2017/10/23

A ‘World Without Mind’: Big Tech’s Dangerous Influence

book1
bookFrench philosopher Rene Descartes famously said “I think, therefore I am.” But in the digital age, what we think and how we live are being influenced in a big way by just a handful of tech firms: We are informed by Google and entertained by Apple; we socialize on Facebook and shop on Amazon. It’s time to reclaim our identities and reassert our intellectual independence, according to Franklin Foer, a national correspondent for The Atlantic and former editor of The New Republic, in his book, World Without Mind: The Existential Threat of Big Tech. He recently joined the Knowledge@Wharton show, which airs on SiriusXM channel 111, to explain why these firms’ hold on society is a cautionary tale for the future.
An edited transcript of the conversation follows.
Knowledge@Wharton: Tech companies such as Amazon have truly transformed themselves over the last couple of decades [and become a big part of our lives].
Franklin Foer: Amazon is really one of the most impressive specimens in the entire history of American business. It started off as a bookstore, then it morphed into becoming the ‘everything’ store. And it’s morphed beyond that. We know about Amazon Web Services and how it powers the cloud. We’ve seen how it just keeps expanding, culminating most recently in its decision to purchase Whole Foods. The same could be said for Google, which set out to organize knowledge but then became Alphabet, which has this massive portfolio, including a life-sciences company that aims to make us immortal.
Where do these companies end? Do we have a problem with their size? These are questions that go to the fundamental nature of our economy and whether we can really have a competitive, capitalistic system. There are more fundamental questions [we need to ask] about the future of our culture and our democracy because these companies amass tremendous troves of data about us. Those troves of data are portraits of our psyche. They use this incredibly powerful information about us in order to alter our behavior. There’s a huge amount of convenience that comes with that, but there are also real, important questions that need to be asked of these companies.
In the last couple of months, we’ve started to ask some of these questions. The outcome of the last election, with the proliferation of fake news and the debate over Facebook’s culpability in that question, has triggered a real backlash against that company. There are a number of flashpoints that have shifted the debate [about society and technology] considerably.
“In Silicon Valley, the greatest ambition now is not to displace Google or Facebook. It’s to get bought by Google and Facebook.”
Knowledge@Wharton: There are three or four companies, which are giants in the tech world, that have unbelievable amounts of control over so many things in our society.
Foer: Absolutely. The Europeans call them GAFA: Google, Amazon, Facebook and Apple. There are a couple of reasons why these guys have triggered so much anxiety and why I found myself drawn to asking hard questions of them. The first is the accumulation of data. The second is the way in which that data ends up getting leveraged. We’re in the realm of algorithms and machine learning and artificial intelligence, where the advantages that accrue to the companies that have mastery over those things end up compounding over time.
So the gap grows between those big four and everybody else. We may already have reached the point where people have stopped trying to chase them. In Silicon Valley, the greatest ambition now is not to displace Google or Facebook. It’s to get bought by Google and Facebook. There’s a real question about [the future of] entrepreneurship here. Where are the opportunities? If you cease to exist in an economy where you can displace those big players, the incentive to aim for the stars and to try to create those kinds of unicorn companies diminishes.
Knowledge@Wharton: You write in the book, “As these companies have expanded, marketing themselves as champions of individuality and pluralism, their algorithms have pressed us into conformity and laid waste to privacy. They’ve produced an unstable and narrow culture of misinformation and put us on a path to a world without private contemplation, autonomous thought or solitary introspection. A world without mind.”
Foer: There’s so much about technology that’s so wonderful. I have a daughter who’s 12 years old. When she was born, there was no iPhone, there was no Kindle, there was hardly social media. Over the course of this decade, incredible things have happened. They’re real monuments to human creativity, and it’s hard not to bow down before these creations.
But the magical qualities of these creations shouldn’t distract us, shouldn’t preclude us from asking skeptical questions because the stakes here are supremely high. Over the course of the long history of humanity, we’ve always had tools that have been extensions of us. You could argue that technology is one of the things that defines us as a species.
But what’s getting automated right now isn’t upper-body strength. We’re not automating our ability to plough the fields or make widgets. We’re talking about the automation of mental exercises. These companies have technologies that are intellectual technologies. [They come] between us and reality. They are the filter we use to get news and information. They intend to create virtual realities that we’re going to be inhabiting, and they’re trying to complete this long merger between man and machine.
Soon, these technologies are going to be not just worn on our wrists or worn as glasses. They’re going to be implanted within us. We need to ask the biggest questions about what makes us human, what are the things that we want to preserve in this transition? You can’t fight the flow of technology. But we should also assume that, as human beings, we have agency. We have the ability to shape our own destiny, and we should be active in doing that, not just passively accepting whatever comes next.
“These companies have technologies that are intellectual technologies. [They come] between us and reality.”
Knowledge@Wharton: How impactful have some of these changes been on retail? Malls have gone significantly down in the last few years, and manufacturing has become more automated.
Foer: Let’s just take that one question of the future of retail, for instance. My dad was a small-business owner. He had a small chain of stores. He taught me a real appreciation for the value of small business and capitalism. He was also — in a weird combination — an antitrust lawyer, which really affected my thinking about capitalism, the virtues of having a competitive, diverse marketplace and what that means for us as consumers. But we also need to think about what it means for us as citizens.
While prices may be low [with automation], we need to start asking questions about the future of work. As stores disappear, a big source of jobs is evaporating. I think about it in terms of what makes life meaningful. If we live in a world where we’re planted in our own houses and we’re able to summon every movie, every book to our fingertips, that takes away a great opportunity to go out and experience culture in a collective sort of way. I think about commerce as being a fundamental social experience. When I go to the store, I get out of my house. I interact with other people. It may seem trivial, it might seem incredibly superficial, but those interactions are really important to us in the way that we think about our fellow human beings and about the quality of our own lives.
What comes next when commerce is entirely virtual? How will human interaction change? How will our society change? Are we happy with those changes? At what price [comes] convenience and efficiency? I don’t pretend that these are easy answers, and I don’t pretend that we’re not accruing incredible benefits from all of these changes. But we should also spend a little time thinking about what we’re losing in the process.
Knowledge@Wharton: How do you see Facebook’s role in how we consume media changing in the future?
Foer: I want to talk about this from a very narrow perspective, which is that I’m a journalist. Over the course of my career as a journalist, the profession has become extremely dependent on Google and Facebook. As advertising markets collapsed, there became this need to scale up in a quick sort of way, and the only way to get revenue was through growing traffic. The only way to grow traffic was by relying on these platforms. That meant that journalism needed to master these platforms. It’s a very unhealthy state of dependence. The values of those platforms end up becoming the values of everybody who depends on those platforms.
As an editor, the type of work that we did changed because we needed to succeed in Facebook. It’s kind of a debasing thing where the headlines we wrote had to be sensationalistic in a way that could travel on Facebook. The subjects that we had to write about had to tap into the hive mind that existed on Facebook. Instead of shaping the news, instead of making choices that were ennobling for our readers, trying to expand the minds of our readers, we ended up doing a whole lot of pandering. It can’t be healthy in the long run.
“You can’t fight the flow of technology. But we should also assume that, as human beings, we have agency.”
I edited a magazine that was left of center. The mood that exists in the world right now is not left of center, it’s kind of left. I found that, just to get traffic, there was this temptation constantly to pander to what politicians call “the base.” I see this all the time. It’s a dissent to be somebody who disagrees with whatever the consensus is — it’s to be cast out. Ultimately, it’s just not healthy for our politics to have these two tribes.
We think about our politics as extremely polarized, and it is. But it’s also extremely conformist right now. If you live in one of these two tribes, your informational ecosystem is extremely restricted. Facebook is a feedback loop where you get what you want to hear. We just get driven further and further into our corners through this technology that’s giving us what we want.
Knowledge@Wharton: What about Apple’s role?
Foer: Of the four big companies, Apple is the one that troubles me the least. I dislike the way in which it collects data. But at the end of the day, Apple is a hardware company and less involved in the sorts of intellectual technologies that I’ve described. Apple has done things to remake the music industry, for instance, that probably on balance I don’t like. But if I were to rank the four companies in terms of their perniciousness, I would put Apple at the bottom of the list.
Knowledge@Wharton: What about Google?
Foer: To me, the problem with Google is its ever-expanding goals. The thing that bothers me about Google is that there’s almost a religious intensity to what they do. [Co-founders] Sergey Brin and Larry Page come from the world of artificial intelligence. Artificial intelligence is this incredible thing, but there are different ways to practice artificial intelligence. There are all sorts of ways in which it’s an incredible convenience. But there are other people who want to achieve what’s called ‘AI complete,’ which is to create an artificial intelligence that is truly akin to a human intelligence, that has an understanding of language. There’s a whole, almost messianic vision that comes with it.
I’m sure you’ve heard of Ray Kurzweil, an amazing engineer who has this idea of singularity, of this moment where we completely merge with the machine, and the machines become smarter than the humans. We end up downloading our brains into this virtual world where we live forever. It’s really a religious vision. Ray Kurzweil is the director of engineering at Google now, and I think that Larry Page has a version of this sort of fantasy that he entertains. That’s his ambition for the company.
It’s a bit of sci-fi fantasy, so I’m not really concerned about singularity. What I’m concerned about is that when you believe you’re on this kind of messianic mission, and when you treat your job with that kind of religious fervor, all of the temporal concerns, all of the concerns about law and ethics and the present and what you might be destroying, end up getting thrown out the window. This is a problem that I have more generally with these companies.
“Some of these companies are just so fervent, so hubristic and self-confident … they don’t really pause to consider what’s being destroyed.”
You might think that I wrote a left-wing book, but I think I wrote a pretty deeply conservative book where I’m really worried about the fate of important institutions. There’s a lot of wisdom built into the things that we’ve developed over time. I worry that some of these companies are just so fervent, so hubristic and self-confident about what they’re doing that they don’t really pause to consider what’s being destroyed in the course of rushing to a glorious future.
Knowledge@Wharton: We’ve also transformed into a society where income inequality is a staggering issue.
Foer: Absolutely. We need to look at the ways in which these companies exacerbate the divide, the ways in which they sit on these piles of cash. If you work for one of these companies, your life is amazing, right? We all know about their famous corporate campuses and the incredible benefits that come with working for one of these monopolistic firms. But what we see a lot of in the economy is not just a gap between the rich and poor in the aggregate sense. There’s almost a gap between the rich and poor within each of these sectors.
If you’re the second or third player in one of these fields, you don’t get paid the same because these companies collect the monopolistic rent. They are able to because they have such a dominance in their field and they don’t actually have to worry about competition. They can sit on piles of cash and distribute it in whatever way they want. They can hoard it, as Apple does, or they can distribute it to their workers in terms of benefits that keep their workers tethered to those companies. But everybody else in the economy doesn’t have the pleasure of benefiting from monopolistic rents, so the gap grows.


2017/10/19

Eyzaguirre alude a No+AFP: "No creo que los movimientos del último tiempo estén en contra del modelo"

Reynaldo Arancibia www.pulso.cl

El jefe de las Finanzas Públicas se refirió también escuetamente a las propuestas económicas de Sebastián Piñera asegurando que "no son muy disrruptivas".
Enfatizando en una recuperación de la economía, el ministro de Hacienda, realizó su primera intervención ante el empresariado como titular de la cartera en Enade 2017, donde enfocó su discurso en el sistema tributario, en la regla fiscal y en el crecimiento.
Sin embargo, en la parte final de su discurso apuntó su análisis al malestar social que se ha generado respecto al sistema de pensiones y otras políticas en medio de un lento crecimiento económico.
Según Eyzaguirre, “las marchas no corresponden a los grupos pobres si no a los medios que tienen miedo de caer en la pobreza. No creo que los movimientos del último tiempo sean porque la población esté en contra del modelo. Pero exigen que no haya abusos y si la vida juega una mala pasada al menos que tengan una buena educación para sus hijos y pensiones dignas.
“Si tuviésemos mejor educación, salud y pensiones, la gente tendría un mayor compromiso con las reglas económicas”, enfatizó el Jefe de las Finanzas Públicas.
En ese sentido, enfatizó, además, que el malestar social se debe a que “se nos ha hecho más cuesta arriba seguir creciendo más rápido”.
Eyzaguirre también tuvo palabras para el panorama político. “Chile va a tener que hacer una reflexión profunda sobre el régimen político Una cosa es ganar y otra gobernar”, subrayó.
Asimismo, valoró la propuesta hecha por la Sofofa y la CPC respecto a la creación de una agencia de evaluación de políticas públicas. El país se beneficiaría con una agencia, es un muy buen antídoto contra el populismo, por lo que tener más control sobre las políticas publicas es fundamental”.

Benavides llama al gobierno a convertir en ley la comisión de productividad para reimpulsar economía

Reynaldo Arancibia www.pulso.cl

Con un fuerte foco en el próximo período presidencial, el presidente de Icare abrió los fuegos de Enade 2017 enfatizando, además, en mejorar los niveles de productividad para reimpulsar la economía.
“Creemos que sería un legado de gran valor para el futuro de Chile si esta iniciativa se transforma en ley y finalmente da lugar a la instauración legal de una Comisión Chilena de Productividad, de características similares a las que hoy existen en Nueva Zelandia y Australia, reconocida esta última por la OCDE como la mejor práctica en este campo”, señaló.
El mandamás de Icare también deslizó una critica, subrayando que “a pesar las diversas iniciativas desarrolladas, no fue posible revertir el ritmo de deterioro que observa lo productividad en nuestro país”.
Benavides agregó que “debemos recuperar el ritmo de crecimiento de nuestra productividad. El sólo llevarlo de -1% a 0% ya significaría agregar un punto más en nuestra tasa de crecimiento”.
Por otro lado, resaltó el rol de los empresarios dentro de este panorama político y económico. “Nuestro rol como actores empresariales es ayudar a que Chile no se estanque; lograr que la gran fuerza transformadora de las empresas y su agilidad para adaptarse a los cambios, beneficie a toda la sociedad chilena”, sostuvo.

A pesar de baja del cobre dólar cae nuevamente de la barrera de los $625

dolarwww.pulso.cl

El dólar abrió a la baja este jueves, cayendo nuevamente de la barrera de los $625 y operando –a las 9:30am– $2 a la baja con respecto del cierre de ayer.
Esta baja se daba a pesar de una nueva caída en el precio del cobre, el metal se depreció luego de que se publicaran los datos del crecimiento de China para el tercer trimestre que demostraron menor dinamismo que en la primera mitad del año.
De todas maneras, el dólar bajaba a nivel internacional cerca de un 0,2% ante una canasta de monedas de referencia y perdía más de un 0,3% contra el euro.
Al respecto, Samuel Levy de Capitaria comenta que Samuel Levy, Jefe del Departamento de Estudios Capitaria: “Para el día de hoy, vemos que pese a la caída del Dollar Index, los descensos en el cobre tras la publicación del PIB y producción industrial en China no dejaron conformes al mercado generando una caída en el cobre, por lo que esperamos ver leves alzas en la presente jornada”.
Desde BCI proyectan que “los fundamentos económicos llevarían a una ligera alza en el tipo de cambio hacia fin de año, situándose en $640”.

CPC llama a reemplazar reforma por "acuerdo laboral" e insta a mayor entendimiento con el Gobierno

Reynaldo Arancibia www.pulso.cl

Un fuerte llamado al entendimiento entre el Gobierno y las empresas hizo el presidente de la Confederación de la Producción y el Comercio, Alfredo Moreno, durante su discurso en Enade 2017.
“Para el desarrollo necesitamos flexibilidad, agilidad y trabajar juntos”, indicó el líder gremial, agregando: “¿por qué no pasamos de la reforma laboral al acuerdo laboral? Decidir en conjunto de qué manera queremos trabajar”. Moreno puntualizó que para esto se debe tener mayor diálogo.
En ese sentido, Moreno enfatizó que “Chile es el único país latinoamericano que está dentro de los 25 países mejor preparados para enfrentar los cambios”, pero precisó que nuestro país “no será capaz de aprovechar los cambios sociales y la modificación del entorno”.
Además, hizo una crítica a su sector por no haberse pronunciado frente al alza de la cotización previsional que plantea el Gobierno en la reforma a las pensiones y que deberán pagar los empleadores. “Es un costo muy alto y no he escuchado a las empresas decir algo”, sostuvo.
Moreno, en cuanto a impuestos, indicó que “Chile debe cambiar la discusión de la recaudación a los incentivos, facilitar la inversión”, añadiendo que el desincentivo de la inversión con la actual regulación tributaria en Chile es alta.
El líder del empresariado también se refirió al panorama político, asegurando que “para trabajar juntos debemos revalorizar la política” y señaló que “la política es esencial para Chile y su futuro. Es la única manera de enfrentar los problemas que tenemos y los que vendrán”. Propuso, además, crear una oficina de evaluación de políticas públicas.

Cobre cae por tercera jornada consecutiva presionado por crecimiento chino

KGHM, minería, cobreEmilia Benítez Silva www.pulso.cl

El cobre volvió a caer este jueves, consolidando así su tercera sesión a la baja luego de que el lunes alcanzara su nivel más alto desde el 26 de agosto de 2014 (US$3,2187 la libra)Según información entregada por Cochilco, el metal rojo terminó hoy en la Bolsa de Metales de Londres en los US$3,1389 la libra, lo que representa una caída de 0,73% con respecto al cierre de ayer.
La caída de hoy se da luego de que anoche se conocieran el PIB del tercer trimestre de China que reveló que el crecimiento disminuyó (como estaba previsto), pero sigue siendo el reflejo de una economía robusta.
El analista de Capitaria, Ricardo Bustamante, comenta al respecto que “a pesar de que el dato de producción industrial resultó levemente mejor a las expectativas, se confirmó que el crecimiento económico se enfrió al pasar del 6,9% al 6,8% durante el tercer trimestre. Si bien las expectativas iniciales apuntaban a esta cifra, algunos comentarios del gobernador del Banco Central del gigante asiático durante esta semana generaron cierto optimismo que finalmente no se concretó”.

Bustamante advierte además que debido a la ausencia de noticias macroeconómicas provenientes del gigante asiático, la próxima semana podría ser una estable para el dólar. “De todas maneras, una fuerte fluctuación del dólar impactaría a los metales en general, por lo que debemos estar atentos a lo que pase con cifras relevantes en Estados Unidos y con declaraciones de la Fed”, asegura.

Ad portas de llegada de Amazon: DHL estudia replicar en Chile su alianza con el retailer

Catalina Iturriaga www.pulso.cl

La empresa de servicios logísticos tiene experiencia trabajando en el extranjero con la firma de comercio electrónico. De hecho, se trata de uno de sus clientes más relevantes en su portafolio global.
La llegada de Amazon ha metido ruido en el mercado, tanto para los retailers como para los proveedores de servicios del comercio electrónico. Esto, debido a los esfuerzos logísticos que deberá realizar el gigante estadounidense para replicar su distribución de productos en plazos acotados.
Amazon se encuentra en proceso de licitar justamente esta área de negocios, para aprovechar la experiencia de las compañías en la entrega de productos en Chile. La empresa logística DHL tiene experiencia tanto en esto último, como operando con la compañía liderada por Jeff Bezos. “Amazon es uno de nuestros clientes más grandes a nivel mundial y si ellos comienzan a realizar actividades en Chile, será muy importante para nosotros estar relacionados con ellos”, comentó el vicepresidente de estrategia de las Américas para DHL en e-commerce, Craig Morris. “Es una buena oportunidad para el país. Hará que el consumidor esté más relacionado con el e-commerce”, agregó el representante de DHL.
Amazon tiene previsto construir un centro de distribución en el país, lo que le permitirá ofrecer por primera vez su servicio express denominado Prime Now. Este, permite el despacho de productos en un plazo máximo de dos días, además del streaming de películas y música. Actualmente el retailer permite la compra de algunos de sus productos con envío a Chile, pero se espera que las compras aumenten de manera exponencial una vez que cuente con presencia física en el país.
Oportunidades. La empresa de origen alemán de transportes incursionó en el área logística del comercio electrónico en Chile en marzo del 2016. ¿La principal razón? Las buenas perspectivas para dicho mercado. “El e-commerce es una tremenda oportunidad para el país, pese a que su cifra es muy baja en relación a los mercados desarrollados, se encuentra entre los más altos a nivel latinoamericano. La incorporación de Amazon en el mercado, en un futuro próximo, podría hasta duplicar las cifras”, agregó.
Según cifras de la Cámara de Comercio de Santiago, el comercio electrónico representa el 3,5% de las ventas totales del retail. “Para los próximos 20 años (el comercio electrónico en Chile) seguirá creciendo. Hoy, en Estados Unidos, representa el 12%”, comentó Morris.
Según el ejecutivo, las oportunidades de crecimiento en este canal de ventas en Chile se deben a múltiples factores. Entre ellos, la masificación de las tarjetas de crédito, el alto número de teléfonos celulares por persona. A ello se agregaría después la familiaridad que ha comenzado a existir con este tipo de transacciones. “Vía web ya se pueden revisar comentarios de otros usuarios, se puede exigir el retorno de los paquetes por error, ya que cada día el puente entre lo físico y lo digital se está contrayendo”, comentó. A esto se suma otro fenómeno: las fronteras entre lo digital y la venta en tiendas ha tendido a borrarse en Chile. Al igual como ha pasado en el extranjero, muchas tiendas permiten realizar compras online con retiro en la tienda o adquirir productos de forma presencial con despacho a domicilio.

2017/10/18

America's Richest Sports Team Owners 2017


Entry to the Forbes 400 is harder than ever, with a minimum net worth of $2 billion needed to crack the list of richest Americans. The bar for entry is up 18% from last year thanks to a booming stock market. The world of sports is well represented, with more than 10% of the 400 owning a major sports team.
Franchise owners are profiting from a media landscape in which they can command blockbuster contracts from broadcasters for the rights to televise live sports at a time when more and more Americans are streaming ad-free content on demand or recording it for playback on commercial-skipping DVRs. There are 87 sports teams worldwide worth at least $1 billion.
Los Angeles Clippers owner Steve Ballmer. (Photo by Mike Windle/Getty Images for WE Day )
Steve Ballmer retains his hold as America’s richest sports team owner for the fourth straight year with a net worth of $33.6 billion, up $6.1 billion from a year ago and No. 15 among all Americans.

Ballmer dropped out of Stanford’s MBA program to become Microsoft’s 30th employee and served as its CEO between 2000 and 2014. He bought the Los Angeles Clippers for a record $2 billion the same year he stepped down.
Microsoft’s stock is up 35% over the past 12 months, fueling the gains in Ballmer’s net worth. The Clippers are in a transition stage with the departure of perennial All-Star Chris Paul, who was traded to the Houston Rockets in July. Blake Griffin is the team’s centerpiece now after signing a five-year, $173 million contract this summer.
Ballmer is looking for a new home for the Clippers, who share the Staples Center with the Los Angeles Lakers. He entered negotiations in June with the city of Inglewood to explore the possibility of building a new arena there.
Another Microsoft alum, Paul Allen, ranks as the second richest sports owner in the U.S. Allen co-founded the company in 1975 with high school friend Bill Gates, who has topped Forbes' list of the richest Americans for 24 straight years. Allen has sold most of his Microsoft stock since leaving the company in 1983 after being diagnosed with Hodgkin’s disease (he beat it).
Allen owns the Seattle Seahawks and Portland Trail Blazers. His net worth jumped $1.7 billion to $20.6 billion.
We only counted sports owners who hold a majority stake or are the managing partner of a major sports franchise. We did not include cases where ownership is spread across a family like the Steinbrenners (New York Yankees) and Glazers (Manchester United and Tampa Bay Buccaneers).
There are more than a dozen billionaires with minority stakes in teams like Steve Jobs’ widow, Laurene Powell Jobs ($19.4 billion), who recently purchased an estimated 20% stake in Monumental Sports & Entertainment, which includes the Washington Wizards, Washington Capitals and the arena they share.
The 43 owners control 55 teams combined, with 11 owners possessing multiple teams. The combined net worth for the 43 sports team owners is $238 billion. The newest member of the exclusive club is Tilman Fertitta ($3.5 billion) who closed on his $2.2 billion purchase of the Houston Rockets this month.
Following Paul Allen. rounding out the top five richest owners is Philip Anschutz ($12.6 billion), owner of the Los Angeles Kings and LA Galaxy, Miami Heat owner Micky Arison ($9.4 billion) and Stanley Kroenke ($8.1 billion), whose sports empire touches the NFL, NBA, NHL and European soccer.
The average NFL franchise is worth $2.5 billion, and not surprisingly football owners are the best-represented sports league among the 400. Eighteen owners made the cut, led by Allen, Kroenke and Stephen Ross ($7.5 billion). The NBA landed 15 owners on the list, followed by nine in MLB with Charles Johnson ($5.9 billion), Marian Ilitch ($5.2 billion) and Ted Lerner ($4.9 billion) on top.
Sports have paved the road to riches for many other Americans outside of team ownership. Nike founder Phil Knight is worth $25.2 billion and ranks as the 18th richest person American. Last year he pledged $500 million to the University of Oregon and $400 million to Stanford, his alma maters. The net worth of Fanatics owner Michael Rubin got a boost in August when SoftBank announced a $1 billion investment in the sports merchandise online retailer. Rubin is worth $2.9 billion, up $600 million. Frank and Lorenzo Fertitta are each worth $2 billion after selling their mixed-martial-arts firm UFC for $4 billion last year to WME-IMG.
Several Forbes 400 members from the world of sports dropped off the list this year, including Under Armour founder Kevin Plank ($1.7 billion). His net worth is off $1.3 billion after a 60% decline in the stock price of the sports apparel maker. Nascar's struggles caused a $300 million drop in the net worth of James France ($1.7 billion) who owns an estimated 36% of the stock car racing series founded by his father.
America's Richest Sports Team Owners
1. Steve Ballmer: $33.6 billion (Los Angeles Clippers)
2. Paul Allen: $20.6 billion (Seattle Seahawks, Portland Trail Blazers)
3. Philip Anschutz: $12.6 billion (Los Angeles Kings, LA Galaxy)
4. Micky Arison: $9.4 billion (Miami Heat)
5. Stanley Kroenke: $8.1 billion (Los Angeles Rams, Arsenal)
6. Stephen Ross: $7.5 billion (Miami Dolphins)
7. Shahid Khan: $7.1 billion (Jacksonville Jaguars)
8. Robert Kraft: $6.2 billion (New England Patriots, New England Revolution)
9. Charles Johnson: $6 billion (San Francisco Giants)
10. Daniel Gilbert: $5.8 billion (Cleveland Cavaliers)
11. Jerry Jones: $5.6 billion (Dallas Cowboys)
12. Ann Walton Kroenke: $5.5 billion (Denver Nuggets, Colorado Avalanche)
13. Richard DeVos & family: $5.4 billion (Orlando Magic)
14. Marian Ilitch: $5.2 billion (Detroit Red Wings)
15. Charles Dolan & family: $5 billion (New York Knicks, New York Rangers)
16. Ted Lerner & family: $4.9 billion (Washington Nationals)
17. Jeremy Jacobs Sr: $4.4 billion (Boston Bruins)
18. Terrence Pegula: $4.3 billion (Buffalo Bills, Buffalo Sabres)
19. Stephen Bisciotti: $4 billion (Baltimore Ravens)
19. Joan Tisch: $4 billion (New York Giants)
21. Arthur Blank: $3.8 billion (Atlanta Falcons, Atlanta United)
21. Robert McNair: $3.8 billion (Houston Texans)
21. Henry Samueli: $3.8 billion (Anaheim Ducks)
24. Tom Gores: $3.7 billion (Detroit Pistons)
25. Jimmy Haslam: $3.6 billion (Cleveland Browns)
26. Tilman Fertitta: $3.5 billion (Houston Rockets)
27. Mark Cuban: $3.3 billion (Dallas Mavericks)
27. Joshua Harris: $3.3 billion (Philadelphia 76ers, New Jersey Devils)
29. Robert Pera: $3.8 billion (Memphis Grizzlies)
30. John Middleton: $3 billion (Philadelphia Phillies)
31. Ray Davis: $2.8 billion (Texas Rangers)
31. Tom Benson & family: $2.8 billion (New Orleans Pelicans, New Orleans Saints)
33. John Fisher: $2.7 billion (Oakland Athletics)
33. Herbert Simon: $2.7 billion (Indiana Pacers)
33. James Irsay: $2.7 billion (Indianapolis Colts)
36. John Henry: $2.5 billion (Boston Red Sox, Liverpool, Roush Fenway Racing)
36. Arturo Moreno: $2.5 billion (Los Angeles Angels of Anaheim)
36. Mark Walter: $2.5 billion (Los Angeles Dodgers)
36. Denise York: $2.5 billion (San Francisco 49ers)
40. Alexander Spanos & family: $2.4 billion (San Diego Chargers)
41. Glen Taylor: $2.3 billion (Minnesota Timberwolves)
41. Dan Snyder: $2.3 billion (Washington Redskins)
43. Jeffrey Lurie: $2 billion (Philadelphia Eagles)

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Local or Global: Who Should Be in Charge of Hiring New Employees?

Everybody bookThere’s a trend in the marketplace these days to go local. Restaurants and grocery stores are touting locally sourced ingredients while Small Business Saturday offers a local antidote to the mad Christmas shopping rush at the mall. Even clothing and furniture stores are jumping on the bandwagon by highlighting items manufactured within the region. But should the push to go local also extend to hiring retail employees? Or is that task best left to the head office? Wharton accounting professor Carolyn Deller and Harvard business professor Tatiana Sandino find answers in their latest research, which examines whether decentralized hiring results in better employee retention and store performance. The paper is titled ”Who Should Select New Employees, the Head Office or the Unit Manager? Consequences of Centralizing Hiring at a Retail Chain.” Deller recently spoke with Knowledge@Wharton about the findings.
An edited transcript of the conversation follows.
Knowledge@Wharton: Your paper looks at who should select new retail employees, the head office or the unit manager? Can you talk about this research?
Carolyn Deller: Typically, where hiring rates fall in an organization is along the continuum. On one extreme, it could be the head office or the headquarters that assumes total responsibility for the hiring process. At the other extreme, it could be local store managers, in our context in the retail chain, who are responsible for hiring.
We’re interested in studying this question because a lot of organizations place emphasis on employee selection, and many executives see it as a key mechanism to ensure that the individuals in the organization are aligned with the company’s goals and values. But there’s very little empirical research in this area. Coming at it from a management control perspective, we were interested in looking at how allocating decision rights plays into the employee selection process.
Luckily, we had this great setting where an organization was rolling out this centralized hiring regime in a staggered manner. They had transitioned from the decentralized regime to the new centralized model, and there were control stores that remained decentralized during our sample period. So, we were able to study not only the main effect of centralized hiring on our outcome variables of interest, but we also felt that it’s unlikely to have a uniform impact in the organization. There’s likely to be circumstances where headquarters would have a hiring advantage over unit managers and circumstances where the local manager would be the best person to hire new employees, maybe because the store is located far from headquarters or it serves a different type of demographic than the rest of the chain. We studied these two different circumstances to see whether centralized hiring was more or less beneficial, depending on the specific circumstances of each unit.
“Our research suggests that the effect of centralized or decentralized hiring could depend very much on the unit’s particular circumstances.”
Knowledge@Wharton: You found some benefits for centralized hiring and some benefits for decentralized. Tell us more details.
Deller: Interestingly, we found that there was no main effect of centralized hiring. On average, centralized hiring did not improve the amount of time that employees stayed with the organization, aggregate monthly employee turnover at the store level, or store sales performance.
What we did find was mostly consistent with our predictions in terms of the moderating effect of headquarters’ hiring advantage or the local managers’ unit advantage. Specifically, we found that in busy stores, which we proxied for the sales per labor hour, where it’s likely that the unit manager is really constrained in terms of time available to screen and hire new employees, centralized hiring was beneficial in terms of increasing the average duration that an employee would stay with the organization.
But in circumstances where the local manager may know best who to hire for the local team — how to serve those unit customers, if the store served a different type of market relative to the rest of the chain, or the store was more likely to serve repeat customers — we found that the benefits of centralized hiring did not appear. In fact, centralized hiring could actually be detrimental, relative to decentralized hiring, in terms of the time that employees stay with the organization and employee turnover for the store overall.
Knowledge@Wharton: What is the takeaway from your research? It seems that retail should take a bifurcated approach. Some places would benefit from centralized hiring, and some places would benefit from local hiring.
Deller: Exactly. I would presume that most organizations probably have a uniform policy in terms of who does the hiring. Is it headquarters? Is it the local unit manager? But our research suggests that the effect of centralized or decentralized hiring could depend very much on the unit’s particular circumstances. Retail chains may wish to consider whether that uniform policy is appropriate or whether they should do a mixed model, where some stores do their own hiring while others leave it up to headquarters, particularly busy stores that really can’t do that on their own, to see if they can improve their hiring processes.
Knowledge@Wharton: In the paper, you point out that decentralized hiring could be beneficial if a store has atypical demographic characteristics. If it’s not like the other stores, it would help more to let the local people hire people locally.
Deller: Yes. A lot of chain organizations franchise some of their units. Prior research has shown that franchising is more common in units that are located farther from headquarters, in units that serve different markets and in organizations where repeat customers are more likely. For those situations, it can be difficult for headquarters to monitor units that are far from headquarters. It can be difficult for headquarters to really understand the nuances of what is needed to serve customers of different demographics.
We were asking, does that apply to the hiring process? You could think that centralized hiring might help employees who maybe feel a bit disconnected from the organization because they’re far away or because they serve a different market. Centralized hiring could be beneficial for those employees to feel like they’re part of the organization. But it seems that the local managers’ informational advantage, in terms of the types of people you need to serve those customers and who would fit in the team, trumps any possible benefits of any centralized hiring.
“I think employee selection and promotion are two very important decisions made by organizations that can have huge costs if you get it wrong.”
Knowledge@Wharton: Are there applications for this research beyond retail chains?
Deller: I think this could apply most directly to retail organizations, but there are many sectors and industries where organizations have multiple units spread across the country or multiple countries. Banking, hospitality chains, even some hospitals. Even more broadly, in large-scale organizations there might be circumstances where managers might know best who fits the demand of different clients served by that business unit. Or there could be cases where that business unit is overly busy, or managers may be disconnected from the overall strategic goals of the organization, so you might want to have experienced HR people in headquarters doing the hiring.
Knowledge@Wharton: What are you going to look at next in your research?
Deller: This paper is really thinking about optimizing the fit between an employee and the organization at the time of initial hiring. But another time where that degree of fit becomes particularly important in organizations is in promotion decisions. You are trying to match existing employees that you have with senior-level positions.
In another study, I am using data from an organization that evaluates employees annually, not only on their performance for the year but also a forward-looking assessment of their potential. How does this employee fare on different leadership competencies that we feel leaders in the firm should have? That potential rating is communicated to employees.
I am looking at the circumstances under which and how those potential assessments are related to employees’ voluntary departure decisions. The parallel with the research I’ve been talking about is, again, looking at a mechanism designed to improve fit and how that might influence whether employees stay or go.
But more broadly, I think employee selection and promotion are two very important decisions made by organizations that can have huge costs if you get it wrong, so many organizations are taking very different approaches to solve promotion and hiring decisions. I’m very interested in continuing to look at these two areas because I think it’s very fascinating.