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Enjoying your open disdain for this newspaper (if it deserves to be called that). I have for obvious reasons been thinking a lot over the past couple of weeks about the role of increasingly sensationalized (and often outright fake) news that is proliferating online and how it seems to be eroding the quality of public dialogue and political discourse on both sides of the pond. In some ways it feels as if the digital era has spawned a market failure in the news media industry, leading many publications to engage in either a race to the bottom or to see their market share gradually erode. Is there an appropriate policy response to this? Or is it possible for the industry to continue to regulate itself and continue to provide us the appropriate amount of serious journalism alongside cat videos? An optimistic person might point to “millennial” era media outlets like Buzzfeed or Vice, which seem to be attempting to move up the value chain from just clickbait to producing serious (though perhaps more irreverent) journalism as well.

On November 18, 2016, Evan Kornbluh commented on Government Innovation: Not an Oxymoron? :

I’m glad you have reason to feel optimistic! I’m particularly interested in this division between the Department of Defense, which seems to be at the cutting edge of so many emerging technologies, and other wings of the government. Could there be some way to increase communication and best practice-sharing between DoD and other parts of our government that could spread these competencies without compromising confidentiality? Could we do staff exchanges between DoD and other cabinet departments, for example?

Interesting post about an internet solution that could help kick-start a lagging industry. Your post also brings to mind questions about regulatory and sustanability risk in the current car loan market. The US has seen recent alarming rises in the rate of subprime auto loans, resembling issues that we saw in the mortgage market before the financial crisis. See, for example, http://money.cnn.com/2016/03/15/investing/subprime-unpaid-auto-loans-oil-crash/. Could risk of further federal regulation, or of the bubble bursting in the coming years, also help spur auto dealers to stop managing this in-house and move to a specialized online vendor?

On November 18, 2016, Evan Kornbluh commented on 311 and Beyond: App-Driven Civic Engagement in Boston :

Great article about some really exciting examples of how digital tech is transforming city governance! One challenge that I imagine the city will have to navigate carefully is public perception of privacy as it pushes out these apps. As we saw in Marketing this week, a lot of people felt uncomfortable about the idea of insurance companies monitoring their driving at all times. I could imagine people feeling similarly about having the StreetBump app on at all times while they drive as well. The city will have to communicate explicit restrictions on how it is collecting and using data to assuage citizens, as well as to identify and celebrate “quick wins” to voters early on in the roll-out in order to demonstrate the value proposition of this initiative.

On November 18, 2016, Evan Kornbluh commented on Playboy: The Naked Truth :

Interesting read and great take on a really unique challenge this company is facing in the digital era. Another channel that Playboy is pursuing is to abandon its role as a content provider altogether and to just license the logo for apparel in China, where it is wildly popular as just a cute bunny logo to put on clothes and where most people don’t know about the brand’s roots in the US at all. See http://foreignpolicy.com/2016/02/15/playboy-is-ditching-the-sex-and-betting-on-china/ for an example. As this article describes, though, such a dramatic pivot is also confronting the company with a range of questions about brand image, as it seeks to maintain some perception as a foreign luxury brand despite a profusion of cheap knock-offs.

I really like how this post highlights the underlying tensions that policy makers face at the city level as they try to tackle complex problems. The short-term political pressure to demonstrate “quick wins” in job gains has clearly led to some economic development projects that don’t necessarily align with Detroit’s long-term goals to become a greener city. The difficulty of affecting a major economic turn-around within Detroit’s considerable resource constraints is also very important to consider. Your suggestions around land use are particularly attractive to Detroit because they seem to be relatively low-cost compare to more commonly promoted government strategies such as big investments in green infrastructure and tax subsidies. The big challenge in getting these done, I think, will be in gaining the political momentum needed to sustain a series of policies that are likely slower-acting and less visible than a big flashy project like relocating a stadium. Detroit’s government will have to think hard about how to celebrate small wins with these projects along the way as it may take longer to attract new businesses and residents. This could include hosting public events whenever the new parks open and finding a couple of green manufacturing companies that have already attracted heavy media attention.

On November 6, 2016, Evan Kornbluh commented on Tesla: A Two-Step Plan to Transportation Takeover :

Your assessment of Tesla’s market challenges make a lot of sense. In particular, given Elon Musks’s aggressive rhetoric in the last few years about trying to actively promote more competition in the all-electric vehicle space, one must wonder whether with a 2/3 drop in market share they were really ready for the competition they asked for. I also agree that distributing production more globally will be essential for Tesla to both meet its environmental goals and reduce costs. In particular, Tesla should reconsider its production and sales strategy with respect to China. China is now the world’s largest electric car market and rising incomes has made it a boom market for luxury cars. However, Tesla is increasingly facing competition from local EV manufacturers. Locating more production in China is a critical step both to reducing the firm’s cost and footprint to serve Chinese customers, and also to gain government favor (an essential piece of any China market strategy) by creating jobs there as well.

On November 6, 2016, Evan Kornbluh commented on Coal. The Next Big Tobacco? :

Your post does a great job of outlining the fraught political challenges surrounding this issue in the US. In particular, your comparison to the tobacco industry’s treatment highlights how climate change activists typically adopt an adversarial tone to attack the coal industry; as the coal industry fights back with climate change denialism, the communities who depend economically on the mines for jobs are caught in the middle and stand to lose the most from anti-coal legislation. Hillary Clinton’s positive proposals to support job and infrastructure transitions in these towns have received very little attention in this year’s campaign (as has any discussion of the environment and climate change more broadly). This seems to leave an opening where private sector players like Cloud Peak could present more of a positive narrative for how these communities could attract new jobs in CCUS or in other green industries as the economy in these regions of the US change. As we discussed in the US election marketing case, however, it’s clear that a fear-based marketing message has galvanized coal communities around opposition to climate change policy much more effectively than a positive message for change has. This will likely continue to create an even greater challenge for forward-thinking companies like Cloud Peak who hope to work with the next administration on transition strategies, regardless of the outcome of the election.

On November 6, 2016, Evan Kornbluh commented on Coca-Cola: Sugar water and climate change :

Your recommendation that Coke be more transparent about its recycling and sustainability goals seems particularly interesting given the conversation we have been having in class in the last couple of weeks about sustainability and customer perception. In the Nike and IKEA cases, we concluded that greater messaging around sustainability goals would actually hurt consumer demand, who would assume that sustainability comes with a “compromise” in price or quality. The Coke case strikes me as slightly different because Coke is producing a commodity product. I don’t think that messaging around sustainability could affect quality perception, because as long as Coke tastes the same there’s no other real change in quality that people could detect. However, if biodegradeable bottles raise the price at all, I would expect demand to be very elastic as consumers can very easily switch to Pepsi. As long as Coke can manage the costs of sustainability initiatives, then, it should gain an edge over competitors by heavily advertising its sustainability work.

On November 6, 2016, Evan Kornbluh commented on Shake Shack – Please, give us the burger of the future. :

Great post on a highly under-reported but critically important contributor to climate change! I agree with your assessment that Shake Shack’s brand puts it in a unique position, relative to other burger chains, to be forward-thinking and innovative in offering more climate-friendly products. Another route that they could consider going, besides plant-based protein, is lab-cultured meat. A number of small start-ups, such as Memphis Meats (http://www.memphismeats.com/), are developing processes to create actual beef cells in the lab that could give us real hamburger without the cow flatulence.

My biggest concern with these strategies (and, likely, Shake Shacks’) is customer willingness to pay. Most approaches to filling Shake Shack’s menu more sustainably (with the exception of switching to chicken) would likely cost the company more and therefore result in higher menu prices. Most of the research that I have seen on consumer behavior suggests that while many consumers say in the abstract that they would be willing to pay more for environmentally friendly goods, in practice they will only accept very small premiums on the prices they pay for “green” products. For example, here is a McKinsey study that looked at consumer willingness to pay to go green (http://www.mckinsey.com/business-functions/sustainability-and-resource-productivity/our-insights/how-much-will-consumers-pay-to-go-green). I thus wonder how much of a price increase Shake Shack’s margins could assume, and also what the role of consumer education should be to help shift consumer behavior, both at the burger counter and more broadly.