JimPinto.com - Connections for Growth & Success™
No. 145 : 25 February 2004

Keeping an eye on technology futures.
Business commentary - no hidden agendas.
New attitudes, no platitudes.

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The coming oil crisis -
American energy independence imperative

The world is running out of oil and we're not doing anything to stave off the coming crisis!

Remember the oil crisis of 1973? The Middle Eastern OPEC nations shut off exports to the US, and the artificial shortage that followed had devastating effects: The price of gas quadrupled in a matter of months. In some places, motorists were forced to wait in line for several hours, just for gas.

The US (approximately 5% of the world's population) uses approximately 26% of the world's supply of oil. That would perhaps be acceptable if we were self-sufficient; but we're not. In the US, the demand for oil outstripped our capacity to produce it in 1970. That's when we started to be really dependent on foreign sources.

Beyond just economic considerations, modern day terrorism feeds off our addiction to oil - the US trades its wealth for Middle East oil, enriching dictators, ideological extremists and the sponsors of terrorism. This harmful dependency threatens our economy and freedom, and that of future generations.

Consider this: without oil propping up their economies, most Mid-East countries would be reduced to relatively poor strips of desert. The bin Laden's and Saudi sheikh's would become ineffective extremists, the financial power of terrorism de-fanged.

Alternative energy sources look expensive until the price of the US Military protection of imported oil is considered by comparison. US taxpayers spend billions every year to pay for military hardware, considered an investment in America's security. The same argument can be made in favor of "investing" in national renewable energy sources.

Here are two books I suggest you read:

    Out of Gas - the end of the age of Oil, by David Goodstein, a physicist and vice-provost at CalTech. He explains in layman's terms the science behind his prediction that our oil-dependent civilization is in for a crude awakening when the world's oil supply really begins to run out. The effects of an oil shortage can be immediate and drastic, while it may take decades, to replace the vast infrastructure that supports the manufacture, distribution, and consumption of the 20 million barrels of oil Americans alone gobble up each day. This book is not a happy read, but an important one.

    The Party's Over - Oil, war & the fate of industrial societies, by Richard Heinberg. The world is about to run out of oil, and will change dramatically as a consequence. Contention for dwindling energy resources will lead to more and more oil wars in the Middle East and elsewhere. There will be chaos, unless the US (the world's foremost oil consumer) joins with other countries to implement a global program of conservation and sharing. Discusses social implications, with recommendations for personal, community, national, and global action. A wake-up call for humankind as the oil era winds down.

Click MSNBC - Crude Awakening

Click Book Out of Gas by David Goodstein -
The end of the age of Oil

Click Book The Party's Over by Richard Heinberg
Oil, war & the fate of industrial societies

Click American Energy Independence website

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Omron - The Philosophical Leader -
No. 10 on the list of Automation Majors

Several people have brought to my attention that my latest list of the major automation companies (published eNews Sep. 2003 - weblink below) did not include one important company: Omron. Let me hasten to correct that omission.

With 23,000 employees and annual revenue of $4.5 billion (year ended March 31, 2003) Omron ranks No. 10 on the list of automation majors, just behind Danaher and ahead of Rockwell Automation. Founded in 1933 by Dr. Kazuma Tateisi, Omron has grown to be the largest industrial automation company in Japan. It is about 3 times the size of Yokogawa, the only Japanese instrumentation company that was included on my list.

For the 9 months ended December 2003, Omron revenue increased 10%, with operating income up 75%. Projected revenue for 2004 is $4.85 bn, up about 10%.

Omron has 5 major divisions:

  • Industrial Automation: Components, products and systems for factory automation. Sales $1.7 bn
  • Electronics & Automotive: Components, relays, sensors, and switches for household appliances, automobiles, office equipment, mobile devices. Sales $1.2 bn
  • Social Systems: ATMs, automatic fare collection systems and modules used in financial, public transportation, and traffic control. Sales $950 m
  • Healthcare: Blood pressure monitors, electronic thermometers, and other healthcare and fitness products. Sales $350 m
  • Others: PC peripherals, card readers, RFID and a variety of other systems. Sales $300m
The unusual thing about Omron is this: alone among any multi-billion corporations, it devotes a significant amount of attention to its ethical, social and philosophical position, and a long-term future plan termed Grand Design 2010. This unusual ethos can be traced to the founder, Dr. Kazuma Tateisi who died in 1991. The innovative yet practical entrepreneurial philosophy he developed and practiced continues in the corporate culture of this significant company.

I met Dr. Tateisi in Japan some 15 years ago, and he gave me a copy of his book, "The Eternal Venture Spirit", the encapsulation of a practical and successful approach to business and society. The book was successful, and has been even been published in China. Peter Drucker wrote the preface for the English version, published in the US. You can still buy a copy on Amazon (see weblink below).

I will be writing more on Dr. Tateisi and Omron in a forthcoming article which will be on my website - I'll let you know when it is published. In the meantime, please take time to study this unusual company through the plethora of information it provides on its website.

I'll be updating the rankings of Automation Majors, and will certainly include Omron on the 2004 list!

Click Omron website

Click Omron results for FY2004 - 9 months ending Dec. 2003

Click Dr. Kazuma Tateisi's book - The Eternal Venture Spirit
Some new and used copies are available on Amazon.com

Click The 2003 List - Automation Majors financial rankings

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Robots are here

Rodney A. Brooks is Director of the MIT Computer Science and Artificial Intelligence Laboratory, and Fujitsu Professor of Computer Science. He is also Chairman and Chief Technical Officer of iRobot Corp. His prescient article in the latest issue of MIT-Tech Review is summarized here.

We've heard for a long time that robots were coming. Now they're actually arriving. There are robot toys everywhere, robotics graduate programs in many universities, US troops in Afghanistan and Iraq are using reconnaissance robots, and home cleaning robots.

Rodney Brooks is convinced robots today are where computers were in 1978. It took another 15 years before computers truly became pervasive in our lives. 15 years from now, says Brooks, robots will be as pervasive as e-mail and the Internet are now.

One of the keys is navigation improvement. Today, lawn-mowing, house-cleaning, and military reconnaissance robots do their specialized tasks almost a side effect of their navigation programming. Similarly, robotic versions of large farming equipment, golf carts, and specially built supply mules for the military are primarily navigation machines.

Robots today are still not very good at recognizing generic objects or readily manipulating them. But accelerating intelligence is starting to solve those problems. Computer vision is still lagging (far behind the average two-year-old) but it is catching up fast. Experimental robots are already tracking motion and recognizing faces. New sensors enabled by microelectromechanical systems (MEMS) and nanotechnologies are tackling robot vision and dexterity. Military funding helps.

Rodney Brooks insists that robots with the vision capabilities of a 2-year-old and the manipulation capabilities of a 6-year-old will be disruptive to our way of life. They will reorder world labor markets and change immigration patterns and the massive shift of labor from developed to developing countries.

Perhaps the most important impact, says Brooks, will come from care giving robots that will assist the elderly when the baby-boomers bubble begins to burst.

Click MIT-Tech Review - Rodney Brooks: The Robots Are Here

Click Forbes - Five Robots That Will Change Your Life

Click Jim Pinto - Robotics technology trends

Click Rodney Brooks Book: Flesh and Machines - How robots will change us

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Buying & Selling TIME

Time is a resource that everyone values - we all have the same 24 hours every day. By delivering convenience (saving time) the new, connected economy yields significant improvements. Companies that can offer those improvements generate growth and success.

You know the old saying, “Time is Money”. Indeed money was invented to save time (bartering took too long and common currency was a convenience). Millennia later, the credit card was invented, again saving time and changing the financial landscape. Banks introduced Automatic Teller Machines (ATMs) for just one purpose - to save their customers time.

The successful companies of tomorrow are not simply providers of traditional goods and services. Electronically linked networks of supplier alliances, sales reps and distributors - the "infomediaries" - are rendering traditional manufacturing and marketing obsolete. The winners are those who create innovative new transactions for their customers and make them come back to a "sticky" business portal. Those that deliver the best total package will prosper. Companies succeed (become leaders) by creating and structuring their own markets. This means offering customers innovative new ways to receive value. E-commerce provides only the technological means, the delivery mechanism - the good marketer must use it creatively, in ways that will generate new value for all the parties involved. And the significant "new" competitive value today is Time.

Click AutomationTechies.comn - Buying & Selling Time

Click Development speed in the Internet age

Click Marketing Speed In the Internet Age

Click Book - The Cluetrain Manifesto - the end of Business as Usual

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RFID technology is spreading fast

Radio frequency identification for business (RFID) was invented in 1969, but is only now becoming commercially and technologically viable. And it is spreading fast!

RFID tags are microchips that you can embed in almost anything to give it a unique ID code. An RFID tag acts as a transponder (transmitter/responder), responding to queries from a nearby transceiver by transmitting back its own unique 64-bit or 128-bit identifier.

The most widely used RFID tags are passive circuits, powered directly by the received radio signal. They are read up to a few feet away. RFID chips cost about 50 cents each, but prices are dropping as quantities increase. Once they get to 5 cents each, you'll be seeing RFID tags in almost anything.

Wal-Mart is now pushing RFID, and many retailers are moving very quickly into widespread adoption. Gillette is buying 500 million RFID tags, to ship with each package of razor blades. Soon, everything priced more than about $1 will carry an RFID tag. There are even washable RFID tags that you can sew into clothing.

Unlike bar codes, which are passive printed codes, RFID tags remain active once you leave a store. That's a scenario that should raise alarms - the possibility of people being tracked though personal possessions. Purchases can be linked to the credit cards that were used to make specific purchases, which allows links to specific advertising based on personal spending patterns. These scenarios are similar to the movie Minority Report, where police surveillance tracked individuals any time, anywhere.

Banks are considering embedding RFID tags into banknotes, to eliminate counterfeiting - it's easy to check that the RFID matches the printed serial number. But then, anybody with an RFID reader could count the money in your wallet...

Click MIT-Tech Review - Visualize how RFID Works: Animated infographic

Click RFID Journal - Good source of information

Click The RFID Imperative

Click ISA InTech - Pinto's Point - 21 January 2004

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Ron Bengtson [Ron@thoughtcurrents.com] is concerned about the loss of privacy with electronic voting:
    The physical privacy of the voting booth is still a cornerstone of democracy. I would never trust a system that captures votes from an ATM, or the Internet, or a connected appliance, since privacy is lost. The accuracy of the voting machine is critical, of course. But, if accuracy is attained at the expense of privacy then democracy is doomed.

    We must find a foolproof way to assure the accuracy and privacy of electronic voting machines. The eVote can be cast inside the private voting booth, and then the eVote machine can print a paper copy of the voter's choices, on an anonymous form, for the voter to review before leaving the booth (with optional cancel and revote, if error is found.)

    The eVote printed copy could have a unique number that associates the printed copy with the electronic vote. Then, using statistically probability, a random sampling of physical votes matched by the corresponding identification number in the electronic database, can be used to compare the votes on the printed copy with the electronic votes in the database. If the data on the printed copy is identical to the data in the database then the system is accurate.

    This way the voter does not carry a physical paper outside where somebody can determine how the person voted; and no one can match the votes in the database with the voter's personal identity.

    Yes, eVote counts will be accurate and fast. The only problem remaining is what to do if a discrepancy is found. An electronic chad? :)

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Mathieu van den Bergh [mathieu-van-den-bergh@cox.net] feels that whoever gets elected, not much will change:

"Of course you are entitled to express your political opinions in your newsletter. Unfortunately too many people take the cynical approach - that it doesn't matter anyway, so why bother?

"None of the presidential candidates today - including GW Bush - offer any long term perspectives for real, structural changes. They just have different priorities as to what they want to spend money on. None of them has come up with any proposals as to how this country can improve its living standard, while shedding manufacturing (and white collar) jobs to low wage countries. They seem to leave that up to the commercial sector, or find consolation in Mr. Greenspan's words that it will fix itself as it did previously (like with the Japanese 10 to 20 years ago).

"Hence, endless debates focus on where money should be spent, how much the tax brackets should be for this or that group etc. This is not productive. It doesn't help anybody. And any change will by definition be marginal, because none of the candidates has enough support to make substantial changes. So, at best we move in the same general direction with minor adjustments to left or right, depending on election outcome."

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Tom Tokar [tmtokar@ra.rockwell.com] wrote about a couple of the topics we've been discussing:
    "How can we complain about India doing exactly what is respected and admired in America?

    "10 years ago the Indians made a decision to capture a good slice of the software business in the US. They had a plan and they executed it well. I wish that more companies and institutions here in the US had that kind of forward thinking. As far as jobs go, I agree with everything you said history-wise. We've seen the pattern before. As individuals we have to be inventive and creative and take risks. If not, then our jobs becomes commodities, farmed out to the lowest bidder.

    "Regarding your political opinions: you certainly have the right to speak your mind in your own free forum and people can choose to skip over it, which I didn't. I pride myself on being an independent thinker and try to assess things before forming a judgment. I'll listen to just about anything before forming an opinion, which is why I watch right-wing extremists sometimes, as I also listen to National Public Radio. You can filter the noise to get a signal, but you have to listen to the noise first.

    "What a tough job the politicians would have if we were a nation of thinkers!"

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