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Archive for March 2011

Food Inflation Kept Hidden in Tinier Bags

Here is an interesting article from the NY Times. It truly optimizes the old adage of “its not the deal you get but the deal you think you get”. This is why marketing is sometimes known as creative manipulation. Check it out here!

-DF

Written by David Frederick

March 29, 2011 at 2:53 PM

Posted in Business, Economics, General

China ‘to overtake US on science’ in two years

As many of you who have followed my blog know, I am very skeptical of China politically and economically which is why I find this latest article from the BBC interesting. In it, the BBC asserts based on a report from the Royal Society, an eminent organization, that China is on course to overtake the US in scientific output possibly as soon as 2013 – far earlier than expected.

What the BBC and the Royal Society dont mention with clarity is that they are basing their “output” measure on “white papers” and other technical documentation. The output of White Paper’s and technical documents is not the true measure of one’s scientific or innovation leadership. Particularly with the Chinese who are know to steal, copy and plagerize just about anything they can get their hands on. Don’t believe me? Just ask the Russians.

What is note worthy is that I don’t believe China currently posses the “innovation gene”…yet. Where the U.S. has this as part of our DNA. This is why the U.S has been the worlds leader in innovation, science and technology advances for two centuries. What does this mean in regards to China? Well, I believe they will find new and different ways to innovate, acquiring their own “Innovation Gene”.  As long as the U.S., EU, Japan, and others outsource their manufacturing to China, the Chinese will eventually figure out how to innovate through a method called Lead User Innovation (for more on this search MIT Professor Eric Von Hipple).

Will China be a bigger player in the innovation of new technologies, scientific advances, etc….. yup. Maybe not in 5 years or even 1o. But the Chinese are smart, resourceful, adept and willing to learn and grow. More importantly, they have the financial and political systems in place to hit innovation really hard over the next 25 years.

Probably the most important issue when looking at the Chinese and their innovation growth potential is that they are patient. They can afford to wait and do it right. Through decades of practical and effective reverse engineering, the Chinese will acquire the skills they need to start applying process frameworks to their ideas and then China will be a major player in both development and manufacturing. This will cause huge financial, technological, political, geopolitical, economic, military and product development issues for the rest of world.

The writing is on the wall for the rest of the world. Step up and get moving or get plowed over by China.  No one should under estimate the potential the Chinese have to compete on the global stage of ideas. Its not enough for just MIT, Harvard,  Stanford, and other research universities to carry the weight of scientific output and innovation leadership. We need a culture of innovation and the means and diverse resources to continue to lead, otherwise we will find ourselves in perpetual catch up mode. Check out the BBC article here!

-DF

Written by David Frederick

March 29, 2011 at 1:37 PM

Japan’s Disaster Sparks Serious Tech Supply Shortage Concerns

As if Japan didn’t have enough problems. Its economy may take decades to recover. But the related consequences on a global scale for technology and consumer electronics could equally devastating. Components such as memory chips and liquid crystal displays that are used in consumer electronics ranging from smartphones to televisions will likely be in short supply in the weeks ahead. This could have huge supply and economic implications for companies like Motorola, Apple, HTC, Samsung, Vizio, Sony and many others both in OEM and Retail.

I remember back several years ago when a memory chip manufacturer’s facility in Taiwan caught fire and burn to the ground. That single event raised the price of RAM to huge levels. In the current case, Japan is home to several memory chip makers, including Elpida Memory Inc. and Toshiba Corp., the world’s second-largest NAND flash memory chip producer by revenue after Samsung Electronics Co. of South Korea. Obviously, this is a very volatile industry with a select group of manufactures, most located in Japan, Taiwan, or Korea.

To underscore my point, “We expect phenomenal price swings and large near-term shortages as a result of this earthquake,” said Jim Handy, an analyst at Objective Analysis. “Over 40% of the world’s NAND flash … are manufactured in Japan. It doesn’t take a large production decrease to cause prices to increase dramatically.” All I can say is what a mess. Humanitarian crises, energy crisis, economic crisis all on unprecedented levels and that’s just in Japan. The fragile world economy can not sustain huge hits like this without major economic repercussions. I fear, we are only at the beginning of the economic aftershock of this catastrophe for both the people of Japan and the world.

The WSJ has a very interesting article on this topic. Check it out here!

Written by David Frederick

March 15, 2011 at 10:07 AM

Technology Will Make Collaboration Your Next Competitive Advantage

MIT Technology Review recently had a great article by Jeff Rayport on the competitive advantages of collaboration. In it, he discusses how new tools are changing the way people work with each other, their companies’ partners, and their customers. Jeff articulates some very interesting points on the obvious and not so obvious advantages of utilizing collaboration as a sustainable and effective competitive advantage.In today’s distributed work place, taking collaboration to new a level is not only smart, but a competitive imperative.

Here is a brief excerpt from Jeff’s article:

Since the dawn of managerial capitalism, collaboration and work have almost always been synonymous. People need other people to realize their greatest impact, and innovation, perhaps the most valuable activity in business, depends critically on the kind of cross-pollination of ideas that collaboration enables.

But technology has changed how we collaborate, especially since the communications revolution began 150 years ago with the telegraph and the telephone. This wave of change continued with the commercialization of the fax machine in the 1970s and of e-mail in the 1980s. The last 20 years have brought a convergence of communications and computing technologies that has expanded the possibilities for technology-enabled collaboration, whether synchronous or asynchronous, proximal or distant. With voice mail, videoconferencing, instant messaging, chat forums, blogs, wikis, social networking, microblogging (through services such as Twitter and Foursquare), voice-over-IP, telepresence, and, of course, mobile communications and computing, never have we had so many ways to collaborate without having to be in the same place at the same time.

To read the full article, check it out here!

-DF

Written by David Frederick

March 14, 2011 at 11:16 AM

The dangers of “e-personality”

As if we didn’t already know this….

Excessive use of the Internet, cell phones, and other technologies can cause us to become more impatient, impulsive, forgetful and narcissistic according to a new book on “e-personality,” say psychiatrist Elias Aboujaoude, MD, clinical associate professor of psychiatry and behavioral sciences and director of Stanford University’s impulse control and obsessive-compulsive disorder clinics, in a new book, Virtually You: The Dangerous Powers of the E-Personality.

Drawing from his clinical work and personal experience, he discusses the Internet’s psychological impact and how our online traits are unconsciously being imported into our our offline lives. Check out Dr. Elias Aboujaoude’s new book if this is of interest.

-DF

Written by David Frederick

March 11, 2011 at 12:18 PM

The End of the Dollars Reign

The end of the U.S. dollar’s reign as the world reserve currency. This issue has been of strong interest to me for the past 5 years. Why? Because of the cataclysmic impact it would have on U.S. Businesses, the U.S. economy, and ultimately you and me and our families. Let me break this down in a very simple way.

  1. The U.S. dollar is currently and for roughly the last 50+ yeas has been the world’s reserve currency.
  2. This means when Non-U.S. businesses want to buy, import, export, or sell things globally, they have to first purchase U.S. Dollars in which to conduct the transaction. this is expensive for them.
  3. When global companies price products for the global markets i.e. OPEC, they do so in U.S. Dollars.
  4. There are many reasons for this – stability of the dollar, the track record of the U.S. of honoring its debt, treasure bonds, U.S. economic strength, etc.
  5. A huge advantage of being the United States is that since our currency is the standard, we do not have to purchase U.S. dollars to conduct business in the U.S. or globally. We don’t have to include huge risk and fluctuations of world currencies in our business transaction, the U.S. consumer is not directly subjected to global currencies fluctuations on a large daily scale. We don’t have to sell dollars to buy Yuan, Peso’s, etc. and absorb the currency difference and then sell or buy in Yuan’s, etc.
  6. This is one of the perks of being the worlds largest economy and economic leader….. until now.

With China and India becoming huge economies, # 2 and #3 respectively behind the U.S.,  it is predicted by many that in the next 10-20 years, China will surpass the U.S. and then in 10 years further, India will surpass China as the worlds largest economy. Already with huge deficits in the U.S., inflation creeping in, the cost of U.S. goods going up across the board, things are already precarious. If the U.S dollar was to be devalued further by say 20% and/or the world decides to use multiple currencies as the currencies reserve i.e. Chinese Yuan’s or Euros instead of OR in addition to the dollar, things could get real bad for a fragile U.S. economy and the impact on U.S. business and consumers could be cataclysmic.

The cost of everything we do, build, buy, sell, earn, etc. would sky-rocket to a proportion unimaginable. No this isn’t a doomsday prediction. Its reality. Already, China, Russia, France, Brasil, the World Bank, OPEC and others are all calling for and openly discussing moving away from the U.S. dollar as the worlds currency reserve. This is real folks and will most likely happen in the next 5-10 years. I personally believe the EURO and Yuan need some time to mature structurally and get its act together, but it’s coming. China and the EU are taking measures to shore up their currencies to be a viable competitor. Even having competition and multiple world currency reserves could have huge impacts for the U.S. and its people and businesses. When you look at a $14+trillion-dollar U.S. deficit, uncontrolled spending, major entitlement issues like social security, medicare, pensions, etc. unresolved and bankrupting the country, states and local governments, etc. we have our work cut our for us in the U.S. The last thing we need is a major impact to our currency status. That could be the one thing that knocks the U.S. over the tipping point of economic collapse i.e. restart and rebuild mode. The impact of that is almost unimaginable. Who will bail us out? China? No way.

Check out this related article from the WSJ where several economists from UC Berkeley discuss this very issues. Personally, I think they understate the impact to the U.S. economy, but it is a good read. Check it out here!

-DF

 

Written by David Frederick

March 3, 2011 at 10:20 AM

Mission Possible…Really?

I came across an interesting article on avoiding impossible assignments that started me thinking of all the suicide missions and impossible assignments I had taken on over my career. Why do we do it? Challenge? A sense of accomplishment? Ego? Because it needed to be done and done right? Maybe someone you respected really needed your help. Who knows. Maybe all of the above. But with most impossible assignments, how you prepare, execute and communicate through the assignment are critical to the overall success of the assignment.

Pricilla Clamen wrote an interesting blog article about how to avoid impossible assignments and even better, offers some unique advice on how to prepare and execute should you find yourself in this precarious positions either through your own willingness (which means you ignored her advice) or by necessity. Either way, its a good read with some valuable insight. Check it out here!

-DF

PS: Remember, if someone asks for volunteers, watch out for those that step backward not forward.

Written by David Frederick

March 2, 2011 at 10:27 AM