JimPinto.com - Connections for Growth & Success™
No. 127 : 30 July 2003

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

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Globalization - outmoded & irrelevant

The fall of Communism left Democracy and Capitalism as the only real alternative for modern society. Industrialized countries present their neo-liberal brand of globalization and capitalistic freedom as things that bring peace, prosperity and power. America is portrayed as the ultimate example.

The basic tenet of our capitalistic system is "enlightened self-interest". Increasing corporate profits provide the motivation and drive for corporate leaders, expressed by their paychecks, stock options and bonus packages which fuel personal wealth. They are projected as heroes, to somehow justify their motives. Their wealth is somehow supposed to "trickle down", with prosperity for everyone.

Wasn't it wonderful when that mirror of prosperity, the stock market, went up and up endlessly? The WorldComms and Tycos saw endless growth opportunities, while the Enrons moved from generating electricity to simply factoring it as a computer entry with leverage and quick margins. The values of dotcom tech companies jumped to stratospheric heights, and capitalism seemed to be on a track to save the world.

But, when the dreams of unlimited growth suddenly stopped, corporate minds turned quickly to cost-reduction as a means to generate continued profit. In the absence of any coherent alternative, many corporations carry on recklessly down a path that leaves behind record unemployment, a US economy with growth far too low for new job creation, and ecological concerns on a magnitude never before witnessed.

Increasingly without allegiance to any specific country, international corporate power weaves its webs virtually unopposed, commanding hordes of hired guns in all areas - marketing, production, commerce, finance. They are building the universal culture of McWorld which has no roots in the past, and only profit in the present, and a future without any cultural context.

International corporations expand, invest and grow, concentrating ever more wealth in a limited number of hands. Together, they conspire to influence local, national and international institutions and laws. With the governments of their home countries in Europe, N. America and Japan, as well as with the international institutions they fund (such as the World Trade Organization, the World Bank, the IMF) they are molding an international system in which they can trade and invest even more freely. They look for a world where they are less and less accountable to the cultures, communities and countries in which they operate. Underpinning this effort is NOT the development of world prosperity, but rather the reality of the overriding corporate purpose: maximum profits.

In the past, it was easy to embrace this enticing vision, especially with no clear alternative on the horizon. But, the dreams of capitalistic globalization could not be sustained. The bubble was already bursting before 9/11 took center stage.

Today, more and more nation-states are being plagued by growing nationalism and ethnic divisions. With the fall of Communism, the only remaining bulwark is Religion. In the West, religion seeks to limit corporate greed by preaching charity to a hypocritical elite, and tolerance to the masses. But, especially in the mid-east, anti-modernist clerics harp on the obvious weaknesses of freedom (hedonistic excesses and pornography) as unjust and immoral, preaching religious fundamentalism and even holy war. Without much of a choice, the increasingly helpless masses are easily swayed.

And this is where the world stands today...

Click Corporate Control of American Democracy

Click Corporate Watch - Globalization 101

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Strategic business transformation

Andy Grove has been on the forefront of technology change at INTEL for decades. His latest article in Fortune magazine (July 21, 2003) makes good reading. Andy discusses business strategy - how new technology changes the rules of the game, usually by providing an order of magnitude - "10X" - improvement in cost-effectiveness.

The history of technology-based business is marked by such transformations : communications, computing and health sciences.

  • The introduction of personal computers transformed the business models of the leaders: It led to the decline of "Big Blue", IBM (main-frames), and the disappearance of DEC (mini-computers) through acquisition by Compaq, a PC startup. HP, long-time "equal" of DEC and way down in the PC line-up, then acquired Compaq.
  • The growth of the Internet transformed business in the communications industry. It gave rise to new giants like CISCO (which had the largest market-cap for a while) and AOL (which acquired Time-Warner).
  • In bio-tech, the sequencing of the human genome is generating new giants in genomics and proteomics. Medicine based on molecular biology is likely to transform the pharmaceutical industry.
Andy Grove insists that strategic actions, with profound consequences, are not caused only by technological innovations. Southwest Airlines, for example, with a strategy of low-cost, no-frills air transportation, became the "Greyhound of the skies", and changed the structure of the airline business. The altered environment, and Southwest's ability to take advantage of it by promoting cost before comfort reinforced each other, providing a change of 10X magnitude.

Click Fortune (July 21, 2003 ) Andy Grove - Churning things up

Click Andy Grove on the confident leader

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Near-term Nanotechnology

Nanotechnology, the science of manipulating nanoscale particles, is emerging fast, with revolutionary new products already on the horizon. The list of products that are already being envisioned is mind-boggling, with applications ranging from medical breakthroughs (tiny cancer-fighting particles in the bloodstream) to revolutionary (eliminating pollution) to mundane (stain-resistant clothing).

Not all of these are just future visions. How about the near-term? It turns out that commonly used materials take on entirely different characteristics when "assembled" at a molecular level. Here are just some of the real nanotech products that are already on the market:

  • Sunscreen makers have found that nano-scale particles cover the skin more thoroughly and do not reflect light. So, Procter & Gamble is adding nano-size particles to its sunscreen lotions, with significantly better results.
  • With a rubber core that uses tiny "nanoclay" particles to form an airtight seal, Wilson's tennis balls retain their air pressure twice as long as ordinary balls.
  • Stain-free and wrinkle-resistant slacks developed by Nano-Tex are being sold by Eddie Bauer, Lee Jeans and others. Billions of tiny whiskers create a thin cushion of air above the cotton fabric, smoothing out wrinkles and allowing liquids to bead up and roll off without wetting the fabric.
In his new book : "Nanocosm, Nanotech and the big changes coming from the inconceivably small", William Atkinson lists products and applications that are coming short-term - 2 to 5 years:
  • Car tires that require air just once a year
  • Self-assembly of small electronic parts
  • Artificial semiconductors based on proteins
  • Instant, error-proof pregnancy tests
  • Medical diagnostics computer chips
  • Portable concentrators that produce drinking water from air
On the horizon - 5-10 years:
  • Erasable, re-writable paper for books and newspapers
  • Bulletproof armor
  • Ultra-light, ceramic car engines
  • Voice-recognition hearing-aids
  • AIDS and cancer treatments
  • Smart buildings that resist earthquakes
Nanotechnology is here! Find out how it will revolutionize YOUR markets, with applications in YOUR business!

Click Wired magazine: Get Ready for New 'Nano' Products

Click Book: Nanocosm - Nanotechnology and the big changes coming
from the inconceivably small, By: William Atkinson

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World population growth trends

Today, the world has about 6.3 billion people. This was expected to grow about 50%, to 9.3 billion by 2050, according to UN previous (2000) UN estimates. But the latest (2002) UN estimates predict that global population growth will be slower - only 8.9 billion people by 2050.

About half of the slower increase is a result of declining birth-rate in developed and developing countries. The current fertility rate of 3 children per woman is down from 6 in 1960, just 40 years ago. 75% of developing countries will reach below-replacement fertility rates (fewer than 2.1 children per woman) by 2050. That's the good news.

The bad news is that the other half of the slowdown is due to a rise in projected deaths, the majority stemming from higher projected levels of HIV (AIDS). The UN report projects some 278 million AIDS-related deaths by 2050. Even grimmer, for the 53 countries for which the UN makes AIDS projections, the population increase in 2050 will be nearly 0.5 billion smaller due to AIDS.

The current annual growth rate (1.2%) is much slower than the peak of more than 2% in the early 1970s. At this rate, there will be an additional 77 million people each year. And with people living longer worldwide, the population figures add up.

There are still extremes on either end of the growth spectrum. Russia, for example, suffers from increasing mortality rates and decreasing fertility rates; its population is projected to decline from 146 million in 2000 to 101 million in 2050.

Fertility rates are expected to remain below replacement level in China, Japan, almost all of Europe, and many parts of South and Southeast Asia. The US is an exception - it will continue to grow primarily because of immigration, and the higher birth-rate among immigrants. Meanwhile, several very poor African countries, such as Niger, Somalia, and Uganda, may see their populations quadruple.

The UN projections do not include significant decline in a catastrophic war - the theme of Twilight Zone episodes, and many other movies. But, try applying World Democracy (one person, one vote) to the projected mix in a global village of 10 billion people about 60 years from now - when my grandson will be about my age....

Click World Future Society - Population growth slows

Click World Population Prospects

Click US and world population Clocks

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Wonder where Wonderware

Interesting story about where Wonderware is headed....

In the last eNews (24 July 2003) I mentioned the possibility of Schneider Electric acquiring Invensys - a suggestion that came from UK financial analysts. To spice that up, we got word via the JimPinto.com weblog, that an email had been broadcast within Wonderware (owned by Invensys) that there was to be a "Dinner with Schneider" last week. Then the email was mysteriously withdrawn, and "all" were asked to ignore it. This was followed by news of a strangely different layout for the scheduled SOB (State of the Business) meeting last week. The weblog was poised, with bated e-breath....

We then got a spirited email from Mike Bradley, President of Wonderware (Archestra), describing the "Johnny Carson" State Of the Business meeting skit on Thursday. Good fun, courtesy of Wonderware Studios, to celebrate "double-digit growth and double-digit profit" for the first quarter. And, it turned out too, that the dinner with Schneider was not NOT a sinister, secret tryst. It was just to bring them on as an OEM Customer.

Mike Bradley was upset that someone had "leaked" the news of the Schneider dinner, and the surprise SOB format, to the JimPinto.com weblog. Indeed, he challenged JimPinto.com to publish his memo on the Invensys weblog, with a steak dinner at stake.

The complete Mike Bradley memo was immediately weblogged, and the steak dinner claimed. Mike Bradley has promised to payoff. On reading this the weblog, another Wonderware employee responded (summarized here):

    "Speculation occurs when bits and pieces of information are divulged and not the complete details. Given the current precarious financial condition at Invensys, a purchase interest on Schneider's part is a rational conclusion. It was a reasonable conclusion from a concerned employee."
Jim Pinto note:
I have long been uncomfortable about the negativity in the Invensys weblogs. I have (many times) invited senior Invensys people to send positive responses, or have some senior or HR people post something positive. This was the first positive, motivated response from someone in senior management. I'm happy to publish it, unedited!

Click Read the complete memo and comments on the Invensys weblog

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Brian Blazevic [bblazevic@ucsd.edu] disagreed with Michael Tsoukia's eNews comments (24 July 2003) and feels that current threats are NOT destroying the precious freedoms that are unique in the US:
    "I want to point out that, even though there is much debate over the President's actions and policies, the country remains sound. Michael's comments won't earn him a knock on the door from the government or a political party. This is something that can't be said in most Middle Eastern countries, and many Asian, African, and South American countries. Cuba recently sent 75 people to jail for doing what Michael did. Not only is dissent still acceptable, but the US is the first country in the last 2,000 years to allow it.

    "In trying times, which these are for many reasons, we can - and should - remember that our freedoms come exclusively from a small, 4,480-word document called the Constitution, which Michael referenced. Bush has threatened that document with the outlandish USA Patriot Act and various DARPA civilian monitoring projects, which is a very serious problem. But, warring against fantastically brutal dictators who use chemical weapons on civilian populations and openly defy the United Nations, will not erode that which makes this country great."

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Don Caffee [valpers@yahoo.com] is concerned about continued US presence in Iraq:
    "My giant fear has been that Iraq will turn into another Viet Nam; and now I sincerely believe it has. If left unchecked, the situation will continue to escalate. I have no doubt that Saddam Hussein is alive and well. I also believe that more than 50% of the Iraqis want him back.

    "Democracy is not compatible with the Islamic religion and I don't believe any Islamic country seriously want democracy. Frankly, I would like to see the US walk out of Iraq and leave them to their devices. We don't need their oil. And if we do shame on us.

    "It's time for us to stop dictating and trying to buy the rest of the world. We must tend to our business at home. We have serious problems here, and they are not going to get better any time soon. The money being spent in Iraq on a daily basis would do a lot for US citizens in health care and many other domestic areas.

    "Our troops want out as badly as we want them out. In any event, we owe them continued support until the decision is made to end this insanity, one way or another. Feel free to use these comments, they are my sincere feelings."

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Doug Keefe [dkeefe@newarkinone.com] is concerned that social security is being mis-directed:
    "While it might not solve the entire problem, the fact that there is an income limit on the social security tax seems remarkably insensitive to the real problems.

    "With all the press on the social security shortfall over the past years, it seems surprising that our government's first step would be to increase the retirement age for full benefits, rather than eliminate the income limit. They appear to be placating too many high income constituents rather than the majority of voters.

    "I would be far more agreeable to pay social security tax on more of my income now, while I have an income, than to experience insufficient income when retired on a fixed income. Instead of worrying about how to maintain the survival of social security, they should be floating ways to increase social security, Medicare and discount drug benefits for the elderly."

    "I am not retired yet, but would like to think that someday I can with at least some level of comfort."

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