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Constituency Statues Protect Companies’ Ability to Innovate and Thrive

In this world of incredible pressures to produce short-term profits, business leaders can become understandably skittish about taking a longer view that encourages both innovation and their company’s long-term health. With anxious stockholders demanding one dazzling quarterly report after another, and with the constant threat of hostile takeovers, it’s hard to devote the time and patience required to develop new products and services. To remedy this, 34 states in the U.S. have enacted little-known “constituency statutes.”

A constituency statute is a state law that offers companies that legal right to consider stakeholders other than their stockholders, in particular employees and the community within which a company resides. Aleksandra Kacperczyk of MIT recently released a study that examines whether these laws, which first started appearing in the 1980s, actually work. Spoiler alert: They do.

Kacperczyk used patent records as a concrete way of measuring how constituency statutes protect and encourage innovation, more and more a top priority for business. But there’s a difficult “trade-off that you face between short-term profits and the long-term view, in that innovation takes longer to develop,“ as Kacperczyk puts it.

The report — co-authored with Caroline Flammer, assistant professor at the Ivey Business School, University of Western Ontario — found that in states with constituency statutes, the average patent rate rose by at least 6.4 percent. And, ”There were not only more patents, but they were more original and influential,” says Kacperczyk, with the number of citations — other companies incorporating innovations they contain — increasing by 6.3 percent, according to the study.

Constituency statutes were initially designed to protect local communities from losing their businesses due to hostile takeovers by stockholders impatient for profits. According to Kacperczyk, “Hostile takeovers can be detrimental to workers and communities, so they really needed this. This is precisely when the interests of shareholders are being pitted against the interests of stakeholders. You need the stakeholder supremacy model to protect the interests of stakeholders.” The first state to adopt a constituency statute was Ohio in 1984, while Texas was the most recent to do so.

Robby Berman

Robby Berman is a reporter, father, and musician who creates and discovers good stuff for the Internet world.

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An Intriguing App for Finding Gigs in the Gig Economy

Forbes columnist Brian Rashid makes a great point. When someone is looking for a job, they’re caught in a time wasting, reactive form of professional growth since their skill set gets stuck on hold as they wait for a job. The emerging gig economy offers a way out of this numbing stasis by elevating freelancing to a legitimate career choice as a fluid — maybe even enjoyable — environment in which you can develop a diverse array of work skills. According to Rashid, there are currently about 53 million freelancers in America these days, and by 2020, it’s estimated that 50% of the workforce will be on-demand workers.

And how will these temporary gigs be found? One interesting idea comes from a company called Tispr, which is developing what they call a “sustainable, reliable, and safe ecosystem to instantly connect, collaborate, and work.” Their job marketplace is built around the company’s mobile iOS Tispr app that will soon also be available for Android devices.

Within the app, freelancers list whatever it is they can do as “offers.” An offer includes whether you’ll be providing a service remotely or locally (based on the app’s knowledge of your location). Tispr is currently set up for over 40 different loosely defined service categories. People who need jobs done use those categories to make requests in which they describe what they need and where they’d like it done. Tispr automatically matches requests with offers and sends freelancers notifications about opportunities, after which a bidding process between freelancer and client can begin. Tispr doesn’t take a cut or guarantee anyone’s legitimacy.

As the gig economy takes over, innovative network systems like Tispr’s are likely to become central to people careers, creating responsive frameworks within which work can get done and money can be made.

Robby Berman

Robby Berman is a reporter, father, and musician who creates and discovers good stuff for the Internet world.

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THE UNEXPECTED IDEA THAT LAUNCHED THIS ENTREPRENEUR’S BUSINESS

The Chesapeake Bay Bridge may be the scariest bridge in America. What makes the Bay Bridge so terrifying for some people is its height — 200 feet in some places — and the fact that it’s 4.3 miles long, across open water in an area that’s been known to experience sudden violent weather. The low barricades don’t help either. (And we won’t even get into how it dives under the sea into its tunnel segment.)

Robby Berman

Robby Berman is a reporter, father, and musician who creates and discovers good stuff for the Internet world.

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