Economic Imagination


Three economists went out hunting, and came across a large deer. The first economist fired, but missed, by a metre to the left. The second economist fired, but also missed, by a metre to the right. The third economist didn’t fire, but shouted in triumph, “We got it! We got it!”

A few recent predictions by economists.

The first from a former colleague, Doug Porter, chief economist at BMO:

Like many economists, Mr. Porter is ratcheting back predictions of much higher interest rates ahead. He points out that strong investor demand for Canada”™s recent issue of 50-year bonds (with a yield of less than 3 per cent) suggests rates could stay low for quite some time. We may be in a “brave new world of low-for-long interest rates,” he said.

For investors, slow growth and low interest rates means “modest” financial market returns. BMO said a balanced portfolio will generate just 5.6 per cent a year in the next 10 years, compared with 7.8 per cent a year over the past two decades.

The second from a session which featured former US Federal Reserve Chairman Ben Bernanke as a guest speaker:

Bernanke, 60, does not expect the federal funds rate, the Fed”™s main benchmark interest rate, to rise back to its long-term average of around 4 percent in Bernanke”™s lifetime.

The average life expectancy in the U.S. is about 78 years.

The Bank of Canada seems a bit more upbeat in their forecast:

Core inflation is expected to stay well below 2 per cent this year due to the effects of economic slack and heightened retail competition, and these effects will persist until early 2016. Total CPI inflation is forecast to be closer to 2 per cent over the coming quarters and remain close to target thereafter. The Bank continues to expect Canada”™s real GDP growth to average about 2 1/2 per cent in 2014 and 2015 before easing to around the 2 per cent growth rate of the economy”™s potential in 2016.

Consensus from three economists: prolonged low growth and prolonged low interest rates.

We got it. We got it.

Digital Decline


The Recording Industry Association of America has released its numbers for 2013. You can find the U.S. report here. It shows that even with digital downloads, subscriptions and streaming, the industry revenues are, at best, holding even in the U.S. after many years of decline. The overall picture shows an industry still in retreat.

From the music industry blog a few weeks back:

The IFPI and RIAA today released their annual music sales numbers. Though there are positive signs, overall they make for troubling reading

  • Total sales were down 3.9%. Based on 2012 numbers the trend suggested that 2013 revenues should have registered a 2% growth, so that is a -6% swing in momentum.
  • Digital grew by 4.3% which was not enough to offset the impact of declining CD sales, which has been the story every year since 2000 except last.
  • Download sales declined by 1%. Continued competition from apps and other entertainment, coupled with subscriptions poaching the most valuable download buyers is finally taking its toll.
  • Subscriptions up by 51%: An impressively strong year for subscriptions but not enough to make the digital increase bigger than the physical decline on a global basis nor in key markets, including the US.

A similar trend can also be seen with the most recent data from the Camera and Imaging Products Association (click on the chart for a larger image):

Shipments of Still Cameras

There were a number of factors that negatively impacted music sales. Increased competition for entertainment from TV, movies, gaming consoles, etc. The relative ease of copying and sharing digital audio. The reluctance of the consumer to pay for recorded music. The inability of the industry to quickly embrace new digital distribution models. One of the major factors was the emergence of portable digital music players. The convenience of carrying a music collection without the bulk of hundreds or even thousands of CDs created a dramatic shift in consumer behavior as well as a new business model that relegated the industry to a very different role namely as a provider of catalogs with sharply reduced profits.

And now the same thing is happening to digital still cameras. The new point and shoot camera is the smartphone. And the impact on the camera industry is no less dramatic than what happened to the music industry.

Digital decline and digital disruption. Both at the same time.

I Get Mail


On Mon, Apr 14, 2014 at 2:57 PM, Unsolicited Email <> wrote:

Hello Richard,

Greetings ! Please allow me to introduce myself ”“ my name is Unsolicited Email and I work at Some Consulting Inc, NYC a subsidiary company of Some Technology Company (STC), New Delhi, India.

Is there a possibility of utilizing our SFDC/ Mobility Development & Support Services, from our offshore facility ? We could handle SFDC Development, SF Admin Support and Production Support.

Can you suggest a timeslot for a telephonic discussion?.

I look forward to your response. Thank you for your time.

Best regards,

From: Richard Cleaver
Date: Usually dozens of times a day
Subject: Thank you for your note
To: Unsolicited Email

Hello Unsolicited,

Thank you for your note.

Ultimately, the ETA for a qualified interaction via FDDI/VOIP handset interconnectivity would require a culminating intersection of two spheres of interest — both mutual as I am certain you would concur — to obtain the maximum ROI from any SFDC/ Development & Support Services opportunities regardless of whether such opportunities were contained within domestic boundaries or extraneous to continental geographies.

As such, a timeslot for a telephonic discussion would require a more involved exploratory analysis of the meta properties associated with both the passage of time and the ability to position time at a fixed point and device particularly one that would satisfy our respective registers as well as ephemeris time. And that presumes a level of qualification and motivation that is remarkably absent from both my level of interest and the proposed agenda.

Kindest regards,

Retirement Speech


Retirement. A special event in the workplace (click on the photo for a larger image).

I always enjoy being involved in a retirement celebration. I was recently honoured to say a few words for one of my team members last week. She retired after a long and distinguished career. Attached is the speech that I used for marking the occasion. Names have been changed. The speech was roughly 500 words or about 3 minutes and change. Just about the perfect length for such an event. Not too long, not too short.

Text of Retirement Speech

Good afternoon everyone.

I am delighted to add my congratulations and best wishes to Jane and I extend a warm welcome to her family. It is wonderful to see John, Mary and Susan with us today to celebrate this special moment. And it is also terrific to see so many of our colleagues here to wish Jane well as she begins her journey into this new chapter of her life.

Jane, I would like to share three things with you today: milestones, Freedom 55 and regeneration.


1974 was a unique time in history.

Rubik’s Cube was invented and it went on to sell somewhere in excess of 350 million cubes.

The first Universal Product Code was scanned — a package of Wrigley’s chewing gum.

A second lieutenant in the Japanese Army surrendered in the Philipinnes — thirty years after the World War II had ended.

The first interstellar radio message was sent to M13, a great globular cluster in Hercules, and it should arrive by the year 27,000 AD

John Draper aka Captain Crunch discovered that a breakfast cereal children’s whistle could create a 2,600 hertz tone. Using this whistle and a blue box he was able to successfully get into AT&T’s phone network and make free calls anywhere in the world.

But perhaps one of the most significant events for Jane in 1974 was the day that she decided to join Empire Life. And we are so pleased that she did.

Freedom 55

Jane is close in age to myself which means she is still very young. We spoke about her planning for retirement. And, having worked at a Freedom 55 company, I can give you a few interesting statistics.

Financial Freedom at 65 (not 55): Ӣ 1 person will be financially independent Ӣ 8 will work to maintain a lifestyle Ӣ 14 will work to keep food on the table Ӣ 24 will be no longer be on the planet Ӣ 53 will rely on the government to survive

To achieve such a financial goal in your fifties is a remarkable achievement.

Jane has prepared herself for this new journey and she has planned well. She has worked hard to achieve her goals, not only for this next stage of life but for all of the accomplishments in her life.


We often focus on the financial side of getting ready for retirement. But there is far more to this period of life. I think this is a wonderful and exciting time for Jane. This is a new beginning in life. A time for regeneration.

When we reach a certain age, whether it is fifty-five, sixty-five or seventy-five, we really do not retire. We do not retire from life. Rather, we have a new and evolving mission: we continue on our journey of growth and development and sharing our lives and our love with those around us.

Jane: on behalf of our company and on behalf of your colleagues in our department, I wish you and your family all of the best during this next chapter of life. Continue to grow, continue to develop and continue to make a difference in the lives of those around you.

The Great Divide

Lions Gate Bridge

Lions Gate Bridge (click on the photo for a larger image).

I was reading a Gartner report on The Psychology of Serial Innovation. The report highlighted ten ways companies act to squash innovation:

  • Don’t select an aspiring innovation goal
  • Don’t ask people to innovate
  • Don’t recognize or reward people for their contributions
  • Publicly humiliate anyone who suggests something new or who tries something that fails
  • Only allow creative types to innovate
  • Ask for ideas but don’t act on them
  • Insist that innovation projects use the same tools, business cases and methods as the rest of the business
  • Wait for people to complete routine tasks before giving them time to innovate
  • Make the innovation process bureaucratic and slow
  • Prevent people from discussing the ideas they are trying

I then read Fast Company’s list of the most innovative companies in 2013. The top ten:

  • Nike
  • Amazon
  • Square
  • Splunk
  • Fab
  • Uber
  • Sproxil
  • Pinterest
  • Safaricom
  • Target

I did not know half of the companies on their top ten list.

Fast Company’s take on innovation is a bit different from Gartner: social is now a layer for everyone, software is the wow factor, data makes a big difference, and long-term investment still matters.

Harvard Business Review talks about how a company can define a managerial approach to innovation. And HBR offers a quadrant model to help choose the most appropriate approach to innovation.


There are so many definitions for innovation. Is it introducing something new? Is it radical change to products, processes or services? Is it fresh thinking that creates value? Is it incremental and continuous improvement?

Whenever I think about this topic, the Cupertino Riders come to mind. They helped to create and popularize mountain biking. From the Mountain Bike Hall of Fame:

The origins of mountain biking were totally innocent. It came into being not as some faddist vision of profit-oriented marketing types, but rather as the product of true cycling enthusiasts trying to find something new to do on two wheels. These cyclists found through fun and competition that the old one-speed klunkers they were using could be improved with modern cycling technology. One thing led to another and mountain biking “the sport” was born.

No corporate process created this innovation in cycling. True believers did. I wonder if the same is true for most examples of innovation.

High Income Trends in Canada

Let’s take a look at those folks in the very top of income in Canada. The top one percent of income earners has been highlighted repeatedly by the media over the past few years and it always brings a refreshing perspective on so-called income inequality.

I long ago recognized that in a capitalist system, the market is willing to pay people at different levels. I never viewed my income as an indicator of inequality. Rather, it was an indicator of the relative value of my labour as dictated by the market. If I wanted to make more money, I needed to find ways to increase the relative value of my labour. And that is not very easy to achieve particularly in a highly competitive marketplace. I also learned that there would always be a very small and a very elite group that would be truly wealthy. And the marker of being truly wealthy has very little to do with the relative value of labour.

Well, with all of that preamble out of the way, what did the government statisticians find when they prowled through the income data of high-income earners over the past few decades?

There are not very many high income earners in Canada. Out of 25.5 million tax filers, only 254,700 break into the top one percent of income. And to get there in 2010, they needed an annual income of $201,400 or higher. These folks also accounted for 10.6% of Canada’s total income in 2010.

A bit different in the United States. 1.4 million Americans made 16.9% of the United States total income in 2010 and they needed an annual income of $369,691 or higher in 2010 to break into the top one percent.

The median income of the top one percent of filers in Canada was $283,000. If you made more than $283,000 you were in the top .5 percent.

The top one percent in Canada paid 21.2% of federal and provincial taxes. The top one percent redistribute their earnings at a more progressive level than any other income level.

Most high income earners are male. Women represent only 21% of high income earners in Canada.

The report goes on to highlight other details and if you are interested you can follow the link above or go to it here.

High income is not a reflection of wealth. Assets matter far more.

Consider the following perspective on high income earners in the United States:

Until recently, most studies just broke out the top 1% as a group. Data on net worth distributions within the top 1% indicate that one enters the top 0.5% with about $1.8M, the top 0.25% with $3.1M, the top 0.10% with $5.5M and the top 0.01% with $24.4M. Wealth distribution is highly skewed towards the top 0.01%, increasing the overall average for this group. The net worth for those in the lower half of the top 1% is usually achieved after decades of education, hard work, saving and investing as a professional or small business person. While an after-tax income of $175k to $250k and net worth in the $1.2M to $1.8M range may seem like a lot of money to most Americans, it doesn’t really buy freedom from financial worry or access to the true corridors of power and money. That doesn’t become frequent until we reach the top 0.1%.

Yes, that very top 0.1% is quite a different world.

Winter Driving

TD Insurance asked the Environics Research Group to poll drivers in Ontario about winter driving. What did they discover?

  • 54% of Ontario drivers do not carry an emergency kit in their car
  • 43% of Ontario drivers do not use snow tires

I do carry an emergency kit in my car. The car manufacturer was thoughtful enough to put a kit in the trunk otherwise I likely would not have one.  My car runs on a set of high performance tires. Terrific in mild weather. Completely hopeless in cold weather. I had no choice but to purchase snow tires. I installed them on the car a few weeks back.

TD Insurance provided some helpful tips for winter driving:

  • Prepare your car for the winter (servicing and winter tires)
  • Do not let your fuel tank run low
  • Pack some extra windshield wash
  • Keep an emergency kit
  • Carry a fully-charged cellphone

I must be getting older. I never used to think about this kind of stuff. The press release is here.

I Get Mail

A personal invitation.

Dear ,

In this fast-moving and ever-changing telecom world, executives like you need an understanding of the leading innovations, emerging pressures and looming disruptions to manage risk, capture opportunities and ensure future growth for your organization.

This is why you are personally invited to a five-day Executive Briefing Series presenting a view of the key telecom services and technologies of impact for the coming 12 to 24 months.

Dear [blank].

Nothing is more personal than [blank].