Reading across disciplines is one of the best ways to improve our investment acumen. Here is a summary of some of the best articles I read this week. If you like this collection, consider forwarding it to someone who you think will appreciate it.
1. China's tech workers are pushed to limits by surveillance software
In China, technology adoption promises its swelling middle classes an easier, more productive life. But as companies bring productivity-enhancing tools into everyday office life, their efficiency is being channeled, not into leisure time, but into squeezing ever more value from employees.
This is particularly the case in China's tech industry, where rapid technological development, paired with poor labor regulations, has created a potential for labor abuse. The big tech companies themselves, locked in cutthroat competition for new business opportunities, are pioneering these technologies and tools in their own operations. From hiring and goal-setting to appraisal and layoff, productivity-enhancing technologies look to quantify workers' behavior by collecting and analyzing extensive amounts of personal data.
Some scholars warn that some practices can be unethical, invading employees' privacy and burdening them with greater workload and mental stress. Others draw parallels to the fatigue faced by factory laborers during industrial revolutions, where workers chased the pace of machines.
The harsh conditions synonymous with China's sweatshop factory culture have come to be identified with the country's technology companies, where workers often endure slavishly long hours to hit objectives set by big data analytics. The environment of intense pressure has, in some cases, created a lethal environment for office workers.
2. The future belongs to the intangibles
Investment in intangible assets that underpin the knowledge or learning economy, such as intellectual property (IP), research, technology and software, and human capital, has risen inexorably over the past quarter-century, and the COVID-19 pandemic appears to have accelerated this shift toward a dematerialized economy.
Investing in intangibles correlates with productivity and sector growth. Regardless of the sector, companies that invest more in intangibles grow more.
The evidence is stacking up in an age increasingly driven by innovation and knowledge that firms and sectors that invest most heavily in intangibles are reinforcing and deepening their competitive advantage and achieving the highest rates of growth in gross value added. Fast-growing companies invest 2.6 times more than slower-growing counterparts. But investment in intangibles is only a starting point. The full potential of these game-changing assets will not be realized unless companies are smart about how they deploy them to create synergies and scale, and enhance a range of capabilities that can deliver on growth.
3. What's wrong with processed food?
One of the reasons sugar is so prevalent in packaged foods is that ultra-processing tends to eliminate flavours found in nature. Something needs to fill the void: “Sugars are used in large quantities by the food industry to give flavour to foods that have had their intrinsic flavours processed out of them and to mask any unpleasant flavours in the final product. These sugars are not only used as sweeteners but have important technological functions in foods, providing texture, bulk, colour and acting as preservative agents.”
"The problem is that, in the past half-century, a different type of food processing has been developed," says Fernanda Rauber, a nutritional epidemiologist at the University of São Paulo, Brazil, about what we now call "“ultra-processed foods”. "These substances would not be found in our kitchen. Usually, they contain little to no proportion of real foods."
"Very commonly, they use what we call cosmetics additives – colours, flavours, thickener, emulsifiers, gelling agents – to improve the sensory properties of the food, to give something to the substance that otherwise would taste like nothing, just plain starch," says Priscila Machado, a public health nutritionist at Deakin University in Geelong, Australia. "The problem when you think about these substances, in isolation they don’t add anything particularly nutritious to the food. Food is more than the sum of the nutrients they contain. There are no antioxidants and phytochemicals that we find in whole foods if they are stripped out in processing." Even when nutrients are added back in, like cereals fortified with iron or fibre, food might not be as healthy as it seems. Added nutrients don’t work as well as those found in whole foods, she says.
4. The fall of GE ... By Bill Gates
My first big takeaway is that one of GE’s greatest apparent strengths was actually one of its greatest weaknesses. For many years, investors loved GE’s stock because the GE management team always “made their numbers”—that is, the company produced earnings per share at least as large as what Wall Street analysts predicted. It turns out that the culture of making the numbers at all costs gave rise to “success theatre” and “chasing earnings.” In Gryta and Mann’s words, “Problems [were] hidden for the sake of preserving performance, thus allowing small problems to become big problems before they were detected.”
Investors bought into the notion that the company’s world-renowned training made it better at managing things than anyone else, and that GE could produce consistent profits even in highly cyclical markets. And GE successfully persuaded people that its generalists could avoid the pitfalls that had tripped up big conglomerates in the past. In reality, those generalists often didn’t understand the specifics of the industries they had to manage and couldn’t navigate trends in their industries.
5. Oxford University Press shuts down after 500 years
Oxford University’s right to print books was first recognised in 1586, in a decree from the Star Chamber.
Oxuniprint’s closure will mark the final chapter for centuries of printing in Oxford, where the first book was printed in 1478, two years after Caxton set up the first printing press in England. There was no formal university press in the city over the next century, but the university’s right to print books was recognised in a decree in 1586, and later enhanced in the Great Charter secured by Archbishop Laud from Charles I, entitling it to print “all manner of books”.
OUP has existed in a recognisable form, with its own printing division, since the 17th century, printing everything from the King James Bible to scholarly works.
