to be the “interesting problem” for most of us. We leave that to folks we sometimes reflexively view as slow, uncreative and generally unimpressive, aka the government. But, after 40 years, workable and scalable solutions that don’t involve collective public action seem rare. So, this attitude seems unhelpful.
Simply stated: We’re helping to create the problem. Whether through private or public means, or a combination of both, we need to get equally serious about helping to solve it. That starts with serious dialogue.
If you're of a certain age, like me, the Toys“R”Us bankruptcy and impending liquidation might've hit you harder than you expected. Maybe you grew up wandering those aisles. (I did, and still remember the excitement of visiting Geoffrey the Giraffe before Christmas.) Maybe you took your children there. (I did that, too: I cherish a photo of my daughter riding a bike at Toys“R”Us, only months ago. There was plenty of room to ride, where the customers used to be.)
Stores fail. That happens. But is there anything to reflect on here, besides the pull of nostalgia as we all get older and the world changes all around us? Just maybe.
Here in New Jersey, we’ve had a special connection to Toys“R”Us, a company first headquartered in Montvale and then Wayne. Many of us worked for the company, knew others who did, or had business relationships with it. The disappearance of those jobs and supplier relationships has hurt us and our communities, even though it’s happened gradually, and we’ve had time to get used to the collapse of a once-great company.
Of course, it’s also hammered the toy manufacturers and distributors for whom Toys“R”Us was the best way to place real, living, breathing products in front of customers. That’s why one toy distributor is still trying to save some Toys“R”Us stores. It sounds like a heck of a long shot, but weirder things have happened.
Today, even as the VR era approaches, the virtual experience remains a much narrower portal to life in so many ways, whether you’re moving product or engaging people in a venture or social cause. Sometimes, humans still need to see and smell and touch and experience objects (not to mention other living, breathing humans). Historians will likely find it bewildering that Facebook apps, handheld mobile devices, text messages and tweets were ever considered our communications methods of choice.
This weekend, when I need to get some home goods, I’ll take my girls to a real store. I’ll force them to interact with actual salespeople, and let my girls hand the cashier actual printed coupons. Will that be a “real” experience, or mere nostalgia? Just my way of showing them what life used to be like? A symbolic but futile gesture at keeping those stores open?
Hard for me to tell. On one hand, I know full well that it would be easier to just shop online. Relying on customers deliberately doing things the hard way isn’t exactly a sustainable business model. On the other hand, Amazon has opened bookstores and bought Whole Foods, and Facebook and Google are both trying to invent actual physical neighborhoods. So there’s a growing awareness of the need for old-fashioned physicality, even at the commanding heights of the tech industry.
Speaking of my industry, there’s another practical lesson to be learned here. It’s easy to blame online shopping for Toys“R”Us’ demise, but as many observers have noted, an even bigger cause was the private equity deal that saddled the retailer with an insurmountable debt load, making it ever more difficult for the firm to modernize its customer experience and compete for talent.
In recent years, private equity’s role in the tech industry has grown dramatically. Few tech private equity deals resemble the classic real estate-based approach used in the transactions that contributed to the so-called “retail apocalypse.” But that doesn’t make tech deals immune from misvaluation or massive debt growth that must be carefully managed so it doesn’t eliminate R&D or compromise customer experience.
Whether it’s finding ways to evolve face-to-face retail (and physical communities) for the future, or thinking more clearly about our investments and innovation strategies, maybe there is one shared lesson in all this. Disrupt, if you will – but not blindly, not just for short-term profit, and not with zero responsibility for the ripples (or tsunamis) you may be generating.
Every day, I’m proud to help the technology industry and its ecosystem come together, succeed and change the world. But Spider-Man’s Uncle Ben and Winston Churchill had it right: With great power comes great responsibility. We in tech now have great power. To use it well — and not have it stripped away from us — we need to focus on the enlightened long-term interests of our industry and the people we serve. That starts with understanding our role and responsibility — and engaging with those we affect.
We have plenty of historical examples of industries that failed to do this. Most of us can recall companies that obfuscated or denied their impact on health or the environment, even as that evidence grew to the contrary. Most of us have seen companies blame customers for negative impacts of their products, even as those companies invested immense resources in promoting dependence or even physical addiction.
We in tech can do better. And we can draw on our own cultural roots to do so.
Most people I know in technology joined the business not only to build wealth — or because we love to compete (although we certainly do) — but also to make a difference in the world. Most of us have been attracted by tech’s foundations in logic, science and meritocracy: a device or app works well if it’s been designed and built well, not because somebody powerful and important says it does. We need to apply the same principles to our societal impacts.
As an example, let’s consider one issue that’s gotten an awful lot of publicity lately: screen time, which is time spent using a device such as a smartphone, tablet, computer, television or game console. This has gotten an awful lot of publicity lately. Perhaps most notably, Dr. Jean Twenge has published findings correlating the rapid growth of smartphones and social media with abrupt deterioration in the rising generation’s attention spans, mental health and ability to form intimate connections.
While some may find Twenge’s results questionable, worrisome evidence links excessive screen time to obesity and sleep disturbance. Furthermore, as the American Academy of Pediatrics notes, heavy parental use of mobile devices tends to reduce the interactions with children that create emotional connection, improve child health outcomes and development of language, cognition, social skills and self-regulation of emotion.
As a parent, I for one am still limiting my 7- and 10-year-old daughters’ screen time disproportionately, compared to their friends. My girls are close to disowning me — but I personally doubt I’ll regret my strict stand in the years to come. As for us in the tech industry, what do we do with the admittedly imperfect knowledge we have about screen time? To begin with, we ought to help promote objective research in the field and resist the temptation to reflexively minimize it. Then, perhaps, we ought to consider how such findings affect the way we invest in (and build) our products and services.
Some of us might conceivably adjust business models found to be overly dependent on generating dopamine hits. Finally, when a preponderance of evidence does arise, we shouldn’t use the excuse of imperfect knowledge to avoid action.
Screen time is, of course, just one example. But it points to a wider lesson: Some disruptions are improvements. But some aren’t. And disrupters share responsibility for trying to tell the difference.
By now, you've probably heard that “blockchain will change the world.” Notwithstanding massive recent hype, it almost certainly will. And its impact will be even larger right here in New Jersey, because we're at the heart of many of the industries it's likely to transform.
The web is now packed with introductions to blockchain, but here’s the minimum you need to know. It offers a powerful new way to track value, transfer ownership, and confirm transactions securely, without a centralized authority to supervise, act as a bottleneck, or charge high fees for doing so.
Blockchains are distributed databases where transaction records, called blocks, are replicated almost immediately across computers worldwide, across a decentralized peer-to-peer network. Each block is timestamped and linked in a chain, from earliest to latest. New transactions add to the chain, but strong cryptography and complex mathematical techniques prevent older events from being altered or counterfeited without detection. Every participant can access full data for checking transactions on their own. Transactions take place between blockchain identifiers: users can remain private or use their identifiers to prove who they are. Finally, as Harvard Business Review notes, since it’s all digital from start to finish, transactions can be triggered through algorithms and rules -- for example, “smart contracts” that recognize delivery and release payment.
As you probably know, the blockchain concept was first envisioned as a way to secure bitcoin transactions, theoretically enabling users to be certain about who owns a bitcoin, without involving governments or banks. But, as with other potentially earth-shaking technologies, people have quickly discovered far wider applications.
That starts, of course, with the financial industry -- obviously a colossal presence throughout New Jersey and its surrounding region. Which explains the massive explosion of “FinTech” startups that have emerged to exploit the blockchain opportunity--as well as fast-moving experimentation by global financial institutions aiming to use blockchain to improve their businesses (and protect their market positions).
At the New Jersey Tech Council, we know just how much excitement surrounds blockchain in the FinTech space. On September 27th, the region’s top players will participate in the Council’s 6th Annual FinTech Conference. Our keynoter, Ron Quaranta, leads the Wall Street Blockchain Alliance, and our various panels will discuss the potential effects of blockchain and the latest trends in the space.
Excitement about blockchain is also growing throughout the life sciences industries that are central to New Jersey’s economy. A June 2017 Pistoia Alliance survey of senior pharma and life sciences executives found that 83% expect blockchain to be adopted in under five years, and nearly one-fourth are already experimenting with it.
Their #1 potential application is a matter of life and death: ensuring drug safety throughout the supply chain. The Drug Supply Chain Security Act (DSCSA) will require medicine to be fully traceable, protecting against counterfeits, dangerous, illegal, or stolen drugs, and making recalls faster and more complete. Blockchain may be an important part of the solution.
So, too, 60% of life sciences executives believe blockchain may enable more secure, patient-centered sharing of medical records and genomic information. As personalized medicine and ubiquitous DNA testing arrive, this is a problem that desperately needs solving.
Blockchain’s potential healthcare applications point to even broader applications wherever provenance, safety, and contractual performance must be guaranteed. As Michael Casey and Pindar Wong recently wrote in HBR, companies with complex global supply chains constantly struggle to ensure transparency and accountability. With blockchain, digital tokens could track intermediate goods through production, shipping, and delivery -- ensuring provenance, reducing risk, allowing for more flexible credit terms, and permitting more efficient use of assets.
Here in New Jersey, of course, we’re at the cutting edge of supply chains -- and not just at Port Newark, Newark Airport, and our massive logistics facilities. We’re home to key players and investors in supply chain technology, too. That’s why Council regularly hosts important regional supply chain technology events -- such as our forthcoming December 7th Data Summit in Newark which will feature a keynote by UPS’ Kim Felix.
Blockchain won’t mature overnight. Years of work will be needed to transform its promise into reality. But I’m happy to tell you: much of that work will be done in New Jersey.
Here in New Jersey, it's time to anticipate new social and development patterns, reimagine our suburbs, and prepare for a new generation of prosperity.
Start by considering some history, courtesy of the superb new book New Jersey's Postsuburban Economy by Rutgers professors James Hughes and Joseph Seneca. The authors recount how New Jersey successfully evolved from an urban manufacturing-based economy to an economic powerhouse based on suburbanized information and research-driven employment.
But, as they note, "The baby boom will soon be yesterday's workforce. Tomorrow's workforce will be dominated by a new, expansive generation... young creatives...[who] currently do not find the car-culture suburbs in which they grew up an attractive place to live, work and play.”
Their takeaway: "Suddenly, New Jersey's greatest core advantage in the late twentieth century -- a suburban-dominated, automobile dependent economy and lifestyle -- is now regarded as a disadvantage." Sure enough, we’ve seen the welcome rebirth of cities like Jersey City and Newark, propelled by young people looking for places that are fun, exciting, walkable, and bikeable.
But New Jersey’s beautiful suburbs, large swaths of forests and farms and mountains, and gorgeous coastline are still here, beckoning a lifestyle that can be just as much fun, and for many, even healthier. And, of course, communications technology has almost entirely eliminated geographical barriers, promoting distributed innovation, and spurring development of tech hubs even in the “middle of nowhere.”
What, then, should we do? Re-envision and reinvent our suburbs to welcome more of the fun, creativity, and experiential lifestyles valued by new generations. Build on what we already have, sensitive to what makes each community unique, as we evolve our safe and beautiful suburbs to welcome some of the urban spirit and experience people want in their lives.
New transportation solutions such as ridesharing, bikesharing, connected/autonomous transportation, and “smart city” technology will make it significantly easier to get around in the suburbs -- especially if we complement them with needed investments in mass transit and infrastructure. (With the growing use of new devices ranging from scooters and Segways to electric bikes and skateboards, getting around in the suburbs could even become fun.)
One specific way to reinvent our suburbs: support the flexible transformation of yesterday’s corporate campuses and office parks, welcoming more creative mixed uses, from bike paths to entertainment. Where these venues have faded, flexible redevelopment can turn them back into major community assets, offering crucial reinforcement to local tax bases, as well as diverse new employment opportunities.
Communities only keep thriving when they flexibly evolve to serve new generations, creatively reinterpreting the values that originally made them great. In New Jersey, we’ve done that repeatedly. It’s time to do it again. We can -- and I’m convinced we will.
That is why, as New Jersey gets set to elect a new governor, a key part of his or her agenda must be how to transition these fading suburban properties back to taxpaying assets that our tech sector sees the right place to grow businesses and attract employees to live, work and play.
Recently, it was my privilege to speak at the Haiti Tech Summit, where 500+ leaders from throughout the western hemisphere shared a remarkable conversation about technology, entrepreneurship, innovation, and ecosystems. The summit attracted executives from Google, Facebook, Uber, LinkedIn, Airbnb, PayPal, and many other leading tech companies — but for me, a highlight was the keynote address by Ben Horowitz, co-founder and partner of top VC firm Andreessen Horowitz.
I’ve heard hundreds of keynotes. Based on that experience, I didn’t expect to learn much. I was wrong. Horowitz shared a fascinating history lesson about Toussaint L’Ouverture, the leader of Haiti’s slave rebellion — the era’s only successful slave rebellion. L’Ouverture not only won: he built an independent country that earned the world’s respect, and negotiated as an equal with foreign leaders including John Adams. Under L’Ouverture’s leadership, Haiti built a larger export market than the U.S.
How did he do it? Horowitz distilled four lessons that are powerfully relevant to the challenges faced by entrepreneurs who need to build a robust culture that can scale:
- Keep what works. L’Ouverture sought ways to build on the strengths of “legacy” slave culture. One of those strengths was music. So, he recruited women to quickly communicate military plans by singing in a local language code the European authorities couldn’t understand. Similarly, Steve Jobs revived a struggling Apple by building on a strength embedded deep in its corporate DNA: the ability to vertically integrate brilliantly-designed systems to deliver an exceptional user experience.
- Create shocking rules. Horowitz says you need shocking rules to make people seriously reflect on why you’re doing things as you are. So, in an era where conquerors routinely raped their victims, L’Ouverture demanded that his officers remain faithful to their wives — one key way he aimed to develop a culture of loyalty and integrity. Centuries later, Facebook’s Mark Zuckerberg told his developers to “move fast and break things.” This sent a powerful message. Zuckerberg didn’t just want “generic” innovation: he wanted relentless experimentation and light-speed iteration.
- Incorporate people from other cultures at senior levels. L’Ouverture knew Julius Caesar had retained local rulers after his conquests, leveraging their unique knowledge of local culture. To integrate elements of foreign culture he needed, L’Ouverture recruited defeated officers into his military. In the 21st century, Google saw it could only succeed in the enterprise by bringing in outside leadership that deeply understood enterprise culture. By recruiting former VMware CEO Diane Greene, it did precisely that.
- Make decisions that demonstrate your priorities. L’Ouverture knew he needed former slaveholders’ skills in managing Haiti’s plantations. So, instead of killing them, he transformed them into employers and lowered their taxes to make this new business model viable. More recently, Reed Hastings accelerated Netflix’s transition to streaming media by evicting the leaders of its DVD rental business from his executive strategy meetings — even though they were still responsible for nearly all company revenue.
From left are Michele Perras, Pivotal; Christine Souffrant, Summit organizer; James Barrood, and Zassmin Montes de Oca, Women Who Code
After L’Ouverture’s era, of course, Haiti has often struggled. Most Americans know it’s one of the world’s poorest countries. But many don’t realize that it has a remarkably entrepreneurial and resilient populace: a legacy of L’Ouverture himself.
A key goal of the Haiti Tech Summit was to promote collaboration between American and Haitian companies, and to deploy technologies in Haiti as a test bed. Based on what’s learned there, entrepreneurs can successfully scale their services and products throughout the developing world.
This model works. I saw it first hand while visiting the Haiti Business Incubator run by Silicon Valley entrepreneur Jim Chu. He’s rapidly deploying a clean water technology franchise which will offer inexpensive clean water and create more entrepreneurs at the same time.
On behalf of the Tech Council, I participated to deepen our collaboration with Haiti: both an important market and a new source of entrepreneurial and technical talent for our regional tech hub. Our region also boasts one of the world’s largest Haitian communities. We have a powerful stake in helping Haiti’s economy succeed, and direct financial opportunities in promoting our own services and products there. These are the same motivations that led the Council to our pioneering 2015 Cuba trade mission.
Seeing Haiti’s tech community first-hand, I’m convinced of the country’s immense potential — and the crucial importance of deep, long-term collaboration to actualize it.
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