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21 posts from November 2007

November 15, 2007

Will Money Solve Africa's Problems?

The John Templeton Foundation asked a number of analysts to respond to the question, "Will money solve Africa's problems?" The answers were not only mixed but guarded. Ashraf Ghani, chairman of the Institute for State Effectiveness, answers the question with a "yes, if ..." response. His answer should sound familiar to readers of this blog.

"If it is invested in enhancing African capabilities to integrate the continent into global networks of knowledge and creating prosperity and stability. This will mean confronting and overcoming a triple failure: corruption and abuse of power by African governments, predatory practices by extractive industries, and the waste of resources by an uncoordinated and ineffective aid system. Africa will acquire a strong voice when it is represented by credible leaders and managers. Such people cannot be produced without investment in the appropriate institutions. Currently, about $5 billion per annum is provided in the form of technical assistance to meet donor requirements. Directing a significant portion of this money toward investment in institutions will produce stakeholders focused on creating a positive change."

Ghani is calling for investments in infrastructure as well as noting that certain pre-conditions must exist to make those investments sustainable and productive. In my writings about Enterra Solutions' Development-in-a-Box™ framework, I have repeatedly made the same arguments. Ghani continues his response with arguments similar to those I've used in the past.

"African entrepreneurs encounter significant national and international constraints to business development. While there is favorable legislation in Europe and North America for African exports, access to information that allows Africa to benefit from these laws is limited. The necessary knowledge for taking advantage of legislation exists within corporations that are leading the global effort in corporate social responsibility and social entrepreneurship. These organizations could partner with African businessmen to ensure exports meet the standards necessary for developed countries. Infrastructure planning in Africa has not allowed for sub-regional and regional integration, or improved Africa’s access to global markets. As reliable infrastructure is a prerequisite for participation in the global economy, the strategic horizon for Africa’s infrastructure needs to be between ten and twenty years.Such a strategy requires moving from the current one to three-year budget cycles of the aid system to predictable, long-term financing mechanisms (such as trust funds) that will guarantee the effective use of resources. There is sufficient evidence that poor people are able to both prioritize and manage the use of limited resources. A programmatic approach, along the lines of the successful rural development programs in Afghanistan and Indonesia, would enable the most excluded segments of the African population to become stakeholders in systems of good governance and carry-out development themselves."

Enterra Solutions recently announced that is partnering with the International Resources Group. This new strategic partnership is aimed at utilizing IRG's unequaled development skills and Enterra Solutions' Development-in-a-Box framework to establish a entirely new approach for development. The approach gets at many of the challenges identified by Ghani. The other analyst who answered "yes," also added an "if" in his response. Professor James Tooley, president of The Education Fund, Orient Global, also offered thoughts that should sound familiar to readers of this blog.

"Only if the money comes as investment. Africa doesn't need aid from governments and international agencies. Over the last 40 years, aid to developing countries has reached $2.6 trillion, 25% of which has gone to sub-Saharan Africa. It has notably failed to eliminate poverty. Philanthropy should have only a limited role – for disaster relief – and helping policy makers promote good governance, the rule of law, and property rights. What Africa needs in order to overcome its problems is the same as that of any other region or country: flourishing enterprises that provide employment and create wealth. This is true even in my field – education. Less than 60% of the adult population of sub-Saharan Africa can read and write with understanding. And for every 100 men, only 76 women are literate."

Tooley talks about the rise of private, but affordable, schools where teachers actually show up and teach (apparently a rare occurrences in state run schools) and are held accountable for their results. He indicates that his organization, Orient Global, is making a major investment in such schools. I have often noted that an education population is one of the pre-conditions that help foster development success.

So much for the "yes" answers. All of the other pundits who wrote essays said that money would not solve Africa's problems. To be honest, even the "yes" answers were qualified by many of the arguments raised by those answering "no." The two principal arguments raised by the "no" responders is that money is wasted by corruption and has only spawned unhealthy dependency. Those were the reasons, for example, that Edward Green, director of the AIDS Prevention Research Project at Harvard’s Center for Population and Development Studies, responded negatively. Green writes:

"By now we should have learned. Donor nations have spent billions of dollars for development schemes in post-colonial Africa, yet there is little to show for this beyond dependency and corruption. Yet current policy and sentiment seem to advocate more of the same."

Green then quotes from The White Man’s Burden, by William Easterly, who insists that wealthy donor nations need to stop looking at Africa as an engineering problem. "Needed instead are [planners], 'who go to Africa with humility, open minds, and ability, to learn and discern what works and what doesn’t in different cultural settings.'" Dr. Donald Kaberuka, president of the African Development Bank, continues to sound the theme that money won't solve problems as long as bad leaders lead badly.

"Money won't solve Africa's problems "as long as there are issues such as prolonged violent conflict, bad governance, excessive external interference, and lack of an autonomous policy space. Alone, money cannot solve Africa’s development problems. Proof, if any was needed, is the fact that many of Africa’s natural resource-rich countries score very low on human development indicators. ... No amount of money can build the damaged trust between a government and its citizens. Decades of defective political and economic governance, and the failure by early post-independence governments to deliver on the promises of independence spun disillusionment and led to unfulfilled expectations paving the way to undemocratic dictatorial rule, the demise of the rule of law, ethnic strife, and economic and social chaos. In extreme cases these conditions led to a string of very weak or failed states. This said, we must realize money is still needed and Africa will, for a while, require external support by way of concessional finance, given its limited domestic savings."

Part of the Development-in-a-Box flexible framework involves investment in human capital. After all, unless local workers can sustain development by themselves nothing but economic colonialism can be achieved. Kaberuka concludes with arguments that echo Ghani's: "Lastly, Africa must be given a chance to meaningfully integrate into the global trading environment in order to sustain growth performance." Perhaps the strongest "no" comes from James Shikwati, the founder and director of the Inter Region Economic Network and CEO of The African Executive business magazine. As a businessman and entrepreneur myself, I certainly find myself in sympathy with what Shikwati writes.

"The problem in Africa has never been lack of money, but rather the inability to exploit the African mind. ... Out of 960 million Africans in 53 states, there are innovators and entrepreneurs who, if rewarded by the market, will address the challenges facing the continent. If money was the key to solving problems, banks would send agents on the streets to supply money to afflicted individuals. But banks only offer money to individuals who successfully translate their problems into opportunities. A $7 million British compensation to 228 Samburu herders in Kenya in 2002 did not stop them from turning into paupers by 2007. Money in itself is neutral. Big money viewed as capital has led strategists (who depict Africa as trapped in a cycle of poverty) to argue for massive inflows of money as the only means of escape from poverty. Viewing money as a receipt for value, a creation, and a resultant effect of exchange between different parties offers a chance to translate African problems into opportunities. As Lord Peter Bauer aptly pointed out, 'Money is the result of economic achievement and not a precondition.' How can Africans engage in activities that will lead to economic achievement? The key is to transform the mindset of the 50% of the African population below age 20 to focus on turning African problems into opportunities. In Africa today, there are entrepreneurial opportunities to feed an estimated 200 million hungry people, kill billions of malaria causing mosquitoes that threaten the lives of an estimated 500 million, and develop infrastructure."

Shikwati could have easily been writing about the objectives of Development-in-a-Box. That approach rewards entrepreneurs, creates jobs, connects economies, and establishes conditions for sustainable prosperity. Iqbal Z. Quadir, founder of GrameenPhone in Bangladesh, and founder and executive director of the Legatum Center for Development and Entrepreneurship at the Massachusetts Institute of Technology, responded with an "only if" answer that focused on entrepreneurial activity as did Shikwati. Quadir wrote:

"Only if it empowers citizens. African entrepreneurs are the key to solving Africa’s development problems. It is they who can drive their continent’s economic growth and it is they who can make their governments better. If money is invested engaging the organic and transformative potential of local entrepreneurs, Africa will flourish. If money is poured into government bureaucracies – which hold back these entrepreneurs – Africa will continue to languish."

Quadir understands the economics at the bottom of the pyramid and found a way to help some of the poorest people in the world become entrepreneurs. He continues:

"There are many instances where money – funding entrepreneurs and non-governmental bodies – does wonders in Africa. These examples are often cited by development gurus who then claim that aid in general is helping Africa, justifying any aid – including that to governments. But there is a clear pattern: money to entrepreneurs and non-governmental bodies helps; money to governments hurts. ... In today’s sub-Saharan Africa, the opportunity exists to put into motion true economic development. It will not happen by deluging African leaders with aid dollars, but rather by adopting practical ways to help Africa’s citizens thrive. Their increased strength is the best way to remove blockages to progress in the long run. First, rich countries must be challenged to remove trade barriers for African countries now, irrespective of African trade policies. With global market access, Africans would automatically attract private investment to their countries, despite their institutional weaknesses. These institutions would become stronger over time as businesses began to flourish. Private investments capitalizing on access to global markets would necessarily employ Africa’s low-cost labor, thus creating jobs. This is in stark contrast with companies extracting mineral resources in Africa, employing very few people relative to size of the business. Next, small entrepreneurs must be helped with seed money in increments of $10,000 to $20,000 (in contrast to the approach of mega-institutions who tend to direct billions into state bureaucracies). Even these relatively small cash amounts can be broken up into several installments, each of which is provided under certain pre-determined performance criteria. Just like they do everywhere else in the world, these entrepreneurs would create jobs, products, services, and – let us not forget – choices. It is precisely such jobs, entrepreneurs, and choices that form the bedrock of flourishing democracies. What goes naturally with supporting small entrepreneurs is introducing technologies that cost-effectively empower individuals, an area where Western knowledge can obviously add value. Such technologies multiply people’s abilities and deliver genuine aid to citizens directly. A pair of wheels, for example, provides invaluable assistance in moving a heavy load of bricks."

Entrepreneurs create jobs. Jobs provide wealth to grow a middle class. A prosperous middle class (or even lower middle class) demands more accountability from government. Better governance provides better business conditions which attracts more foreign direct investment and virtuous cycle is created. When that occurs, great things happen. Quadir concludes:

"Heightened productivity gives rise to four exciting benefits. First, as individuals control what they produce and consume, their lives improve. Second, when citizens accrue increased economic clout, institutions are forced to become more responsive to their needs. Third, by becoming more productive, users are able to pay for productivity tools, creating opportunities for entrepreneurs to launch profit-seeking enterprises to provide such tools. This is why businesses selling computers and cell phones sprang up naturally in Africa. Finally, profitable businesses attract imitators, unleashing competition. Competition gives rise to innovation, specialization, scalability, lower prices, higher wages, and a host of other good things including curtailing potential abuses by businesses. It’s a virtuous cycle of organic economic growth that, like a mighty wheel, can move the entire continent. ... The time has come for us to stop pouring billions of dollars into bureaucracies. Instead, we must activate the billion brains in Africa, each of whom will tame those bureaucracies and make the continent a global economic powerhouse."

The final respondent was Michael Fairbanks, co-founder of OTF Group, and the SEVEN FUND, which provides grants for enterprise solutions to poverty. He indicates that he used to think that money would solve Africa's problems, but he's changed his mind.

"There is that threadbare maxim: If you hold a hammer in your hand, every problem looks like a nail. What happens, then, when all we hold in our hand is a checkbook? Checkbook Development suggests that poor nations cannot build the skills necessary to solve their own problems. ... Every nation needs money to upgrade and improve the lives of their citizens; and it is good when a rich nation helps a poor one after a devastating act of God, or to meet a basic human need. But, too often, when one nation aids another it is based on a massive infusion of financial capital in return for changing monetary, trade, investment, fiscal, sectoral, and wage policies. This is often the right advice, but there is a trade-off, too. The nation with all the money often assumes the decision rights; and the responsibility for a nation’s future must always reside with the citizens of that nation, not with foreign advisors, and certainly not with its creditors and donors. This sort of checkbook development confuses compassion and generosity with over-responsibility for fellow human beings. Explicitly or implicitly, the donor is telling them how to run their country, and in the process, without meaning to, can rob citizens of emerging nations of their most precious assets – dignity and self-reliance."

Fairbanks spends a good deal of his essay talking about Rwanda and its enlightened president, Paul Kagame.

"Rwanda receives little foreign aid. The leaders of the World Bank had introduced me and several other experts to President Kagame and promised to pay the cost of our work; but they needed two years to program it, and Rwanda did not have two years. President Kagame understood that poverty was destroying the cornerstones of his country’s society: –tolerance, trust, aspirations, and hope. He decided to pay our salaries from the proceeds of his privatization program, but he stipulated that we begin immediately, and that we pay him back if we did not do what we said we could do. .... Rwanda doesn’t have money, but it is a nation without the rampant fatalism often fostered (however unintentionally) by benevolent people. Its leadership has had the courage to challenge the underlying assumptions of international aid, and that has led to growth of almost 20% per year in subsistence wages in its key export sectors. The responsibility for its own future lies squarely on the shoulders of its men and women. Not a single Rwandan objects."

These essays only convince me further that the Development-in-a-Box will work. Development does take money, but it also takes courage, creative thinking, and solid principles upon which to act. Africa is continent filled with challenges -- which means it is a continent filled with opportunities.

November 14, 2007

The Economist Looks at the System Administration Force

My partner Tom Barnett has been arguing for several years that the United States needs both a Leviathan force and a System Administration force -- the former being primarily military and the latter being mostly civilian. The Leviathan force should be capable of winning wars and the System Administration force should be capable of securing the peace. The transition from war to peace will require a mixing of the two forces as the military gives way to the constabulary. The cover story on 27 October 2007 print edition of The Economist is entitled, "Brains, not bullets: How to fight future wars." It begins, "Western armies are good at destroying things. Can they be made better at building them?" Anyone who has been a consistent reader of this blog knows that my company, Enterra Solutions, has been working with the Pentagon's Business Transformation Agency to help answer that question. The larger question, perhaps, is whether militaries should be in the building business at all.

Many critics don't believe nation-building should be a military role and, in an ideal world, they're probably correct. When the military is only large organization in place that can handle security, logistics, communications, humanitarian assistance, and so forth, it is unrealistic to believe that it won't get involved. Tom argues that its involvement is necessary but it should transition as quickly as possible to civilian control. Security always seems to be the sticking point as it is in Iraq. The Economist reports that the Pentagon is fully engaged in the debate about which kinds of roles and missions the military should engage in the future.

"Another debate to do with Iraq and Afghanistan is building in America, one that could have important consequences for the West. This debate is being conducted in the Pentagon—and it has to do with the future shape of America's armed forces. With its far-flung alliances and commitments, the superpower rightly wants a 'full spectrum' of military capabilities to deal with everything from an all-out war to a small policing action. But precisely what the mix should be is increasingly contentious—and could prove expensive. If the biggest threat comes from rising powers, such as a belligerent Russia or a pushy China, America and its allies will need to invest in aircraft, ships and advanced weapons to cope. If the greatest challenge is the fight against militants and insurgents around the world—seen by some as a new and different 'fourth generation' of warfare—then they will need more boots on the ground and, crucially, different sorts of soldiers wearing them. Sadly for taxpayers everywhere, the emerging answer from America is that a modern power needs to prepare for both challenges. But there has been a clear swing towards manpower from technology."

If you really want to get engaged in the debate and learn more about subjects like fourth generation warfare, then you should routinely read Tom's Weblog. Tom spends a great deal of his time discussing the future of the U.S. military with its leaders. You can also find links to Tom's two books on his web page which are well worth a read. Following the end of the Cold War, people started talking about a Revolution in Military Affairs. The touchstone term for that movement became "transformation." You couldn't get a program through Congress unless you could show how it would help transform the military. The Economist captures the tenor of the debate pretty well.

"The 'transformation' advocated by Donald Rumsfeld, George Bush's first defence secretary, envisaged that the armed forces would be slimmed down and money invested in 'smart' weapons, reconnaissance systems and data links. Speed, stealth, accuracy and networks would substitute for massed forces. The army's idea of its “future warrior” was a kind of cyborg, helmet stuffed with electronic wizardry and a computer display on his visor, all wirelessly linked to sensors, weapons and comrades. New clothing would have in-built heating and cooling. Information on the soldier's physical condition would be beamed to medics, and an artificial 'exoskeleton' (a sort of personal brace) would strengthen his limbs. The initial success in toppling first the Taliban in Afghanistan and then Saddam Hussein in Iraq seemed to vindicate such concepts. But the murderous chaos in Iraq, and the growing violence in southern Afghanistan, have shown that America is good at destroying targets, and bad at rebuilding states. Firepower is of little use, and often counter-productive, when the enemy deliberately mingles among civilians."

The article goes on to discuss the new counter-insurgency manual being used by the U.S. military. It abandons the notion that the military doesn't do "nation-building."

"America must expect to fight protracted, enervating counter-insurgency wars that offer no clear-cut victories and risk the prospect of humiliation. A new manual on counter-insurgency co-authored by the man now in charge of the war in Iraq, General David Petraeus, overturns the notion that America doesn't 'do nation-building.' Counter-insurgency, it says, is 'armed social work.' It requires more brain than brawn, more patience than aggression. The model soldier should be less science-fiction Terminator and more intellectual for 'the graduate level of war,' preferably a linguist, with a sense of history and anthropology."

In other words, at least part of the U.S. military must start to look more like Tom's System Administration force. Tom asserts that the purpose of the SysAdmin force is export security in a non-threatening manner. It engages in capacity building. It prefers preventative measures over mitigation. It acts deliberately. It seeks connectivity with as many partners as possible to pursue its constructive objectives. The Economist article believes the shift in focus is helpful.

"In general, the shift from technology to manpower is welcome. Some sceptics will argue that America's first future priority should be to avoid smallish wars of choice altogether. Even if that were sensible, history suggests it is unlikely to happen: American troops have kept on getting involved in foreign conflicts. The military planners' job is to cope with the likely, not to restrict democratically elected politicians' options."

The concerns expressed in the article center around the fact that most occupations don't end happily for occupying nations. Generally that is because the goal is ending the insurgency (i.e., winning the war) as opposed to securing the peace.

"Post-colonial politics, stronger concerns for human rights, the rapid dispersal of news: all these (good) things make today's conflicts even harder to win for occupiers. So it may well be better to step back and work through local allies. Few insurgencies have unseated existing governments. In the 'war on terror' most of the important al-Qaeda suspects have been rounded up for America by local allies. Strengthening local forces is the best way of salvaging Iraq and Afghanistan, and may help avoid the need for future interventions. To be fair, the Pentagon talks about building 'partner capacity,' but it may need more radical steps—in particular creating new specialist units to train allies, embed Western soldiers in local forces to improve their performance and be able to call in airstrikes, and help organise civil reconstruction. Generals complain about splitting the army, but they already oversee a myriad of specialist units. It is at least worth trying."

That sounds like a pretty good endorsement of Tom's SysAdmin idea. It mystifies me that reporters from The Economist didn't stumble across Tom's writings in preparing their articles. I know of no one who has spent more time and thought about such a force than Tom. When he first started talking about the SysAdmin force, some pundits thought he was crazy. People are laughing no more.

November 13, 2007

Turning to Nature to Save Energy

At the beginning of the industrial age, mankind marveled at the inventions being developed. Clearly, humans sat atop the food chain and the machines they designed were modern miracles. For the next century, designers and engineers used an "industrial model" to create machines aimed at increasing productivity. Little, if any, consideration was given to using a "biological model" that borrowed from nature. That meant that most engineers believed machines had to get more and more complex in order to become more and more effective. In recent years, that situation has changed dramatically. The industrial model has fallen out of favor and the biological model is on the rise. We've finally figured out that borrowing rules from nature, the rules it has used to generate countless systems and designs, produces better results than trying to engineer rules of our own. Nature has managed to evolve by organizing living organisms into ever more complex systems. "If there's anything more remarkable in nature than its complexity," marvels Robert Frenay, "it's how gracefully it is organized – that such an unimaginable number and diversity of life forms somehow behaves as a coherent system." [Pulse: The Coming Age of Systems and Machines (New York: Farrar, Straus and Giroux, 2006), p. 167.]

BusinessWeek reports that designers are now looking to nature to help save energy by using natural shapes and materials to help reduce friction ["Saving Energy by Fighting Friction," by Stephen Baker, 5 November 2007]. Baker writes:

"Have you ever tried drinking a milkshake through a skinny straw? It can leave your cheeks burning for a piddling payoff. Replace it with a fatter straw, and the cheeks barely have to work at all. Why such a difference? Friction. The liquid rubs the straw. And that same force slows the traffic in all kinds of pipes throughout our economy. Strange as it may sound, the energy implications of skinny pipes are huge: More than one-quarter of the electricity consumed by American industry powers pumps and fans that push along stubborn gases and liquids. So the need for shorter, squatter tubing has never been greater. Fat pipes are part of a barely recognized industry that may soon become much more prominent: friction fighting. Estimates indicate that overcoming resistance accounts for as much as one-third of the energy we consume on the planet. Now, with oil topping $80 per barrel, the cost of each rub, chafe, or blast of headwind is soaring. But such costs also bring opportunities for those with high-tech fixes."

We may long for the day when oil was "just" $80 per barrel. In the weeks since Baker first wrote his article, oil prices have soared. As a result, the energy savings he discusses have become even more important.

"The fight against friction is moving from garages and fix-it shops right into strategy sessions in the corner office. It's driving innovation across the global economy. New nanotechnologies, for example, combat the rubbing and clinging of objects in motion with ingenious thin coatings and ball bearings barely the size of molecules. Chemical giants such as DuPont and BASF, leaders in the $40 billion lubrication market, are developing new polymers and low-friction plastics for car engines and airplanes. And design shops, like Rumsey Engineers of Oakland, Calif., are installing--you guessed it--fat pipes. The company recently used them to double the efficiency of the air-conditioning system at the Oakland Museum. 'We cut friction in half,' says company President Peter H. Rumsey."

Baker goes on to note that designers are increasingly turning to nature to discover how it has dealt with the problem of friction.

Designers in the battle against friction draw lessons from the streamlined forms of plants and animals. One team at Mercedes-Benz , for example, has modeled a concept car on the smooth-swimming form of a boxfish. The 'Bionic' car slices neatly through strong winds on the open highway. Better aerodynamics leads to cars that get 70 miles per gallon of gas, according to Mercedes, 30% more than a standard design. The opportunities for savings are even greater in trucks. When they're rolling at highway speeds, they burn two-thirds of their fuel just to overcome the drag of wind. Researchers at Georgia Tech report that streamlining truck design could reduce this drag by 12%, saving 1.2 billion gallons of fuel per year in the U.S."

No one has ever accused the lowly boxfish of being particularly handsome, which is probably why it attracted the eye of designers.Boxfishbioniccar "Why," they must have asked, "did nature create this particular shape?" Sharks, for example, appear to have a much more aerodynamic shape than the boxfish, but it turns out that the fish's boxy shape does indeed have great friction-reducing properties. If the design leads to cars that actually achieve 70 miles per gallon, I'll bet it starts looking a lot more attractive to consumers.

Scientists, Baker reports, are looking beyond design to the nature of materials themselves -- especially at the molecular level.

"The nanotech players focus mostly on new substances. ApNano Materials makes chemical spheres called fullerenes, each one so small that several billion scarcely fill a single teaspoon. When blended into traditional motor oils, these balls leave a smooth film several atoms thick on the metal they touch. Tests by Israel's technical institute Technion show that they can reduce friction by as much as 50%. ApNano founder Menachem Genut says his fullerenes will be available as an additive in name-brand fuel oil within a year. At DuPont's giant Experimental Station in Wilmington, Del., friction is an age-old adversary. (Teflon, first developed to fight this problem on frying pans, later turned up as a lubricant in jet engines.)"

I read somewhere that Teflon was accidentally discovered while DuPont was looking for an alternative form of Freon and that its non-stick properties were a side effect. One of DuPont's innovative thinkers saw an alternative use for the substance and non-stick cooking was born. Historical product development is often intriguing and Baker goes on to discuss how a Cold War DuPont creation is making a comeback.

"In the late 1950s, researchers at DuPont commercialized a molecule with astounding properties. It held up even in furnace-like conditions where lesser lubricants broke apart. They called it Krytox. The only trouble: Since it was produced from calcium fluoride, a mineral that's expensive to mine, Krytox cost too much to make. DuPont shelved it. But in 1967, a buyer finally surfaced: Following a deadly fire during a launchpad test, NASA needed a nonflammable lubricant that could withstand tremendous heat. Krytox is still pricey. In some forms it can cost more than $1,000 a pound. But its market is growing in double digits, and far beyond NASA. Why? Automakers face a host of challenges that demand better lubrication. First, they're under pressure to build hotter engines, which are far more fuel-efficient than cooler ones, but harder to lubricate. At the same time, today's engines are lighter and smaller, which leaves less room for the flow of cooling air. These sizzling engines must do their work quietly--a key selling point for luxury cars--and must make good on the common 100,000-mile warranty. To meet such specs, automakers are paying top dollar for Krytox and dabbing key components with the Space Age oil. It's as if the world's awakening to the costs of friction, says DuPont's Senior Engineer Carl Walther. 'The market's coming to us.'"

Nature learned long ago how to evolve to conserve energy, including strategies and designs to reduce friction when required. Innovations will continue to come from discoveries found in nature, including coping strategies. We just need to be smart enough to look past things like the unattractive shape of the boxfish to discover the secrets hiding in nature. In my company's business, which centers on rule set automation, we search for the simplest rule that achieves a desired result. Researchers have found that computer models following very simple rules can create some very complex behavior -- just like in nature. Who would have imagined?

November 12, 2007

Energy from Crowds

Crowds seem to be one of life's unavoidable challenges. Of course, where one person sees a challenge others see opportunities. A couple of MIT graduate students looked at crowds and instead of seeing bedlam saw energy ["'Crowd Farm' looks underfoot for renewable energy source," by Angela Haupt, USA Today, 1 November 2007].

"Crowds of people -- the next renewable source of energy? OK, it's not likely to happen in the immediate future, but it's a feasible prospect, say two architecture students who have a prize-winning plan to turn human power into electricity. 'Almost everyone has felt a concrete floor quiver or walked down a staircase that vibrates each time their foot falls,' says James Graham, 27, a graduate student at the Massachusetts Institute of Technology in Cambridge. 'What they're feeling is the energy they're producing being absorbed by the structure. And it made us wonder: Where could we be gathering that energy from?' In April, Graham and Thaddeus Jusczyk, also a graduate student at MIT, took home the top prize at an international sustainable-construction competition in China. There, they presented an idea they call the Crowd Farm. It's a responsive sub-flooring system of blocks that depress slightly under the force of human steps, Graham says. If such a system were installed beneath a train station's lobby, for instance, the slippage of blocks against one another as crowds of people walked would generate electricity-producing power."
Just think of any large venue where thousands of people gather, such as stadiums and arenas. Graham and Jusczyk see them as untapped energy sources.  The picture accompanying Haupt's article shows a "power-generating stool" whose seat moves up and down to generate energy. My partner, Tom Barnett, prides himself on his deep Green Bay Packer roots and celebrates the tickets he has at Lambeau Field. Known to lift a lager or two, he is also pleased that his seats are not too far away from the bathroom. Just imagine the energy that Lambeau Field could generate during a game as all those Wisconsin beer drinkers get up and down to relieve themselves! While in China, Graham and Jusczyk demonstrated their stool.

"The weight of a person sitting on the stool causes a flywheel to spin, powering a dynamo — or electrical generator — and, in turn, four lights. It's a way to use some of the energy that is usually dissipated into architectural surroundings, Graham says. 'People sat down and said, "Oh, wow, who actually knew we were producing so much energy?"' he says. 'And we think that's important. We want whatever energy is produced to be very visible, something you can actually see.' Right now, producing piezoelectric — or mechanical-to-electrical — surfaces is too expensive to be practical, Graham says. But experimentation could lead to more cost-effective technologies. 'As designers, our role is to provoke people into discussion about the development of this technology,' he says. 'We have demonstrated the architectural concept … and now the actual development has to happen through other channels.' Graham says he's optimistic about the potential for human power to be converted into electricity and other forms of energy."

I have stressed before that when you are talking about energy for development, the most important energy under discussion is electrical power. Since that is what is harvested by "crowd farms" and most underdeveloped nations have an abundance of people, there is real opportunity here if the right technologies can be developed at a reasonable price.

"'We're simply taking small vibrations and converting them into energy,' Graham says. 'People all over the world are working on actual technologies like this to convert human power into energy.' Energy harvesting — the process of capturing and storing energy — has grown over the past 10 years, experts say. Today, some bicyclists use headlights that are powered by pedaling. Kids and hikers are using backpacks that charge their cellphones and MP3 players by converting walking-generated energy into electricity. 'It's already being implemented in different scales in the world around us,' says J. Meejin Yoon, an associate professor in MIT's architecture department. 'I think there's a lot of potential in it. And what's great about the Crowd Farm is that it really tackles the multiple levels of harnessing human energy.'"

Obviously the idea of harvesting human activity to produce electrical power has been around for a while (we have all seen the little generators mentioned in the article that are attached to bicycle wheels to produce enough electricity to power a small headlight). What I like about Graham's and Jusczyk's ideas is that they are not only thinking big but are also thinking about context and design (like their sub-flooring idea). I suspect that they look at the world very differently than most of us when they see a big crowd. They not only ask, "What kinds of movements are people making?" but, "What kinds of surfaces are they interacting with?" Great designers and innovative thinkers always look at the world from a unique perspective and never fail to find opportunity.

November 09, 2007

Helping the Bottom Billion

A couple of weeks ago, Robert Zoellick, President of the World Bank, presided over his first annual meetings for that institution. That occasion prompted Washington Post op-ed contributor Paul Collier, an economics professor at Oxford University, to ask "Will the Bottom Billion Ever Catch Up?" [21 October 2007].

"As the world's finance and development ministers descended on Washington, ... Zoellick established himself firmly at the head of the most important agency designed to ensure that globalization does not leave people behind, mired in desperate poverty. But he faces a planet that has changed far more rapidly than his institution has. The Third World has shrunk, but it hasn't vanished. The new third world -- the hard core of the development challenge that Zoellick faces -- is composed of about 50 countries that are home to a billion people."

First, second, and third world designations have long abandoned the ideological framework in which they were first used. Today, they more closely resemble Tom Barnett's Core, Seam, and Gap countries. Core countries are the first tier of globalized nations that are well connected to international economy and prospering as a result. Seam countries are those trying their best to connect so that can benefit from globalization's advance; but their geographical location often places them next to gap countries where things like conflict and corruption act as anchors on development. Some countries, like China and India straddle groups but are moving in the right direction. It is in these emerging market nations that Enterra Solutions' Development-in-a-Box™ framework is designed to work. The problem that Collier's column addresses whether Gap countries -- those at the bottom -- can advance. Collier continues:

"Globalization is propelling China and India toward wealth, and both are closing in on the prosperous with unprecedented speed. But globalization is not working for the bottom billion. Their incomes have been virtually stagnant. From 1960 to 2000, the new third world experienced no growth at all. Meanwhile, the economies of the rest of the developing world have enjoyed accelerating growth, decade by decade. First gradually, then rapidly, the bottom billion have fallen away from the rest of mankind. Encouragingly, Zoellick has picked up on this. "Globalization must not leave the bottom billion behind," he told the National Press Club on Oct. 10. But it already has."

What Collier means is that development is not stagnant. A country is either advancing or it is falling behind. In this accelerated information age, countries that are advancing are outpacing the bottom billion so badly that those at the bottom are being left in the dust and, as a result, are choking on poverty.

"During the golden decade of the 1990s, between the end of the Cold War and 9/11, the bottom billion's divergence from the middle 4 billion people on Earth accelerated to 5 percent a year, measured in per capita gross domestic product. By the millennium, the income gap between the average citizens of the bottom billion and those of the middle 4 billion was 5 to 1. And if you think that wealth gap is alarming, think about the lucky billion -- in Europe, North America, Japan and elsewhere -- at the top."

Collier complains that organizations like the World Bank and the United Nations study global poverty and then report on it from a "bean counting" perspective. The numbers, Collier insists, don't tell the most important part of the story. In the past, he notes, poverty-stricken populations knew they were struggling, but they didn't really understand their relative position at the bottom of the pyramid. That, he says, is no longer the case.

"It is not enough that absolute levels of poverty start to fall in the new third world. The further a billion people fall behind the rest of humankind, the more it will present the world of our children with unmanageable pressures. Even as the world's economies are bifurcating, the Earth continues to draw closer together socially through information and migration. So youth in the bottom billion know that they are being left behind. To catch up, they will need spectacular increases in growth."

One challenge is that this impoverished billion at the bottom live in places that don't really mean very much to developed countries. The primary thing that draws wealthy countries to pay attention to them is moral obligation not national interest.

"Most of the bottom billion live in Africa, but the countries at the bottom are scattered across the continents: places such as Haiti and Bolivia in Latin America, Yemen in the Middle East, many of the 'stans' in Central Asia, and Laos and East Timor in East Asia. They are nearly all small, which is part of the problem. Countries with small and poor populations tend to lack the critical mass of educated and talented people to diagnose failure and do something about it. Globalization has compounded this shortage by making exits both feasible and attractive: The bottom billion are hemorrhaging their limited talent. Chinese students go back to China, Indian students now go back to India, but students from the countries of the bottom billion don't go back. Many of these small countries are also plagued by civil war. Imagine if India or China were divided into 50 countries. Do you think they would all be at peace? To be small is also to be at the mercy of your neighbors, especially if you are landlocked."

Some might be tempted to point to the small, landlocked Kurdish region of Iraq to demonstrate that the conditions Collier describes need not be fatal. There are 25 million ethnic Kurds, however, and they are backed by a very supportive and prosperous diaspora. Most of the countries at the bottom of the pyramid have no such support group of wealthy expatriates. I have written about some necessary pre-conditions that are helpful for development programs to gain traction. Collier's point is that most of those pre-conditions are missing in countries at the bottom. He muses about whether America would have become prosperous had each state attempted to develop separately.

"Suppose this country were not the United States but the Divided States, each sovereign and self-serving. The great manufacturing and agricultural heartland states would have been strangled at birth by the absence of interstate highways, railways and canals. The plight of Niger, which is dependent on Nigeria, and of Uganda, which is dependent on Kenya, is to be landlocked and located in the Divided States of Africa. A third of Africa's population lives in such countries."

Since one of the primary responsibilities of central government is to develop critical infrastructure, it is easy to understand how some countries are limited in what they can do. Eventually, public/private partnerships are going to have to be developed to fill that need. There are thousands of ethnic groups longing to found their own countries. The plight of countries at the bottom of the economic pyramid should serve as a warning that separatist movements aren't generally the path to prosperity. So what's to be done? We can start, Collier argues, by helping create the pre-conditions necessary for develop.

"In each country of the new third world, reformers are struggling with entrenched interests. Catching up depends on the reformers winning these struggles. We can't do that for them, but we can make their battles a whole lot easier than they have been. In 1945, the United States got serious about rebuilding Europe. Yes, there was aid, through the Marshall Plan. But there was also trade: Washington reversed the protectionism of the 1930s and created the General Agreement on Tariffs and Trade, thereby integrating Europe into the U.S. economy. And there was also security: Washington reversed the isolationism of the 1930s and created NATO, thereby stabilizing Europe by placing U.S. troops on European soil for decades. And there was also a shrewd attempt to create systems that produce good governance: Washington created the Organization for Economic Cooperation and Development and encouraged the formation of the European Economic Community, thereby starting the process of mutually setting standards that locked first Greece, Spain, and Portugal and then much of Eastern Europe into democratic market economies. It's feasible to get the bottom billion on a more prosperous track, but doing so will require a serious approach that utilizes all the instruments at our disposal -- and is sustained for at least two decades. Indeed, we will need the same toolkit we used in the recovery of postwar Europe: aid, trade, security and good governance, though utilized differently."

I'd like to underscore two points that Collier makes. First, the solution must be holistic (getting all national sectors involved). Second, it won't be easy and it will take a long time -- Collier predicts at least two decades. When we started contemplating Development-in-a-Box, we knew the approach had to be holistic. We also knew it would be tough to achieve. Collier properly identifies the pre-conditions that can help set the stage for the Development-in-a-Box framework: aid (which I assume will be used to educate the population and improve their health), security, and good governance. Trade, I agree, is also critical, but sustainable trade only follows when the other pre-conditions are in place, because they are necessary conditions to attract foreign direct investment.

"Aid will probably be more or less as important to helping the bottom billion as it was to saving postwar Europe: part of the solution but not decisive. The exclusive reliance on aid has distorted what should be institutions and energy devoted to development. Instead of development agencies, we have aid agencies. Instead of pressure from the street for development, we have pressure for aid. The distortion of institutions and citizen pressure is self-perpetuating because it crowds out consideration of other approaches. (What, for example, do you imagine aid agencies lobby for?) Our utter neglect of trade, security and governance policies for the bottom billion is a scandal -- and an opportunity. Properly used, these policies have real power, which is why they were employed for the recovery of Europe. Zoellick and others who care about world poverty have to learn how to use the full array of policies, rather than pretending that it can all be done with aid. Saving the bottom billion will also require the United States and Europe to work together. The emerging economies will need to do the same. To produce this unity of serious purpose, caring will not be enough: Goodness is in limited supply. Fortunately, it can be reinforced by the less morally demanding (and therefore better supplied) motivation of enlightened self-interest."

I couldn't agree more. We believe Development-in-a-Box is a better approach because it fundamentally relies on making an emerging market economy profitable -- for everybody. Collier wonders, however, if our generation (and those that follow) will step up to the challenge.

"Moved as I am by the miseries of life at the bottom, I, too, have a self-interested stake here: I am fearful of the world that my 6-year-old son will inherit unless we wake up. The generation of Harry S. Truman and Dwight D. Eisenhower rose to the challenge of restoring Europe and gave us a safer world. Our own generation now has its own choice to make: whether to face up to our responsibilities or, like the generation of the 1930s, to go into collective denial and sleepwalk into a nightmare. It isn't just about Zoellick. In our democracies, politicians will ultimately do what we ask of them. It is our collective responsibility to grasp the challenge posed by the bottom billion -- and, critically, to get up to speed with the issues to understand what can be done about it. Only then will our politicians move from gestures to serious, effective actions."

I wrote a post about the desperate need for global leadership . Collier is making the same plea for leadership and vision that I have made. He is also calling for a groundswell of support that would motivate leaders to become more visionary.

November 08, 2007

Will Cheap Cars Undermine India's Future?

India is trying to turn the automotive industry on its ear by offering cheap automobiles ["In India, a $2,500 Pace Car," by Heather Timmons, New York Times, 12 October 2007]. Timmons frames this announcement in revolutionary terms:

"A revolution is taking place in India that could change what most of the world drives. Next fall, the Indian automaker Tata Motors is scheduled to introduce its long-awaited People's Car, with a sticker price of about $2,500. Hot on its tail may be as many as half a dozen new ultra-affordable vehicles — some from the world's leading carmakers, including Toyota and Renault-Nissan."

There is no question as to why automakers want to make and sell cheap cars -- to make money from India's blooming middle class and similar economic groups growing elsewhere.

"With a median age of just under 25 and a rapidly expanding middle class, India will overtake China next year as the fastest-growing car market, according to estimates by CSM Worldwide, an auto industry forecasting service. To tap that emerging market, automakers are starting to respond to Indians' desire for small and cheap cars. As a result, car companies are coming up with new ways to develop and build automobiles worldwide. 'Ask one billion people, and 99 percent of them are going to say they want a car,' said Jagdish Khattar, managing director of Maruti Suzuki India, the country's largest car manufacturer. 'The problem is, How many can afford it?' For a long time, only a few carmakers in India concerned themselves with that question. ... India differs from giant slow-growth and no-growth auto markets like the United States and Western Europe, and even from fast-growing markets like China, in that the emphasis is on small, low-cost cars — but with four doors, not two, and room for the extended family. While the Indian upper classes are snapping up roomier models and even imports like Mercedes-Benz, first-time buyers will provide a big chunk of growth for years to come. By 2013, CSM predicts, India's market will expand an average of 14.5 percent a year, compared with just over 8 percent for China. CSM estimates that in 2013, the Chinese will buy 10.8 million cars, compared with 3.8 million in India, but says there is already a glut of local and foreign manufacturers in China, making India a more attractive long-term market."

Like other companies, the automobile industry is discovering that bottom of the pyramid economics can be profitable. Timmons points out that if the car companies can conquer the Indian car market they will look elsewhere to export cheap cars. Making a cheap car is not easy even if it comes with few frills.

"To satisfy that market, manufacturers and suppliers will need 'exceptional creativity and inventiveness,' Wolf-Henning Scheider, president of Robert Bosch’s gasoline services division, said in a speech in June. 'Slimmed down versions of existing components and systems are not sufficient.' Daryl T. Rolley, general manager for international operations at Ariba, a sourcing and procurement company working closely with Tata, agreed. 'There are so many legacy costs built into a design, and trying to engineer those out is difficult,' he said. 'It's better to start with a clean sheet of paper and engineer low costs in.' The competition to make cars less expensive could finally help make India an automotive research and development hotspot — after years of false starts and complications from bureaucracy, poor infrastructure and labor unrest."

Innovative ideas could make their way into cars sold in the developed world and that would be a good thing. There is, of course, a rub. As Timmons puts it, "Environmentalists and safety advocates are less enthusiastic." Automakers have not suddenly discovered cheap air bags, catalytic converters, and so forth. These basic cars will be ... well ... basic. And that's what worries consumer and environmental advocates.

"Anumita Roychowdhury, the associate director for the Center for Science and Environment in New Delhi, said the ultra-affordable vehicles would worsen India’s pollution and traffic congestion. Already, nearly 60 percent of India’s cities have pollution levels that are considered critical, she said. On the safety front, auto executives insist the cars will comply with the safety standards of the markets they are sold in. But in India those standards do not currently include full-body crash testing, airbags or antilock braking systems. Critics worry that thousands more cars on the roads will increase an already high accident and fatality rate in India, and those traveling in cheap cars are most likely to be injured or killed."

This is a little like tobacco companies dumping cheap cigarettes on emerging markets -- there are profits to be made but the risks probably outweigh the benefits. Among the chief critics of the cheap car is New York Times columnist Thomas Friedman ["No, No, No Don't Follow Us," 4 November 2007].

"India is in serious danger — no, not from Pakistan or internal strife. India is in danger from an Indian-made vehicle: a $2,500 passenger car, the world's cheapest. India's Tata Motors recently announced that it plans to begin turning out a four-door, four-seat, rear-engine car for $2,500 next year and hopes to sell one million of them annually, primarily to those living at the 'bottom of the pyramid' in India and the developing world."

What's Friedman's beef? He's concerned, of course, about the environment, but he's also concerned that in an attempt to make the India poor more mobile, just the opposite will occur. He writes:

"Last week, I was driving through downtown Hyderabad and passed the dedication of a new overpass that had taken two years to build. A crowd was gathered around a Hindu priest in a multicolored robe, who was swinging a lantern fired by burning coconut shells and praying for safe travel on this new flyover, which would lift traffic off the streets below. The next morning I was reading The Sunday Times of India when my eye caught a color photograph of total gridlock, showing motor scooters, buses, cars and bright yellow motorized rickshaws knotted together. The caption: 'Traffic ends in bottleneck on the Greenlands flyover, which was opened in Hyderabad on Saturday. On day one, the flyover was chockablock with traffic, raising questions over the efficacy of the flyover in reducing vehicular congestion.' That’s the strain on India's infrastructure without a $2,500 car."

I've written before about India's lack of infrastructure and how it cannot afford to make improvements without private assistance. No such assistance to build roads is coming from the car makers. What's Friedman's solution?

"It should leapfrog us, not copy us. Just as India went from no phones to 250 million cellphones — skipping costly land lines and ending up with, in many ways, a better and cheaper phone system than we have — it should try the same with mass transit. India can't ban a $2,500 car, but it can tax it like crazy until it has a mass transit system that can give people another cheap mobility option, said Sunita Narain, the dynamo who directs New Delhi's Center for Science and Environment and got India's Supreme Court to order the New Delhi bus system to move from diesel to compressed natural gas. This greatly improved New Delhi’s air and forced the Indian bus makers to innovate and create a cleaner compressed natural gas vehicle, which they now export. 'I am not fighting the small car,' Ms. Narain said. 'I am simply asking for many more buses and bus lanes — a complete change in mobility. Because if we get the $2,500 car we will not solve our mobility problem, we will just add to our congestion and pollution problems.' Charge high prices for parking, charge a proper road tax for driving, deploy free air-conditioned buses that reach every corner of the city, expand the existing beautiful Delhi subway system, 'and then let the market work,' she added."

Friedman then asks rhetorically, "Why should you care what they're driving in Delhi?" Aside from the obvious answer, that anything that adds to global warming is a global concern, Friedman provides an economic argument.

"Here’s why: The cost of your cellphone is a lot cheaper today because India took that little Western invention and innovated around it so it is now affordable to Indians who make only $2 a day. India has become a giant platform for inventing cheap scale solutions to big problems. If it applied itself to green mass transit solutions for countries with exploding middle classes, it would be a gift for itself and the world. To do that it must leapfrog. If India just innovates in cheap cars alone, its future will be gridlocked and polluted. But an India that makes itself the leader in both cheap cars and clean mass mobility is an India that will be healthier and wealthier. It will also be an India that gives us cheap answers to big problems — rather than cheap copies of our worst habits."

China has declared that it wants to become a center for research and development. Here is India's chance to do the same. We would all be better off if India would take Friedman's advice. India could be the shining example of a post-oil state (and one that could make lots of money selling green solutions to richer nations). Friedman's concern is that the $2,500 car will drive India even more deeply into oil dependence. Unless you're living in Venezuela, where Hugo Chavez still gasoline for less than a dime a gallon to preserve his political base, eventually even cheap cars will be expensive to run. Oil dependence is not the best strategy for helping lift millions out of poverty.

November 07, 2007

Kurdistan's Economic Boom and Relations with Turkey

Because of Enterra Solutions' business pursuits in Iraq (especially in the Kurdish region of northern Iraq), I have written a number of posts about developing tensions there [Despite Advances, Kurdistan Sits in Shaky Neighborhood, The Kurdish Situation Intensifies, and Internecine Challenges in Kurdistan]. Writing for the New York Times, Richard A. Oppel, Jr., provides a unique perspective on complicated relationship between Turkey and Kurdistan ["Turkish-Bred Prosperity Makes War Less Likely in Iraqi Kurdistan," 6 November 2007].

"Viewed from the outside, Iraqi Kurdistan looks close to war. Tens of thousands of Turkish troops are amassed on the border. And thousands of Iraqi Kurdish pesh merga fighters have taken up positions in the Mateen Mountains, ready for a counterattack, their local commanders say, should any Turkish operation hit civilians. But wander the markets and byways here and a different reality comes into view, helping to explain why, despite bellicose Turkish threats, an all-out armed conflict may be less likely than is widely understood: the growing prosperity of this region is largely Turkish in origin."

I've described how trucks stream across the Kurdish border filled with Turkish goods and, when returning to Turkey, sit in line empty waiting to be cleared back into Turkey. At the moment, it's really a one-way deal with Turkey on the winning end. Oppel believes that Turkey will think long and hard before destroying that trade relationship.

"While Turkey has been traditionally wary of the Kurds of Iraq, it is heavily invested here, an offshoot of its own rising wealth. Iraqi Kurdistan is also a robust export market for Turkish farmers and factory owners, who would suffer if that trade were curtailed. Moreover, the Kurds' longstanding fear of dominance by other powers now seems to be colliding with modest yet growing material comfort for some urban Kurds that was unthinkable not long ago, and has come on the back of Turkish investment, consumer goods and engineering expertise."

As I noted in an earlier post on Kurdistan, even many of the workers being used in the building boom are Turkish (even though they are mostly ethnic Kurds). Iraqi Kurds have found Turkish workers both honest and hard-working. Oppel goes on to note just how extensive Turkish investment in Kurdistan has become.

"About 80 percent of foreign investment in Kurdistan now comes from Turkey. In Dohuk, the largest city in northwestern Kurdistan, the seven largest infrastructure and investment projects are being built by Turkish construction companies, said Naji Saeed, a Kurdish government engineer who is overseeing one project, a 187-room luxury hotel with a $25 million price. Some of the projects, including overpasses, a museum and the hotel, are financed or owned by the Kurdistan Regional Government, Mr. Saeed said, underscoring the direct financial partnership. Turkish investors are also building three large housing projects, including a $400 million venture that will feature 1,800 apartments as well as a health clinic, school, gas station and shopping center. At the construction site for a 15-story office building in central Dohuk, all of the engineers and managers are Turkish, as are dozens of laborers. 'There are not any Kurdish engineers for a big project like this,' Ahmed Shahin, the Turkish engineering manager, said."

Walk into most stores and they are filled with Turkish goods. Because Kurdistan is landlocked, it must be resupplied primarily by land and the Turkish border is the most reliable -- not to mention that the Kurds prefer Turkish products.

"At the upscale Mazi Supermarket, rows and rows of Turkish-made glassware, shoes, cleaning supplies, beauty products and frozen chickens are for sale. Sixty percent of Mazi’s products are from Turkey, Sherwan Jamil. a store manager, said. Many other products are imported through the Turkish border crossing at Zakho. 'Turkish things are the best, better than Syria and Iran,' said Shamiran Eshkery, 34, as she shopped for shoes. 'We don't have any problem with Turkish food and clothing, but we are upset because we don't want to fight.'"

The official position of the Kurdistan Regional Government is that is doesn't want to fight either. They have continued to insist that the solution to the PKK rebel problem is political not military. As Oppel noted, the Pesh Merga are poised to protect Iraqi Kurds rather than positioned to rebel a Turkish incursion aimed at routing the PKK. For its part, Turkish leaders feel compelled to act against the PKK.

"Turkish Prime Minister Recep Tayyip Erdogan suggested in Washington this week that military operations in Iraq would be narrowly concentrated on guerrillas from the Kurdistan Workers' Party, or P.K.K., who use the jagged mountain border frontier as a haven after attacks in Turkey. 'We have taken the decision to pursue an operation,' Mr. Erdogan said Monday through an interpreter at the National Press Club. 'We are not seeking war,' he added, but offered no specifics or timing. His battle is largely one of perception, trying to convince the Turkish public that he is acting against the Kurdish guerrillas and that he has United States support to do so. But most analysts in Turkey expect any attack to be limited. Whatever the case, Mr. Erdogan's visit seemed to satisfy the Turkish public. Daily newspapers on Tuesday shouted headlines like, 'Green Light to the Operation.' Hard-line nationalists expressed disappointment, but on talk shows, most seemed to welcome the result."

KRG leaders should be able to remain apart from the fight as long as Iraqi Kurds do not become victims of Turkish operations. Even though the PKK enjoys broad support in Kurd, the KRG will insist that any attacks carried out against the PKK are a result of ill-conceived operations against Turkey by the PKK. Just like the Turks can't tolerate PKK attacks against their citizens and soldiers, the KRG has an obligation to protect its citizens.

"If a large attack were to occur, Turkish soldiers would encounter thousands of Kurdish pesh merga fighters who have formed a loose sort of Maginot defensive line that parallels the Turkish border along the ridges of the Mateen Mountains. Kurdish leaders speak only generally about repelling an invasion, but political and military commanders here have specific instructions: Attacks on civilian villages will draw a fierce counterattack."

It appears that cooler heads are prevailing for the moment. It doesn't look like the Turks have any desire to cross the line, but an uneasy tension nevertheless remains in the region. The hope is that economics will trump politics for the time being.

November 06, 2007

The Wireless Web

Google just announced that it is leading an effort to develop technologies that will turn celluar telephones into powerful mobile computers that will be connected to Web anytime and anywhere ["Google Enters the Wireless World," by Miguel Helft and John Markoff, New York Times, 5 November 2007].

"The personal computer is climbing off its desktop perch and hopping into the pockets of millions of people. The resulting merger of computing and communications is likely to revolutionize the telecommunications industry as thoroughly as the PC changed the computing world in the early 1980s. Google, which wants to be as central to the coming wireless Web as it is to today’s PC-dominated Internet, announced ... that it was leading a broad industry effort to develop new software technologies aimed at turning cellphones into powerful mobile computers."

The primary user purpose of new computer phones will be connectivity not productivity, which seems to be a natural next step for Web 2.0 applications.

"If successful, the effort will usher in new mobile devices that as the iPhone has done, will make it easier to use the Internet on the go. The phones, which would run on software that Google would give away to phone makers, could be cheaper and easier to customize. And by giving outside software developers full access to a Google-powered phone’s functions, the alliance members hope for a proliferation of new PC-style programs and services, like social networking and video sharing."

Google, of course, is not going to give its software away as an act of altruism. Its bottom line is higher profits -- which means more ads on more platforms.

"With the move, Google is trying to alter the dynamics of yet another industry. It is already using its deep pockets and innovative technology to shake up television, book publishing, computer software and advertising."

Helft and Markoff indicate that Google has no plans to build a "Google Phone"; rather it is concentrating on working with an impressive group of hardware providers to bring phones with Google software to market.

"[Google] has signed up powerful partners to develop and market the phones, including handset makers like Motorola and Samsung, carriers like T-Mobile, Sprint and China Mobile and semiconductor companies like Qualcomm and Intel. The group, the Open Handset Alliance, expects to start selling the Google-powered phones in the second half of next year."

Google is counting on its Internet clout to convince people to buy phones containing its software. Helft and Markoff not that in order to make a dent in the cell phone sector, Google will have to muscle aside players like Microsoft, Palm, and Research in Motion (famous for it Blackberry offering). Not all analysts are convinced Google will have the impact it expects.

"'I'm not convinced,' said Chetan Sharma, a technology consultant who tracks the wireless data industry. 'It's a pretty impressive list of people in the group, but it takes a long time to get things into the ecosystem.' However, the strength of Google's brand with consumers, as well as the open-source strategy that will make the phone software freely available and customizable, make it difficult to discount Google’s potential impact."

Google is going to have to convince consumers who have appreciated limited advertising on their small phones that increased performance and flexibility is worth getting inundated with ads.

"The initiative is an ambitious push to take its overwhelming dominance of advertising on PC screens onto wireless devices. The company has been frustrated at the limited availability of its services on mobile phones, whose features and software are largely controlled by carriers and handset makers. By courting programmers, Google hopes to give the phones abilities that users demand and carriers find difficult to resist. The idea is that just as spreadsheets, word processors, video games and other software tools turned the personal computer into an everyday appliance, the emergence of new mobile applications can spur wider adoption of so-called smartphones. More use of the Web, whether on PCs or on phones, benefits Google because its advertising systems have such broad reach. Software developers 'will build applications that do amazing things on the Internet and on mobile phones as well,' Eric E. Schmidt, Google's chief executive, said at a news conference.'"

Of course smart phones would be even more useful if the U.S. had a faster and more widely available wi-fi system. One of the hits on the iPhone is that its connectivity through AT&T remains irritatingly slow. Helft and Markoff note that the Open Handset Alliance does include some carriers, but they are mostly international companies. AT&T and Verizon, that account for 52 percent of the U.S. market are not part of the Alliance. Smart phones account for a small portion of the cell phone market, but Google would like to see that change. In fact, according to Helft and Markoff, Google hopes that the availability of new and better software will spur the invention of new devices they call "Mids" that are halfway between a cell phone and a laptop. For most business people, access to email and phone calls remains their lifeblood with Internet access being a sometimes nice to have feature. The new Google phone will like appeal first to younger users who are addicted to social networking. Since they represent the future, however, it is clear that Google is betting on the future.


November 05, 2007

Good Sign from Kurdistan

Over the weekend, Kurdish rebels from Turkey operating out of the mountains of northern Iraq made conciliatory gesture with the release of eight Turkish soldiers they were holding ["Kurdish Guerrillas Release 8 Turks," by Amit R. Paley, Washington Post, 5 November 2007].

"Kurdish guerrillas based in northern Iraq on Sunday freed eight Turkish soldiers captured during a cross-border ambush last month. The guerrillas from the Kurdistan Workers' Party, or PKK, had been under international pressure to release the soldiers before President Bush's scheduled meeting with Turkish Prime Minister Recep Tayyip Erdogan on Monday in Washington."

This is good news for the Kurdistan Regional Government (KRG) which has been pleading for a negotiated settlement of the crisis amid military threats from Turkey.

"Turkey has massed an estimated 100,000 troops on the border, and some observers had feared that the country would invade northern Iraq if the soldiers were not freed. Turkish officials have faced intense domestic pressure to launch a military offensive to stop the PKK, which Turkey, the United States and other countries have designated a terrorist group."

The conciliatory gesture by the PKK was a bit of a surprise. Terrorist groups rarely succumb to public pressure. In this case, however, PKK leadership may have given in because it relieves some political pressure on the KRG (who by most accounts have been good hosts). Regardless of the reasons, a PKK spokesman admits the gesture is an olive branch.

"A PKK spokesman, Abdul Rahman al-Chaderchi, said the group released the soldiers in Iraq about 7 a.m. in order 'to stop deepening the war, violence and bloodshed, and also to make a step toward peace.' He said the PKK was also motivated by humanitarian reasons and a desire to respond to 'demands from the different sides like the European Union, Kurdish regional government, Iraq's government and the U.S. government.' The PKK, whose stated goal is to create an independent Kurdish state out of parts of Turkey, Iraq, Syria and Iran, sparked an international crisis when it ambushed the Turkish soldiers, killing 12 and capturing the eight released on Sunday."

Exactly what "a step toward peace" means is unclear. As long as the PKK harbors separatist goals, it will remain at odds with politicians in Ankara. The PKK may dream of a larger Kurdistan, but KRG leaders probably have different feelings. They have successfully carved out an autonomous region that is quickly becoming an economic oasis. It was not easy for rival Kurd factions to come to an accommodation that permitted the current government arrangement. Adding more rivals for power into the mix could plunge the region into internecine warfare, not to mention the fact that Iraq, Iran, Syria, and Turkey (as well as most of the rest of the world) are against the formation of a greater Kurdistan. The U.S. response didn't indicate that anyone was reaching out for the offered olive branch.

"The United States has been caught in the middle of the standoff, condemning the attacks on Turkey, one of the closest U.S. allies in the Muslim world, but also warning Turkey against attacks in Iraq, which could further destabilize an already violence-ridden country. The U.S. military continued to play the middleman Sunday, receiving the soldiers from Iraqi officials and then transferring them to Turkish custody, according to State Department spokesman Sean McCormack. 'We applaud the efforts of the Government of Iraq to secure the release of the hostages,' McCormack said in a statement. 'We urge continued, deepened and immediate cooperation between Iraq and Turkey in combating the PKK, which is a common enemy of Turkey, Iraq and the United States.'"

Identifying the PKK as a "common enemy" might not be the most helpful language after the PKK's conciliatory gesture. KRG leaders have repeatedly stated that the only solution to the situation is political. Any such political solution will require the PKK to be a partner in the process. A next good step for the PKK would be to renounce its avowed goal of an independent Kurdistan so that it could begin the process of establishing an autonomous (or federated) Turkish Kurdistan. A peaceful and prosperous Kurdish area in Turkey would benefit both greater Turkey as well as local Kurds. The way forward remains perilous and the path to peace is long. Nevertheless, each step that moves the region in the right direction is a good step.

November 02, 2007

At the Nexus of IT and ET

New York Times columnist Thomas Friedman wrote a great column about the need for a revolution in electric power generation and distribution technology (ET) to match the ongoing revolution in information technology revolution (IT) ["If I.T. Merged with E.T.," 31 October 2007]. As I have argued before, the most interesting activities generally take place where two sectors intersect -- in this case, where ET meets IT. Normally, we think of the IT revolution only getting a toehold where electrical power is already available. After all, all IT requires some sort of power to work. Friedman begins his column disabusing us of such a notion.

"Well, here’s something you don't see every day. I was visiting an Indian village 350 miles east of Hyderabad and got to watch a very elderly Indian man undergo an EKG in a remote clinic, while a heart specialist, hundreds of miles away in Bangalore, watched via satellite TV and dispensed a diagnosis. This kind of telemedicine is the I.T. revolution at its best. But what struck me most was that just underneath the TV screen, powering the whole endeavor, were 16 car batteries — the E.T., energy technology, revolution, at its worst."

In past posts, I've described people in Africa who recharge their cell phones using car batteries. I've written about pedal-powered generators that keep villages connected. I've discussed Dean Kamen's idea for a Stirling engine that can be used in outlying areas to generate enough power to purify water and power small devices. I've detailed advances in solar technology that would help get electrical power to many places that remain without it. Despite all the talk about electrical power generation, the availability of electricity to poor areas remains dismal. Friedman notes this remains true for India, even though it boasts of one the world's fastest growing economies.

"Some 250 million Indians today have cellphones. Many of them are people who make just $2 or $3 a day. More and more are getting access to computers and the Internet, even in villages. But only 85 percent of Indian villages are electrified — and that is being generous, since many still don’t have reliable 24/7 quality power."

Friedman argues for a concerted push for an ET revolution because he believes it would generate an exponential increase in the benefits that the IT revolution could bring to poor regions. I couldn't agree with him more. Widespread access to electrical power is one of the pre-conditions I've discussed as necessary to make Enterra Solutions' Development-in-a-Box™ framework more effective in emerging market countries. Friedman writes:

"If only ... If only we could make a breakthrough in clean, distributed power — an E.T. revolution — it could drive the I.T. revolution into every forgotten corner of the world to create jobs, light up schools and tap the innovative prowess of rural populations, like India's 700 million villagers. There is a green Edison growing up out here — if only we can give them the light to learn. To appreciate that potential, look at how much is being done with just car batteries, backup diesel generators and India’s creaky rural electricity grid. I traveled to a cluster of villages with a team from the Byrraju Foundation — a truly impressive nonprofit set up by B. Ramalinga Raju and his family. Raju and his brother Rama are co-founders of one of India's leading outsourcing companies, Satyam Computer Services. The Hyderabad-based brothers wanted to give back to their country, but they wanted it to be a hand up, not a hand out. So besides funding health clinics and computer-filled primary schools in villages in their home state of Andhra Pradesh, they tried something new: outsourcing their outsourcing to villages. Here in Ethakota, amid the banana and palm groves, 120 college-educated villagers, trained in computers and English by Satyam and connected to the world by wireless networks, are processing data for a British publisher and selling services for an Indian phone company. They run two eight-hour shifts, but could run three — if only the electricity didn't go off for six hours a day!"

As I noted in yesterday's post about the new university being built in Saudi Arabia [Education in Saudi Arabia], education without a complementary program to create jobs that can take advantage of those receiving the education is destined to create a generation of disaffected, if not angry, young people. Jobs cannot be created if electrical power is not available -- development is driven by electrical power. Friedman concluded his column this way:

"When the world starts getting wired and electrified, you never know who you'll bump into. In the village of Podagatlapalli, I met Sha Yu, a 22-year-old Chinese graduate of Beijing's Renmin University and a Byrraju volunteer, teaching rural Indian high school students how to produce their own newspaper on a computer. 'I felt in China people don't know so much about India, so I thought I want to come and see what is happening here,' she explained. 'In rural India, communication is not that developed, so I started a newspaper for the high school. If I can learn something from here, and bring it back, I can give some ideas to the Chinese government. If this rural area can be empowered, it would be an amazing thing for the world.' Amazing indeed. India's strained megacities, like Mumbai and Calcutta, can't keep growing. Mr. Jacob estimates that just one of his rural outsourcing centers creates the equivalent employment and salaries of 400 acres of farm land. India, in other words, could actually mint more land in the countryside, but it can't do it off car batteries. It will take a real energy revolution. If only ..."

Earlier Friedman noted that whereas workers in India come and go with some frequency in city jobs, rural workers are more reliable and virtually never leave. That shouldn't be surprising; they really have no where to go. Job opportunities in rural areas are few and far between. Friedman's point, however, is that they don't want to leave their villages for the big cities and he sees that as a good thing. Not only is getting jobs to rural areas a good thing, but the concomitant benefits of those jobs would be just as good. Infrastructure would improve, housing would improve, availability of commercial products would improve, people would get healthier, there would be more stress on education, etc., etc. The viral benefits of development and job creation are what help bring people out of poverty and the key is availability to electrical power.