E-commerce turbo-boost. It’s official — the world’s largest retailer is going to buy e-commerce startup Jet.com for $3 billion (Recode). A move against the Amazon threat, as most media reports argue? Sure — but more importantly, a broader acknowledgment that even the biggest and most efficient company today can’t figure out the future by itself. It’s hard to look around corners when you own the whole street. Walmart rose to its retail dominance by inventing new distribution and pricing systems, but like most industry leaders, it came to face the innovator’s dilemma. Jet offers Walmart some novel algorithmic low-pricing techniques, as well as some startup-speed talent. But history suggests it might take more than an acquisition for Walmart to stay on top. Meanwhile, Jet’s team took only two years to grow to triple-unicorn value by reliably delivering low prices online. (The Walmart-Jet deal is exactly the kind of BigCo-NewCo cross-fertilization that the NewCo Shift Forum event next February is all about.)
Economy stuck in low-grow land. Forget market swings and mega-deals for a second and zoom out to fundamentals: What you see is a new economic normal of low inflation, low unemployment, low interest rates — and low growth. How’d that happen (New York Times)? The gap between long-term U.S. growth of 2 percent (the late 20th-century average) and the 1 percent typical since 2000 explains a lot of today’s news, including the stubborn persistence of inequality and the rise of populist anger. Is our economy “fundamentally broken”? Or did recent generations just experience a one-time boom, and then overestimate how cool new tech would keep it going? Of course, we could be measuring “growth” all wrong (see: GDP). Or we could be in for a rough century. No one’s suggesting a quick fix, but a big spend on infrastructure looks promising to leaders across the political spectrum.
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