Market Line
Business and economic news from Indiana University
EDITORS: Contact information for expert sources is included. If you would like photos or further information on any of these story ideas, contact George Vlahakis of IU Media Relations at 812-855-0846 or gvlahaki@indiana.edu.
Alarms being raised about Social Security have a hollow ring, according to Bill Witte, an economist and co-director of the Center for Econometric Model Research at Indiana University. "There is no crisis. A crisis implies something imminent," Witte said, disagreeing with claims that the system will be undermined by 2018 and bankrupt by 2042. In his view, deep philosophical questions are raised by President George Bush's proposal calling for workers to take a portion of the tax that goes into the Social Security system and put it into a savings account that each individual can invest. "If you view it as a social security system, it is set up appropriately," Witte said. "It has lasted and performed well for three-quarters of a century, making it one of the most successful government programs ever." Privatization would shift the risks and responsibilities away from society as a whole and place them on each worker individually, he said. Witte can be reached at 812-855-2080 or at witte@indiana.edu.
One important aspect of the response to the recent tsunami that is getting the least attention is what kind of long-term help the philanthropy gives the giant wave's victims, according to Les Lenkowsky, IU professor of public affairs and philanthropic studies. "Though critical right now, caring for those harmed, restoring local services and preventing additional problems, such as the spread of disease, are only part of what needs to be done. In addition, philanthropic groups could provide valuable long-term aid by assisting the countries affected in reducing the impact of natural disasters," Lenkowsky said. "That is not just a matter of creating early warning systems and the like. It also requires addressing the economic and political problems that make countries, such as those hit by the tsunami, especially vulnerable." Philanthropic efforts in international development need to produce substantial long-term economic gains. Otherwise, they leave developing countries not only more impoverished, but also more exposed to other natural disasters, he said. The Center on Philanthropy at IU has established a database which is tracking publicly reported charitable support from the United States directed toward relief efforts in Southeast Asia, including gifts from relief organizations, individuals, corporations and foundations. It does not include the aid delivered or pledged by the U.S. government. The database is available online at https://www.philanthropy.iupui.edu/tsunami_relief_giving_1-18-05.html. Lenkowsky can be reached at 812-855-0731 or llenkows@iupui.edu.
Kelley School MBA students and faculty are bolstering Indiana's life sciences industry while receiving valuable, real-world experience that will supplement the knowledge they receive in the classroom. They will staff and provide expertise to a new company, a subsidiary of Indianapolis-based Inproteo, that will become a vehicle for second-stage development of new life science products created in the state. This new initiative places MBA students in more responsible, day-to-day operations to produce and market a high-tech device used in proteomic and pharmaceutical research. "In the classroom, we always have to distill something down to a case level -- something that can be done economically in a fairly short period of time. This gives them a rolling, complex case that is somewhat unbounded to have to deal with. We are getting to a higher level of cognitive skill here," said John W. Hill, associate dean of the Kelley School and the faculty member directing the project. "You don't get any higher level of cognitive skill in business than what is going to be done with these students." The Kelley School has a strong track record for integrating experiential learning into the curriculum, which is increasingly valued by employers. Bloomington Brands is a successful marketing unit that enables MBA students to immerse themselves in every aspect of marketing a real, $12 million brand for the Scotts Co. Other students manage the Reese Fund, a $400,000 stock portfolio that frequently has outperformed many of the primary stock indexes. Hill can be reached at 812-855-8924 or hillj@indiana.edu.
Although knowledge management has been a much-ballyhooed buzzword for years, the bloom has faded from the rose of late as firms have struggled to pinpoint the bottom-line value such systems bring to a firm. Adding to the confusion is the debate over whether to implement "personalization" systems that are initially cheaper to set up, but have proven unwieldy for large firms, or the "codification" systems that often are given short shrift by top knowledge management gurus. As it turns out, codification-based systems are much better. Two professors at IU's Kelley School of Business, chronicling and analyzing how 1,500 sales representatives at a major pharmaceutical firm used a knowledge management system, have empirically linked well-run codification-based knowledge management systems to dramatic sales increases. "Over a two-year period, we found that the increase in sales due to knowledge management use was about 4 percent," said Alan Dennis, the John T. Chambers Chair of Internet Systems. "We also found new sales reps with less than one year of experience experienced about a 2 percent increase in sales from knowledge management use, whereas very experienced reps, e.g., more than five years, gained about a 6 percent increase in sales." Dennis and Dong-Gil Ko, assistant professor of information systems, say their study is the first to catalogue the bottom-line impact of a knowledge management system. Alan Dennis can be reached at 812-855-2691 or ardennis@indiana.edu. Dong-Gil Ko can be reached at 812-855-9978 or dgko@indiana.edu.
Some useful online IU resources for business reporters:
Stats Indiana -- An information service of the Indiana Business Research Center that is a constantly updated repository of data on the economy, population and workforce. Features include comparative profiles of U.S. counties and states, and maps. It is located at https://www.stats.indiana.edu/.
Center for Urban Policy and the Environment -- A topical and wide-ranging resource of research and other information about policy issues, such as those involving land use, economic development and non-profits, located at IUPUI's School of Public and Environmental Affairs and online at https://www.urbancenter.iupui.edu.
