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Tech Leaders Talk Jobs

Jobs were reportedly the No. 1 agenda item at yesterday’s conclave of tech industry royalty and Donald Trump, and that simple fact should send a message to all leaders. Ostensibly the issue was the relatively few Americans employed by many of the biggest, most valuable tech companies. But the larger issue, the real issue, is how technology will affect employment across the economy as machines do ever more tasks not just faster and cheaper than humans do them, but also better.

Consider: the president-elect of the world’s largest economy wanted to talk with tech industry leaders not about the miracles that technology makes possible or how it could be used in government, for example, but about its affect on jobs – and this at a time when the U.S. unemployment rate is a microscopic 4.6%. That’s a sign of things to come. Though unemployment is low, Trump was elected with heavy support from areas where jobs are scarce. While many of those voters seem to think free trade is to blame, the reality is that advancing technology is at least as important; for example, manufacturing jobs are declining even in China, where many of those vanished American jobs supposedly went. More broadly, employment insecurity is becoming a central issue for all voters, including those who are employed.

All business leaders need to think about where their company fits into a world like that. Not long ago I asked a CEO and a former CEO from major manufacturing companies if they thought it was possible that advancing technology might cause a net reduction in jobs, contrary to the pattern that has prevailed through history. They both gave the same answer, on background: A year ago I would have said no, but based on what I see happening in our company now, yes, I think it’s possible.

Publicly, leaders are responding in various ways. Apple’s Tim Cook, who was at yesterday’s meeting, is reportedly considering investing $1 billion in a fund organized by SoftBank’s Masayoshi Son, who met with Trump last week and said the fund would create 50,000 U.S. jobs. IBM’s Ginni Rometty, also at yesterday’s meeting, noted in an op-ed article Tuesday that over a half million jobs are open in the U.S. tech sector, unfilled in part “because the nature of work is changing” and many candidates lack the needed skills; she outlined IBM’s extensive efforts to help train young people in those skills.

Unresolved is the main question of whether technology overall will increase or decrease net jobs. Economists are divided on the issue, a first in the history of the economics field; until now, new technology has always increased total employment. Even with that question unanswered, job requirements may now be changing so fast that many workers won’t be able to keep up.

In that environment, voters will demand that politicians take action, as the Trump phenomenon shows, and business leaders probably won’t like what politicians of either party do in response. Organizing an effective response to employment insecurity will be among the most important tasks that business leaders face in the decade ahead.

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What We’re Reading Today

Yahoo discloses billion-account hack
It happened in 2013, and the company doesn’t know how. This appears to be separate from the previously disclosed hack that put 500 million accounts at risk. this massive new incident gives Lowell McAdam‘s Verizon more leverage in renegotiating its planned $4.83-billion purchase of Yahoo. TechCrunch

NBA and union settle
The National Basketball Association and the National Basketball Players Association agreed to terms a day before the period to opt out of the previous deal ended; players would likely have opted out if no new agreement had been reached. It’s a win for the players, whose average salaries are expected to rise from $5 million to nearly $9 million. The upside for commissioner Adam Silver is avoiding a lockout as the league’s popularity reaches new heights. ESPN

Uber’s self-driving cars in San Francisco hit a snag
Travis Kalanick‘s company launched self-driving vehicles in San Francisco this week; they’re already being tested in Pittsburgh. But California officials say Uber needs a permit. Uber disagrees, noting that a driver is always at the wheel. Fortune

China places weapons in the South China Sea
Satellite imagery shows that the weapons were placed in the past few months, apparently violating President Xi Jinping‘s pledge not to militarize the disputed area. The news further strains relations with president-elect Donald Trump, who has promised to take a firm stance on the disputed area. WSJ

Building Better Leaders

A simple rule for raising money from investors…
…comes from venture capitalist Guy Kawasaki. Use the 10/20/30 rule: Explain your business in 10 slides within 20 minutes and in 30-point font. Stanford Insights

To be a great leader, show vulnerability
It isn’t a weakness. It enables you to build connections and trust with employees. Fortune

As the holidays near, the urge to relax kicks in
Keep your focus on your to-do list before the holidays, and avoid temptations like the eggnog until everything is completed. We’re not wired to control impulses, but we can avoid them. Kellogg Insight

Worth Considering

Darren Woods will lead Exxon
As expected, Woods will take over January 1 as CEO Rex Tillerson prepares for confirmation hearings on his nomination as secretary of state. Tillerson was set to retire in March, and Woods had been positioned as heir apparent. Woods must form a strategy with energy prices, and thus Exxon profits, much lower than they were a few years ago.  Bloomberg

Fed Chief: I intend to serve
At the press conference following the Federal Reserve’s policy meeting, Chairwoman Janet Yellen said she has no intention of stepping down before completing her four-year term in early 2018. Yellen and the board voted to raise rates for the first time this year. Fortune

Putin involved in U.S. election intervention
Two unnamed intelligence officials say Russian President Vladimir Putin ordered the cyber-campaign as a personal vendetta against Hillary Clinton. Reports last week said the CIA believes Russia intervened in the election to help Donald Trump. NBC News

Up or Out

Christie’s has named Guillaume Cerutti CEO, succeeding Patricia Barbizet Art News

Royal Dutch Shell CFO Simon Henry will step down in March. Jessica Uhl will succeed him.  WSJ

Fortune Reads and Videos

Twitter wasn’t invited to Trump’s tech confab
A report says it was because Jack Dorsey‘s company refused to make a #CrookedHillary emoji during the campaign. Trump‘s team says it was because Twitter isn’t large enough. Fortune

The problem Chipotle still hasn’t addressed…
…is its poor ability to communicate. Even CEO Steve Ells‘s recent apology conveyed a weak response to the company’s problems.  Fortune 

In a trade war with China…
…the industries Trump would likely target are steel, aluminum, and auto parts. He would avoid targeting consumer goods manufacturers, which would hurt U.S. consumers directly. Fortune

The average price of a Manhattan apartment…
…tops $2 million. The median price is $1.2 million, up 9% from last year. Fortune

On this day…

….in 1978, President Carter announced that the U.S. would establish official diplomatic relations with the People’s Republic of China. The U.S. agreed to end diplomatic recognition of Taiwan as a separate country.  Office of the Historian

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