In short, here's how it works: Figure out which customers make you the most money, segment them carefully, then realign your stores and empower employees to target those favored shoppers with products and services that will encourage them to spend more and come back often.

Best Buy's giant gamble | FORTUNE

Are smart people overrated?

This is an old piece ...

gladwell dot com - the talent myth

For now, however, too many Microsoft managers are still measured by their success with yesterday's business model—selling boxes of software. Microsoft is still formulating its response to the rise of online software. As one former Microsoft executive explains: the company's problems are not just technical but organisational. “It has a vision but not a roadmap; it can see the peaks but doesn't know how to cross the foothills to get there.”

Microsoft the dinosaur

Amid mounting concern over the loss of jobs to low-wage economies, one fact is clear: America's prosperity hinges on the ability of its businesses to continually introduce new products and services. But what makes for a creative economy? How can the remarkable surge of innovation that fueled the boom of the 1990s be sustained?

For an answer, Richard K. Lester and Michael J. Piore examine innovation strategies in some of the economy's most dynamic sectors. Through eye-opening case studies of new product development in fields such as cell phones, medical devices, and blue jeans, two fundamental processes emerge.

Innovation--The Missing Dimension

In An Engine, Not a Camera, Donald MacKenzie argues that the emergence of modern economic theories of finance affected financial markets in fundamental ways. These new, Nobel Prize-winning theories, based on elegant mathematical models of markets, were not simply external analyses but intrinsic parts of economic processes.

Paraphrasing Milton Friedman, MacKenzie says that economic models are an engine of inquiry rather than a camera to reproduce empirical facts. More than that, the emergence of an authoritative theory of financial markets altered those markets fundamentally. For example, in 1970, there was almost no trading in financial derivatives such as "futures." By June of 2004, derivatives contracts totaling $273 trillion were outstanding worldwide. MacKenzie suggests that this growth could never have happened without the development of theories that gave derivatives legitimacy and explained their complexities.

MacKenzie examines the role played by finance theory in the two most serious crises to hit the world’s financial markets in recent years: the stock market crash of 1987 and the market turmoil that engulfed the hedge fund Long-Term Capital Management in 1998. He also looks at finance theory that is somewhat beyond the mainstream--chaos theorist Benoit Mandelbrot’s model of “wild” randomness. MacKenzie’s pioneering work in the social studies of finance will interest anyone who wants to understand how America’s financial markets have grown into their current form.

An Engine, Not a Camera

Interest in intellectual property and other institutions that promote innovation exploded during the 1990s. Innovation and Incentives provides a clear and wide-ranging introduction to the economics of innovation, suitable for teaching at both the advanced undergraduate and graduate levels. It will also be useful to legal and economics professionals. Written by an expert on intellectual property and industrial organization, the book achieves a balanced mix of institutional details, examples, and theory. Analytical, empirical, or institutional factors can be given different emphases at different levels of study.

Innovation and Incentives presents the historical, legal, and institutional contexts in which innovation takes place. After a historical overview of the institutions that support innovation, ranging from ancient history through today's government funding and hybrid institutions, the book discusses knowledge as a public good, the economic design of intellectual property, different models of cumulative innovation, the relation of competition to licensing and joint ventures, patent and copyright enforcement and litigation, private/public funding relationships, patent values and the return on R&D investment, intellectual property issues arising from direct and indirect network externalities, and globalization. The text presents technical and abstract analysis and at the same time sheds light on current controversies and policy-relevant topics, including the difficulty of enforcing copyright in the digital age and international protection of intellectual property.

"This book, by one of the nation's leading students of patent law, is a wide-ranging, rigorous, and lucid synthesis of the economics of innovation and the law of intellectual property. It is packed with useful information, penetrating critique, and concrete, practical, and important proposals for legal reform."
-- Richard A. Posner, United States Court of Appeals for the Seventh Circuit, and University of Chicago Law School

Innovation and Incentives

In The Venture Capital Cycle, Paul Gompers and Josh Lerner correct widespread misperceptions about the nature and role of the venture capitalist and provide an accessible and comprehensive overview of the venture capital industry. Bringing together fifteen years of ground-breaking research into the form and function of venture capital firms, they examine the fund-raising, investing, and exit stages of venture capitalists. Three major themes run throughout the process: venture investors confront tremendous information and incentive problems; venture capital processes are inherently interrelated, and a complete understanding of the industry requires a full understanding of the venture cycle; and, unlike most financial markets, the venture capital industry adjusts very slowly to shifts in the demand for and the supply of investment capital.

This second edition has been thoroughly revised in light of recent research findings, and includes six new chapters. The first part, on fund-raising, now includes a chapter that examines what determines the level of venture capital fund-raising and how tax policy influences the demand for venture capital. Three new chapters in the second part, on investing, examine what kind of distortions are introduced when the venture capital market goes dramatically up, a question prompted by the 1999-2000 market bubble; demonstrate that the venture capital industry does indeed spur innovation, an important determinant of economic growth; and examine whether and under what circumstances governments can be effective venture capitalists. Two new chapters in the third part, on exiting venture capital investments, discuss whether venture capital firms affiliated with investment-banks are prone to conflicts of interest with public offerings and how lockups on initial public offerings are used to limit conflicts of interest.

The Venture Capital Cycle

Internet companies yesterday criticized legislation that would give the Federal Communications Commission only limited ability to stop phone and cable companies from blocking access to Web sites, saying the proposal would endanger the open nature of the Web.

Internet Firms Want FCC to Enforce Net Neutrality

Those not in the diamond trade might find it hard to understand why Emile Chayto, a Geneva dealer with more than 40 years of experience, gave $14 million worth of gems to a stranger who claimed to be the wife of the deceased president of the Congo — before she had paid him one penny.

Unfortunately for Chayto, she was not the widow of Mobutu Sese Seko. And her wire transfer never arrived.

As Scams Go, This Is a Gem

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