Oh, how the locus on competition has shifted

graphic here

WSJ story where the headline just made me laugh.

It read, “Carriers Go To Battle Over Faster Networks.”

When I first glanced at it, I thought it was a story about naval technology—you know, big decks!

Instead, it was about Google v Apple.

That tells you something about the world we live in, a world in which radical Islam pales in comparison to the rise of the global middle class—where all the real battles will take place and virtually none of them will involve any kinetics.

The China model of crime spreads

pic here

Wherever the Chinese go globally, they tend to enclave themselves far more than any other nationality.  That kind of closed community-atmosphere is perfect for criminal activity, making it all that much harder for the local cops to penetrate illicit networks—as Italian cops are discovering.

With the mafia still entrenched in Sicily and the southern portion of Italy, it’s the Chinese triads who have moved into central and northern Italy, where previously the mob was decimated through effective prosecution.

You know that old bit about “carrying coal to Newcastle?”  Well, it don’t get any better than exporting mafia to Italy.

It’ll be interesting to see how the Italian police go after the triads.  They certainly have the experience and will, so maybe they’ll teach the world a thing or two about how to do this right.

Facebook targets the East

FT story on Mark Zuckerberg declaring at a recent conference in France that Facebook is targeting major expansion in China, Japan, South Korea and Russia, hoping to become the first social network with 1B members. These four are all nations where Facebook is not the #1 social network.

Each of the four countries features entrenched local players, like QQ in China. Then there’s China’s record with Google, ostensibly over censorship but really over market share/domination by foreigners(!).

Zuckerberg sees mobile usage as the future for Facebook, noting that India just tipped over from more web users than mobile users to more mobiles users than web users.  He sees that happening everywhere soon enough.

Globalization’s connectivity shows no signs of slowing down.

Chart of the day: Buddy, got $40T to spare?

Caught it first in FT special overview of infrastructure, but then went to source for chart.

Of the $40T to be spent by 2030, $6.5 in North America, $9.2T in Europe writ large, $7.5T in LATAM, $1.1T in Africa, $0.9T in Mideast, and $15.9T in Asia.

Per the Core Gap map, light in the middle and thicker along the edges.

Breaking it down by category, it's $22.6T in water, $9T in electricity, $7.8T in road and raid, and $1.6T in air & sea.

A lot will be internal improvements, but plenty will be external improvements, i.e., improving linkages between states and regions.

Hardly the picture of a world de-globalizing, yes?

The terrific strains caused by a rising car culture in emerging economies

NYT story on rising traffic fatalities in India, where, like China, the car culture explodes.

It is a little-known truth that when you travel in the Gap or in New Core pillars even, the biggest danger you face is not illness or bad water-food or terrorism.  The most likely route to death is a car accident.

This totally corresponds to all the travel I've done in my life (almost forty countries in all, about 2/3rds New Core/Gap): the illnesses and the security stuff were nothing to the routine dangers of automobile travel.

And yeah, I think of that as we contemplate our travels around Ethiopia in coming weeks (thanks for that third donated otoscope, though!).

But India's got it bad:

India overtook China to top the world in road fatalities in 2006 and has continued to pull steadily ahead, despite a heavily agrarian population, fewer people than China and far fewer cars than many Western countries.

See, the Chinese can't be #1 in everything!

But it's not just a size-matters argument, because a lot of New Core/emerging economies are seeing car fatalities level off or even decline as they upgrade fleets and roads and technology, but not India:

While road deaths in many other big emerging markets have declined or stabilized in recent years, even as vehicle sales jumped, in India, fatalities are skyrocketing — up 40 percent in five years to more than 118,000 in 2008, the last figure available.

The World Health Org says India's government is slow to wake up to the issue, but even hearing that is kind of amazing to me:  the notion that rising India needs to focus more government attention on such prosaic things when, of course, it could be waging resource wars across the planet, right?

Ah, the details of globalization's advance.

Certain biases don't help:  new car drivers seems to despise motorcyclists, pedestrians, etc. (not exactly an Asia-specific bias, I might add); helmet laws for motorcyclists are only for men, as women are apparently expendable; etc.  But if you've spent any time being driven or driving in places like China and India, you're probably like me and have to squint a lot so as to not flinch constantly at all the close calls with those not wearing wrap-around steel. 

So as the BRIC continue to balloon their domestic car fleets, expect these tensions to rise, triggering greater government responses.

The world stands at the bottom of a very steep curve.  About a century to get the first billion cars; maybe 1/4 that to get the second!

Chart of the day: under-five global deaths since 1970

Economist article on public health citing what one Aussie expert calls "undoubtedly the biggest advance in mortality measurement in four decades!"  

This guy, Alan Lopez of Queensland U, presented a study on infant death trends in Washington in late May (later published by Lancet), and the Economist readily excused his hyperbole, because it's a stunning trend.

As the Economist chart showed, everybody was tracking the incredible decline over the past four decades.  What Lopez's work showed was that they were all underestimating the drop.

Setting aside methodological controversies that naturally ensue, along with the fear of charities that such revisions rob them of donations, the real point of this chart is the overwhelming agreement on the curve, with only minor disagreements (to the layman, that is) regarding degrees of steepness.  

You want to sell me that crap that says globalization is bad for the weakest and the poorest on this planet?  Well, infant mortality is a great measure, and there seems to be an amazing correlation between globalization's explosive spread since the early 1970s (when this globalized world was truly born) and the cutting in half--in absolute terms--of infant mortality globally--EVEN AS THE WORLD POPULATION ALMOST DOUBLED FROM 3.6B TO 6.6B!

So factoring in the population growth, babies today are really roughly four times more likely to make to five than those born in 1970.

Put that in your pipe and smoke it.

Arms spending is up! Among the rich and rising great powers--quelle surprise!

I'm too sexy for my hurt

A Guardian story by way of WPR's Media Roundup.

SIPRI, the arms-spending-tracking think tank out of Stockholm, says global defense spending is up almost 50% over the past decade, so a more dangerous world right?

Except when you examine the details, it's all so underwhelming.

Global defense spending peaked in the late 1980s and then dropped dramatically over the 1990s, picking back up around the turn of the century and eventually equally the late 1980s total in the latter years of the last decade. That means we spent two decades getting back to the late Cold War total. 

How did we do this as a planet?  Well, the bulk of that additional spending was by the U.S. (more than half). The rest was almost all by rising powers like India, China, Turkey, etc.--nothing out of the historical norm there.

So you look at the top spenders and unless you can sustain the fantasy of America taking on its banker (China), this is simply a cash of the rich getting richer.

Meanwhile, the 65-year moratorium on great-power non-war holds as steady as ever, despite our collective navigation of the worst financial crisis in modern globalization's history.  State-on-state war remains historically low, and our primary problems remain terrorists and civil strife.

SIPRI's report admits as much:

Only six of the biggest armed conflicts last year concerned territority, with 11 fought over the nature and makeup of a national government, according to Sipri's report. It said that only three of the 30 big conflicts over the past decade were between states.

My, what a dangerous world.  Rich, largely uninvolved rising great powers are bulking up their militaries, while rich-but-aging Western powers are spending precious coin on COIN.  All that tells me is that we need to get the free-riders to pay for their ride.

Now I take it ALL back on the myth of "deglobalization"!!!

NYT story kills the one "give" I made in my recent WPR column on "deglobalization's" many myths.

My mistake, because if I hadn't been so busy turning 48 (Sniff! My 49-year-old wife just joined AARP, but she's got a MA in elder studies, so I'm calling it a professional quirk) and watching Em graduate from HS (frugal babe, she refused to buy her academic honors and Japanese honors cords), I would have noticed this article just in time for the piece I wrote last Saturday!

In the piece, I admitted that guest worker numbers depressed, and thus so did remittances.  Based on this piece though, the former effect was negligible-to-unimportant and the latter?  Well, there was less money everywhere for a while, so that says little about "deglobalization" and simply says it was a financial crisis on a global scale (Boo hoo!  No repeal of the biz cycle!  Topple capitalism!).

Read it and weep:

The world may be staggering through its worst economy in 70 years, but international migration, an ever-growing force, shows few signs of retreat.

Globally, the number of migrants appears undiminished, and last year they sent home more money than forecasters expected. Many migrants did lose jobs, but few decided to return home, even when others offered to pay.

In some places, demand for foreign labor grew.

From the Arizona Statehouse to Calabria, critics warn that porous borders hurt native workers, threaten local cultures and increase crime. But even a downturn of rare magnitude did less than expected to slow the flows, revealing instead the persistent forces that keep migrants venturing abroad.

Perhaps no place shows the lure of migration as much as the Philippines, a nation of nearly 100 million people, where a quarter of the labor force works overseas. Despite the world’s sagging economy, the country set records last year for the number of workers sent abroad and the sums they returned.

“We hardly felt it — the global financial crisis,” said Marianito D. Roque, the labor secretary, who has been promoting the virtues of Filipino workers from Alberta to Abu Dhabi.

On every corner of this jeepney-jammed capital, someone seems to be coming from or going to a job overseas. At the Magsaysay Training Center, beside Manila Bay, college graduates scrub replicas of cruise ship cabins, hoping for housekeeping jobs that can pay four times the local wage. A park across the street doubles as a sailors’ bazaar, a reminder that the Philippines supplies at least a fifth of the world’s seafarers.

In government seminars a mile away, throngs of outbound maids learn to greet future bosses in Arabic, Italian and Cantonese. Some cry through a film about a nanny who wins an overseas job but loses the love of her children.

Doctors go abroad to work as nurses. Teachers go to work as maids. Would-be migrants set off sparks at the Tesda Women’s Center, where the government offers free training to female welders.

Naturally, the Philippines still provide large numbers of poster boys and girls for the whole "people flow" from PNM.

The financial crisis follows an age of growing mobility that has scattered migrant workers across the globe. Polish nannies raise Irish children and Indians build towers in Dubai. Of 15 million American jobs created in the decade before the bust, nearly 60 percent were filled by the foreign born, according to a report by the Organization for Economic Cooperation and Development. To be sure, the crisis has hurt migrants, often disproportionately. A report by the Migration Policy Institute found that in the past three years, joblessness grew by 4.7 percentage points among native-born Americans, while rising 9.1 points among immigrants from Mexico and Central America.

Anti-immigrant feeling in some places has swelled, at times to the point of violence. South African riots in 2008 killed dozens of African migrants, including many Zimbabweans. In Italy, attacks on African farm workers this year brought condemnation from the pope.

But with few exceptions, the hard times have not sent migrants home. Spain, Japan and the Czech Republic tried to pay foreign workers to go, but found few takers. Likewise, the number of Mexicans leaving the United States has not grown, said Jeffrey S. Passel of the Pew Hispanic Center. While the economy and tightened borders have reduced new arrivals, he said, the total population of Mexican migrants remains unchanged.

Hania Zlotnik, director of the United Nations Population Division, said, “Worldwide, the crisis has slowed the growth of migration, but the number of migrants is still increasing.”

That's it:  the crisis slowed the GROWTH of migrant workers, but did not stall it or reverse it WHATSOEVER.

CAN YOU FEEL IT!!!!!

The key for resiliency in the face of crisis is an old one:  keep your network wide.

While remittances to Mexico took an outsize hit (16 percent over two years), the Philippines offers a contrasting model of overseas work.

Mexicans are closely tied to one place (the United States), and one industry (construction). Filipinos work across the globe in dozens of occupations. Mexican migration is unmanaged and mostly illegal. Filipino workers are promoted by the state, and most go with contracts and visas.

The key lesson:  when you know the vision is on target, don't join in the freakout that naturally comes with any crisis.

No surprise: hottest job of 2018 expected to be biomed engineers

WSJ story.

The list:

• biomed engineers up 72%
• network system analysts (53%)
• home health aides (50%)
• personal and home-care aides (46%)
• financial examiners (41%)
• medical scientists (40%)
• physician assistants (39%)
• skin-care specialists (38%)
• biochemists and biophysicists (37%)
• athletic trainers (37%)

To me, that says an aging population, by definition living a lot longer.

Globalization's great infrastructural buildout: China's grid

WSJ story by Shai Oster.  Pic is of smart-grid demo center in Yangzhou.

GE, Siemens and others all competing fiercely to gain footholds in "one of the world's biggest markets for advanced power transmission and distribution systems."

I remember talking to a GE exec in 2005 in Williamsburg:  he said GE would make the bulk of their future profits on electricity and water alone--in Asia.

At least $100B spent over next decade, comparable to what we're spending for upgrades to our currently, far too dumb grid.  China likewise expected to spend $60-80B per year on gear, but Chinese companies will dominate there, so the smart-grid operation niche is where it's at for the West.  

The BOP (bottom of the pyramid) logic is clear:  

GE says the size of China's expected demand also offers opportunities for economies of scale in smart-grid products.  Long term, that could make products exported to other countries cheaper to produce.  GE said it would expand research facilities it already has in Shanghai.

Right now, China's losses due to bad transmission are roughly tripled that in the West (8% compared to OECD average of 2.5%).

Diasporas around the world, unite!

Economist article, which highlights a favorite theme of mine:  globalization allows for enclavism to flourish even as it forces society to integrate with the larger whole and submit to its overarching rule-sets.

Starts with a meeting in Chicago of NRIs (non-resident Indians as India refers to its ex-pats) who want to encourage market and political reforms back home.  The transmission of such ideas is facilitated by globalization.

The old ethnic lobbying model was regressive and guilt-ridden:  ex-pats working to get their adopted government to support hardline causes back home or supporting them directly themselves with donations. That model dissipates more and more as immigrants are more easily assimilated and no longer form a reliable lobby on such issues.

So what happens when grievances no longer dominate the ex-pat agenda?  You see the residual nationalism refocused on progressive reforms--as in, give your homeland some of the skill and vision you picked up in your successful ex-pat lives abroad.

The social networks facilitate all this wonderfully.

Coming soon to a home theater in your basement!

The gist:

Major Hollywood studies and one of the country's largest cable operators are in discussions to send movies to people's living-room TVs just weeks after films hit the multiplex, a step that would shake up film distribution.

The norm is four months.  The premium charge would be 20-30$ extra.

Understand this:  I take my brood of six total to an IMAX and I drop $100 on tickets and sundries, so I will consider this a great bargain, especially since my high-def projector's always in focus, my sound is excellent, and I control the projector and the audience.

This could come as early as fall, with the first movies affected being those at the tail end of the year or early 2011.

The driver is obvious:  Hollywood is scrambling to figure out how to cut its declining revenue on video and adjust itself to the emerging realities of digital on demand.

Another Big Pharma purchase downmarket

Abbott buys Piramal Healthcare's generic drugs unit for almost $4B, "the latest in a series of deals by Western drug makers to strengthen their presence in emerging markets including India."

This is good, but it also undercuts Big Pharma's arguments about how there's unsafe drugs in unsafe markets and safe drugs in safe markets and never the two shall meet.

I support this M&A activity because I believe the bottom-of-the-pyramid markets should inform Big Pharma as to how it should be able to deliver drugs a lot more cheaply back home.

And it damn well better do so, because those of us American who buy their prescription drugs via Canadian online drugstores know full well that there's no reason for us to be paying these prices when nobody else in the world--either developed or emerging--seems to.

Abbott's big interest in India is that it's mostly self-pay (70%), as opposed to government-controlled--as in Europe.  So Abbott hopes to balance the belt-tightening in the West with the expanding New Core middle class being willing--and able--to spend more on their healthcare.

Whither Central Asia: the South Korean model

An exploration by Banyan in The Economist of the lack of progress toward democracy in Central Asia--and why it will matter more in coming years.

Nice point:  "Central" Central Asia is not, but rather a true periphery--or in my vernacular the Gap's hernia in Asia.

Key point I've been making for a long time WRT the Shanghai Cooperation Organisation:  "Not only America but also Russia and China view the region as a bulwark against militant Islam."  It either goes NE from the Persian Gulf or SW into Africa--or both. We create Africom in Africa as our instrument of bulwark, and Russia and China instinctively reach for what becomes the SCO.  Same concept, similar execution.

But what really seals Central Asia off from radical Islam is being pulled into China's economic orbit, thanks to mineral and energy resources--a 50-fold increase in trade since 1990.  Meanwhile, the West offers aid and advice.

But it's South Korea's growing presence that is the subject here, as well as the admiration for its national development model held by Uzbek president Islam Karimov, who is allegedly obsessed with the nation and its "cleanliness and order."

The analysis:

Yet Mr Karimov and others seem fundamentally to misunderstand the Korean model.  Although government resources were channelled to favoured companies, these firms then had fiercely to compete among themselves and on world markets.  In Central Asia the most successful companies are sinecures of nepotism.

What is more, South Korea's transition to liberal democracy entailed grassroots activism as well as top-down guidance.

Meaning the educated growing middle class was crucial.

Meanwhile, China is described as learning from Kyrgyzstan's mistakes by cracking down on its own NGOs.  

Sounds like China's got the wrong model.

More on Venter's bid for godhood

FT full-page "analysis," plus Economist editorial and briefing.

FT first:

The first application for synthetic genomes may be the rapid development of new flu vaccines . . . "If this technology had been available last year, we could have cut the period needed to make a vaccine for H1N1 by 99 percent," says Dr Venter.  "We could have done it in a day."

The basic reminder:  most life extension is accomplished by defeating everyday disease, not revamping the body.  So the benefits of life extension tend to be fairly democratic, meaning everybody gets them--and not just the super-rich.

Venter, as indicated before here, is focused on creating algae that can suck CO2 out of the air and produce hydrocarbons--great stuff that should be happening here in America. 

From The Economist:

Is the answer lots of new rules?  The better answer is profound openness on developments, so a vote for open-source.  

A key glimpse of the future:  the falling cost of analyzing DNA sequences and the faster and cheaper DNA synthesis.

It's getting better all the time

Matt Ridley hawking his new book, "The Rational Optimist," in the WSJ weekend journal.

The line that got me from the piece, which is good:

Trade was the most momentous innovation of the human species; it led to the invention of invention.

More:

Trade is to culture as sex is to biology.  Exchange makes cultural change collective and cumulative.  It becomes possible to draw upon inventions made throughout society, not just in your neighborhood.  The rate of cultural and economic progress depends on the rate at which ideas are having sex.

Dense populations don't produce innovation in other species. They only do so in human beings, because only human beings indulge in regular exchange of different items among unrelated, unmated individuals and even among strangers. So here is the answer to the puzzle of human takeoff. It was caused by the invention of a collective brain itself made possible by the invention of exchange.

Once human beings started swapping things and thoughts, they stumbled upon divisions of labor, in which specialization led to mutually beneficial collective knowledge. Specialization is the means by which exchange encourages innovation: In getting better at making your product or delivering your service, you come up with new tools. The story of the human race has been a gradual spread of specialization and exchange ever since: Prosperity consists of getting more and more narrow in what you make and more and more diverse in what you buy. Self-sufficiency—subsistence—is poverty.

The fundamental rule-set that underlies all my thinking: connectivity drives code (my security focus) but likewise wealth (my argument that globalization is beneficial).

Strong finish:

The process of cumulative innovation that has doubled life span, cut child mortality by three-quarters and multiplied per capita income ninefold—world-wide—in little more than a century is driven by ideas having sex. And things like the search engine, the mobile phone and container shipping just made ideas a whole lot more promiscuous still.

Again, so much for the myth that we now enter a great period of deglobalization just because of the financial crisis of the past year-and-a-half.  Also, you realize what BS it is to declare globalization some top-down-driven, elite conspiracy.

People connect because they instinctively know it brings them a better, safer, more prosperous life.

Dream all you want about communitarian enclavism as the great alternative salvation, and then realize that it too will be accommodated under globalization--not as a solution but as a means of exploring and retaining individual identity.

Face recognition: the global ID card

Pic here.  FT article.

Google, like Facebook and just about everybody else on the web right now, is suffering privacy issues, hence it has "put the launch of controversial facial recognition technology under review."

But no one expects, argues the article, that Google will back off from the technology, as all sorts of powerful face recognition techs are just hitting the market.

Hell, my new--and tiny--handheld Canon HD digital camcorder/camera does a fascinating job of spotting and tracking faces live as I film or shoot, so if that low-level capacity has reached everybody's personal cameras, you just know that far more profound technologies are being massed by major players.

Most of us have bumped into this technology in travel or across our work days, and there's long been the simple stuff for identifying faces of friends in programs like Apple's iPhoto.  The iPhone's got that bit where you record a snippet of a song and then search the web for its title, so no surprise that companies are rolling out similar technology that allows you to do the same with faces off your phone.

One telecom exec: 

There isn't a single mobile company that isn't interested in this. There are some 800m camera-equipped phones sold each year, but most people don't really use the cameras.  Mobile phone companies are looking for ways to enhance the camera experience.

The fear is easy to imagine:  the ability to snap a photo of somebody, find out who they are, and then be able to pull info up on them instantly, increasing the capacity of stalkers everywhere. Naturally, an Israeli start-up firm, Face.com, is at the forefront of the technology, having already scanned 9bn photos, yielding 52m identities.  Face.com admits it is still defining the safeguards on such a system.

But some smart words from an exec of a Swedish tech firm:

Now people are scared when they see [facial recognition products], but three or our years from now it won't be like that. At the moment, it is hard to control privacy on social networks, but it won't always be that way.  We will see a lot of legal cases over this, and a lot more control given to the user.

I believe he's right, and that this is the normal catch-up phenomenon on rules.

Larger point:  this will be a powerful security tool in a world where violence has largely migrated down to the level of individuals.

WPR's The New Rules: Whatever Happened to Deglobalization?

In the midst of deep crisis, cooler heads rarely hold sway -- at least in the public discourse.  Thus it was that just a year ago, we heard from many experts -- and joyous activists -- that globalization was on its deathbed: The global economy was on the verge of a great and permanent unraveling.  It was to be an inexorable and exact reversal of everything that defined the go-go globalization of the 1990s, replete with social and political unrest of the highest order.  In effectively re-enacting the Great Depression of the 1930s, we even faced the incredible prospect of resumed great-power war.

Read the rest at World Politics Review's "The New Rules" column.

Chart of the day: Battle-deaths in state-based warfare since 1946

From the Human Security Report Project's Mini Atlas of last year.

One of the many bases I cite for the argument that state-on-state war, when compared to the great expanse of human history, has pretty much gone away.

Great Recession did not equate to Great Diet WRT Western food styles

FT story.

Cargill CEO (see other post today) says the growing appetite for processed food, meat and dairy from Western sources has reversed fears that the Great Recession would trigger a significant drop.  The shift to a more Western diet over the past ten years held solid through the crash, unlike in other crashes where typically the locals turn to cheaper traditional staples.

Gregory Page called  the demand "remarkably resilient."

This time around contrasts greatly with the Asian "flu" of 1998-99, when a decade of dietary change was wiped out in 2 quarters.

Again, so much for deglobalization and the great distinctiveness of Asian tastes.