Piketty’s Historical Perspective on Economic Inequality

The debate over income inequality and job loses in the U.S. too often devolves to overly simplistic and narrow arguments. Thankfully, deeper and more thoughtful analyses are emerging, and one of those — French economist Thomas Piketty’s recently-translated book, Capital in the Twenty-First Century — is making waves, at least among the center-left of the political spectrum in the United States.  And it is a major contribution to the inequality debate.  He takes a historical view of inequality, arguing that:

“When the rate of return on capital exceeds the rate of growth of output and income, as it did in the nineteenth century and seems quite likely to do again in the twenty-first, capitalism automatically generates arbitrary and unsustainable inequalities that radically undermine the meritocratic values on which democratic societies are based.”

This long-term trend, he says, accounts for the dramatic growth of economic inequality over the last thirty years. Piketty’s historical perspective reminds us that, in seeking to understand decades-long economic trends, we might be taking a view that is too narrow and too short-term.  It is worth keeping a wider perspective when it comes to thinking of possible policy responses to these trends.

This wider perspective, backed by detailed analyses of new historical data sets, promises to generate some spirited debate in the coming years.  It provides a useful counterpoint, moreover, to the continuing drum beat of articles and books, such as the very thoughtful best-selling The Second Machine Age, linking job loss and economic inequality to the more recent spread of high technology and software throughout modern economies.

The reality of inequality is far more complex.  For one thing, generalized talk of economic inequality masks several different recent developments: a fall in labor’s share of total income, an increase in the share of compensation going to top executives, and an increase in economic inequality among employees.

Moreover, short-term causal factors that might contribute to these different types of inequality are hard to disentangle.  The rise in inequality has been associated with the intensification of skills-biased technology, which increases the demand for skilled workers, and to globalization, which decreases the bargaining power of workers and decreases the pricing leverage of companies. Now, a recent study links inequality to another recent development the authors call financialization: an increase in the extent to which non-financial corporations in the United States earn income from providing financial services in addition to the core products and services that they also provide. How financialization relates to these other factors needs further study.

The role of software needs to be assessed in a fuller way as well. Too often software is linked to job loss based on nothing more than casual empiricism – like noting that if there are fewer accountants, it must be because of accounting software.  The net effect of software on job creation can’t be established simply by noticing that a job that used to take several people can now be done by one person and some software.  Unfortunately, this is how too many people approach the current debate.  The reality is that, as software spreads through the economy, it contributes to GDP, exports and employment in myriad direct and indirect ways.  SIIA will continue to examine the role of software in the economy in the coming year.

Mark MacCarthy, Vice President, Public Policy at SIIA, directs SIIA’s public policy initiatives in the areas of intellectual property enforcement, information privacy, cybersecurity, cloud computing and the promotion of educational technology. Follow Mark on Twitter at @Mark_MacCarthy

HP’s Top Cloud Executive to Keynote SIIA Maximize; Leaders from Grant Thornton, Oracle, SAP, Totango and Others will also Speak

SIIA today announced that Margaret Dawson, Vice President of Product Marketing and Cloud Evangelist for HP Cloud Services, will deliver the opening keynote presentation at SIIA’s Maximize – the software industry’s premier ISV conference.

Held May 20-22 at the Palace Hotel in San Francisco, SIIA Maximize will bring together C-level and senior executives, analysts and venture capitalists to look beyond the Cloud and identify the disruptive and innovative growth strategies ISVs need to be efficient, competitive, and successful in today’s market.

In her keynote, Dawson – who recently helped HP unveil its CloudSystem 8 solution for private and hybrid clouds – will discuss hybrid clouds and the challenges and benefits they present for ISVs.  SIIA Maximize will also include a keynote presentation by Guy Nirpaz, CEO and founder of Totango – a real-time customer success management solution.

SIIA Maximize will also feature C-level executives from leading companies and ISVs, including:

  • Eileen Boerger, CEO, CorSource
  • Marc Chiang, Partner, Transaction Advisory Services, Grant Thornton LLP
  • Michael Corcoran, CMO, Information Builders
  • Bill McNee, Founder & CEO, Saugatuck Technology
  • Nick Mehta, CEO, Gainsight
  • Kevin O’Brien, Senior Director, ISV & SaaS Strategy for Worldwide Alliances and Channels, Oracle Corporation
  • Omid Razavi, Global VP, Cloud Customer Success & Growth, SAP
  • Matt Shanahan, SVP Strategy, Scout by ServiceSource
  • Tien Tzuo, Founder & CEO, Zuora

Additionally, SIIA’s Maximize will also feature:

  • One-to-One Business Connections. Attendees will have the opportunity to arrange pre-scheduled meetings with the conference attendees that matter most and match their business development needs.
  • Beyond Cloud Challenge. Finalists in this live competition will come together at SIIA Maximize to battle in front of a panel of industry experts, who will crown the industry’s next “Big Bang.”
  • The CODiEs: Industry’s Only Peer-Selected Awards. The 2014 SIIA CODiE Award software winners will be announced during a gala dinner. The CODiE Awards program, now in its 29th year, has recognized more than 1,000 software and information companies for achieving excellence. The CODiE Awards are the industry’s only peer-recognized awards program in the content, education, and software industries.

WHO: Software & Information Industry Association (SIIA)

WHAT: SIIA’s Maximize 2014 #Maximize2014

WHEN: May 20-22, 2014

WHERE: The Palace Hotel, San Francisco, CA

For a complete schedule of events, visit: http://www.siia.net/maximize/2014/schedule.asp.

Rhianna Collier is VP for the Software Division at SIIA. Follow the Software team on Twitter at @SIIASoftware.

SIIA Software Division Announces New Board of Directors

SIIA today announced the new members of its Software Division Board of Directors. Made up of twenty executives from SIIA member companies, the Board represents the voice of the full-member firms of the SIIA Software Division.

In their role as board members, these executives will come together to provide the software industry with leadership, advocacy and critical market information in the months and years ahead. As representatives of the Software Division member firms, all of the newly elected and appointed executives will develop and prioritize the Division’s initiatives and determine the projects, activities and events to be undertaken by SIIA.

Newly elected and appointed board members are:
• Ron Antevy, e-Builder
• Eileen Boerger, CorSource
• Marc Chaing, Grant Thornton
• Dianne Del Rosso, IBM
• Lou Guercia, Scribe Software
• Fezyi Fatehi, Corent Technology
• Jerome Labat, HP
• Edy Liongsari, Accenture
• Michael Ni, Avangate
• Morris Panner, DiCOM Grid
• David Roth, AppFirst
• Michael Welch, SafeNet

Continuing to serve on the board to complete their terms are:
• Brian Bell, Zuora
• Mike Binko, kloudtrack
• Mary Brandon SoftServe
• Richard Dym, GageIn
• Gunnar Hellekson, Red Hat
• Kevin O’Brien, Oracle
• Joe Talley, Deloitte
• Frits Veltnik, SaaS Energy

These industry leaders bring a varied perspective, helping SIIA to advance business priorities for our member companies. Together we can ensure that SIIA continues to provide valued tools and services to our member organizations and remains a strong voice for the software industry.

Rhianna Collier is VP for the Software Division at SIIA. Follow the Software team on Twitter at @SIIASoftware.

SIIA Announces Software Finalists for 2014 CODiE Awards

The Software Division today announced the 125 finalists in the 2014 SIIA CODiE Awards for Software categories. These finalists recognize applications, products, and services which deliver solutions for use by business, government, consumers, academic, or other organizations.

This year’s program features 28 Software categories, several of which are new or updated to reflect the latest industry trends. Winners will be announced during a special Awards dinner on May 21in San Francisco during the industry’s premier ISV gathering of SaaS, BI, and Cloud providers, Maximize.

The SIIA CODiE Awards are the industry’s only peer-reviewed awards program. The first round review of all nominees includes industry executives and analysts, representatives of media outlets, bloggers, and investors. The judges are responsible for selecting the CODiE Awards finalists. SIIA members then vote on the finalist products and the scores from both rounds are tabulated to select the winners.

Details about each finalist are listed at http://siia.net/codies/2014/finalists.asp

2014 CODiE Awards Software Finalists [Read more...]

Webinar: Management by Metrics

Best Practices for High-Growth SaaS Companies
CFOs work with their executive teams to track key financial and operating metrics data to drive performance and keep the company on track to deliver growth in the coming year.

Listen to this pre-recorded webinar featuring Lauren Kelley, CEO of OPEXEngine, a software and SaaS industry benchmarking leader, and Tyler Sloat, CFO of Zuora, the global leader in subscription commerce and billing, for Management by Metrics—Best Practices for High-Growth SaaS Companies. You’ll learn:

  • The latest benchmarks from OPEXEngine’s seventh annual “Software and SaaS Financial Benchmarking Survey”
  • Key SaaS KPIs, their underlying drivers, and why they matter
  • Recent IPO financials for leading SaaS vendors
  • How successful companies use benchmarking to drive executive teams and collaborate with boards and investors for higher performance
  • How Zuora uses metrics, benchmarking, and best practices to manage performance and growth



Cloud Computing and Data Analytics Are Net Job Creators

Some recent articles on technology such as this report from The Economist reawaken the old fear of technological unemployment. SIIA thinks this fear is unfounded. Studies show that technology is a net generator of jobs across the entire economy.

Some evidence of this effect comes from studies of cloud computing. One recent report found that “cloud computing is a powerful catalyst for job creation. Although some lower-skilled jobs will be lost because of the higher automation and efficiencies of the cloud, we expect cloud computing to generate hundreds of thousands of net new jobs in the United States and worldwide…”

The job growth related to cloud computing comes from several sources. Existing cloud companies themselves are hiring new workers and if their growth continues on its current trajectory that could generate almost 472,000 jobs in the United States in the next 5 years. In addition, new cloud companies are expected to enter this rapidly growing market and investments in these startup cloud companies could add another 213,000 jobs.

Cloud services also make it possible for new business to form more easily, since they can rent the computer services they need as they scale up. Moreover, existing businesses can use the savings generated by using less expensive cloud computing services to invest in new lines of business and to expand their operations, thereby generating new jobs needed to provide these additional products and services. Together these cost savings could generate hundreds of thousands of jobs beyond those generated directly by expanding cloud computing companies.

As we pointed out in an earlier blog post on this issue, the growing demand for big data analytics services has created hundreds of thousands of job openings. This demand for data scientists is another example of technological job creation.

Economists have long thought that over the long term and viewed from the point of view of the economy as a whole better technology means more and better jobs. The evidence of the effect of cloud computing and big data on job creation confirms this traditional view.

Mark MacCarthy, Vice President, Public Policy at SIIA, directs SIIA’s public policy initiatives in the areas of intellectual property enforcement, information privacy, cybersecurity, cloud computing and the promotion of educational technology. Follow Mark on Twitter at @Mark_MacCarthy

Webinar: 2014 SIIA Marketing Industry Report – Marketing with Confidence

In February the Software and Information Industry Association (SIIA) released the findings of the third annual “Software Marketing Industry Report.” The survey interviewed marketing executives about their company’s use of email, mobile marketing and social media to build their brand, gain leads, and improve customer support.

Listen to SIIA’s pre-recorded webinar to gain insight into the results of the survey including how marketers have changed their focus over the course of the year. Learn the key metrics marketers are watching to determine ROI of marketing activities and the areas where marketers continue to face challenges.


René van Erk
Chief Executive Officer, ISVWorld

Rhianna Collier
Vice President, Software Division, SIIA


SIIA Slide Deck

ISVWorld Slide Deck