Enterprise Resilience Management Blog

Nerds get Curves

The cinematic stars of all those 1980s class B movies about nerds portrayed peculiar, weak, socially outcast, but bright, young males. They defined for a generation what a nerd or geek was supposed to look and to act like. Even more modern offerings, like the hit TV show Chuck, continue to perpetuate some of these stereotypes. According to Stephanie Rosenbloom, all that is changing ["Sorry, Boys, This Is Our Domain," New York Times, 21 February 2008].

"The prototypical computer whiz of popular imagination — pasty, geeky, male — has failed to live up to his reputation. Research shows that among the youngest Internet users, the primary creators of Web content (blogs, graphics, photographs, Web sites) are not misfits resembling the Lone Gunmen of 'The X Files.' On the contrary, the cyberpioneers of the moment are digitally effusive teenage girls."

When you think about it, it makes sense. In the Web 2.0 age of social networking, the primary user is unlikely to be an anti-social male happy to be locked alone in his bedroom with his computer. The surprising thing is how very young some of the "young" girls involved are. Take, for example, Nicole Dominguez, who has her own domain on the Web.

"'Most guys don't have patience for this kind of thing,' said Nicole Dominguez, 13, of Miramar, Fla., whose hobbies include designing free icons, layouts and 'glitters' (shimmering animations) for the Web and MySpace pages of other teenagers. 'It's really hard.' Nicole posts her graphics, as well as her own HTML and CSS computer coding pointers (she is self-taught), on the pink and violet Sodevious.net, a domain her mother bought for her in October. 'If you did a poll I think you'd find that boys rarely have sites,' she said. 'It's mostly girls.' Indeed, a study published in December by the Pew Internet & American Life Project found that among Web users ages 12 to 17, significantly more girls than boys blog (35 percent of girls compared with 20 percent of boys) and create or work on their own Web pages (32 percent of girls compared with 22 percent of boys)."

This phenomenon appears to be particularly associated with the social aspects of the World-Wide Web. There is one exception to this, however, and it too comes as no surprise considering the popularity of the Jackass movies among young teenage boys.

"Girls also eclipse boys when it comes to building or working on Web sites for other people and creating profiles on social networking sites (70 percent of girls 15 to 17 have one, versus 57 percent of boys 15 to 17). Video posting was the sole area in which boys outdid girls: boys are almost twice as likely as girls to post video files. Explanations for the gender imbalance are nearly as wide-ranging as cybergirls themselves. The girls include bloggers who pontificate on timeless teenage matters such as 'evil teachers' and being 'grounded for life,' to would-be Martha Stewarts — entrepreneurs whose online pursuits generate more money than a summer's worth of baby-sitting."

Rosenbloom reports that for some girls the Web represents an economic opportunity not just a social one.

"'I was the first teenage podcaster to receive a major sponsorship,' said Martina Butler, 17, of San Francisco, who for three years has been recording an indie music show, Emo Girl Talk, from her basement. Her first corporate sponsorship, from Nature's Cure, an acne medication, was reported in 2005 in Brandweek, the marketing trade magazine. Since then, more than half a dozen companies, including Go Daddy, the Internet domain and hosting provider, have paid to be mentioned in her podcasts, which are posted every Sunday on Emogirltalk.com. 'It's really only getting bigger for me,' said Martina, an aspiring television and radio host who was tickled to learn about the Pew study. 'I'm not surprised because girls are very creative,' she said, 'sometimes more creative than men. We're spunky. And boys ... ' Her voice trailed off to laughter."

While men may still rule the code writing world, content creation on the Web (especially for social networking sites) is being done increasingly by teenage girls.

"The 'girls rule' trend in content creation has been percolating for a few years — a Pew study published in 2005 also found that teenage girls were the primary content creators — but the gender gap for blogging, in particular, has widened. As teenage bloggers nearly doubled from 2004 to 2006, almost all the growth was because of 'the increased activity of girls,' the Pew report said. The findings have implications beyond blogging, according to Pew, because bloggers are 'much more likely to engage in other content-creating activities than nonblogging teens.' But even though girls surpass boys as Web content creators, the imbalance among adults in the computer industry remains. Women hold about 27 percent of jobs in computer and mathematical occupations, according to the Bureau of Labor Statistics."

These skewed employment numbers in the IT industry have their beginnings in high school and the disciplines that teenage girls opt to pursue.

"In American high schools, girls comprised fewer than 15 percent of students who took the AP computer science exam in 2006, and there was a 70 percent decline in the number of incoming undergraduate women choosing to major in computer science from 2000 to 2005, according to the National Center for Women & Information Technology. Scholars who study computer science say there are several reasons for the dearth of women: introductory courses are often uninspiring; it is difficult to shake existing stereotypes about men excelling in the sciences; and there are few female role models. It is possible that the girls who produce glitters today will develop an interest in the rigorous science behind computing, but some scholars are reluctant to draw that conclusion."

I'm willing to go out on a limb and predict that young girls who create Web content are unlikely to pursue computer science careers. I'm not alone in this assessment. 

"Jane Margolis, an author of “Unlocking the Clubhouse: Women in Computing” (MIT Press, 2002) [notes that while she is] pleased that girls are mastering programs like Paint Shop Pro [she sees a] profound distinction between using existing software and a desire to invent new technology."

Neither Margolis nor I am saying that all girls will steer clear of computer science careers. What we are saying is that users of software and creators of software have profoundly different motivations for doing what they do. Both groups are creative, but their creativity expresses itself in very different ways. Rosenbloom writes that there are a few theories about why girls provide more content on the Web. I think the strongest argument Rosenbloom mentions is the fact that girls generally read more and write better than boys.

"Teasing out why girls are prolific Web content creators usually leads to speculation and generalization. Although girls have outperformed boys in reading and writing for years, according to the National Center for Education Statistics, this does not automatically translate into a collective yen to blog or sign up for a MySpace page. Rather, some scholars argue, girls are the dominant online content creators because both sexes are influenced by cultural expectations."

The boys, as noted earlier, do post more videos, but as Rosenbloom reports, this activity is more about demonstrating their manhood than their creativity.

"The one area where boys surpass girls in creating Web content is posting videos. This is not because girls are not proficient users of the technology, Professor [John Palfrey, the executive director of the Berkman Center] said. He suggested, rather, that videos are often less about personal expression and more about impressing others. It's an ideal way for members of a subculture — skateboarders, snowboarders — to demonstrate their athleticism, he said."

The article focused on American culture primarily. Whether the trends holding sway in America hold globally is not revealed; but I wouldn't be surprised if they do in countries where girls are provided education. Nasrin Alavi, author of We are Iran: The Persian Blogs, discusses how important blogs are for Iranian women. She writes:

"Blogs have allowed Iranian women to express themselves freely for the first time in modern history and this small freedom may have a big knock-on effect."

My partner, Thomas Barnett, noted on his blog that girls around the world are starting to be appreciated more [To go Core is to value daughters]. As father of daughter, this is a trend I'm pleased to see. It is also a concomitant benefit of globalization that rarely gets mentioned. I do think that as more young girls become familiar with technology more of them will eventually get interested in the technical side of IT. These, however, will be the girls who are fascinated with how things are done (i.e., how the programs work) rather than the girls who are fascinated by what's done with them (i.e., content created for the Web). We are all better off when half of humanity is neither sidelined nor pigeon-holed into stereotyped roles. We need all of the help we can get from all of the best minds available to help solve the challenges headed our way.

Shades of Blackness

Occasionally a story about something far afield from your normal range of activities and interests catches your eye and draws you in. I found an article about scientists developing their own little black hole such a story ["Their Deepest, Darkest Discovery," by Rick Weiss, Washington Post, 20 February 2008]. Technically, of course, what scientists have done is not create a black hole but a material that absorbs light -- almost all of it.

"Researchers in New York reported this month that they have created a paper-thin material that absorbs 99.955 percent of the light that hits it, making it by far the darkest substance ever made -- about 30 times as dark as the government's current standard for blackest black. The material, made of hollow fibers, is a Roach Motel for photons -- light checks in, but it never checks out. By voraciously sucking up all surrounding illumination, it can give those who gaze on it a dizzying sensation of nothingness. 'It's very deep, like in a forest on the darkest night," said Shawn-Yu Lin, a scientist who helped create the material at Rensselaer Polytechnic Institute in Troy, N.Y. 'Nothing comes back to you. It's very, very, very dark.'"

I guess you could say that the scientists have created the antithesis of what the British band Procol Harum called "A Whiter Shade of Pale." The scientists are now ready, they believe, to help move science fiction into reality. Are we ready for a Klingon cloaking device?

"Using other new materials, some are trying to manufacture rudimentary Harry Potter-like cloaks that make objects inside of them literally invisible under the right conditions -- the pinnacle of stealthy technology. Both advances reflect researchers' growing ability to manipulate light, the fleetest and most evanescent of nature's offerings. The nascent invisibility cloak now being tested, for example, is made of a material that bends light rays 'backward,' a weird phenomenon thought to be impossible just a few years ago. Known as transformation optics, the phenomenon compels some wavelengths of light to flow around an object like water around a stone. As a result, things behind the object become visible while the object itself disappears from view."

That's cool and scary. It doesn't take much imagination to realize how such a device could be used for both good and ill. Weiss reports we have a few years yet to ponder such a dilemma.

"'Cloaking is just the tip of the iceberg,' said Vladimir Shalaev, a professor of electrical and computer engineering at Purdue University and an expert in the fledgling field. 'With transformation optics you can do many other tricks,' perhaps including making things appear to be located where they are not and focusing massive amounts of energy on microscopic spots. U.S. military and intelligence agencies have funded the cloaking research 'for obvious reasons,' said David Schurig, a physicist and electrical engineer at North Carolina State University who recently designed and helped test a cloaking device. In that experiment, a shielded object a little smaller than a hockey puck was made invisible to a detector that uses microwaves to 'see.' The first working cloaks will be limited that way, he said -- able to steer just a limited part of the light spectrum around objects -- and it could be years before scientists make cloaks that work for all wavelengths, including the visible spectrum used by the human eye. But even cloaks that work on just a few key wavelengths could offer huge benefits, making objects invisible to laser beams used for weapons targeting, for example, or rendering an enemy's night goggles useless because objects would be invisible to the infrared rays those devices use."

Weiss reports that the military didn't fund Lin's research into light absorbing material, but it was one of the first groups to knock on his door after its existence was made known. Such a material could be added to the military's other stealth coatings to help protect its assets. What immediately sprang to my mind, however, and obviously to others, was a more peaceful use for the material.

"Solar panels coated with it would be much more efficient than those coated with conventional black paint, which reflects 5 percent or more of incoming light. Telescopes lined with it would sop up random flecks of incidental light, providing a blacker background to detect faint stars. And a wide array of heat detectors and energy-measuring devices, including climate-tracking equipment on satellites, would become far more accurate than they are today if they were coated with energy-grabbing superblack. That helps explain why Lin has been fielding queries from solar-energy companies such as SolFocus of Mountain View, Calif., and the European Space Agency."

Lin's material is made out of nanotubes; a substance that has received a lot of attention the past few years.

"It is made of carbon nanotubes: microscopic, hollow fibers whose walls are just one atom thick. Importantly, the fibers are widely spaced, providing plenty of space to allow light in and almost no surfaces to bounce it back out. 'There are a lot of materials that are very absorbing of light so that once the light gets in, very little is reflected. That is not the big issue,' said John Pendry, a physics professor at Imperial College London. 'The big issue is persuading the light to go in there in the first place' -- something the New York team accomplished by spacing the nanotubes so widely."

As a side note, there are fears being raised about the safety of nanotubes such as those expressed in an article the Economist ["A Little Risky Business," 22 November 2007].

"Waving a packet of carbon nanotubes accusingly at the assembled American politicians during [an October 2007] hearing ... in Congress, Andrew Maynard was determined to make a point. The nanotechnology expert at the Woodrow Wilson International Centre for Scholars in Washington, DC, had bought the tiny tubes on the internet. They had arrived in the post along with a safety sheet describing them as graphite and thus requiring no special precautions beyond those needed for a nuisance dust. Dr Maynard's theatrics were designed to draw attention to a growing concern about the safety of nanotechnology. The advice he had received was at best uncertain, and at worst breathtakingly negligent. For a start, describing carbon nanotubes as graphite was rather like describing a lump of coal as a diamond. Graphite is made of carbon, just like the nanotubes, although the tubes themselves are about 1m times smaller than the graphite that makes up the 'lead' in a pencil. Carbon nanotubes may be perfectly safe, but then again, they may have asbestos-like properties. Nobody knows. Indeed, industry, regulators and governments know little about the general safety of all manner of materials that are made into fantastically small sizes."

Back to the subject at hand -- invisibility!

"Pendry and others are hoping to [perfect] complete invisibility. ... A superblack object, even if invisible to the eye, still casts a shadow behind it, while an object shielded by an invisibility cloak does not. Pendry pioneered much of modern thinking about how to attain full invisibility using 'metamaterials' -- substances engineered to manhandle light. Ordinary matter, such as glass or water, slows and bends light as it passes through. Metamaterials contain bits of metal or other substances embedded in precise patterns to make the light bend in an opposite direction from normal paths. ... The first generation, metamaterial 'cloaks' are not thin and flexible like Harry Potter's imagined version but are inches thick and solid, resembling canisters, making them able to hide a stationary object but not a moving person. But the science is progressing quickly, physicist Schurig said. To make a thin, flexible metamaterial cloak, Schurig said, 'is technically challenging but not fundamentally impossible.' And although no cloak can yet make objects fully invisible to the human eye, he added, it may not be long before scientists can bend the visible spectrum enough to make an object hard to see. ... Pendry added a cautionary note about invisible cloaks, making a real-life distinction from the stuff of fiction: People inside them will not be able to see out. By definition, if no light is bouncing off them, none can reach their eyes, either."

That removes a bit of the creepiness about invisibility cloaks. When people think about invisibility, they undoubtedly remember the Invisible Man shows and imagine all of the unseemly things an invisible man could do. Weiss concludes his article by mentioning another potential use of light bending technologies.

"There is a flip side to the emerging ability to manipulate light, scientists say. 'Think anti-cloaking,' said Shalaev, the engineering professor. 'Instead of excluding light from an object, you can concentrate light in a small area.' Normally, light cannot be squeezed into a space smaller than its own wavelength, he said, but transformation optics create the possibility of accomplishing just that -- packing loads of energy into a vanishingly small space. Such beams could pack a destructive punch, or could be tamed to serve as ultrasensitive needlelike probes, able to detect even a single molecule of some substance of interest."

All of this work with light is fascinating. You might have read about other researchers who have managed to capture and stop light then release it [see "Researchers now able to stop, restart light," by William J. Cromie, Harvard University Gazette, 24 January 2001]. As that article notes, nobody has ever disproved Albert Einstein's theory that light cannot travel faster than 186,282 miles per second; but everything else about the properties of light appear to be up for grabs.

Negative Views of Free Trade

It is no secret that free trade and globalization have their critics -- just listen to the presidential debates between Clinton and Obama. Among other critics of free trade is Ha-Joon Chang, author of the book Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism. Paul Blustein, journalist in residence in the Global Economy and Development Program at the Brookings Institution, reviewed Chang's book for the Washington Post ["The Case Against Globalization," 17 February 2008].

"Bookstore shelves are loaded with offerings by economists and commentators seeking to explain, in accessible prose, why free-trade-style globalization is desirable and even indispensable for countries the world over. Now comes the best riposte from the critics that I have seen. Readers who are leery of open-market orthodoxy will rejoice at the cogency of Bad Samaritans. Ha-Joon Chang has the credentials -- he's on the economics faculty at Cambridge University -- and the storytelling skill to make a well-informed, engaging case against the dogma propagated by globalization's cheerleaders. Believers in free trade will find that the book forces them to recalibrate and maybe even backpedal a bit."

As I noted in a recent post [The Return to Protectionism?], there is already some backpedaling going on. Chang's book may add stimulus to the movement, which is not necessarily a good thing. Blustein suspects, however, that Chang won't win over many new converts.

"That's because Chang goes way overboard in advancing his central argument, which is that poor countries can get rich only by doing pretty much the exact opposite of what they are told by the World Bank, the International Monetary Fund and the World Trade Organization -- the 'bad' Samaritans to which the title refers."

Blustein reports that Chang, a South Korean, draws heavily from his childhood experience with the spectacular growth of the South Korean economy, which took that country from one where indoor plumbing was a luxury to one where high tech gadgets are the norm.

"In the process of achieving this breathtakingly rapid improvement in living standards, he notes, South Korea departed dramatically from free-market principles. The country set up high barriers to protect its fledgling industries, such as steel and autos, and offered subsidies to help promising firms flourish. Other Asian countries, notably Japan and Taiwan, developed in similar ways. The dirty secret of capitalism, as Chang explains, is that much the same is true of the modern industrial economies of the West, including Britain and the United States. Although advocates of free trade typically extol the British as the pioneers of open markets, London lowered tariffs in the mid-19th century only after its industries had firmly established their lead over rivals. Likewise, U.S. tariffs remained high throughout America's industrialization. So why, Chang asks, should today's poor nations be required to develop differently?"

Blustein asserts that this is Chang's strongest argument.

"Chang acknowledges that 'the mere co-existence of protectionism and economic development does not prove that the former caused the latter.' But, he asserts, 'Free trade economists have to explain how free trade can be an explanation for the economic success of today's rich countries, when it simply had not been practiced very much before they became rich.' A fair point, and Chang scores some more when he recounts the widespread unemployment and subpar growth that occurred in countries such as Mexico and Ivory Coast after their governments, under pressure from the 'bad Samaritans,' lowered barriers that were sheltering their industries."

The theory behind free markets is that they force a country to shed unproductive industries and allow it to focus on what it does best. Protectionism implies that any country can master any industry given enough time. Blustein uses Zambia as an example of bad protectionism.

"Consider Zambia, a country I visited recently, which followed World Bank advice in the 1990s to open its markets to foreign clothing. Unfortunately, the local industry was woefully uncompetitive, having survived in a protected market by selling shoddy, expensive apparel to the local population and showing no sign of success at exporting. So it quickly collapsed amid a flood of imports, resulting in 10,000 lost jobs. Sad as that was for the workers, millions of Zambians can now afford decent clothing (much of which is used and has been donated by Americans to various organizations, shipped to Africa in bulk and sold cheaply by street vendors). That's probably a very good trade-off for the poor. Did it help put Zambia on the path to prosperity? No, and for that the World Bank should be embarrassed -- for being overoptimistic Samaritans, not bad ones."

I would venture to say that Muhammad Yunus would take a different take on whether such actions put Zambia on the path to prosperity. The street vendors and their customers are probably both better off. For them, prosperity is measured in tinier steps than the big leaps Chang is advocating. The big leaps made by developing countries were all preceded by smaller steps, such as good education systems and adequate healthcare. There is no one template that fits every situation, because every country starts at a different point and faces different challenges.

"Chang counters that short-term benefits such as cheaper clothing should be sacrificed for the sake of long-term development. That means nurturing manufacturers with long periods of protection and subsidies, like the 30 years Toyota got in Japan. He insists that this approach can work even in destitute countries. 'A backyard motor repair shop in [Mozambique's capital] Maputo simply cannot produce a Beetle, even if Volkswagen were to give it all the necessary drawings and instruction manuals,' he writes. 'But this does not mean that Mozambicans should not produce something like a Beetle -- one day. ... After all, a backyard auto repair shop is exactly how the famous Korean car maker, Hyundai, started in the 1940s.'"

I'm not sure Chang's vision of an automaker in every country is either workable or desirable. Environmental concerns, which were on the back burner in the 1940s, cannot be pushed aside today simply because developed nations were poor stewards in the past. The Samaritans, developed countries, and developing countries need to find a way forward that permits development, protects the environment, and leverages technology to leap frog the mistakes of the past. Enterra Solutions' Development-in-a-Box™ approach is based on the philosophy that it is wasteful and ineffective for every developing country to reinvent their industries. Doing it "exactly how the the famous Korean car maker, Hyundai" did it is not the answer. Blustein concludes with the point I've made in the past about the importance of establishing pre-conditions for development, which include, a healthy and educated work force as well as good governance.

"Lamentably, the book gives short shrift to the debacles that show the pitfalls of industrial planning. India's experience in the 1950s and '60s was a revealing example; its poor are still paying a dreadful price for the government's excessive investment in steel plants, fancy hospitals and universities instead of elementary schools and small clinics. Chang also glosses over the objection that industrial planning is doomed to fail in countries lacking the strengths that Japan, Korea and Taiwan had -- well-educated populations and talented, mostly incorruptible civil servants. Ironically, in an incisive chapter on privatization, he cites the poor training and low ethical standards among government officials in many developing countries as a good reason to avoid selling off state enterprises that will require effective regulation. 'Privatization sometimes works well, but can be a recipe for disaster, especially in developing countries that lack the necessary regulatory capabilities,' he writes. Well, if such governments can't regulate properly, how can they successfully oversee the creation of world-class auto industries?"

Clearly, the perfect economic theory has not yet emerged. There are likely to be many paths to development, but almost all of those paths will have to share some common features -- good health, good education, and good governance being among them. To fully enjoy the benefits of globalization, developing countries must eventually play by the same rules as other global players, which means they must eventually make peace with the Samaritans. For their part, the Samaritans must keep an open mind and willingness to learn. Muhammad Yunus was as frustrated with the World Bank as Chang seems to be, but the World Bank eventually saw the wisdom in Yunus' work. Trying to create good guys and bad guys among the big players in globalization is not the best way forward for either developed or developing states.

National Integration and Minority Rights

As you might be aware, Kosovo recently declared its independence from Serbia; a move immediately recognized by the United States. As a result, thugs attacked the U.S. embassy in Serbia and riots broke out in northern Kosovo. The primary reason that Kosovo declared its independence is that the majority of Kosovo's citizens are ethnic Albanians rather than Serbs. For years, they were persecuted by the Serbs and they are convinced their lives will better once they are out from under Serbian control. This break highlights a challenge that most nations face, how do you deal with minorities in such a way that their interests are protected and so that the territorial integrity of the nation can be preserved. Kenya is currently undergoing a significant internal population movement that could eventually lead to separate states. The same is happening in Sudan with southern Sudan [see my post Looking Forward to "New Sudan"] breaking away. There are also concerns that the Kurdistan region of northern Iraq might pursue independence from the rest of Iraq -- an outcome U.S. policymakers see as extremely undesirable.

A politician in a town in southern Turkey, an ethnic Kurd, is trying to point the way in that part of the world as to how to integrate ethnic groups and move forward; but his efforts may be premature ["Minority Rules," by Meline Toumani, New York Times Magazine, 17 February 2008]. Toumani points out that the politician's course has not been easy nor the way smooth.

"Walking through the Sur district of Diyarbakir with Abdullah Demirbas was like taking an old-fashioned mayoral stroll. ... Demirbas addressed most of the locals in Kurdish, his native language, but every now and then he switched to Turkish. When I asked him why, he said he has known all his constituents long enough to remember which language each speaks. Neither my question nor his answer was idle. Demirbas was in a legal ordeal when we spoke last summer because he had been using Kurdish in his capacity as the mayor of Sur, Diyarbakir's central district, an ancient neighborhood ringed by several miles of high basalt walls. For printing a children’s book and tourist brochures in Kurdish, according to a report by the pro-Kurdish Democratic Society Party, Demirbas was accused of misusing municipal resources. For giving a blessing in Kurdish while officiating at a wedding ceremony, he was accused of misusing his position. And for proposing that his district should employ Kurdish-speaking phone operators and print public-health pamphlets in Kurdish, he was accused (and later acquitted) of aiding a terrorist organization — the Kurdistan Workers Party, or P.K.K. The fact that a reference to terrorism should find its way into the reported accusations against Demirbas, a 41-year-old schoolteacher-turned-politician, might seem bizarrely beside the point, given the scale of the conflict between Turks and Kurds."

Demirbas' plight underscores exactly how sensitive the Turk/Kurd situation remains. The wounds run deep because PKK fighting has waged for decades. This past week the Turks made a major land incursion into northern Iraq to attack PKK strongholds. They claim to have killed dozens of PKK rebels.

"The fighting between P.K.K. guerrillas and Turkish soldiers has raged in various forms for nearly 30 years and since 2004 has alternated between short-lived cease-fires and sporadic attacks. After 12 Turkish soldiers were killed in a devastating assault in October last year, the military began a series of airstrikes against P.K.K. camps in northern Iraq. These came after months of diplomatic wrangling in which Turkey criticized American and Iraqi leaders for not supporting its fight against the P.K.K., and the Bush administration begged Turkey not to destabilize the one part of Iraq that was fairly functional. This would seem to be far more serious than a dispute over the language of a children's book. But the battle that Demirbas entered, waged entirely on paper and in courtrooms, is closely related to the violence. For the past two years, politicians all over southeastern Turkey, along with human rights advocates, journalists and other public figures, have been sued for instances of Kurdish-language usage so minor that they are often a matter of a few words: sending a greeting card with the words 'happy new year' in Kurdish, for example, or saying 'my dear sisters' in a speech at a political rally. Such lawsuits have become so common that in some cases the accused is simply fined for using the letters W, X or Q — present in the Kurdish but not the Turkish alphabet — in an official capacity. In cases involving elected politicians, like Demirbas, the language usage is sometimes considered disloyalty and can carry a prison sentence. This miniaturist culture war and the fighting in the mountains are related because they both reflect the inability of Turkish society to integrate Kurds — about 20 percent of the country's total population and the majority in the southeast — in a way that doesn't insist on assimilation down to the last W, X or Q. For decades, Turkish law has not allowed acknowledgment of Kurds as a distinct ethnic group; from 1983 to 1991 it was even illegal to speak Kurdish in public. Until 2002, broadcasting in Kurdish was essentially banned, and only in 2003 could parents give their children Kurdish names (except, again, for names using W, X or Q). But even these small advances suggest that while the military fight has been a stalemate, the deeper cultural conflict can, with relative ease, be resolved. Such at least is the vision of Abdullah Demirbas. His may not be the effort that makes headlines, but it is probably the one that matters most."

The mayor, a younger Kurdish colleague, has faced similar trials.

"Demirbas's colleague Osman Baydemir is six years younger but has similar stories. A lawyer by profession, Baydemir is mayor of the greater Diyarbakir municipality, which encompasses Sur and 31 other districts. Baydemir faces more than 50 investigations and also risks prison for a long list of cultural offenses. ... One of the most aggressive legal investigations against Baydemir concerned a series of public statements he made in Kurdish in March 2006. In a battle that month between P.K.K. militants and Turkish soldiers, 14 Kurds had been killed. Diyarbakir exploded in mass demonstrations that ultimately became violent. Baydemir begged the crowd — in Turkish — to settle down, to refuse further violence, to go home and rest. The crowd chanted P.K.K. slogans, like 'Teeth to teeth, blood to blood, we are with you Ocalan,' referring to Abdullah Ocaclan, the head of the P.K.K. whom Baydemir, as a lawyer, had defended after his capture in 1999. Desperate to subdue the crowd, Baydemir switched to Kurdish. 'You claimed your identity,' he told them. 'With burnt hearts, you claimed your people and your pain. We are also with you. Be sure of this. But for the sake of peace, for the sake of your success, we have to listen to each other under the leadership of the party' — the Democratic Society Party, or D.T.P., Turkey's only legal 'pro-Kurdish' party. 'We fear,' he went on, 'that this mobilization from now on will harm our nation and our people. From now on, we all will go back to our homes quietly.' Sixteen people were killed in the rioting that subsequently spread across the southeast and into Istanbul. The mandate — the ordeal — of a mayor in a Kurdish town was clear: a kind of internal mediation of the highest order, the challenge of connecting to the hearts of the Kurdish population while governing according to the laws of the state."

Minorities seldom believe their interests are being looked after unless there is a political party that specifically identifies itself with their plight. In the U.S., for example, the Democrats have largely been perceived as the party of minorities. The DTP, however, is coming under attack in Turkey.

"Nearly all of the prominent Kurdish politicians accused of language violations are members of the D.T.P. But the latest front in the party's legal battles is not crimes against the alphabet but the status of the D.T.P. itself. On Nov. 16 [2007], Abdurrahman Yalcinkaya, chief prosecutor of the Supreme Court of Appeals, applied to the Constitutional Court to ban the D.T.P., arguing that it is merely a suit-and-tie-clad front for the P.K.K. 'The party in question has become a base for activities which aim at the independence of the state and its indivisible unity,' the prosecutor wrote in his statement."

Despite calls from all quarters for the DTP to renounce the PKK and its insurgency, the party has failed to do so.

"D.T.P. leaders have attempted to distance themselves from the P.K.K. without directly condemning the group: in public statements, they constantly reiterate that they are against separatism, do not want to divide the Turkish state and oppose all violence."

The roots of the DTP dilemma are found in culture not politics.

"Aysel Tugluk, a young female leader of the D.T.P. and a one-time member of Ocalan's defense team, [... has asserted]: 'If you force the D.T.P. to condemn the P.K.K., you deny us the possibility to take initiative in a way that could turn out to be effective.' But she added that if Kurdish cultural demands were met, the D.T.P. would be able to condemn 'any force that deploys violence' and that the most important step right now would be for Kurds to be allowed to express themselves in their native language."

Toumani reports that almost every Kurdish family in Turkey has a relative in prison or in the mountains with the PKK. That complicates the political situation and has made the troubles in Turkey linger on for decades. Toumani points out that her interest in Abdullah Demirbas, the politician with whom she began her article, was personal.

"When I asked Demirbas how he feels about the P.K.K. and the prospect of a separate state, his voice grew softer both in tone and in volume. 'I am against separation,' he says, 'but it's difficult to convince people of this. I am not working for the Kurds; I am working for all people. Democracy means that when you want something for yourself, you also want it for others.' It was Demirbas's interest in others that led me to seek him out. I had heard from a friend in Istanbul that the mayor of the central neighborhood of Diyarbakir had published a map of the city in Armenian. One hundred fifty years ago, Armenians and other Christians made up about half of Diyarbakir's population, but as an ethnic Armenian myself, I was astonished that a mayor in a Turkish town had done something to acknowledge this history. Most old Armenian sites in Turkey are either abandoned altogether or labeled with signs and explanations that offer roundabout explanations without ever mentioning that a particular site was Armenian. (Even the much-lauded official renovation of an Armenian church in Van relied on the geographical term 'Anatolian.') In Turkey, the 'Armenian question' — whether the massacre of the Ottoman Armenian population during World War I was a state campaign — is at least as taboo as the Kurdish issue."

Last year the U.S. Congress almost caused an international uproar by passing a declaration condemning the Turkish massacre of Armenians at a time when Turkish support for efforts in Iraq remain important. Eventually, that episode will also need to be reconciled, but it remains a sore point in Turkish politics and history. Demirbas provided Toumani with a historical tour of his district.

"Tucked among a cluster of alleyways in his district, several ancient structures remind visitors of the Armenians, Assyrians, Chaldeans, Jews and other groups who once populated a neighborhood that is still known locally as the infidel quarter. Demirbas calls it the 'Armenian quarter,' at least while talking to me, and has drafted a proposal to undertake a major renovation of the area and its monuments. 'So many civilizations lived in the Sur district over millennia,' he says. 'Kurds, Arabs, Armenians, Chaldeans, Assyrians, Nestorians, Jews, Turks, Hanafi, Shafi'i, Alevi, Yezidi, traces of Sabihi' — occasionally he lengthens his list by repeating groups he has already named — 'all these different beliefs coexisted in the Sur district of Diyarbakir. The more we lose this multicultural side of ourselves, the more we become one another's enemies.' Listening to him, I felt sure that he meant it, but also sure that he knew he was undermining the nationalist foundations of the Turkish Republic. At first, I wondered if he was using Diyarbakir's other ethnicities to somehow soften the blow of his support of Kurdish cultural rights. But supporting the Armenian issue would hardly win him friends in Turkey, at least not friends with power."

The "nationalist" fervor that countries need to provoke is one that makes all its people proud to be citizens, regardless of their ethnic heritage. It is an art that seems to be losing ground among politicians around the globe. People are generally proud of a country that takes ethical positions, provides for the young, the destitute and the disabled, and works to promote a better standard of living for all of its citizens. That's a real challenge for large countries with multiple ethnicities. Toumani asserts that Demirbas' call for multi-ethnic tolerance is an attempt to curry favor with the European Union.

"The European Union has been consistently supportive of Kurdish cultural rights, and Demirbas's case has held the attention of E.U. observers since 2006, when he traveled to Strasbourg to talk about using multiple languages in municipal affairs. For presenting a paper, 'Municipal Services and Local Governments in Light of Multilingualism,' Demirbas was sued by the Turkish minister of the interior on the grounds of 'making propaganda to promote the aims of the terrorist organization P.K.K.' ... Unfortunately, European support of minority rights in Turkey has its own hazards: for many Turks, it brings to mind the period when European nations sought to undermine the Ottoman empire's strength by pitting different ethnic groups against one another and against the Ottomans. The eventual collapse of the empire and the trauma of dismemberment were in many ways the foundation for Turkish nationalism, as Mustafa Kemal Ataturk sought to empower his new nation with a strong Turkish identity."

Most "old world" countries have long and vivid memories. It is sometimes difficult for a nation as young as the United States to understand how deeply history and culture affect everything that takes place in a country that enjoys an ancient and glorious history. Turkey is such a nation and even wounds a century old are recent wounds when compared to the rest of its history. Demirbas' sensibilities about appealing to an even deeper sense of pride and nationalism that is associated with Turkey's history is probably a good one, but he must realize that his efforts will take years to bear the fruit he desires to harvest.

"Even some of the most sympathetic analysts of the Kurdish problem believe that Demirbas and Baydemir have been needlessly provocative in their initiatives. One analyst with a major human rights organization said that the mayors should know better than to work blatantly outside of the system. 'The Kurdish people are suffering because their leaders are not realistic about what Turkey can accept right now,' she said. This refrain is repeated by people on all sides of the problem. And perhaps Turkey is not ready for major change, but you wonder how it will ever become so. Demirbas and Baydemir, and to a lesser extent their colleagues all over the southeast, have chosen to forge new fiefs in what may ultimately prove to be a self-destructive campaign, heavily dependent on a European support whose usefulness is itself questionable."

Toumani concludes her article noting that the DTP lost support during the last elections because it wasn't as effective at bringing economic benefits to the area as other more mainstream parties. The Kurds who voted for other parties (that is, for economics rather than ethnicity) might have been looking across the border to the Kurdistan region of Iraq. The economic boon there, which has also helped the economic situation in Turkey, has done more for improving the lot of Kurds than all the fighting that preceded it. Like Demirbas, they see a better way forward, but unlike him, they think it is economic not cultural. The two visions are not necessarily incompatible; nor are they incompatible with a unified and prosperous Turkey. The fighting has to stop, however, and emotions cooled before the path to prosperity can been seen as the fog of war clears.

Poverty's Persistent Pull -- The Case of Angola

Some people I talk with about Enterra Solutions' Development-in-a-Box™ approach take away the wrong message. They think that "in the box" solutions trivialize or make the development process seem easy. They're wrong. Just because we believe that development can be jump-started by implementing pre-packaged world class standards (like those used in banking, telecommunications, utilities, etc.) and then adapt them to local circumstances, it doesn't mean we think that development is easy or can be accomplished quickly -- even when a country is blessed with natural resources. Angola is a good case in point ["As Angola Rebuilds, Most Find Their Poverty Persists," by Sharon LaFraniere, New York Times, 14 October 2007]. Angola is, by most accounts, a country on the move (or, at least, one that should be).

"Two years ago, only the brave or desperate would attempt the 186-mile drive from this garbage-strewn capital [of Luanda] to the northern provincial capital, Uige. It was a 12-hour, teeth-clenching, hair-raising ordeal of dodging tire-blowing potholes and edges of roadway that crumbled into precipices. Now, thanks to Angola’s surging oil production, the journey takes half the time. And that is not all that is being transformed: All over Angola, hundreds of workers are rebuilding roads, airports, bridges and railways that were shattered during nearly three decades of civil war. For most Angolans, the drone of road graders and steam shovels is the first tangible evidence of a dividend from their country’s oil and diamond wealth, mined in earnest now after five years of peace. Many call it long past due. Angola is gushing oil, pumping about 1.5 million barrels a day, more than any other African country except Nigeria. The International Monetary Fund projects a 24 percent economic growth this year — one of the fastest rates in the world. The government is taking in two and a half times as much money as it did three years ago. "

Yet as bustling as all that sounds, the good times are not reaching everyone.

"But Angolans, by many indications, remain as poor as ever. The poverty rate is a matter of debate: the government claims a 12 percent drop in the past five years; analysts for the Catholic University of Angola’s research center say two in three Angolans still live on $2 or less a day, the same percentage as in 2002. Still, no one disputes that most Angolans face appalling living conditions, sky-high infant mortality rates, dirty water, illiteracy and a host of other ills. The United Nations ranked Angola last year as the world’s 17th least developed country. In a December [2006] poll by a pro-democracy group and the United States Agency for International Development, 6 in 10 Angolans said their economic situation was no better now than five years ago."

That doesn't mean that the government's efforts aren't working at all. It takes time to build the necessary infrastructure upon which a sustainable economy can grow. That is what is the government is currently trying to achieve -- sort of.

"The government's huge effort to rebuild the county's infrastructure is intended to help change [the country's poor economic condition]. Aguinaldo Jaime, the nation's deputy prime minister, said Angola had taken out between $8 billion and $9 billion in loans from China since 2004, exchanging guarantees of oil supply for reconstruction work. Others, like the World Bank, estimate the Chinese loans at $12 billion. Reconnecting roads and railways, Mr. Jaime said, will help jump-start agriculture and commercial sectors and spread the wealth beyond a small elite."

The cruel truth is that whenever large sums of money and African leaders are mentioned in the same sentence, the word "corruption" is never far behind. Unfortunately, LaFraniere reports the same is true for Angola.

"The government's critics argue that progress would be quicker if public officials were not so busy enriching themselves. In 2003, the weekly newspaper Angolese Samanario published a list of the wealthiest people in Angola. Twelve of the top 20 were government officials; five were former government officials."

I have repeatedly stated that good governance (meaning a government that operates transparently and with integrity) is a crucial pre-requisite for sustainable development. Corruption always undermines development efforts. Things have gotten a little better in Angola, but not enough to achieve the development its leaders claim they want.

"Since [2003], the government has opened some of its financial records. Mr. Jaime said in an interview that some officials had prospered not by stealing public funds, but by exploiting business prospects and Angola’s antiquated conflict of interest law. Still, Transparency International, the anticorruption organization, continues to rank Angola as the world’s 10th most corrupt nation. Many Angolans take it as a given that those who shop at Luanda's new upscale mall or tool about in Land Cruisers are state officials or their friends. One car dealership manager, who caters to government officials, said he ordered only the costliest luxury cars. 'They want to be first with the latest model,' he said, speaking anonymously so as not to lose customers."

Fortunately, 12 billion dollars is a lot of money and some of it has actually managed to miss lining the pockets of government officials and has found its way into infrastructure projects.

"Since 2002, the government says, it has rebuilt 2,400 miles of crumbled roads — more than half of the nation's system — and renovated airports in Luanda and three other cities. More than 430 miles of new rail track have been laid, officials said. Even once forgotten provincial capitals like Uige are bustling with work crews in royal blue work outfits. One Chinese engineer who identified himself as Tom said his Beijing-based company had sent 100 workers to live in a compound surrounded by half-ruined buildings pockmarked with bullet holes."

That needs to be put into perspective however. Angola is nearly twice the size of Texas and nearly five times the size of the United Kingdom. By comparison, the UK has over 240,000 miles of paved roads, 310 airports with paved runways, and over 10,000 miles of railway track. Angola's infrastructure is puny by comparison. The influx of petrodollars should be a boon for the country. But the money is as much a curse as a blessing because it has given Angola's leaders a sense of invulnerability that is bad for the country.

"Western diplomats and representatives of financial institutions like the World Bank try to keep up the pressure for elections and good governance measures. But as oil revenues have ballooned, their influence has diminished. This year, Angola joined the Organization of Petroleum Exporting Countries, but limited its cooperation with the International Monetary Fund. ... Some Western diplomats say the West missed a major chance to help shape Angola when the United States and other nations turned down the government’s request in 2002 to hold a donor conference. Mr. Jaime said that rejection was a major reason that Angola turned to China to finance its reconstruction."

The bottom line is that the even $100/barrel oil is not going to pull Angola out of its economic morass as long as corrupt officials enrich themselves at the expense of the rest of the country. Invested wisely, the money could, in fact, build the infrastructure necessary to encourage development in all Angolan economic sectors -- creating jobs, improving lives, and breaking poverty's grip. With no one able to effectively put pressure on government officials, this is not likely to happen. The Chinese, who have the most influence, have shown in Sudan that they are more interested in oil than people and are unlikely to play the hero in Angola.

Tailoring Products to Emerging Markets

Recently the Economist published an article about Unilever, the world's second largest consumer goods company, and how it nearly lost its considerable advantage in emerging markets ["The Legacy that got left on the shelf," 2 February 2008]. It provides some good lessons for companies desiring to expand their markets by courting consumers in developing countries.

"When a consumer-goods company casts around for the best growth prospects, rarely does anything look more promising than emerging economies. These markets are growing so rapidly that within just two years they will account for half of all the world's consumer spending, estimates Harish Manwani, head of the Asian and African businesses of Unilever, a giant of the world's consumer-goods industries. But even with more than a century of experience in some of these countries, Unilever tripped up. Few companies have had the head start in places like Africa, China, India and Latin America that Unilever enjoyed. Yet despite the Anglo-Dutch giant's formidable range of products and unprecedented depth of local knowledge, when rivals began to push harder its empire came under threat. Unilever was forced to re-examine its legacy and to act on what it found. Now the results are coming through."

Unilever's brands are well known in the developed world -- in addition to soap (Lifebuoy), it sells Knorr soup, Hellmann's mayonnaise, and Lipton tea. It's come a long way from its humble beginning (a merger between a margarine producer and a soap maker), but its ancestral roots reach all the way back to the beginning of modern globalization.

"Unilever was born in 1930 in one of the largest mergers of its time, between Margarine Unie, a Dutch producer of margarine, and Lever Brothers, a British soapmaker. There was industrial logic in this because both businesses shared a common ingredient, palm oil: growing it in overseas plantations and importing it would benefit from economies of scale. Yet the histories of both firms stretch back into the 19th century, to when they dispatched young men on ships from Liverpool and Rotterdam to faraway places. The young men were under instruction to build businesses. They set up plantations, built factories and established distribution and supply systems. With long lines of communication, these ventures invariably developed as and how they could, often with great independence."

As that description connotes, the first age of globalization was inextricably connected with colonization. The merged company, however, was able to maintain its deep local knowledge and connections without getting tarred with colonization's brush. One would have thought they could have turned this asset into a significant competitive advantage -- but, according the Economist, it didn't. When Unilever realized it was slipping, it began searching for the reasons why. The answer surprised them.

"The reason was that Unilever's great strength—its strong roots in local markets—had turned into its biggest weakness. In an age of globalisation, Unilever's local bosses had become kings who took important strategic decisions autonomously. There was duplication and even triplication of corporate structures, creating unnecessary complications. All this weighed heavily on the company, so that it was not able to exploit its size and geographical reach as well as it should have done."

In other words, Unilever needed to transform into what IBM CEO Sam Palmisano calls the "globally integrated enterprise" or what I have referred to as a Resilient Enterprise [see my earlier posts Globalization and Resilient Enterprises and Multinationals 2.0]. I established Enterra Solutions primarily to help businesses achieve this goal. I created a new Enterprise Resilience Management System that can strategically align an organization by identifying the critical assets and enabling business processes that are key for sustainability and competitiveness. It then identifies the security, compliance and performance rules or policies that apply to those assets and processes. The organization is then transformed by the fusion of those business processes and best business practices or rules sets into automated business processes that are dynamically updatable to changing management and market requirements. For the first time best business practices are infused into technology in a dynamically updatable fashion –- creating an advanced integrated management and technology platform for organizations competing in international marketplaces. The trick for Unilever was to achieve a globally integrated enterprise status without destroying its ability to tailor products for local markets.

"This is a necessity for any multinational selling to the consumer. Even McDonald's and Starbucks, which appear to sell the same stuff everywhere, in fact vary their offerings from place to place. In many instances, Unilever's attention to detail has worked well. For instance, Indian women often oil their hair before washing it, so Western shampoos that do not remove the oil have not sold well. Unilever reformulated its shampoo for India and ditched the conditioner. But Unilever sometimes went too far. It used different formulations for shampoo in Hong Kong and mainland China, even though the hair and washing habits of most people in both markets are almost identical. Unilever would also sometimes vary the packaging and marketing in similar markets of even its most commoditised products, such as deodorants."

These apparent anomalies resulted from the fact that Unilever was not globally integrated.

"'We tended to exaggerate complexity,' says Simon Clift, [Unilever's] chief marketing officer. This complexity continued at the operating level. In China, says [Patrick Cescau, Unilever's CEO], Unilever had three companies. Each had its own chairman, who in turn reported to two regional presidents, who answered to two members of the executive committee."

The problem wasn't just in China and other emerging markets it was a holdover from the original merger. In Unilever's case, global integration began at home.

"Change had to begin at the top. Listed on both the London and Amsterdam stock exchanges, Unilever used to be run almost by committee, with two joint chairmen, one appointed from Britain and the other from the Netherlands. In February 2005 its management structure was altered: Patrick Cescau, the joint chairman from the British side, became the sole chief executive. Mr Cescau, a soft-spoken Frenchman, is a Unilever veteran and may seem an unlikely revolutionary. Nevertheless, under him a more unified company has been taking shape. And it seems all the better for it. In 2006 sales grew by 3.2% to €39.6 billion ($49.7 billion) with net profits of €5 billion. The trend is continuing. Analysts estimate that sales rose by more than 5% last year (the company is due to report its annual results on February 7th), which would be Unilever's best performance for years. The company's improvement 'shows that our business model has integrity,' says Mr Cescau in his unflorid way. So Unilever seems to have got itself back on course. But the battle for the emerging-market consumer remains far from straightforward. And it is far from over."

The same integration effort took place in China to overcome the complexity challenges noted above.

"Today one person is in charge of China across all divisions. Unilever's China business, with a turnover of around €600m in 2006, is now growing by 20-30% annually, compared with 8-9% before the changes were made. There were similar examples throughout the company, with hundreds of different policies for things like company cars and human resources."

The article points out that all this integration was painful. Unilever's infrastructure was so redundant that tens of thousands of jobs had to be eliminated and dozens of factories closed. The upside, of course, is that the company is likely to remain profitable, especially in emerging markets.

"The possibilities in some emerging markets are huge. For instance, the company is the biggest maker of deodorants in the world, with brands including Rexona, Shields, Dove, Lynx, Axe and Sure. But only about half the world uses deodorants. Three decades ago deodorants were almost impossible to find in Brazilian shops, but Unilever's sales there are now worth €400m a year. In 1999 Unilever had almost half of the Argentine market for deodorants; by 2006 its share had increased to more than 70%. Potentially, other markets could soon smell as sweet. Only seven out of every 100 Asians use deodorants, the company reckons, while many Russians and others use them only for special occasions, such as weddings. The home and personal-care division of Unilever accounts for 45% of the group's sales and does about two-thirds of its business in emerging economies. It also represents the bulk of the company's business in India. Yet Doug Baillie, chairman of Hindustan Unilever, which is listed separately on the Mumbai stock exchange, is also looking at other opportunities. He intends to push particularly hard into food. The Indian market is worth $300 billion a year, but little of this is accounted for by processed food, Unilever's speciality."

The company has also successfully managed to use its local knowledge to tailor its products (and product size) for the various markets in which they are sold. India is a good example.

"Hindustan Unilever is one of the jewels in the company's emerging-market operations. It is India's biggest consumer-goods company and biggest advertiser. One of its strengths is its ability to cater to all segments of the population by adapting products and prices. In laundry detergents, for instance, it makes Surf Excel for the affluent, Rin for the 'aspiring' class and Wheel for poorer people, the vast majority of whom live in the countryside. It sells 70% of its shampoo in one-use sachets for the equivalent of a couple of cents. Though Western consumers might find big bottles better value, India's poor simply cannot afford anything more than small quantities."

Unilever, like many companies working in emerging markets, discover that becoming socially responsible is important to strengthening the consumer class that buys their products. As quality of life rises, profits tend to increase.

"Social and political issues also matter more. And there is always more to learn. In South Africa, where Unilever has operated for more than 100 years, it recently worked with Ethan Kapstein, a professor of sustainable development at INSEAD, a French business school, to consider the impact that its operations are having on that country. The result has been a report designed to help Unilever think harder about things like training, medical care, pensions, skills transfer, black empowerment initiatives and environmental standards. Unilever has 4,000 employees and 3,000 suppliers in South Africa. Indirectly, it found that some 100,000 jobs depend on the company, making it responsible for the equivalent of 0.8% of total South African employment. The direct and indirect effects of its operations provide almost 0.9% of GDP."

Unilever can only think about becoming more socially responsible because it is profitable. For more on this subject, see my recent post about Corporate Social Responsibility. The Economist concludes "with the balance of the world economy shifting, Unilever's head start in emerging markets is a valuable advantage, not least because many of its brands are already well-known there. For instance, Lifebuoy, its disinfectant soap, is one of the world's oldest global brands. So if it can make even more out of its legacy, Unilever will be a fearsome competitor." That's what becoming a globally integrated enterprise is all about.

The Return of Protectionism?

Nothing can slow globalization as fast as rising protectionism. Globalization, as I have pointed out before, requires the relatively free movement of capital, people, and resources and protectionism is all about curbing the free flow of goods. According to Wikipedia, several past surveys of professional economists recorded up to 95 percent support ratings for free trade; but that may be changing according to BusinessWeek ["Economists Rethink Free Trade," by Jane Sasseen, 11 February 2008].

"Many ordinary Americans have long been suspicious of free trade, seeing it as a destroyer of good-paying jobs. American economists, though, have told a different story. For them, free trade has been the great unmitigated good, the force that drives a country to shed unproductive industries, focus on what it does best, and create new, higher-skilled jobs that offer better pay than those that are lost. This support of free trade by the academic Establishment is a big reason why Presidents, be they Democrat or Republican, have for years pursued a free-trade agenda. The experts they consult have always told them that free trade was the best route to ever higher living standards. But something momentous is happening inside the church of free trade: Doubts are creeping in."

Liberal pundits have decried for years that productivity in the U.S. was increasing and bringing companies bigger profits, but those gains were not matched by salary increases. The resulting wage stagnation, some analysts have argued, is what has created the credit crunch now plaguing America and spreading like a cancer throughout the global economy.

"Economists [concede] their ideas can't explain the disturbing stagnation in income that much of the middle class is experiencing. They also fear a protectionist backlash unless more is done to help those who are losing out. 'Previously, you just had extremists making extravagant claims against trade,' says Gary C. Hufbauer, a senior fellow at the Peterson Institute for International Economics. 'Now there are broader questions being raised that would not have been asked 10 or 15 years ago.' So the next President may be consulting on trade with experts who feel a lot less confident of the old certainties than they did just a few years ago. From Alan S. Blinder, a former vice-chairman of the Federal Reserve and member of the Council of Economic Advisers in the Clinton Administration, to Dartmouth's Matthew J. Slaughter, an international economist who served on President George W. Bush's CEA, many in the profession are reevaluating the impact of globalization. They have studied the growth of low-wage work abroad and seen how high-speed telecommunications make it possible to handle more jobs offshore. Now they fear these factors are more menacing than they first thought."

Even as economists ponder how to increase middle class wages, they fear protectionism -- the economic policy of restraining trade between nations. Protectionism comes in many guises from tariffs on imported goods to restrictive quotas and regulations. The objective of these measures is the protection of domestic industries and the jobs they represent. Protectionism is the very antithesis of globalization. Wikipedia notes, "Some may feel that better job choice is more important than lower goods costs. Whether protectionism provides such a tradeoff between jobs and prices has not yet reached a consensus with economists. Some point out that free-trade has not benefited those in manufacturing, and that service-sector jobs, such as store clerk, do not pay as well as manufacturing used to."

The big question remains about whether globalization and free trade has caused the current wage stagnation. Even if that question is answered, another bigger question is raised: what can be done about it? The fact wages have stagnated is not in question. Robert B. Reich, a former Secretary of Labor in the Clinton administration and currently a professor of public policy at the University of California, Berkeley, asserts that wage stagnation (which has caused people unwilling to reduce their standard of living to turn to credit) must end ["Totally Spent," New York Times, 13 February 2008]. He writes:

"We're sliding into recession, or worse, and Washington is turning to the normal remedies for economic downturns. But the normal remedies are not likely to work this time, because this isn't a normal downturn. The problem lies deeper. It is the culmination of three decades during which American consumers have spent beyond their means. That era is now coming to an end. Consumers have run out of ways to keep the spending binge going. The only lasting remedy, other than for Americans to accept a lower standard of living and for businesses to adjust to a smaller economy, is to give middle- and lower-income Americans more buying power — and not just temporarily. ... The underlying problem has been building for decades. America's median hourly wage is barely higher than it was 35 years ago, adjusted for inflation. The income of a man in his 30s is now 12 percent below that of a man his age three decades ago. Most of what's been earned in America since then has gone to the richest 5 percent. Yet the rich devote a smaller percentage of their earnings to buying things than the rest of us because, after all, they're rich. They already have most of what they want. Instead of buying, and thus stimulating the American economy, the rich are more likely to invest their earnings wherever around the world they can get the highest return. The problem has been masked for years as middle- and lower-income Americans found ways to live beyond their paychecks. But now they have run out of ways."

Reich notes that American workers used three principal means to combat wage stagnation. First, women joined the work force in record numbers, creating households dependent on two incomes. Second, workers started working longer hours. Finally, they turned to borrowing. He concludes:

"We're finally reaping the whirlwind of widening inequality and ever more concentrated wealth. The only way to keep the economy going over the long run is to increase the wages of the bottom two-thirds of Americans. The answer is not to protect jobs through trade protection. That would only drive up the prices of everything purchased from abroad. Most routine jobs are being automated anyway."

His prescription for solving the problem, which includes larger earned-income tax credits and more unions, is certainly debatable; but his concluding remarks need to be taken seriously.

"Over the longer term, inequality can be reversed only through better schools for children in lower- and moderate-income communities. This will require, at the least, good preschools, fewer students per classroom and better pay for teachers in such schools, in order to attract the teaching talent these students need. These measures are necessary to give Americans enough buying power to keep the American economy going. They are also needed to overcome widening inequality, and thereby keep America in one piece."

One would think that conservatives and liberals alike would agree that an economy dependent on the shaky credit of over-extended consumers is not in America's best interest. Even though many economists, like Reich, still believe protectionism is bad, it seems to be rearing its ugly head. Sasseen writes:

"No one is suggesting that trade is bad for the U.S. overall. According to estimates by the Peterson Institute and others, trade and investment liberalization over the past decades have added $500 billion to $1 trillion to annual income in the U.S. Yet concern is rising that the gains from free trade may increasingly be going to a small group at the top. For the vast majority of Americans, Dartmouth's Slaughter points out, income growth has all but disappeared in recent years. And it's not just the low-skilled who are getting slammed. Inflation-adjusted earnings have fallen in every educational category other than the 4% who hold doctorates or professional degrees. Such numbers, Slaughter argues, suggest the share of Americans who aren't included in the gains from trade may be very big. '[That's] a very important change from earlier generations, and it should give pause to people who say they know what's going on,' he says. Blinder warns the pain may just be starting. He estimates that eventually up to 40 million service jobs in the U.S. could face competition from workers in India and other low-wage nations. That's more than a quarter of the 140 million employed in the U.S. today. Many of the newly vulnerable will be in skilled fields, such as accounting or research—jobs U.S. companies will be able to move offshore in ever greater numbers. 'It will be a messy process of adjustment, with a lot of victims along the way,' Blinder says. The rumble of academic debate is already having an effect on the Presidential campaign. In an interview with the Financial Times late last year, Hillary Clinton agreed with economist Paul A. Samuelson's argument that traditional notions of comparative advantage may no longer apply."

Sasseen's article underscores the fact that there are probably as many recommended solutions to this problem as there are economists.

"What to do? Blinder argues for a big expansion of unemployment insurance and a major overhaul of the poorly performing Trade Adjustment Assistance program (TAA), which retrains manufacturing workers whose jobs disappeared. More vocational training and wage insurance, which would partially reimburse displaced workers who take new jobs at lower pay, also figure in his proposals. Both Clinton and Obama—and even Republican Senator John McCain—have similar ideas. That's not enough, says Slaughter. He sees a need for some form of income redistribution to spread the gains from free trade to more workers. In a controversial article Slaughter co-wrote last summer for Foreign Affairs, he proposed 'A New Deal for Globalization' in which payroll taxes for all workers earning below the national median income level would be eliminated. Slaughter has talked with campaign advisers in both parties. So far, he has no takers. But it's one more sign of how far the trade debate has moved."

Few pundits seem to think that the stimulus package recently passed by Congress and signed by the President provides a long-term fix to the U.S. economy. Some belt tightening and real gains in middle and lower class wages seem to be the prescription gaining support. I expect the economy to be the biggest issue on voters' minds come this November, which means it will be interesting to see which economists the presidential nominees decide to listen to.

Exporting Education

For decades foreign students have flocked to the United States to take advantage of its system of higher education. This was good for the students, the universities they attended, and, often, for the United States as well since many of the best and brightest students stayed in America. Since 9/11, it has been more difficult for foreign students to get student visas and they have begun looking elsewhere for educational opportunities. This development has obviously not gone unnoticed by U.S. institutions of higher education. Many of them have decided that if the students can't get to them they'll go to the students ["U.S. Universities Rush to Set Up Outposts Abroad," by Tamar Lewin, New York Times, 10 February 2008].

"The American system of higher education, long the envy of the world, is becoming an important export as more universities take their programs overseas. In a kind of educational gold rush, American universities are competing to set up outposts in countries with limited higher education opportunities. American universities — not to mention Australian and British ones, which also offer instruction in English, the lingua franca of academia — are starting, or expanding, hundreds of programs and partnerships in booming markets like China, India and Singapore. And many are now considering full-fledged foreign branch campuses, particularly in the oil-rich Middle East. Already, students in the Persian Gulf state of Qatar can attend an American university without the expense, culture shock or post-9/11 visa problems of traveling to America."

The list of universities that have set up shop in the Middle East is impressive.

"At Education City in Doha, Qatar's capital, they can study medicine at Weill Medical College of Cornell University, international affairs at Georgetown, computer science and business at Carnegie Mellon, fine arts at Virginia Commonwealth, engineering at Texas A&M, and soon, journalism at Northwestern. In Dubai, another emirate, Michigan State University and Rochester Institute of Technology will offer classes this fall."

International programs are important for universities, Lewin reports, because globalization is making the world a more connected place. They find it ironic, therefore, that they must go overseas to find students, recruit faculty, or help their current faculty remain relevant in their fields -- all thanks to 9/11.

"Overseas programs can help American universities raise their profile, build international relationships, attract top research talent who, in turn, may attract grants and produce patents, and gain access to a new pool of tuition-paying students, just as the number of college-age Americans is about to decline. Even public universities, whose primary mission is to educate in-state students, are trying to establish a global brand in an era of limited state financing. Partly, it is about prestige. American universities have long worried about their ratings in U.S. News and World Report. These days, they are also mindful of the international rankings published in Britain, by the Times Higher Education Supplement, and in China, by Shanghai Jiao Tong University."

This rush overseas is not driven only by educational motives Lewin points out, but is also being driven by economic factors, which apparently sticks in the craws of those who oppose this outsourcing.

"'A lot of these educators are trying to present themselves as benevolent and altruistic, when in reality, their programs are aimed at making money,' said Representative Dana Rohrabacher, a California Republican who has criticized the rush overseas."

Although as a businessman I see nothing wrong with a profit motive, there have been serious concerns raised about the quality of education being offered overseas.

"While universities with overseas branches insist that the education equals what is offered in the United States, much of the faculty is hired locally, on a short-term basis. And certainly overseas branches raise fundamental questions: Will the programs reflect American values and culture, or the host country's? Will American taxpayers end up footing part of the bill for overseas students? What happens if relations between the United States and the host country deteriorate? And will foreign branches that spread American know-how hurt American competitiveness?"

For their part, the universities insist that their outreach programs are good for the United States and represent an important source of soft power.

"David J. Skorton, the president of Cornell, ... said the global drive benefit[s] the United States. 'Higher education is the most important diplomatic asset we have,' he said. 'I believe these programs can actually reduce friction between countries and cultures.'"

Setting up shop overseas sounds simple, but as I'm learning, it's not that easy. This is even more true in education than it is in business. Culture and language can present greater barriers than people imagine -- especially when teaching courses. Lewin points out that not all courses are in demand.

"Most overseas campuses offer only a narrow slice of American higher education, most often programs in business, science, engineering and computers. Schools of technology have the most cachet. So although the New York Institute of Technology may not be one of America's leading universities, it is a leading globalizer, with programs in Bahrain, Jordan, Abu Dhabi, Canada, Brazil and China."

Other universities are storming the beaches overseas by offering what is more correctly called training than education.

"Some huge universities get a toehold in the gulf with tiny programs. At a villa in Abu Dhabi, the University of Washington, a research colossus, offers short courses to citizens of the emirates, mostly women, in a government job-training program."

As noted above, there are critics of U.S. universities' rush overseas. Some of them, like Representative Rohrabacher, take an "America first" approach to education and want to keep education in and foreigners out. Others are afraid that the rush overseas will hamper America's global brain drain that has helped it remain at the top of the educational and research ladder. Others fear that the resulting educational isolation will ultimately hurt America's cultural development. One of the things that helped America in the past is the fact that many world leaders have been educated in the U.S. Not all of them have been benevolent democrats; but because of their connections with the U.S., there have been opportunities to influence them that would not otherwise have been available. I suspect that Harvard, Yale, and other top U.S. universities will continue to attract the world's elite, but the competition is getting stiffer.

Bio-fuel Growing Pains (or are they really gas pains?)

Since I have recently posted several blogs about bio-fuels [The Potential of Pond Scum, Search for Oil Alternatives Pushes Food Prices Higher, and Dealing with Bio-Diesel Waste], I thought it fitting to do a post about a new report that concludes bio-fuels are just as (or even more) harmful for the environment as the petroleum-based products they are supposed to replace ["Biofuels Deemed a Greenhouse Threat," by Elisabeth Rosenthal, New York Times, 8 February 2008]. Rosenthal bluntly reports:

"Almost all biofuels used today cause more greenhouse gas emissions than conventional fuels if the full emissions costs of producing these 'green' fuels are taken into account, two studies ... have concluded."

The problem is not just that greenhouse gases are generated during the growing, harvesting, and refining of biological base stocks, but that large tracts of land being cleared to grow biofuel crops -- especially in South America -- are destroying ecosystems that used to remove greenhouse gases from the environment. It is the combination of effects on which the reports focus.

"The benefits of biofuels have come under increasing attack in recent months, as scientists took a closer look at the global environmental cost of their production. These latest studies, published in the prestigious journal Science, are likely to add to the controversy. These studies for the first time take a detailed, comprehensive look at the emissions effects of the huge amount of natural land that is being converted to cropland globally to support biofuels development. The destruction of natural ecosystems — whether rain forest in the tropics or grasslands in South America — not only releases greenhouse gases into the atmosphere when they are burned and plowed, but also deprives the planet of natural sponges to absorb carbon emissions. Cropland also absorbs far less carbon than the rain forests or even scrubland that it replaces. Together the two studies offer sweeping conclusions: It does not matter if it is rain forest or scrubland that is cleared, the greenhouse gas contribution is significant. More important, they discovered that, taken globally, the production of almost all biofuels resulted, directly or indirectly, intentionally or not, in new lands being cleared, either for food or fuel."

Environmentalists have argued for years that consumers have never really paid the cost environmental damage for the products they buy or the resources they consume. In much the same way, the authors of the studies indicate that past analyses have all involved "accounting errors" because only emissions at the far end of the process have been considered.

"'When you take this into account, most of the biofuel that people are using or planning to use would probably increase greenhouse gasses substantially,' said Timothy Searchinger, lead author of one of the studies and a researcher in environment and economics at Princeton University. 'Previously there's been an accounting error: land use change has been left out of prior analysis.' These plant-based fuels were originally billed as better than fossil fuels because the carbon released when they were burned was balanced by the carbon absorbed when the plants grew. But even that equation proved overly simplistic because the process of turning plants into fuels causes its own emissions — for refining and transport, for example. The clearance of grassland releases 93 times the amount of greenhouse gas that would be saved by the fuel made annually on that land, said Joseph Fargione, lead author of the second paper, and a scientist at the Nature Conservancy. 'So for the next 93 years you're making climate change worse, just at the time when we need to be bringing down carbon emissions.' The Intergovernment Panel on Climate Change has said that the world has to reverse the increase of greenhouse gas emissions by 2020 to avert disastrous environment consequences."

Rosenthal goes on to note that many of the challenges (like those I wrote about in posts mentioned previously) are interconnected.

"The European Union and a number of European countries have recently tried to address the land use issue with proposals stipulating that imported biofuels cannot come from land that was previously rain forest. But even with such restrictions in place, Dr. Searchinger's study shows, the purchase of biofuels in Europe and the United States leads indirectly to the destruction of natural habitats far afield. For instance, if vegetable oil prices go up globally, as they have because of increased demand for biofuel crops, more new land is inevitably cleared as farmers in developing countries try to get in on the profits. So crops from old plantations go to Europe for biofuels, while new fields are cleared to feed people at home. Likewise, Dr. Fargione said that the dedication of so much cropland in the United States to growing corn for bioethanol had caused indirect land use changes far away. Previously, Midwestern farmers had alternated corn with soy in their fields, one year to the next. Now many grow only corn, meaning that soy has to be grown elsewhere. Increasingly, that elsewhere, Dr. Fargione said, is Brazil, on land that was previously forest or savanna. 'Brazilian farmers are planting more of the world's soybeans — and they're deforesting the Amazon to do it,' he said."

Some environmental groups are concerned that the findings will cause a backlash against biofuels, which they still consider useful. For their part, Rosenthal writes, the authors simply didn't want the consuming public to believe that biofuels are the silver bullet answer to global environmental change. It comes as no surprise that the biodiesel industry has come out swinging.

"Industry groups, like the Renewable Fuels Association, immediately attacked the new studies as 'simplistic,' failing 'to put the issue into context.' 'While it is important to analyze the climate change consequences of differing energy strategies, we must all remember where we are today, how world demand for liquid fuels is growing, and what the realistic alternatives are to meet those growing demands,' said Bob Dineen, the group's director, in a statement following the Science reports' release. 'Biofuels like ethanol are the only tool readily available that can begin to address the challenges of energy security and environmental protection,' he said. The European Biodiesel Board says that biodiesel reduces greenhouse gasses by 50 to 95 percent compared to conventional fuel, and has other advantages as well, like providing new income for farmers and energy security for Europe in the face of rising global oil prices and shrinking supply."

The studies, of course, deal with land crops. If algae ever becomes a cost effective resource for bio-fuel, a different calculus would be in play. One of the authors also gives a grudging nod to sugar cane.

"Dr. Searchinger said the only possible exception he could see for now was sugar cane grown in Brazil, which take relatively little energy to grow and is readily refined into fuel. He added that governments should quickly turn their attention to developing biofuels that did not require cropping, such as those from agricultural waste products."

Clearly, the energy debate is going to continue to rage. In the meantime, scientists will continue to research ways to get better yields from crops, develop uses for refinery byproducts, and pursue other fuel related issues.

A Manual for the SysAdmin Force

In a recent post [Attention Turns Again to Afghanistan], I noted that the U.S. military was paying a lot more attention to the mission of "nation building." To underscore that point, the Army just released a new operations manual on the subject ["New Weight in Army Manual on Stabilization," by Michael R. Gordon, New York Times, 8 February 2008].

"The Army has drafted a new operations manual that elevates the mission of stabilizing war-torn nations, making it equal in importance to defeating adversaries on the battlefield. Military officials described the new document, the first new edition of the Army's comprehensive doctrine since 2001, as a major development that draws on the hard-learned lessons of Iraq and Afghanistan, where initial military successes gave way to long, grueling struggles to establish control. It is also an illustration of how far the Pentagon has moved beyond the Bush administration's initial reluctance to use the military to support 'nation-building' efforts when it came into office."

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. It was not just the Bush administration that had it doubts. 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." Philosophically, Perry was correct. Mixing military operations and humanitarian efforts has always been problematic. As I noted in my last post on Afghanistan, that was the state of things when my partner, Tom Barnett, introduced his notion of a System Administration Force, whose primary purpose was securing the peace (i.e., nation-building). Despite the military's apparent change of heart, questions remain as to whether the force structure is properly aligned with the new doctrine.

"Some influential officers are already arguing that the Army still needs to put actions behind its new words, and they have raised searching questions about whether the Army's military structure, personnel policies and weapons programs are consistent with its doctrine. The manual describes the United States as facing an era of 'persistent conflict' in which the American military will often operate among civilians in countries where local institutions are fragile and efforts to wi