Enterprise Resilience Management Blog

Seeking Security and Development in Afghanistan

I have often written about how development and security go hand in hand. Although security generally precedes development, it is not by much. In almost all situations where there is or has been a crisis, you are likely to find humanitarian organizations in place. While many of these groups are concerned with the immediate health and welfare of the victims of crisis, you will also often find non-governmental organizations in the area whose focus is on development and the long-term health and welfare of the local population. In areas where there are absolutely no assurances of security, you are likely to find no help at all. There are, apparently, many such areas in Afghanistan. They are the focus of a recent column by David Ignatius ["Building Bridges in the Back of Beyond." Washington Post, 1 May 2008]. Ignatius focuses on the work being done by Lt. Col. Chris Kolenda of the U.S. Army. Ignatius begins his narrative in Naray, Afghanistan.

"This remote, mountainous patch of Afghanistan is near where Rudyard Kipling set his famous story 'The Man Who Would Be King.' And as you listen to Lt. Col. Chris Kolenda rattle off the names of the region's tribes and subtribes, you realize that he and other Americans here might be Kipling characters themselves. Kolenda's base truly is 'the back of beyond,' as 19th-century British travelers sometimes described this part of the world. It's located in a hauntingly beautiful region of northeastern Afghanistan, a few miles from the Pakistan border -- a land of steep mountains, narrow river valleys and primitive terraced farms. There are no paved roads, and in most villages there is no electricity and no running water. You reach the base by Black Hawk helicopter, soaring above the rushing rivers and isolated canyons of the Hindu Kush."

It is into these isolated, disconnected areas that insurgents and terrorists like to flee. The only way to dislodge them is with the help of the local populace. That is the objective Lt. Col. Kolenda is pursuing.

"Kolenda talks like an amateur ethnologist as he explains the tribal makeup of Kamdesh, an area just north of here where U.S. forces have been trying to woo the elders and mullahs away from the insurgents. He identifies a main tribe, four subtribes and 12 clans, each with its own history of feuds and friendships. If the U.S. military doesn't understand the local culture, Kolenda explains, it will make mistakes in trying to forge alliances that can stabilize the area. The surprising fact is that Kolenda, a Nebraska native, and his soldiers in Task Force Saber are having some success. When he arrived here last June, this area was mostly a no-go zone for U.S. forces. That meant some hard fighting last summer to drive the insurgents away from population centers and deeper into the mountains."

Once U.S. forces had achieved a bit of security, Lt. Col. Kolenda could help local leaders visualize a better future with the promise of development. Like all people, those in the "back of the beyond" want some hope in their lives.

"Once he had pushed back the insurgents, Kolenda's strategy was to re-empower the traditional tribal structure, which had lost sway during 30 years of war to a new elite with guns and money. Working through tribal shuras, or local councils, he offered the elders a deal: If they would provide security, he would bring them economic development in the form of roads, bridges, schools and health clinics. He financed these projects mostly with quick cash from the Commander's Emergency Response Program, or CERP, which has proved to be one of the most potent American weapons in Iraq and Afghanistan. Kolenda gradually won the tribal leaders' trust, traveling to one insurgent haven 16 times to meet with the elders. This year, attacks on U.S. forces in most parts of the region have largely ceased."

Kolenda is performing the work of a group that my partner Tom Barnett calls the System Administration Force. The objectives of such a force are achieved using non-kinetic means (i.e., they don't want to blow things up -- they want want to build things up). Tom's vision of this force is one that is less military and more civilian. There are, in fact, non-military government personnel involved in this work.

"Alison Blosser, a young State Department officer, is using a similar approach to help guide the Provincial Reconstruction Team for Kunar province, based south of here in Asadabad. An Ohio State graduate, she speaks fluent Pashto, which she learned before taking up her previous assignment at the U.S. consulate in Peshawar, Pakistan. Dressed in a head scarf and body armor, she might be a modern version of Gertrude Bell, the celebrated British adventurer and colonial administrator of the 1920s. Blosser and her colleagues have employed what they call a 'roads strategy' to bring stability to Kunar. The biggest project so far was building a paved two-lane road from Jalalabad in the lush flatlands up the Kunar River valley to Asadabad. The road is a magnet for economic development in what had been an insurgent stronghold, and the PRT is planning new roads into what Blosser calls the 'capillary valleys' where the insurgents have fled."

Building infrastructure is a necessary precursor to real development work; but, as Ignatius points out, put in a road and economic development follows. Ignatius goes on to report that the old adage "success breeds success" is just as true at the edges of globalization and beyond as it is in the developed world.

"The tribal elders see the prosperity the new roads have brought and want the same for their villages. 'We say, "Fine, but you have to guarantee security,"' Blosser says. That's the essence of the counterinsurgency strategy U.S. forces are using in Afghanistan. As the military clears new areas, the PRTs follow quickly behind with roads, bridges and schools."

The secret to the success of such programs is that promises made must be promises kept. If they are not, unfulfilled expectations quickly turn into anger. Ignatius concludes:

"Back in Kabul, Gen. Dan K. McNeill, the overall commander of American forces in Afghanistan, reflects on how the counterinsurgency battles have changed the U.S. Army. Back when he was a battalion commander in the 1980s, he says, 'I thought the world was move, shoot and communicate.' The new generation, he says, understands that these traditional warrior skills won't win today's counterinsurgency wars. The modern term for what these American soldiers and diplomats are doing in Afghanistan is 'nation building,' but some of the strategies and skills are reminiscent of the old British Colonial Office. America has had little experience in this kind of faraway struggle but, as McNeill says, the Army is a 'learning institution,' and it's gradually learning how to fight this kind of war. Yet it should be remembered that even the wily British colonial administrators and brave regiments of the Raj couldn't subdue Afghanistan's warlords."

The military has come a long ways over the past decade and a half when it comes to understanding how important nation building is to creating stability. The Bush administration was dead set against nation building when it first came to office. It was not just the Bush administration that had it doubts. As I wrote in a previous post on the SysAdmin force, there was more than a little initial reluctance to nation-building when the term and potential mission first emerged. In fact, it was considered '"mission creep" and was anathema to many military leaders. Clinton Secretary of Defense William Perry remarked, "Generally the military is not the right tool to meet humanitarian concerns. We field an army, not a Salvation Army." There is a much better understanding now about the relationship between humanitarian needs and security. As a result, we are seeing programs breeding success in remote areas where fighting has never achieved peace.

Closing the Tech Gap in the Middle East

When my partner Tom Barnett first published his New York Times best-seller The Pentagon's New Map, the Middle East was near the center of the disconnected group of states he labeled the Gap. Countries in that region (with some exceptions, like Israel) have been slow coming on line, but that may be changing according to a short article in BusinessWeek ["Playing Catch-up in Tech," by Jennifer Fishbein, 28 April 2008 print edition].

"To diversify their economies, Mideast nations have been increasingly investing in technology. According to the latest annual Global Information Technology Report, high-tech readiness has improved more in these countries, some of them major oil producers, than anywhere else."

Tom has argued that it is important for the Middle East to diversify and open up so that it can hold a conversation with the world over something other than oil and terrorism. During the peak of the Ottoman empire, Muslim culture was often the center of the world's dialogue. Everything from Middle Eastern architecture, to poetry, to mathematics was admired and copied. Getting on-line is the first step down a path that could help recapture some of that historical luster. According to experts interviewed by Fishbein, leaders in Middle Eastern countries understand that the current flush times cannot last if they don't take advantage of the current glut of oil money pouring in to prepare for the future.

"'They're realizing the current oil shock is indeed the last one,' says Bruno Lanvin, executive director of the eLab at INSEAD, the French management school, that, along with the World Economic Forum, released the study."

According to Fishbein, the Global Information Technology Report assesses the economies of 127 participating countries on a myriad of topics ranging from Internet bandwidth and the cost of mobile calls to the quality of higher education. Even with marked improvements, Middle Eastern countries still have a long ways to go.

"No Mideast nation ranked anywhere near the top. (Denmark and Sweden took the No. 1 and No. 2 spots. The U.S. was No. 4.) But Egypt (No. 63), a minor oil player, rose 14 places from its rank last year—the biggest jump in the sample—in part because of its efforts to become a locale for outsourcing tech operations. Saudi Arabia, participating in the study for the first time, made it to No. 48."

In a post I wrote last November [Education in Saudi Arabia], I noted that one of the oft-leveled charges against the royal house of Saud is that is has generally failed to invest its vast oil wealth in infrastructure that will help the kingdom and its people once oil revenues start to decline. The post, however, was about King Abdullah's multi-billion dollar bid to catch up with the West in science and technology by constructing the King Abdullah University of Science and Technology. Although the University will be gated community, life inside the walls could well point the way to further cultural breakthroughs there. Fishbein reports there are other efforts in Saudi Arabia as well to become more tech savvy.

"In January, Cisco Systems agreed to provide the tech infrastructure for a 'knowledge economic city' in the country's Al Madinah province, which hopes to attract high-tech multinationals."

Although these are small steps, they are backed by big bucks. The movement is in the right direction and that should be encouraging for people both in and out of the region.

Financial Globalization

Globalization rests on three principal flows: people, resources, and capital. The Economist, however, published an article questioning whether the free flow of capital is really a good thing for developing countries ["Policing the frontiers of finance," 12 April 2008 print edition].

"When Hank Paulson, America's treasury secretary, urged China to liberalise its capital markets earlier this month, he sensed a hardened reluctance in his hosts. 'There's no doubt that what is happening in the US markets is clearly giving the Chinese pause,' he said. America's subprime meltdown is not, it seems, the best advertisement for unfettered finance elsewhere."

The article has a point, it was the lack of regulation of the mortgage industry that created the crisis (along with the anti-savings, credit spending U.S. culture). The article goes on to note that the theory behind financial globalization and the reality of capital flows seem to be different. At least, the article notes, its hard to prove the theory either right or wrong.

"Against this backdrop, Dani Rodrik of Harvard University and Arvind Subramanian of the Peterson Institute, in Washington, DC, have published a timely reappraisal of financial globalisation. They conclude that it is far from obvious that developing countries benefit much from opening up to global capital. In principle, the free flow of capital across borders makes funds available more cheaply to poor countries and, by lifting investment, boosts GDP and raises living standards. The trouble is, economists have struggled to establish a strong link between freer capital flows and speedier economic development. That has not stopped researchers from looking, and many believe a tangible connection will soon be found. Perhaps the effect is not picked up in studies because capital flows are hard to measure accurately, argue the optimists. Messrs Rodrik and Subramanian are not convinced: measurement error bedevils many studies, but that has not barred researchers from establishing that policies to improve education or trade are good for growth."

In other words, if good policies can improve education and trade, good financial policies ought also to be good for growth. The question remains, what is good financial policy? The article continues in its search.

"Perhaps foreign capital helps indirectly—by disciplining policymakers or by promoting reforms that improve the financial system. The authors say it is possible to make the opposite argument and find indirect costs. Plausibly, lifting restrictions on capital flows could undermine the domestic financial system because spendthrift governments can tap a larger pool of funds abroad. Also, the well-off have less incentive to lobby for reforms at home if they are free to store their wealth overseas. Perhaps, then, the gains from globalised finance are latent and will be unleashed once catalysing reforms are in place? Maybe they will. But the wish list of complementary measures is difficult to tick off. Economies might reap the benefits of foreign capital more fully if property rights were stronger, contracts were more enforceable, and if there were less corruption and financial cronyism. But the authors point out that if poor countries could carry out such ambitious reforms 'they would no longer be poor' and financial globalisation would be 'a clearly dispensable sideshow'. With so much else to do first, liberalising capital flows would not be an obvious policy priority."

Reforms must be made and claiming that legal reforms can't be put in place by poor countries sounds patronizing. There is clearly more than one theory, financial or otherwise, at play here. If global capital is simply a credit line for poor countries, then perhaps Rodrik and Subramanian are justified in their pessimism. A certain amount of credit is needed by poor countries -- if they wisely invest it in physical and human capital (roads, education, etc. and on better governance). That's important because some infrastructure needs to be in place to attract the more important capital -- foreign direct investment. FDI is not just a measure of investment it means real jobs for real people. That's how you get a better quality of life. As American's are learning, the "good life" can only be bought on credit until the bills come due. The article continues.

"Foreign capital ought to be good for countries that have profitable ventures that lack funding because of low savings at home. But Messrs Rodrik and Subramanian argue that for many countries, it is not low savings but a shortage of good investments that is the binding constraint. Weak property rights, poorly enforced contracts and the fear that profits will be siphoned away make it hard to conceive of ventures that might generate a reliable return. When investment opportunities are scarce, capital inflows simply displace domestic savings and encourage consumption."

I harbor no disagreements with Rodrik and Subramanian on these points. The work that Enterra Solutions is doing in Iraq is focused on helping find good investments -- companies that can produce goods for sale domestically and internationally. Part of our efforts is aimed at strengthening the financial sector of the country. Rodrik and Subramanian agree that strengthening that sector is important for development.

"Whatever their misgivings about cosmopolitan capital, the authors do not deny that deeper financial markets in general help to foster prosperity. Even in economies short of good investment projects, a sturdier channel connecting domestic savers and borrowers will help growth. The more domestic savings can be put to work, the less need is there for foreign capital, and using local funds helps keep the exchange rate down and promotes export growth. By contrast, encouraging foreign capital to flood in can put upward pressure on the exchange rate, making exports less competitive. In some circumstances, capital controls may be justified if they keep the currency cheap and promote growth."

The key to prosperity argue Rodrik and Subramanian are exports.

"Why do the authors make such a strong case for export-led growth as a means to development in poor countries, even if it is at the expense of more open capital markets? First, they believe, exports are a force for institutional reform. A firm making clothes to sell abroad demands consistent state regulation, reliable transport links and enforceable contracts with suppliers to a degree that a barbershop serving the domestic market does not. Second, exporters foster skills, technology and expertise that can fruitfully spill over to other enterprises."

Bingo! Rodrik and Subramanian have identified many of the puzzle pieces Enterra Solutions is helping put together in Iraq. This effort has to work hand-in-hand with the government. The Chinese are certainly learning a hard lesson about regulation and enforcement. There is no reason that each developing country has to learn that lesson anew. By implementing proven, internationally recognized policies, procedures, and regulations, developing countries can start to worry more about enforcement than enactment. That will help them gain the trust of the international marketplace must faster and make their goods more attractive to a larger audience.

Globalization, Food, and Resilience

Anthony Faiola, writing for the Washington Post, discusses why globalization hasn't fulfilled the hope that it would end world food shortages and the devastation such shortages bring ["Where Every Meal Is a Sacrifice," 28 April 2008]. He begins his report in Mauritania with a visit to a 39-year-old laborer and her family. The woman had just slaughtered her family goat for food, with the full knowledge that in the long-run it would make her family worse off than before. The goat's milk had supplied the family with milk each morning. Once the goat meat is gone, they will be left with nothing. Faiola reports that scenes like this are occurring all over the developed world as the poor try to cope with rising food prices. In an earlier post [Rising Food Prices take the World's Stage], I discussed some of the reasons for the rise in prices (e.g., climate change and increased demand of grain for biofuels). In a later post [Cultivating the Right Biofuel], I added another reason pointed out by New York Times columnist Roger Cohen; namely, globalization's success means that more people can afford to eat better. While true, it is of little comfort to those yet touched by the benefits of globalization. Faiola writes:

"Like most of the world's poorest nations, Mauritania is caught in a global food trap, producing only 30 percent of what its people eat and importing most of the rest. As prices skyrocket, those who can least afford it are squeezed the most as the world confronts the worst bout of food inflation since the Soviet grain crisis of the 1970s. Strong global demand and limited supplies are key factors driving up prices, but perhaps just as important is a massive disruption in the free flow of global trade. In recent months, food-producing countries from Argentina to Kazakhstan have begun to slam shut their doors to protect domestic access to the food they grow. Agriculturally challenged countries are left out in the cold."

Even before food shortages started to worry food-producing nations, globalization had failed in the agricultural area in that developed countries refused to remove agricultural subsidies at home while demanding the removal of tariffs abroad. All of this was supposed to be cleared up with the negotiation of the so-called Doha round of trade talks. Unfortunately, those talks are moribund. In a post about the Doha round of talks [Doha Trade Talks & Globalization's Future], I wrote that special interests had killed it. Quoting from that post:

"The 'special interest' in this case was primarily agriculture. Developing states want tariffs removed from agricultural products imported into developing nations, while farmers in developing states fear that an influx of cheap agricultural products from abroad will ruin the market for domestic products. Emotions always run high whenever domestic food production is discussed. History is filled with tales of famine and death and that specter haunts the collective conscience of most nations. The Economist, however, believes a diminishing commitment to global trade is also at fault.

"'It is not just the narrow business of the Doha round (if narrow is a fit adjective for an ambition to lift millions out of poverty, curb rich countries' ruinous farm support and open markets for countless goods and services) that is at stake. In the long run, the lack of commitment to multilateral trade that sank the Doha round this week will also start to corrode the trading system as a whole.'"

That is precisely what happened according to Faiola:

"Globalization was supposed to eliminate this kind of recurring disaster. With economists radiating confidence about the new efficiencies of the global market, the need for food self-sufficiency seemed almost archaic. In that new reality, global markets would provide the long-term cornucopia that the arid earth here [in Africa] could not, and at reasonable prices. But it turned out that globalization did not really work for food. Countries, especially rich ones, felt compelled to continue protecting their farmers and their domestic food supply even as they pushed for trade liberalization for manufactured goods. It distorted the market, which didn't adjust as global demand surged and production flagged."

In light of the current situation, proponents of protectionism will more than likely trumpet the wisdom of their past actions. There is certainly no argument against the importance of food security, the challenge is how to create food security for those living in areas incapable of producing sufficient food for those who live there and who are too poor to buy it on the open market (even if it were available). Any resilient strategy will include contingency plans for bad times; that is what many African states are currently scrambling to do. Back in September 2006, I wrote a post about how the Bill & Melinda Gates Foundation are teaming with the Rockefeller Foundation to try and create a "green revolution" in Africa [Gates & Rockefeller Foundations Tackle Food Security in Africa] so that countries there are not entirely held captive by the global trading system. Such a revolution takes time, however, and it has yet to bear sufficient fruit to resolve the current crisis. Faiola continues:

"Mauritania knows it must bear more of its own food burden. All around, food-producing countries are barring the doors to foreign trade. Argentina raised soybean and sunflower export taxes to as much as 44 percent. Russia has quadrupled wheat-export taxes to 40 percent. Kazakhstan, one of the world's biggest wheat exporters, halted foreign sales altogether. Rice prices shot to a record high after Indonesia stopped its farmers from selling the grain abroad. At the same time, import-dependent countries that can afford the higher prices are hoarding. Wealthy Singapore is stockpiling rice. Malaysia is creating a new government agency to stockpile foodstuffs. Many countries, including Mauritania, have dropped long-standing import taxes to facilitate trade and lower prices at home. But with global supplies running short, the measures have had limited effect in controlling prices here. Importers in Mauritania, for instance, say they have roughly a 45-day supply of key commodities such as wheat."

Faiola goes on to report that it is not just land-based agriculture that is affecting the food budgets of the poor. Fish stocks around the globe have declined and rising prices for fish means that the best fish are finding their way onto the tables of the rich; once again leaving the poor's table bare. The crisis creates other rippling challenges as well. Men leave family and farm to find enough work to buy food. Often this means a farm lies fallow during the next planting season -- exacerbating the problem. As noted above, those with livestock are selling or eating their future.

There are bound to be a lot of lessons learned during this current crisis. Let's hope they lead to a more resilient food security strategy. Mankind has been trying to eliminate hunger since before recorded history, but we have yet to discover a strategy resilient enough to cover everyone everywhere.

China Discovers Lawyers

In America, lawyers can be ridiculed with humor without touching off any of the "political correctness" alarms raised when other groups are attacked. Attacking lawyers, of course, is nothing new. In the New Testament we read, "Woe unto you, lawyers! for ye have taken away the key of knowledge." Florynce R. Kennedy, herself a lawyer, once said, "The question arises ... whether all lawyers are the same. This is like asking whether everything that gets into a sewer is garbage." Perhaps the most famous line ever written about lawyers is contributed to William Shakespeare. In his play Henry VI, Dick the butcher utters, "The first thing we do, let's kill all the lawyers." The fact is, however, that when lawyers are needed -- to protect their rights or provide defense -- people quickly put aside their negative perceptions and embrace lawyers as friends if not saviors. Still, people elsewhere marvel that America is such a litigious society. Lawsuits are often viewed as a road to an easy fortune. Lawyers are, in part, responsible for creating this culture through advertising, class action lawsuits, and contingency cases. Legal costs, however, are a necessary (and worthwhile) business expense, especially when it comes to copyrights, patents, and protecting intellectual property. This is a lesson the Chinese are quickly learning ["850,000 lawsuits in the making," The Economist, 12 April 2008 print edition].

"Western firms are always complaining about the theft of intellectual property in China. From knock-off designs to copycat brand names, pirated music and fake drugs, China has a well-earned reputation as a free-for-all when it comes to patents and copyrights. Worse, there often seems little hope of redress: the courts are too distant and too incompetent; the laws are too weak or too vague; the culture is too resistant to the very idea of intellectual property. Yet help is at hand, in the form of Chinese firms with patents to defend. Since 2003 the number of trademark applications has grown by 60%; the number of patents has nearly doubled (850,000 are now active) and the number of lawsuits about intellectual property has more than doubled. The government is encouraging the trend in many ways, including signalling to the press to cheer it on."

With Chinese political leaders openly encouraging their scientists and engineers to become more innovative so that China can become a global leader in innovation, this trend is likely to have legs.

"This enthusiasm marks a dramatic change. During the Maoist era, private property of any kind was seen as theft from the masses, and so subject to just expropriation. Only in 1985 did China begin to enact laws to protect patents. It did not enforce them much until 2001, when the authorities promised to crack down in order to win admission to the World Trade Organisation. China has since opened more than 50 courts that deal solely with intellectual-property cases, and Chinese firms are using them. Prominent litigants include a pram manufacturer protecting designs, a soya-milk producer defending an industrial process and a maker of Chinese medicines shielding a name that, roughly translated, means 'mind and blood purge'. As companies in China establish brands and develop products, the incentive to sue will grow, particularly because the cost of bringing a case is minimal. 'If you can afford a car, you can afford a lawsuit,' says Tony Chen, who works in the Shanghai office of Jones Day, an international law firm."

Although there has been an increase in lawsuits by individuals in China, Chinese leaders' enthusiasm for legal action is limited to helping businesses protect their interests. Human and civil rights enforcement are not greeted with the same eagerness. Another difference between the Chinese legal system and America's is that juries are largely uninvolved.

"In America, firms often settle intellectual-property cases out of court for fear of enormous awards by juries. That is not true in China, Mr Chen says, where a judge rules in the majority of cases and damages tend to be small. They normally cover legal costs, however, turning lawsuits into a self-funding method to battle piracy."

That's where the American and Chinese systems share a lot in common.

"Unsurprisingly, the main beneficiaries of the sudden interest in intellectual property are Chinese lawyers. Some reportedly earn more than $5m a year. Non-Chinese law firms sometimes provide advice on thorny cases. But they are not allowed to file patents or appear in court on behalf of a client—a proprietary process that Chinese lawyers are keen to defend."

If the lawyers turn out to be the primary beneficiaries of lawsuits, Chinese jokes about lawyers won't be far behind. For foreign companies that have seen their intellectual property rights ignored by Chinese firms, this new interest in protecting such rights is long overdue. Whether foreign IP rights will be pursued with the same enthusiasm as the protection of Chinese IP rights remains a question to be answered.

Cultivating the Right Biofuel

The news has been filled lately with reports of food shortages and rising prices. There have been reports of food hording, even in the United States. In response, places like Costco and Sam's Club have put restrictions on how much rice their customers can buy. I've written a couple of posts on the connection between rising food prices and the increased production of biofuels [Search for Oil Alternatives Pushes Food Prices Higher and Rising Food Prices take the World's Stage]. I made it clear in the latter post that using food sources to produce biofuel was only one of the reasons that food prices were rising. New York Times columnist Roger Cohen is concerned that the current food crisis could cripple the biofuel industry and he, like many others, believe that would be a big mistake ["Bring on the Right Biofuels," 24 April 2008]. He writes:

"Fads come fast and furious in our viral age, and the reactions to them can be equally ferocious. That's what we're seeing right now with biofuels, which everyone loved until everyone decided they were the worst thing since the Black Death. Where fuel distilled from plant matter was once hailed as an answer to everything from global warming to the geo-strategic power shift favoring repressive one-pipeline oil states, its now a 'scam' and 'part of the problem,' according to Time magazine. Ethanol has turned awful. The supposed crimes of biofuels are manifold. They're behind soaring global commodity prices, the destruction of the Amazon rain forest, increased rather than diminished greenhouse gases, food riots in Haiti, Indonesian deforestation and, no doubt, your mother-in-law’s toothache. Most of this, to borrow a farm image, is hogwash and bilge."

It's clear that Cohen believes that he must fight hyperbole with hyperbole. Turning food crops into biofuel is "part" of the problem, but that doesn't make it awful or a scam. Cohen tries to dismiss the issue with sarcasm, and that doesn't help the case he is trying to make. Having vented, however, Cohen does start building his case for the "right" biofuel.

"I'll grant that the fashion for biofuels led to excess, and that some farm-to-fuel-plant conversion, particularly in subsidized U.S. and European markets, makes no economic or environmental sense. But biofuels remain very much part of the solution. It just depends which biofuels."

Before he gets to meat of his argument, Cohen insists on debunking arguments that he feels are getting in the way of good policy. Some of the factors that Cohen writes about are ones mentioned in my last blog on the subject.

"If Asian rice prices are soaring, along with the global prices of wheat and maize, it's not principally because John Doe in Iowa or Jean Dupont in Picardy has decided to turn yummy corn and beet into un-yummy ethanol feedstock. Much larger trends are at work. They dwarf the still tiny biofuel industry (roughly a $40 billion annual business, or the equivalent of Exxon Mobil's $40.6 billion profits in 2007). I refer to the rise of more than one-third of humanity in China and India, the disintegrating dollar and soaring oil prices. Hundreds of millions of people have moved from poverty into the global economy over the past decade in Asia. They're eating twice a day, instead of once, and propelling rapid urbanization. Their demand for food staples and once unthinkable luxuries like meat is pushing up prices. At the same time, the rising price of commodities over the past year has largely tracked the declining parity of the beleaguered dollar. Rice prices have shot up in dollar terms, far less against the euro. Countries like China are offloading depreciating dollar reserves to hoard stores of value like commodities. Food price increases are also tied to oil being nearly $120 a barrel. Fossil fuels are an important input in everything from fertilizer to diesel for tractors."

Cohen didn't talk about the drought in Australia that had a major impact on the global rice supply. I found it interesting that he tried to turn a negative story (i.e., food shortages and rising prices) into a positive story (i.e., prices are going up and supplies are going down because globalization has helped billions of people out of poverty and they can now afford to buy and eat more food). Cohen now turns to the subject he was eager to discuss -- the right biofuel.

"Another myth that needs nuking is that the Amazon rain forest is being destroyed to make way for Brazilian sugar-cane ethanol. Almost all viable cane-growing areas lie hundreds of miles from the rain forest. Brazil has enough savannah to multiply its 3.5 million hectares of cane-for-ethanol production by ten without going near the Amazon ecosystem. Brazilian rain forest is burning, as it long has, for a complex mix of economic reasons. ... biofuel is not one of them. The danger in all this anti-biofuel hysteria is that we'll throw out the baby with the bath water. ... What's clear is that ethanol presents the only technically and economically viable alternative for large-scale substitution of petroleum fuels for transport in the next 15 to 20 years. It's not a panacea, but it's a necessary bridge to the next technological breakthrough. The question is: which ethanol?"

The right biofuel, Cohen argues, is ethanol produced from sugarcane. After all, we know that sugar makes you fat and rots your teeth. Why not put it to a more productive use and decrease diabetes around the world at the same time.

"Right now, the biofuel market is being grossly distorted by subsidies and trade barriers in the United States and the European Union. These make it rewarding to produce ethanol from corn or grains that are far less productive than sugarcane ethanol, divert land from food production (unlike sugarcane), and have dubious environmental credentials. What sense does it make to have a surplus of environmentally friendly Brazilian sugar-based ethanol with a yield eight times higher than U.S. corn ethanol and zero impact on food prices being kept from an American market by a tariff of 54 cents on a gallon while Iowan corn ethanol gets a subsidy? 'It would make a lot more sense to drop the tariff, drop the subsidy, and allow Brazilian ethanol into the United States,' said Philippe Reichstul, the chief executive of a biofuel company in São Paulo. 'Pressure on U.S. land will be slashed.' The United States and Europe should maintain their biofuel targets. Pressure to scrap a European plan for renewable fuels to supply a tenth of all vehicle fuel by 2020 must be resisted while rethinking the policies that favor the wrong biofuels. The real scam lies in developed world protectionism and skewed subsidies, not the biofuel idea."

In an earlier post, I focused on the nascent algae biofuel industry. Although there are significant technical challenges in turning algae into biofuel, finding solutions to those challenges would open up vast new non-food source areas for producing biofuel. Cohen is correct that we need to be smart as we move forward. Discarding biofuels is not necessarily the smart thing to do.

IBM Heads into the Clouds

Over the past several months, I have written three posts dealing with IBM's involvement in a concept known as cloud computing [The Coming Age of Cloud Computing, The AIR is getting Blurry with Clouds -- Computing that is, and IBM's Big IT Bets]. The posts dealt mostly with the potential of this new concept. New York Times' columnist Steve Lohr reports that IBM has now taken the first steps towards creating a cloud computing market ["Cloud Computing Gains Steam With New I.B.M. Gear," 23 April 2008].

"I.B.M. is entering the market for Internet-focused data centers with computer systems designed to reduce power consumption sharply and take up less floor space. The move by I.B.M. ... is the most recent sign that the major computer makers are beginning to compete aggressively to supply Internet companies and others with the specialized hardware needed for so-called cloud computing. In the cloud model, data centers with vast stores of information and processing resources can be tapped from afar through a personal computer, cellphone or other device."

Although the hardware being offered by IBM is an important step in the direction of cloud computing, it has to be considered only a partial answer to the vision that the concept's developers have painted. Cloud computing according to Christophe Bisciglia, a 27-year-old senior software engineer at Google, is a network made of hundreds of thousands, perhaps even millions, of cheap servers. These are not the mainframes IBM is usually associated with, they are generally no more powerful than the desktop PCs used in businesses or in homes. This "cloud" of small computers stores almost unimaginable amounts of data that can be searched faster than today's set-up, which would help companies like Google find quicker answers to user queries. In the highly competitive worlds of search engines and on-line gaming, fractions of seconds make a difference.

"The pioneers in cloud computing have been Internet companies like Google, Yahoo, social networks and online game services, which have often designed their own data centers. The Internet companies' requirements are growing, but mainstream corporations are also increasingly interested in cloud data centers, opening up a large potential market."

Over the next five years, that market is supposed to grow into a multibillion-dollar business. That's the kind of money that attracts IBM; but it's not alone.

"Sun Microsystems introduced a product for this market last year, a self-contained data center housed in a 20-foot shipping container. Dell started a cloud computing effort last year. Hewlett-Packard, analysts say, is expected to announce its specialized entry soon. Smaller companies like Rackable Systems and Varari Systems have data-serving computers designed for cloud computing. But analysts and customers who have tested the I.B.M. product, called iDataPlex, said the company had taken an original approach that seemed to place it ahead of rivals for now. I.B.M. says its systems consume 40 percent less power than standard servers, and are designed to pack more than twice as many computers into the same space."

One of the unique innovations introduced by IBM to reduce energy consumption was borrowed from other industries, like the automotive and utility industries -- using water cooling systems instead of air conditioning.

"The I.B.M. systems, analysts note, have an innovative water-cooling mechanism, so they do not heat up a data center, thus eliminating the need for most air-conditioning. ... The I.B.M. systems ... are intended for high-end customers with data centers that have a thousand to tens of thousands of server computers, said James Gargan, the I.B.M. vice president for xSeries computers, which are servers powered by industry-standard microprocessors produced by Intel or A.M.D. The I.B.M. systems will mostly be made to order for large customers. One offering involves putting 1,500 server computers into a 40-foot truck trailer, ready to plug in from a parking lot."

In addition to companies with a World Wide Web business focus, financial services companies have also expressed interest in cloud computing.

"Some large companies in finance and other traditional industries have been testing them as well. Jeffrey M. Birnbaum, a managing director and chief technology architect of Merrill Lynch, said the I.B.M. systems in a trailer container would cost an estimated 50 percent less in real estate, set-up and construction costs than a similar conventional data center. The energy and operating cost savings, he said, would be an added advantage. Merrill Lynch, Mr. Birnbaum said, has very different computing requirements from an Internet company. But the similarity is that Merrill Lynch has large computing needs, and must add capacity flexibly and efficiently. 'I have my own cloud, if you will,' he said. Cloud data centers typically require stripped-down servers, tailored for specific computing tasks. So the big computer makers cannot sell their off-the-shelf servers in this market. 'It's a completely different engineering model for I.B.M. to make these low-cost, highly scalable servers,' said Joe Clabby, an independent analyst in Yarmouth, Me."

Cloud computing has clearly moved off the drawing board and into the market. In the age of information, cloud computing will fill a niche that was created by the Web. As its benefits become more obvious, other industries may determine they too have a need for a cloud of their own. Cloud computing is unlikely to be the last computing niche that emerges. When computers filling entire rooms were first introduced, people couldn't imagine that computers would ever prove useful to home users or individual businessmen. As we find ways to use information more effectively, manufacturers will also find ways to improve how that information is delivered.

Language and Learning

My company, Enterra Solutions, like all companies, uses some descriptive phrases that it has trademarked to help explain what the company does as well as differentiate its products and offerings. Names of things have been important since the beginning of recorded history (and probably long before that). It comes as no surprise, for example, that one of the first things that the Bible records is Adam naming the things around him: "And Adam gave names to all cattle, and to the fowl of the air, and to every beast of the field." [Genesis 2:20]. A new study has shown that people learn faster when they can name (or label) objects which they are studying ["When Language Can Hold the Answer," by Christine Kenneally, New York Times, 22 April 2008].

"Faced with pictures of odd clay creatures sporting prominent heads and pointy limbs, students at Carnegie Mellon were asked to identify which 'aliens' were friendly and which were not. The students were not told that the aliens fell naturally into two groups, although the differences were subtle and not easy to describe. Some had somewhat lumpy, misshapen heads. Others had smoother domes. After students assigned each alien to a category, they were told whether they had guessed right or wrong, learning as they went that smooth heads were friendly and lumpy heads were not."

Not privy to all of the study's details, it sounds like it drew on people's pre-conceived biases about what is beautiful (therefore likeable) -- i.e., smooth things -- and what is ugly or misshapen (therefore scary) -- i.e., lumpy things. The study, however, was about the speed of learning not about prejudice.

"The experimenter, Dr. Gary Lupyan, who is now doing postdoctoral research at Cornell, added a little item of information to one test group. He told the group that previous subjects had found it helpful to label the aliens, calling the friendly ones 'leebish' and the unfriendly ones 'grecious,' or vice versa. When the participants found out whether their choice was right or wrong, they were also shown the appropriate label. All the participants eventually learned the difference between the aliens, but the group using labels learned much faster. Naming, Dr. Lupyan concluded, helps to create mental categories."

For those tasked with explaining complex ideas, it is helpful to find a descriptive name that can serve as shorthand for the entire concept. During the Cold War, for example, the term "mutually assured destruction" or "MAD" used to describe a sophisticated national security strategy. The name was so descriptive, however, that it was easy for those discussing strategy to grasp the concept from the mere mention of its name. Advertisers are always looking for a catch phrase that will capture the imagination and differentiate their products from others. Authors look for book or article titles that will grab readers' interest. Although we can appreciate the importance of language, we don't fully understand the relationship between language and reality.

"The finding [that using labels helps to create mental categories] may not seem surprising, but it is fodder for one side in a traditional debate about language and perception, including the thinking that creates and names groups. In stark form, the debate was: Does language shape what we perceive, a position associated with the late Benjamin Lee Whorf, or are our perceptions pure sensory impressions, immune to the arbitrary ways that language carves up the world? The latest research changes the framework, perhaps the language of the debate, suggesting that language clearly affects some thinking as a special device added to an ancient mental skill set. Just as adding features to a cellphone or camera can backfire, language is not always helpful. For the most part, it enhances thinking. But it can trip us up, too."

Kenneally reports that the traditional debate has not been about the subjective friendliness of fictitious aliens, but about simple things like color.

"The traditional subject of the tug of war over language and perception is color. Because languages divide the spectrum differently, researchers have asked whether language affected how people see color. English, for example, distinguishes blue from green. Most other languages do not make that distinction. Is it possible that only English speakers really see those colors as different? Past investigations have had mixed results. Some experiments suggested that color terms influenced people in the moment of perception. Others suggested that the language effect kicked in only after some basic perception occurred. The consensus was that different ways to label color probably did not affect the perception of color in any systematic way."

Other studies, however, have demonstrated that language can help with learning under certain conditions when subtle differences in objects are involved.

"Last year, Lera Boroditsky and colleagues published a study in The Proceedings of the National Academy of Sciences showing that language could significantly affect how quickly perceptions of color are categorized. Russian and English speakers were asked look at three blocks of color and say which two were the same. Russian speakers must distinguish between lighter blues, or goluboy, and darker blues, siniy, while English speakers do not have to, using only 'blue' for any shade. If the Russians were shown three blue squares with two goluboy and one siniy, or the other way around, they picked the two matching colors faster than if all three squares were shades from one blue group. English makes no fundamental distinction between shades of blue, and English speakers fared the same no matter the mix of shades. In two different tests, subjects were asked to perform a nonverbal task at the same time as the color-matching task. When the Russians simultaneously carried out a nonverbal task, they kept their color-matching advantage. But when they had to perform a verbal task at the same time as color-matching, their advantage began to disappear. The slowdown suggested that the speed of their reactions did not result just from a learned difference but that language was actively involved in identifying colors as the test was happening."

For those involved with the visual display of information upon which they expect others to act, these studies could prove valuable. It could change how they display information, how they teach operators to understand what they are seeing, and what they expect to do with the information once it is provided to them. The last study would indicate, for example, that you want people to carry out non-verbal actions in order to speed response.

"Two other recent studies also demonstrated an effect of language on color perception and provided a clue as to why previous experimental results have been inconclusive. In The Proceedings of the National Academy of Sciences, Dr. Paul Kay of the International Computer Science Institute at Berkeley and colleagues hypothesized that if language is dominant on the left side of the brain, it should affect color perception in the right visual field. (The right visual field is connected to the left side of the brain, and vice versa.) English-speaking subjects were shown a ring of 12 small squares that were all the same color except an odd one on the left or the right. If the odd square was shown to the right visual field and it was from a completely different color category in English, like a green square compared to the ring of blue squares, then subjects were quick to identify it as different. If the odd square shown to the right visual field was the same basic color as the ring of squares, perhaps just being a different shade of blue, subjects were not as fast to recognize the difference. If the odd square was shown to the left visual field, it didn’t matter if it was a different color or only a different shade. The extent to which language affected color perception depended on the side of the brain being used."

These studies could also affect information visualization. It suggests that displays relying primarily on color differentiation to provide information to observers should probably be placed on the right side of the observer station. This could be important in any situation when time is of the essence in initiating a response.

"Language also has a significant role in seeing and remembering where objects are in space. Dr. Dedre Gentner at Northwestern and her colleagues conducted experiments on the spatial reasoning of hearing children and children who 'home-sign.' Home-signers have hearing parents, but they are congenitally deaf and have never been taught a sign language, according to Susan Goldin-Meadow, an expert in homesign. The gestural language they develop is invented solely by themselves. In the past, Dr. Gentner and her colleagues had observed that children who home-sign did not appear to invent gestures for locations spontaneously. The children were shown two side-by-side boxes. Internally, each box was divided in three. In each space was a card. During each trial, the experimenter took a card from the first box and showed the child that it had a special star on the back. Replacing it in the first box in the same space, the experimenter asked the child to find where the special card would be in the second box. Essentially, the children were asked to map the position of the target card in the first box to the same position in the second. The researchers found that children without words for spatial relationships, whether young or home-signers, had much more trouble finding the special card in the second box than older hearing children who had learned the relevant words. For young hearing children, exposure to spatial language in the experiment strongly influenced the success rate. If the experimenter used spatial terms when speaking to a child, saying, 'I'm putting the card in the top' (or 'middle' or 'bottom'), as opposed to, 'I'm putting the card here,' the children were much likelier to find the correct spot in the second box."

For companies doing business around the world, especially if it involves training, understanding the nuances of the local language could be important in ensuring that the training is effective. In circumstances where local languages lack a necessary nuance, participants may need to be introduced to subtleties using new words to help them learn faster and remember longer. On the other hand, they may not need such help.

"There is other evidence that a lack of spatial language is not a handicap in solving spatial problems. In 2006, scientists published an experiment that investigated the ability of the Amazonian Munduruku tribe to understand and manipulate geometric relationships for which their language has no words. The Munduruku performed about the same as Americans whose language is rich with spatial terms."

In other words, there was a difference between the limitations of language and the mechanisms of thought (which suffered from no such limitations). The difference to a businessman, however, is significant. When one person has to explain concepts to another person, it helps if they have a shared frame of reference. Language can help create that shared space. Since the heart of Enterra Solutions' products and offerings are automated rule sets, understanding language and word relationships are extremely important for our rule writers. Fortunately, once those relationships are translated into code, they can bridge most of the language barriers because of the universal nature of math. Language has been around for tens of thousands of years, yet we are still learning about how it works.

Outsourcing Science

In a recent post [Speaking in Numbers], I discussed the fact that the United States needs a program to stimulate an interest in science and mathematics in its children. New York Times columnist Bob Herbert reports that the problem is not in stimulating interest in our younger children, but keeping that interest alive as they enter puberty ["Clueless in America," 22 April 2008].

"Allan Golston, the president of U.S. programs for the Bill and Melinda Gates Foundation ... noted that the performance of American students, when compared with their peers in other countries, tends to grow increasingly dismal as they move through the higher grades: 'In math and science, for example, our fourth graders are among the top students globally. By roughly eighth grade, they're in the middle of the pack. And by the 12th grade, U.S. students are scoring generally near the bottom of all industrialized countries.'"

One way to stimulate that interest in older youth and teens is to ensure that those who major in math and/or science have well-paying jobs waiting for them when they graduate. One of the things that happened in the computer science field was that outsourcing depressed the job market in the IT field after the dot-com crash early this century. This could become an issue in the math and science fields as well according to G. Pascal Zachary, who reports that U.S. companies are now beginning to outsource science ["How Scientific Gains Abroad Pay Off in the U.S.," New York Times, 20 April 2008].

"At a time of economic belt-tightening, might cheap science from low-wage countries help keep American innovators humming? Americans have long profited from low-cost manufactured goods, especially from Asia. The cost of those material 'inputs' is now rising. But because of growing numbers of scientists in China, India and other lower-wage countries, 'the cost of producing a new scientific discovery is dropping around the world,' says Christopher T. Hill, a professor of public policy and technology at George Mason University."

I'm not sure that Americans have "profited from low-cost manufactured goods." America's consumer culture and life style has been maintained through a period of stagnant wages by relying on low cost goods purchased on credit, but America's trade deficit has been enormous. Zachary is arguing that it is time for the U.S. to borrow a page from low cost countries and learn to exploit discoveries made elsewhere to help fix what currently ails the U.S. economy.

"American innovators — with their world-class strengths in product design, marketing and finance — may have a historic opportunity to convert the scientific know-how from abroad into market gains and profits. Mr. Hill views the transition to 'the postscientific society' as an unrecognized bonus for American creators of new products and services. Mr. Hill's insight, which he first described in a National Academy of Sciences journal article last fall, runs counter to the notion that the United States fails to educate enough of its own scientists and that 'shortages' of them hamper American competitiveness. The opposite may actually be true. By tapping relatively low-cost scientists around the world, American innovators may actually strengthen their market positions. 'We shouldn't fear the rise of science in Asia and other poorer countries. We should figure out how to take advantage of it,' says Patrick Windham, a lecturer in technology policy at Stanford and a former staff member of Congressional science committees."

The argument I made in the previously mentioned post is that America needs to produce world class mathematicians and scientists in order to remain in the global conversation that increasingly relies on math know how. I believe it's a complementary argument to one being made by Zachary. Both arguments involve strategies that take advantage of globalization.

"Optimism about scientific globalization is a wrinkle on the familiar story of outsourcing. Just as United States companies have contracted out physical production, they can do the same for scientific 'goods,' which range from formulas and ideas to the results of experiments. In the short-term at least, higher spending on scientists by India and China could create a glut of them in these countries, driving wages down further and making the costs of acquiring science even lower. 'Science is the ultimate global activity,' says Richard B. Freeman, a labor economist with the National Bureau of Economic Research. 'You can outsource research.' Mr. Freeman, among others, questions whether there is a shortage of scientists in the United States. He cites evidence suggesting that American dominance in science will decline over time and that we should worry less about purported shortages at home and more about 'developing new ways of benefiting from scientific advances made in other countries.' Of course, scientific knowledge isn't a thing, like a child's toy or an electric motor, so the day may never come when 'science' can be purchased from a Chinese or Indian catalog."

In order to exploit discoveries made elsewhere, the United States must continue to produce people who can understand the potential of such discoveries. Those people won't be English literature majors or lawyers; they will be scientists and mathematicians. They must be people who are fluent in the global scientific language that will drive innovations of the future.

"While the United States is expected to remain the home of choice for the world's best scientists for some time, industry is increasingly striking deals with scientists in developing countries eager for wider exposure. ... Benefiting from foreign science isn't new. Last October, the Nobel Prize for physics, for instance, was shared by French and German scientists for their basic discovery of what is known as the 'giant magnetoresistance' effect, which enables much more digital data to be stored on a disk drive. The breakthrough, by Albert Fert and Peter Grünberg, had essentially no commercial impact in Germany or France. But by using open scientific literature and attending conferences, Seagate [Technology, a U.S. firm,] found ways to capitalize on the breakthrough, which had been financed by European governments."

Another reason that the U.S. needs to continue to educate math and science students is that commercialization of breakthrough innovations is seldom an easy thing to do.

"Commercializing science isn't easy, which is the main reason that rising scientists from India, China and other countries can't readily achieve business success. In the case of the magneto effect, Seagate engineers ended up using different materials — at different temperatures — than the Nobel winners. 'We made the big step to get the scientific advance into products,' Mr. Re says. 'And then we had to manufacture hundreds of millions of them. This is a very different challenge.' Precisely because the gap between basic science and commercial innovations is large, Mr. Hill's postscientific society makes sense to innovators on the front lines. One implication for the future is that the United States 'won't have to import so many scientists,' says Stephen D. Nelson, associate director of policy programs at the American Association for the Advancement of Science."

That should make the anti-immigrant crowd happy. The only way that can prove to be an accurate prediction, however, is if U.S. schools produce enough mathematicians and scientists to fill the jobs needed by U.S. corporations. A "post-scientific" world is not a world without science but a world that knows how to exploit science from wherever it comes. The "post-scientific" world is just as dependent on scientists and mathematicians as the world in which we now live.

Cellphones and Development

One of the recurring themes of this blog is connectivity. I have written about connectivity within organizations as well as connectivity between nations. The most important connectivity, however, is between individuals. Over the course of the past couple of years I've provided numerous examples of how connectivity has improved the lives of individuals. Most of this connectivity takes two forms, the Internet and cellphones. Of the two, cellphones have been the most important because they have penetrated more deeply into most societies than have computers. A recent New York Times Magazine article by Sara Corbett asks the intriguing question, "Can the Cellphone Help End Global Poverty?" [13 April 2008] Corbett begins her article by introducing us to Nokia employee named Jan Chipchase.

"Chipchase is 38, a rangy native of Britain whose broad forehead and high-slung brows combine to give him the air of someone who is quick to be amazed, which in his line of work is something of an asset. For the last seven years, he has worked for the Finnish cellphone company Nokia as a 'human-behavior researcher.' He's also sometimes referred to as a 'user anthropologist.' To an outsider, the job can seem decidedly oblique. His mission, broadly defined, is to peer into the lives of other people, accumulating as much knowledge as possible about human behavior so that he can feed helpful bits of information back to the company — to the squads of designers and technologists and marketing people who may never have set foot in a Vietnamese barbershop but who would appreciate it greatly if that barber someday were to buy a Nokia."

I have written about before about the importance of culture when it comes to selling international products on local markets. Businesses from Wal-Mart to McDonalds have to adapt to local conditions in order to make their brands appealing. One might think that a cell phone is a cell phone, but one would be wrong. In some cultures, it is the talking that is important, in others it is the texting, in still others it is the ability to make financial transactions.

"What amazes Chipchase is not the standard stuff that amazes big multinational corporations looking to turn an ever-bigger profit. Pretty much wherever he goes, he lugs a big-bodied digital Nikon camera with a couple of soup-can-size lenses so that he can take pictures of things that might be even remotely instructive back in Finland or at any of Nokia’s nine design studios around the world. Almost always, some explanation is necessary. A Mississippi bowling alley, he will say, is a social hub, a place rife with nuggets of information about how people communicate. A photograph of the contents of a woman’s handbag is more than that; it’s a window on her identity, what she considers essential, the weight she is willing to bear. The prostitute ads in the Brazilian phone booth? Those are just names, probably fake names, coupled with real cellphone numbers — lending to Chipchase’s theory that in an increasingly transitory world, the cellphone is becoming the one fixed piece of our identity. Last summer, Chipchase sat through a monsoon-season downpour inside the one-room home of a shoe salesman and his family, who live in the sprawling Dharavi slum of Mumbai. Using an interpreter who spoke Tamil, he quizzed them about the food they ate, the money they had, where they got their water and their power and whom they kept in touch with and why. He was particularly interested in the fact that the family owned a cellphone, purchased several months earlier so that the father, who made the equivalent of $88 a month, could run errands more efficiently for his boss at the shoe shop. The father also occasionally called his wife, ringing her at a pay phone that sat 15 yards from their house. Chipchase noted that not only did the father carry his phone inside a plastic bag to keep it safe in the pummeling seasonal rains but that they also had to hang their belongings on the wall in part because of a lack of floor space and to protect them from the monsoon water and raw sewage that sometimes got tracked inside."

Culture and circumstance determine how phones are used, who has access to them, how minutes are paid for, and how they are kept charged. It was a big day in Cuba, for example, when local citizens (not just government cronies and foreigners were provided access to cell phones). For some people, the cell phone is their business. They rent it out by the call to others who cannot afford to own a phone. Some people make a living in areas without electricity by recharging cellphones using everything from car batteries to bicycle-powered generators. These are the kinds of things that Chipchase discovers as he travels the world taking pictures.

"This sort of on-the-ground intelligence-gathering is central to what’s known as human-centered design, a business-world niche that has become especially important to ultracompetitive high-tech companies trying to figure out how to write software, design laptops or build cellphones that people find useful and unintimidating and will thus spend money on. Several companies, including Intel, Motorola, and Microsoft, employ trained anthropologists to study potential customers, while Nokia’s researchers, including Chipchase, more often have degrees in design. Rather than sending someone like Chipchase to Vietnam or India as an emissary for the company — loaded with products and pitch lines, as a marketer might be — the idea is to reverse it, to have Chipchase, a patently good listener, act as an emissary for people like the barber or the shoe-shop owner’s wife, enlightening the company through written reports and PowerPoint presentations on how they live and what they’re likely to need from a cellphone, allowing that to inform its design. The premise of the work is simple — get to know your potential customers as well as possible before you make a product for them. But when those customers live, say, in a mud hut in Zambia or in a tin-roofed hutong dwelling in China, when you are trying — as Nokia and just about every one of its competitors is — to design a cellphone that will sell to essentially the only people left on earth who don’t yet have one, which is to say people who are illiterate, making $4 per day or less and have no easy access to electricity, the challenges are considerable."

Getting back to the question posed in Corbett's headline, how can all this effort aimed toward designing cellphones help people emerge out of poverty? Corbett's answer begins with the concept of saving time and effort. She talks about meeting with Chipchase in Accra, India.

"From an unseen distance, Chipchase used his phone to pilot me through the unfamiliar chaos, allowing us to have what he calls a 'just in time' moment. 'Just in time' is a manufacturing concept that was popularized by the Japanese carmaker Toyota when, beginning in the late 1930s, it radically revamped its production system, virtually eliminating warehouses stocked with big loads of car parts and instead encouraging its assembly plants to order parts directly from the factory only as they were needed. The process became less centralized, more incremental. Car parts were manufactured swiftly and in small batches, which helped to cut waste, improve efficiency and more easily correct manufacturing defects. As Toyota became, in essence, lighter on its feet, the company’s productivity rose, and so did its profits. There are a growing number of economists who maintain that cellphones can restructure developing countries in a similar way. Cellphones, after all, have an economizing effect. My 'just in time' meeting with Chipchase required little in the way of advance planning and was more efficient than the oft-imperfect practice of designating a specific time and a place to rendezvous. He didn't have to leave his work until he knew I was in the vicinity. Knowing that he wasn't waiting for me, I didn't fret about the extra 15 minutes my taxi driver sat blaring his horn in Accra's unpredictable traffic. And now, on foot, if I moved in the wrong direction, it could be quickly corrected. Using mobile phones, we were able to coordinate incrementally. ... To someone who has spent years using a mobile phone, these moments are common enough to feel banal, but for people living in a shantytown like Nima — and by extension in similar places across Africa and beyond — the possibilities afforded by a proliferation of cellphones are potentially revolutionary."

It is exactly because of the efficiencies created by telephone connectivity, especially cellphones, that one of the first capacities my company, Enterra Solutions, is helping build in Iraq is a call center. That call center will become a touchstone of commerce in Iraq.

"Today, there are more than 3.3 billion mobile-phone subscriptions worldwide, which means that there are at least three billion people who don't own cellphones, the bulk of them to be found in Africa and Asia. Even the smallest improvements in efficiency, amplified across those additional three billion people, could reshape the global economy in ways that we are just beginning to understand."

The Development-in-a-Box™ approach that I often write about is focused on helping countries that have little to no infrastructure. By designing and implementing a call center in Iraq, we can then "box" that solution and use it elsewhere with a few tweaks to adapt it to local conditions. In effect, that is what Chipchase is doing. He is helping Nokia adapt the basic cellphone design to local conditions. Many people believe that cellphone technology is unique among technologies in that it allows people to leapfrog older telephone technology. It's hard to argue with the numbers.

"To get a sense of how rapidly cellphones are penetrating the global marketplace, you need only to look at the sales figures. According to statistics from the market database Wireless Intelligence, it took about 20 years for the first billion mobile phones to sell worldwide. The second billion sold in four years, and the third billion sold in two. Eighty percent of the world's population now lives within range of a cellular network, which is double the level in 2000. And figures from the International Telecommunications Union show that by the end of 2006, 68 percent of the world's mobile subscriptions were in developing countries. As more and more countries abandon government-run telecom systems, offering cellular network licenses to the highest-bidding private investors and without the burden of navigating pre-established bureaucratic chains, new towers are going up at a furious pace. Unlike fixed-line phone networks, which are expensive to build and maintain and require customers to have both a permanent address and the ability to pay a monthly bill, or personal computers, which are not just costly but demand literacy as well, the cellphone is more egalitarian, at least to a point."

Cellphones empower the poor new ways. For example, farmers or miners living in rural communities can check commodity prices so that they don't get cheated on the price of their goods. In one post, I wrote about a woman in Africa who catches fish in a river and keeps them alive on a string until a customer calls. Because she has no refrigeration capability, she used to catch fish and then wander about trying to sell them -- often wasting time and fish. Her cellphone, which provides "just in time moments," changed her life for the better. Others are learning that lesson as well.

"Last year, the World Resources Institute, a Washington-based environmental research group, published a report with the International Finance Corporation entitled 'The Next Four Billion,' an economic study that looked at, among other things, how poor people living in developing countries spent their money. One of the most remarkable findings was that even very poor families invested a significant amount of money in the I.C.T. category — information-communication technology, which, according to Al Hammond, the study's principal author, can include money spent on computers or land-line phones, but in this segment of the population that's almost never the case. What they're buying, he says, are cellphones and airtime, usually in the form of prepaid cards. Even more telling is the finding that as a family's income grows — from $1 per day to $4, for example — their spending on I.C.T. increases faster than spending in any other category, including health, education and housing."

It was probably access to a cellphone that helped families increase their income, but it is not just economic benefits that accrue from having such access.

"A 'just in time' moment afforded by a cellphone looks a lot different to a mother in Uganda who needs to carry a child with malaria three hours to visit the nearest doctor but who would like to know first whether that doctor is even in town. It looks different, too, to the rural Ugandan doctor who, faced with an emergency, is able to request information via text message from a hospital in Kampala. Jan Chipchase and his user-research colleagues at Nokia can rattle off example upon example of the cellphone's ability to increase people’s productivity and well-being, mostly because of the simple fact that they can be reached. There’s the live-in housekeeper in China who was more or less an indentured servant until she got a cellphone so that new customers could call and book her services. Or the porter who spent his days hanging around outside of department stores and construction sites hoping to be hired to carry other people's loads but now, with a cellphone, can go only where the jobs are. Having a call-back number, Chipchase likes to say, is having a fixed identity point, which, inside of populations that are constantly on the move — displaced by war, floods, drought or faltering economies — can be immensely valuable both as a means of keeping in touch with home communities and as a business tool. Over several years, his research team has spoken to rickshaw drivers, prostitutes, shopkeepers, day laborers and farmers, and all of them say more or less the same thing: their income gets a big boost when they have access to a cellphone."

To brush aside criticism that she might simply be pushing the agenda of cellphone makers, Corbett reports that individuals involved in development programs are just as enthusiastic about the benefits of cellphones as their makers.

"It may sound like corporate jingoism, but this sort of economic promise has also caught the eye of development specialists and business scholars around the world. Robert Jensen, an economics professor at Harvard University, tracked fishermen off the coast of Kerala in southern India, finding that when they invested in cellphones and started using them to call around to prospective buyers before they'd even got their catch to shore, their profits went up by an average of 8 percent while consumer prices in the local marketplace went down by 4 percent. A 2005 London Business School study extrapolated the effect even further, concluding that for every additional 10 mobile phones per 100 people, a country's G.D.P. rises 0.5 percent. Text messaging, or S.M.S. (short message service), turns out to be a particularly cost-effective way to connect with otherwise unreachable people privately and across great distances. Public health workers in South Africa now send text messages to tuberculosis patients with reminders to take their medication. In Kenya, people can use S.M.S. to ask anonymous questions about culturally taboo subjects like AIDS, breast cancer and sexually transmitted diseases, receiving prompt answers from health experts for no charge."

Corbett goes on to report that cellphones have even gained support from people who have a bias against government agendas and foreign aid programs.

"Some of the mobile phone's biggest boosters are those who believe that pumping international aid money into poor countries is less effective than encouraging economic growth through commerce, also called 'inclusive capitalism.' A cellphone in the hands of an Indian fisherman who uses it to grow his business — which presumably gives him more resources to feed, clothe, educate and safeguard his family — represents a textbook case of bottom-up economic development, a way of empowering individuals by encouraging entrepreneurship as opposed to more traditional top-down approaches in which aid money must filter through a bureaucratic chain before reaching its beneficiaries, who by virtue of the process are rendered passive recipients. For this reason, the cellphone has become a darling of the microfinance movement. After Muhammad Yunus, the Nobel-winning founder of Grameen Bank, began making microloans to women in poor countries so that they could buy revenue-producing assets like cows and goats, he was approached by a Bangladeshi expat living in the U.S. named Iqbal Quadir. Quadir posed a simple question to Yunus — If a woman can invest in a cow, why can’t she invest in a phone? — that led to the 1996 creation of Grameen Phone Ltd. and has since started the careers of more than 250,000 'phone ladies' in Bangladesh, which is considered one of the world's poorest countries. Women use microcredit to buy specially designed cellphone kits costing about $150, each equipped with a long-lasting battery. They then set up shop as their village phone operator, charging a small commission for people to make and receive calls. The endeavor has not only revolutionized communications in Bangladesh but also has proved to be wildly profitable: Grameen Phone is now Bangladesh’s largest telecom provider, with annual revenues of about $1 billion. Similar village-phone programs have sprung up in Rwanda, Uganda, Cameroon and Indonesia, among other places. 'Poor countries are poor because they are wasting their resources,' says Quadir, who is now the director of the Legatum Center for Development and Entrepreneurship at M.I.T. 'One resource is time, another is opportunity. Let's say you can walk over to five people who live in your immediate vicinity, that's one thing. But if you're connected to one million people, your possibilities are endless.' During a 2006 field study in Uganda, Chipchase and his colleagues stumbled upon an innovative use of the shared village phone, a practice called sente. Ugandans are using prepaid airtime as a way of transferring money from place to place, something that’s especially important to those who do not use banks."

I get excited about concepts like "inclusive commerce" and the effective use of resources like time and opportunity. The Business-to-Business Trading Exchange Enterra Solutions is establishing in Iraq is focused on creating inclusive commerce there. The Kurdistan Business Center, on the other hand, is focused on helping regional businesses better use time and opportunities. Corbett spends a good deal of time talking about how mobile phones are changing the face of finance in many developing countries. I previously wrote on that topic in the post Financial Services in Africa. Interestingly, Corbett reports that Chipchase cautions communities to implement technologies only after considering potential consequences.

"When he is not doing his field work, Jan Chipchase goes to a lot of design conferences, where he gives talks with titles like 'Connecting the Unconnected.' He also writes a popular blog called Future Perfect, on which he posts photographs of some of the things that amaze him along with a little bit of explanatory text. 'Pushing technologies on society without thinking through their consequences is at least naïve, at worst dangerous ... and IMHO the people that do it are just boring,' he writes on his blog's description page. 'Future Perfect is a pause for reflection in our planet's seemingly headlong rush to churn out more, faster, smaller and cheaper.'"

Of course for the world's poor, a better future cannot come fast enough. Chipchase's warning is well-taken but it is unlikely to be heeded if the only alternatives the poor see are hope on one hand (brought about by technology) and more grinding poverty on the other. Hope will always win -- even if that hope may bring with it unintended consequences. Corbett goes on to report that Chipchase is not against the spread of technology, quite the opposite; as is shown from the following exchange between Corbett and Chipchase.

"This is when I voiced a careless thought about whether there might be something negative about the lightning spread of technology, whether its convenience was somehow supplanting traditional values or practices. Chipchase raised his eyebrows and laid down his spoon. He sighed, making it clear that responding to me was going to require patience. 'People can think, yeah, monks with cellphones, and tsk, tsk, and what is the world coming to?' he said. 'But if you wanted to take phones away from anybody in this world who has them, they'd probably say: "You're going to have to fight me for it. Are you going to take my sewer and water away too?" And maybe you can't put communication on the same level as running water, but some people would. And I think in some contexts, it's quite viable as a fundamental right.' He paused a beat to let this sink in, then added, with just a touch of edge, 'People once believed that people in other cultures might not benefit from having books either.'"

Clearly, Chipchase believes that everyone who wants it should have access to cellphone technology. He continues to travel the globe to discover what they need from that technology.

"People in the mobile-handset business talk about adding customers not by the millions but by the billions, if only they could get the details right. How do you make a phone that can be repaired by a streetside repairman who may not have access to new parts? How do you build a phone that won’t die a quick death in a monsoon or by falling off the back of a motorbike on a dusty road? Or a phone that picks up distant signals in a rural place, holds a charge off a car battery longer or that can double as a flashlight during power cuts? Influenced by Chipchase's study on the practice of sharing cellphones inside of families or neighborhoods, Nokia has started producing phones with multiple address books for as many as seven users per phone. To enhance the phone's usefulness to illiterate customers, the company has designed software that cues users with icons in addition to words. The biggest question remains one of price."

Corbett writes about walking through the streets of the Nima neighborhood of Accra with a Nokia designer named Duncan Burns.

"Each time the group stopped to chat with someone, Burns pulled out several prototypes — or 'physical sketches,' as he called them — for potential phones, handing them over one by one for examination. These were elegant, futuristic-looking things, just odd enough to seem as if they'd arrived not from California but from outer space. One was long and wandlike, looking something like an aluminum version of a thick vanilla bean. Another was a slimmer rendering of an everyday phone but with no keypad and no screen, just a single unmarked button. A third did not look at all like a phone but rather like a credit card. There were a couple of small digital photos of people's faces stuck to the front of the card, and it came with a small stylus that could be used, Burns said, to touch a face on the card, which would then dial that person's number — a pictorial address book for someone who was illiterate. A fourth had a camera that took pictures and deposited them right into the phone's address book. ... [One woman who examined the prototypes asked,] 'Brudda, how do you charge it?' ... From his bag, Burns pulled another still-conceptual design, this one a thin metal cylinder with a whirlybird antenna on top. He showed the corn seller how to rotate the cylinder in small circles, causing the antenna to swing, which, he explained, in 15 minutes or so would generate enough power to charge her phone battery. The woman picked up the futuristic gizmo and began to swing it; the antenna whipped around and around. She let out an enthusiastic whoop."

Corbett admits that most of the evidence leading people to believe that cellphones can play a significant role in poverty reduction is anecdotal. More study is clearly needed. Nevertheless, the evidence is mounting and is it seems to bear out the theory that connectivity is beneficial.