Enterra Insights

A Look at Progress

Nobel Laureate, economics professor, and New York Times' op-ed columnist Paul Krugman suggests that we label the past decade "The Big Zero" ["The Big Zero," 28 December 2009]. He writes:

"It was a decade in which nothing good happened, and none of the optimistic things we were supposed to believe turned out to be true. It was a decade with basically zero job creation. ... It was a decade with zero economic gains for the typical family. ... It was a decade of zero gains for homeowners, even if they bought early. ... Last and least for most Americans — but a big deal for retirement accounts, not to mention the talking heads on financial TV — it was a decade of zero gains for stocks, even without taking inflation into account. ... So there was a whole lot of nothing going on in measures of economic progress or success. ... So let’s bid a not at all fond farewell to the Big Zero — the decade in which we achieved nothing and learned nothing. Will the next decade be better? Stay tuned. Oh, and happy New Year."

Has the world really stopped progressing in any meaningful way? In a very thoughtful essay on progress, The Economist asks, "Why is the modern view of progress so impoverished?" ["Onwards and upwards," 17 December 2009]. It begins:

"In the rich world the idea of progress has become impoverished. Through complacency and bitter experience, the scope of progress has narrowed. The popular view is that, although technology and GDP advance, morals and society are treading water or, depending on your choice of newspaper, sinking back into decadence and barbarism. On the left of politics these days, 'progress' comes with a pair of ironic quotation marks attached; on the right, 'progressive' is a term of abuse."

The magazine laments the fact that, at least in the "rich world," too many people are becoming cynical. The article notes that "it was not always like that." In an age bursting with data and new knowledge, people have somehow lost the idealistic fervor that that motivates them to come up "with ideas for how the world might become a better place." The essay continues:

"[In past ages,] for most people, the question was not whether progress would happen, but how. The idea of progress forms the backdrop to a society. In the extreme, without the possibility of progress of any sort, your gain is someone else’s loss. If human behaviour is unreformable, social policy can only ever be about trying to cage the ape within. Society must in principle be able to move towards its ideals, such as equality and freedom, or they are no more than cant and self-delusion. So it matters if people lose their faith in progress. And it is worth thinking about how to restore it."

The essay isn't arguing that progress is not happening. Instead it is arguing that people's view of progress has changed for the worse. The essay agrees with "the case put forward in 'It’s Getting Better All the Time', by the late Julian Simon and Stephen Moore then at the Cato Institute, a libertarian think-tank in Washington, DC."

"Over almost 300 pages they show how vastly everyday life has improved in every way. For aeons people lived to the age of just 25 or 30 and most parents could expect to mourn at least one of their children. Today people live to 65 and, in countries such as Japan and Canada, over 80; outside Africa, a child’s death is mercifully rare. Global average income was for centuries about $200 a year; a typical inhabitant of one of the world’s richer countries now earns that much in a day. In the Middle Ages about one in ten Europeans could read; today, with a few exceptions, such as India and parts of Africa, the global rate is comfortably above eight out of ten. In much of the world, ordinary men and women can vote and find work, regardless of their race. In large parts of it they can think and say what they choose. If they fall ill, they will be treated. If they are innocent, they will generally walk free. It is an impressive list—even if you factor in some formidably depressing data. (In the gently dissenting foreword to her husband’s book Simon’s widow quotes statistics claiming that, outside warfare, 20th-century governments murdered 7.3% of their people, through needless famine, labour camps, genocide and other crimes. That compares with 3.7% in the 19th century and 4.7% in the 17th.) Mr Moore and Simon show that health and wealth have never been so abundant. And for the part of humanity that is even now shedding poverty, many gains still lie ahead."

While the author of the essay agrees with that accounting of the world's progress, he (or she) asserts that "a belief in progress is more than just a branch of accounting. The books are never closed." The essay warns that a global catastrophe, like a nuclear war or an environmental collapse, could "tip the balance into the red." Just as importantly, it claims, is the fact that "the accounts are full of blank columns. How does the unknown book-keeper reconcile such unknowable quantities as happiness and fulfilment across the ages?" Is there a way to measure material progress if it's accompanied by spiritual decline? The essayist is correct in asserting that "belief in progress is about the future." Belief is also intertwined with hope. But people in the rich world have seen so much progress that they expect today's amazing quality of life and it no longer inspires hope for a better future. The essay continues:

"People born in the rich world today think they are due a modicum of health, prosperity and equality. They advance against that standard, rather than the pestilence, beggary and injustice of serfdom. That’s progress."

The essay recalls that in the age of enlightenment (which started in the 17th century), "thinkers believed that man, emancipated by reason, would rise to ever greater heights of achievement. The many manifestations of his humanity would be the engines of progress: language, community, science, commerce, moral sensibility and government." They overestimated man's achievements, however, and, as the essay states, "Unfortunately, many of those engines have failed." The essay continues:

"Some supposed sources of progress now appear almost quaint. ... Purge the language of rotten thinking, they believed, and truth and reason would prevail at last. The impulse survives, much diminished, in the vocabulary of political correctness. But these days few people outside North Korea believe in language as an agent of social change. Other sources of progress are clothed in tragedy. The Germanic thought that individual progress should be subsumed into the shared destiny of a nation, or volk, is fatally associated with Hitler. Whenever nationalism becomes the chief organising principle of society, state violence is not far behind. Likewise, in Soviet Russia and Communist China unspeakable crimes were committed by the ruling elite in the pursuit of progress, rather as they had been in the name of God in earlier centuries. As John Passmore, an Australian philosopher, wrote: 'men have sought to demonstrate their love of God by loving nothing at all and their love for humanity by loving nobody whatsoever.' The 20th century was seduced by the idea that humans will advance as part of a collective and that the enlightened few have the right—the duty even—to impose progress on the benighted masses whether they choose it or not. The blood of millions and the fall of the Berlin Wall, 20 years ago this year, showed how much the people beg to differ. Coercion will always have its attractions for those able to do the coercing, but, as a source of enlightened progress, the subjugation of the individual in the interests of the community has lost much of its appeal."

The inevitable result, it seems, is that Idealism has given way to materialism. Materialism, the essayist claims, has been driven primarily by advances in science and technology. As a result, progress has also given rise to concerns about man's ability to control science and technology.

"The modern age has belonged to material progress and its predominant source has been science. Yet nestling amid the quarks and transistors and the nucleic acids and nanotubes, there is a question. Science confers huge power to change the world. Can people be trusted to harness it for good? The ancients thought not. Warnings that curiosity can be destructive stretch back to the very beginning of civilisation. As Adam and Eve ate from the Tree of Knowledge, so inquisitive Pandora, the first woman in Greek mythology, peered into the jar and released all the world’s evils. Modern science is full of examples of technologies that can be used for ill as well as good. Think of nuclear power—and of nuclear weapons; of biotechnology—and of biological contamination. Or think, less apocalyptically, of information technology and of electronic surveillance. History is full of useful technologies that have done harm, intentionally or not. Electricity is a modern wonder, but power stations have burnt too much CO2-producing coal. The internet has spread knowledge and understanding, but it has also spread crime and pornography. German chemistry produced aspirin and fertiliser, but it also filled Nazi gas chambers with Cyclon B. The point is not that science is harmful, but that progress in science does not map tidily onto progress for humanity. In an official British survey of public attitudes to science in 2008, just over 80% of those asked said they were 'amazed by the achievements of science'. However, only 46% thought that 'the benefits of science are greater than any harmful effect'. From the perspective of human progress, science needs governing. Scientific progress needs to be hitched to what you might call 'moral progress'. It can yield untold benefits, but only if people use it wisely. They need to understand how to stop science from being abused. And to do that they must look outside science to the way people behave."

Humans have always known that there is a difference between knowledge and wisdom. One can have great knowledge without being wise. Wisdom is the correct use of knowledge. The essay goes on to note that science is not the only area where good and evil live as companions.

"It is a similar story with economic growth, the other source of material progress. The 18th century was optimistic that business could bring prosperity; and that prosperity, in its turn, could bring enlightenment. Business has more than lived up to the first half of that promise. As Joseph Schumpeter famously observed, silk stockings were once only for queens, but capitalism has given them to factory girls. And, as Mr Moore and Simon argue, prosperity has brought its share of enlightenment. The Economist puts more faith in business than most. Yet even the stolidest defenders of capitalism would, by and large, agree that its tendency to form cartels, shuffle off the costs of pollution and collapse under the weight of its own financial inventiveness needs to be constrained by laws designed to channel its energy to the general good. Business needs governing, just as science does."

Advances in science and economics, the essayist avers, are good as far as they go, but they do "not seem to be delivering the emotional goods."

"The forests are disappearing; the ice is melting; social bonds are crumbling; privacy is eroding; life is becoming a dismal slog in an ugly world. All this scepticism, and more, is on display in 'Nineteen Eighty-Four' and 'Brave New World', the two great British dystopian novels of the 20th century. In them George Orwell and Aldous Huxley systematically subvert each of the Enlightenment’s engines of progress. Language—Orwell’s Newspeak—is used to control people’s thought. The individuals living on Airstrip One are dissolved by perpetual war into a single downtrodden 'nation'. In both books the elite uses power to oppress, not enlighten. Science in Huxley’s London has become monstrous—babies raised in vitro in hatcheries are chemically stunted; and the people are maintained in a state of drug-induced tranquillity. And in the year of our Ford 632, Huxley’s world rulers require enthusiastic consumption to keep the factories busy and the people docile. Wherever the Enlightenment saw scope for human nature to improve, Orwell and Huxley warned that it could be debased by conditioning, propaganda and mind-control."

Despite the view of pessimists, the worst predictions of past and present fear-mongers have not come to pass. For example, with exceptions of countries like Iran and North Korea, neither "Orwell’s nor Huxley’s nightmares have come to life." The question asked by the essayist is: "Why?"

"The answer depends on the last pair of engines of progress: moral sensibility in its widest sense, and the institutions that make up what today is known as 'governance'. These broadly liberal forces offer hope for a better future—more, indeed, than you may think. The junior partner is governance—not an oppressive Leviathan, but a democratic system of laws and social institutions. ... Even if government ... is often inefficient and self-serving, it also embodies moral progress. That is the significance of the assertion, in the American Declaration of Independence, that 'all men are created equal, that they are endowed by their Creator with certain unalienable rights'. It is the significance of laws guaranteeing free speech, universal suffrage, and equality before the law. And it is the significance of courts that can hold states to account when they, inevitably, fail to match the standards that they have set for themselves. Such values are the institutional face of the fundamental engine of progress—'moral sensibility'. The very idea probably sounds quaint and old-fashioned, but it is the subject of a powerful recent book by Susan Neiman, an American philosopher living in Germany. People often shy away from a moral view of the world, if only because moral certitude reeks of intolerance and bigotry. As one sociologist has said 'don’t be judgmental' has become the 11th commandment. But Ms Neiman thinks that people yearn for a sense of moral purpose. In a world preoccupied with consumerism and petty self-interest, that gives life dignity. People want to determine how the world works, not always to be determined by it. It means that people’s behaviour should be shaped not by who is most powerful, or by who stands to lose and gain, but by what is right despite the costs. Moral sensibility is why people will suffer for their beliefs, and why acts of principled self-sacrifice are so powerful."

The essay ends on an upbeat note by recognizing that "people can distinguish between what is and what ought to be."

"[Although] there are no guarantees that the gap between is and ought can be closed. Every time someone tells you to 'be realistic' they are asking you to compromise your ideals. Ms Neiman acknowledges that your ideals will never be met completely. But sometimes, however imperfectly, you can make progress. It is as if you are moving towards an unattainable horizon. 'Human dignity', she writes, 'requires the love of ideals for their own sake, but nothing requires that the love will be requited.' ... Ms Neiman asks people to reject the false choice between Utopia and degeneracy. Moral progress, she writes, is neither guaranteed nor is it hopeless. Instead, it is up to us. "

I'm idealistic enough to believe that men and women of good will can make a difference in the world. Evil will always live as a companion to good, but that fact need not impede progress altogether. As the New Year and new decade begin, let's work to ensure that it is not another Big Zero.

Artificial Intelligence Still Can't Beat the Real Thing

Earlier this month, John Markoff, who writes about science and information technologies for the New York Times, penned a column about a team of remarkable men who worked to together at the dawn of the information age in the Stanford Artificial Intelligence Laboratory (SAIL) ["Optimism as Artificial Intelligence Pioneers Reunite," 8 December 2009]. He begins his article by noting that the "personal computer and the technologies that led to the Internet were largely invented in the 1960s and ’70s at three computer research laboratories next to the Stanford University campus." SAIL was one of them. The other two were the Augmentation Research Center, "which became known for the mouse," and Xerox's Palo Alto Research Center (PARC), "which developed the first modern personal computer" as well as many other computer innovations we now take for granted. Markoff, however, focuses on SAIL, which was "run by the computer scientist John McCarthy." He notes that SAIL was less well known than the other two research centers.

"That may be because SAIL tackled a much harder problem: building a working artificial intelligence system. By the mid-1980s, many scientists both inside and outside of the artificial intelligence community had come to see the effort as a failure. The outlook was more promising in 1963 when Dr. McCarthy began his effort. His initial proposal, to the Advanced Research Projects Agency of the Pentagon, envisioned that building a thinking machine would take about a decade. Four and a half decades later, much of the original optimism is back, driven by rapid progress in artificial intelligence technologies, and that sense was tangible last month when more than 200 of the original SAIL scientists assembled at the William Gates Computer Science Building here for a two-day reunion."

This is not the first time that Markoff has written optimistically about artificial intelligence. Over three years ago he wrote an article in which he insisted that the field of artificial intelligence was "finally catching up to the science-fiction hype." ["Brainy Robots Start Stepping Into Daily Life," by John Markoff, New York Times 8 July 2006]. That article points to activities (such as robot cars driving themselves across the desert, electronic eyes performing lifeguard duty in swimming pools, and virtual enemies with humanlike behavior battling video game players) to demonstrate advancements that have been made. Although strides continue to be made in artificial intelligence, truly cognitive machines still elude researchers. Returning to Markoff's latest article, he discusses why SAIL was important.

"During their first 10 years, SAIL researchers embarked on an extraordinarily rich set of technical and scientific challenges that are still on the frontiers of computer science, including machine vision and robotic manipulation, as well as language and navigation. ... The scientists and engineers who worked at the laboratory constitute an extraordinary Who’s Who in the computing world. Dr. McCarthy coined the term artificial intelligence in the 1950s. Before coming to SAIL he developed the LISP programming language and invented the time-sharing approach to computers. [Les Earnest, the laboratory’s deputy director] designed the first spell-checker and is rightly described as the father of social networking and blogging for his contribution of the finger command that made it possible to tell where the laboratory’s computer users were and what they were doing. Among others, Raj Reddy and Hans Moravec went on to pioneer speech recognition and robotics at Carnegie Mellon University. Alan Kay brought his Dynabook portable computer concept first to Xerox PARC and later to Apple. Larry Tesler developed the philosophy of simplicity in computer interfaces that would come to define the look and functioning of the screens of modern Apple computers — what is called the graphical user interface, or G.U.I. Don Knuth wrote the definitive texts on computer programming. Joel Pitts, a Stanford undergraduate, took a version of the Space War computer game and turned it into the first coin-operated video game — which was installed in the university’s student coffee house — months before Nolan Bushnell did the same with Atari. The Nobel Prize-winning geneticist Joshua Lederberg worked with Edward Feigenbaum, a computer scientist, on an early effort to apply artificial intelligence techniques to create software to act as a kind of medical expert. John Chowning, a musicologist, ... was invited to use the mainframe computer at the laboratory late at night when the demand was light, and his group went on to pioneer FM synthesis, a technique for creating sounds that transforms the quality, or timbre, of a simple waveform into a more complex sound. (The technique was discovered by Dr. Chowning at Stanford in 1973 and later licensed to Yamaha.)"

Those are all impressive achievements, but where does research on artificial intelligence stand? Markoff concludes that "it is still an open question. In 1978, Dr. McCarthy wrote, 'human-level A.I. might require 1.7 Einsteins, 2 Maxwells, 5 Faradays and 3 Manhattan Projects.'" If AI is a subject that interests you, you might also want to read my blog entitled Superintelligent Computers. In some ways, the fact that we haven't been able to duplicate artificially human-level intelligence is comforting. The fact remains, however, that most computer scientists believe that day will come. Although creating a cognitive machine will be a significant achievement, I tend to agree with Stanislas Dehaene that man's greatest invention was learning to read ["Humanity's greatest invention," a book review by Susan Okie, Washington Post, 29 November 2009]. Dehaene, a renowned cognitive neuroscientist, wrote a book entitled Reading in the Brain that examines how the brain acquires reading skills. About the book, Okie writes:

"About 5,000 years ago, societies in ancient Sumeria, China and South America invented writing, and in the millennia since, the ability to read has propelled human intellectual and cultural development, vastly expanding our capacity to learn, create, explore and record what we think, feel and know. Reading supplies our brains with an external hard drive and gives us access to our species's past: In the words of Francisco de Quevedo, it enables us 'to listen to the dead with our eyes.' But how, in such a short time, did the human species evolve this unique skill, one that requires the brain to decode written words visually and process their sounds and sense rapidly? In this fascinating and scholarly book, French neuroscientist Stanislas Dehaene explains what scientists now know about how the human brain performs the feat of reading, and what made this astonishing cultural invention biologically possible."

In a post entitled The Power of Words, I discussed how the spoken word can stir men's souls. But unrecorded spoken words cannot stir generations since they have no lasting impact. That is why reading and writing is humanity's greatest invention. Okie continues:

"Presented with a word's image on the retina, average readers of English can, within a few 10ths of a second, match it with one of 50,000 or more words stored in their mental dictionaries, comprehend its meaning in context, and proceed seamlessly to the next word. Amazingly, most children become proficient readers during elementary school (although learning to read Italian is easier, and learning to read Chinese harder, than learning to read English). ... 'Only a stroke of good fortune allowed us to read,' Dehaene writes near the end of his tour of the reading brain. It was Homo sapiens's luck that in our primate ancestors, a region of the brain's paired temporal lobes evolved over a period of 10 million years to specialize in the visual identification of objects. Experiments in monkeys show that, within this area, individual nerve cells are dedicated to respond to a specific visual stimulus: a face, a chair, a vertical line. Research suggests that, in humans, a corresponding area evolved to become what Dehaene calls the 'letterbox,' responsible for processing incoming written words. Located in the brain's left hemisphere near the junction of the temporal and occipital lobes, the letterbox performs identical tasks in readers of all languages and scripts."

Okie distills Dehaene explanation of how children (or adults, I presume) learn to read.

"Children learn reading in a stepwise process: first, awareness that words are made up of phonemes or speech sounds (ba, da); then the discovery that there's a correspondence between these speech sounds and pairs or groups of letters. Later the child begins to recognize entire words, and after a few years, reading speed becomes independent of word length. Dehaene deplores the whole-language approach to teaching reading in which beginning readers are presented with entire words or phrases in the hope of fostering earlier comprehension of text. He cites research showing that children who first learn which sounds are represented by which letters, and how pairs or groups of letters correspond to speech sounds, make steadier progress and achieve better reading scores than those taught using the whole-language method. He also notes the success of teaching methods that incorporate multiple senses and motor gestures, such as those used in Montessori schools. For example, in preparation for learning to read, young Montessori students are often asked to trace with their fingers the shapes of large letters cut out of sandpaper. The exercise makes use of vision, touch and spatial orientation, as well as mimicking the gestures used to print each letter."

Understanding how the brain learns to read wouldn't be complete without some discussion about why some people have difficulties attaining that skill. Okie provides a brief discussion about dyslexia and notes that "there is no prospect of a cure." She concludes:

"Reading, Dehaene writes, is 'by far the finest gem' in humanity's cultural storehouse, and judging by the ubiquity of electronic messages and Web surfing, it's a skill no less essential in the digital age than it was during the age of print."

Clearly, there would have been no digital age had there been no age of print. The pioneer researchers at SAIL owe more to the inventers of alphabets than they do the discoverers of electricity. With electronic reading devices, like Amazon's Kindle and Sony's Reader, being hot gift items this Christmas season, it's clear that reading remains humanity's greatest invention. Reading and writing will remain critical to humanity's progress and information age groups are doing what they can to preserve man's written past (see my posts entitled Books Forever and The United Nations' "Alexandrian Library"). A Japanese proverb says, "One written word is worth a thousand pieces of gold." That assertion remains true -- even at time when an ounce of gold is selling at ridiculously high prices.

SecDef Gates Proposes Closer Ties Between Defense and State

For years, analysts and planners who have focused on ways to improve development strategies and policies have encouraged decision makers in the U.S. government to seek greater interagency cooperation. Although things have appreciably improved over the past 15 or 20 years, frictions and separate agendas have continued to plague development efforts supported by the Departments of State and Defense. Secretary of Defense Robert Gates hopes to end all that by establishing a development fund jointly controlled by the two departments ["Gates proposes $2 billion in funds to aid unstable countries," by Mary Beth Sheridan and Greg Jaffe, Washington Post, 24 December 2009]. Sheridan and Jaffe report:

"Defense Secretary Robert M. Gates has proposed a major overhaul of the way the Pentagon and State Department do nation-building, seeking to end friction between the bureaucracies by putting them jointly in charge of three huge new funds aimed at stabilizing strife-ridden countries. The proposal is aimed at addressing problems that have dogged the U.S. effort in Iraq and Afghanistan -- particularly, disputes over whether civilians or the better-funded military should be in charge of stabilization. But Gates' proposal goes beyond those conflicts to address what the military increasingly sees as the greatest threat to the United States -- failing states such as Yemen and Somalia that could provide a haven for terrorist groups. The proposal would concentrate existing and new money in three long-term funds totaling as much as $2 billion. They would be dedicated to training security forces, preventing conflicts and stabilizing violence-torn societies around the world. The funds would exist separately from the war budgets, and allow for quicker and better-coordinated response to looming or actual conflicts, officials said."

It's a bit of hyperbole to call three funds containing a total of $2 billion "huge." While I'll admit that $2 billion is a large amount, compared to other programs and the needs that exist in the area of development, the sum is quite modest. I also think that Secretary Gates has another agenda in proposing these funds beyond better interagency cooperation. He has made it quite clear that he does not think that the military should be in charge of development over the long term. His fear, I suspect, is that unless he can institutionally shift responsibility for nation-building away from the military the Pentagon will remain in charge by default. Sheridan's and Jaffe's report makes it clear, however, that Gates understands that development cannot be achieved in unstable environments. Nevertheless, he would prefer to see the military focus on security and let State focus on development. Sheridan and Jaffe continue:

"In a memo to Secretary of State Hillary Rodham Clinton, Gates noted that the huge increase in Pentagon funding for stabilization efforts in Iraq and Afghanistan has prompted complaints about the militarization of U.S. foreign policy. The proposal 'sets forth a new approach that could transcend these debates. It argues for a new model of shared responsibility and pooled resources for cross-cutting security challenges,' Gates wrote in the unclassified Dec. 15 memo, which was obtained by The Washington Post."

Although many people involved in development think that it's about time that Defense and State stop bickering and start working together, Sheridan and Jaffe assert that Congress (one of the most divisive institutions in government) could be a major impediment to progress. They report:

"Several legislative aides and a senior administration official said Gates' idea for joint funds might not fly, given that the multiple congressional committees that oversee the Defense and State budgets are unlikely to cede control."

What really surprises me, however, is that some observers believe "the plan could raise concerns that the Defense Department is trying to expand its growing role in institution-building, which was traditionally carried out by the State Department and the U.S. Agency for International Development (USAID)." It appears to me as an outside observer that Gates sees nation-state building as a tar pit that could drain both energy and resources from the military's main focus -- security. By emphasizing an interagency approach, it is more likely that Gates is trying to move the issue out of the Pentagon into the broader Washington arena. The article continues:

"Defense Department spokesman Geoff Morrell said the proposal wasn't a Pentagon power play but 'an attempt to get people out of the business-as-usual approach.' 'We need to be much more quick to respond to allies who are in need of security assistance so they can handle these problems and they don't devolve into emergencies that require American forces,' he said. Under Gates' proposal, State and Defense would provide money from their own budgets -- either contributing 50/50 or according to each department's priorities. The departments would select the projects together."

I suspect that a 50/50 split won't fly. State has complained for years that it has been underfunded in comparison to the Pentagon. If Gates is serious about this proposal, he should recommend a departmental contribution more in line with budget realities. The 50/50 split was probably offered because half of the money would be used to create better security in troubled regions and half of the money would be used to support development. Sheridan and Jaffe explain:

"Gates painted different scenarios for launching the three funds in 2011. The most ambitious envisions a $1 billion fund to train and equip foreign security forces and another $1 billion for conflict prevention and stabilization. 'Such an approach would dramatically increase non-military assistance,' the memo says. The joint funds, based on a model used by Britain, would not only improve coordination but set up a broader mechanism to finance national-security needs, Gates said. While the Pentagon has gotten generous increases in recent years, State has lagged."

Another reason that I'm surprised that some analysts see this as a power grab by the Pentagon is that Gates has been emphasizing that he wants greater cooperation between Defense and State for some time. It was one of the reasons that President Obama kept him on as Secretary of Defense (see my post entitled Transforming U.S. Foreign Policy). Even Sheridan and Jaffe note that Gates has stressed the importance of close cooperation between the military and civilians.

"'The civilian component of what we're doing is critical to success for our country,' Gates told U.S. soldiers in Kirkuk, Iraq, earlier this month, echoing a concern he has expressed frequently. 'And, unfortunately, the civilian elements of our government -- the State Department, AID and so on -- have been starved of resources for decades.'"

That hardly sounds like the rhetoric of someone trying to establish nation-state building fiefdom. The State Department is nevertheless moving forward cautiously.

"State Department spokesman Philip J. Crowley said the department was reviewing the memo. 'It contains some creative ideas on moving forward. Secretary Clinton and Secretary Gates share an interest in improving the security assistance process,' he said."

Like all programs, the devil is in the details. According to Sheridan and Jaffe, "The Gates memo is vague on where the lines would be drawn between the funds aimed at improving security services, fostering stabilization and preventing crises. The lack of detail could raise hackles among lawmakers concerned that the pools could become open-ended funding obligations." One group that is likely to be asked to weigh in on this subject is the Center for Excellence in Disaster Response and Humanitarian Assistance. The Center is working feverishly to establish inter-agency relationships that will foster better prevention, mitigation, and response to disasters and better strategies for development. Sheridan and Jaffe conclude:

"Gates noted that the joint funds would fall under the oversight jurisdiction of eight congressional committees. To avoid a bureaucratic nightmare, he suggested creating special standing committees in the House and Senate. The State Department traditionally has taken the lead in institution-building abroad, including providing funds for training and equipping security forces. In recent years, the Pentagon has become more active in that area through its $350 million-a-year Global Train and Equip Program and the Commander's Emergency Response Program, which allows officers to hand out small grants for starting businesses or doing community projects. That program received about $1.5 billion in 2009."

By all accounts Secretaries Gates and Clinton get along well. Let's hope that they can put together a program that better addresses the security and development needs that the U.S. will be asked to address in the coming years. Everyone knows that preventing war is much cheaper than having to fight one. With the government running historical deficits, any effort that can save money, achieve policy aims, and improve the lives of millions of people should be supported.

More Awards for Innovation

In a couple of recent posts (Promoting Innovation and Entrepreneurship and The New York Times' Year in Ideas), I've focused on end of the year recognition for innovative ideas and companies. The Economist has also published its list of winning innovators for 2009 ["And the winners were...," 12 December 2009 print issue]. The article notes that The Economist "was established in 1843 to take part in 'a severe contest between intelligence, which presses forward, and an unworthy, timid ignorance obstructing our progress'. One of the chief ways in which intelligence presses forward is through innovation, which is now recognised as one of the most important contributors to economic growth. Innovation, in turn, depends on the creative individuals who dream up new ideas and turn them into reality." The magazine presents Innovation Awards in eight categories: bioscience, computing and telecommunications, energy and the environment, social and economic innovation, business-process innovation, consumer products, a flexible “no boundaries” category, and the corporate use of innovation. This year's winners include some innovators who have been mentioned before in my blogs. The list of winners this year is:

Bio-Science: Craig Venter -- Dr. Venter is chief executive of Synthetic Genomics, and was recognized "for his contributions to genomics. Dr Venter pioneered the use of expressed sequence tags as a new way to identify human genes, and went on to lead the private initiative to sequence the human genome, completed in 2000. He is now working in the field of synthetic biology, developing modified micro-organisms with the scope to produce clean fuels, among other things." To learn more about what he is currently working on, see my post entitled Biofuel from Algae.

Business Process: Ratan Tata -- Mr. Tata is chairman of the Tata Group, and was recognized "for pioneering the globalisation of corporate India. In 1991, Mr Tata assumed the reins of his family-run company. He has since been the architect of a series of bold foreign acquisitions and is the man behind the world’s cheapest car, the Tata Nano, which costs $2,200." I first mentioned the Tata Nano in a post entitled Will Cheap Cars Undermine India's Future? I also mentioned the Tata Group in post about affordable housing entitled Building Little Houses.

Computing and Telecommunications: Raymond Kurzweil -- Mr. Kurzweil is founder of Kurzweil Technologies, and was recognized "for his work in artificial intelligence. Mr Kurzweil led the development of the first omni-font character-recognition system, the first text-to-speech reading machine and the first commercial speech-recognition system." For more information about Mr. Kurzweil and his work, read by post entitled Looking towards the Future with Ray Kurzweil.

Consumer Products and Services: Steve Sasson -- Mr. Sasson works with Eastman Kodak and was recognized "for inventing the digital camera. Mr Sasson built the world’s first digital camera in 1975. It had a resolution of 0.01 megapixels and stored images on tape. Digital cameras have since revolutionised photography."

Energy and the Environment: Richard Swanson -- Dr. Swanson is president and chief technology officer of SunPower. He was recognized "for his contributions to solar-cell technology. In 1985 Dr Swanson founded SunPower Corporation to commercialise the solar-cell technology he developed while he was a professor of electrical engineering at Stanford University. His design made solar cells thinner, more efficient and cheaper."

No Boundaries: Mark Zuckerberg -- Mr. Zuckerberg is chief executive of Facebook. He was recognized "for popularising social networking. In 2004 Mark Zuckerberg started Facebook, a social-networking site, from his dorm room at Harvard University. Initially available only to Harvard students, it is now a global phenomenon with over 300m active users." For more about social networking, see my post entitled The Social Media Revolution.

Social and Economic Innovation: Mikkel Vestergaard Frandsen -- Mr. Vestergaard is chief executive of Vestergaard Frandsen, a Swiss-based international company specializing in complex emergency response and disease control products. He was recognized "for developing low-cost health devices for the poor. Mr Vestergaard Frandsen reoriented his family firm from making uniforms to developing products to address the developing world’s greatest health problems. They include PermaNet mosquito nets, ZeroFly insecticide-treated plastic sheeting and the LifeStraw, a portable water-purification device." The company claims to be "guided by a unique Humanitarian Entrepreneurship business model, whose "profit for a purpose" approach has turned humanitarian responsibility into its core business."

Corporate Use of Innovation: Reckitt Benckiser -- The company was recognized for "its innovative and entrepreneurial corporate culture. Reckitt Benckiser is one of the world’s biggest makers of household cleaning products. It has maintained strong sales and profit growth, despite the recession, because of its diverse, dynamic and innovative culture."

The article listing the winners also includes a list of the judges who made the selections. That list of people is also impressive. Mired as the global economy is in a terrible recession, there has perhaps never been a more important time to inspire hope in the future by recognizing the efforts of the innovative people on whose work the future will be built. I add my congratulations to them all.

Merry Christmas

Christmas is obviously a Christian holiday; but it reflects historical traditions of giving and celebrations of life that lie at the heart of most of the world's major religions. Few people in the Christian world seriously believe that Christ was born on December 25th. Some trace the holiday's roots to ancient Babylon, where, they claim, a feast honoring the Son of Isis (Goddess of Nature) was celebrated on December 25th. The festival was supposedly characterized by raucous partying, gluttonous eating and drinking, and gift-giving. Others trace the origins of Christmas to the Roman holiday of Saturnalia, a week long period of lawlessness celebrated between December 17th and 25th. Ancient writers describe this celebration as a time of widespread intoxication; going from house to house while singing naked; and consuming human-shaped biscuits (had a gingerbread man lately?). One can easily understand why the Christianized Roman state might have wanted to transform Saturnalia into something more demure.

A festive celebration during the heart of winter probably seemed like a good idea. Following closely on the heels of the winter solstice, the date helped usher in the return of the sun and longer days. As noted above, the tradition of giving gifts during the Christmas season was also borrowed from earlier traditions. The Romans had traditionally exchanged presents during New Years' celebrations. Sliding that tradition ahead a week and tying it to the biblical story of the wise men who brought gifts to the infant Jesus was probably a very simple thing to do. Merchants in the Christian world are certainly grateful for a tradition of gift giving.

If you follow the gift giving tradition during this season of the year, you might want to think about giving to those less fortunate than yourself. Oxfam America's web site has a few non-traditional Christmas gifts you could consider. For example, you could give a grove of "miracle trees" for $30. According the site, the "miracle tree" is "the remarkable moringa tree" which "is cultivated in many tropical countries and earned its nickname because its leaves, flowers, fruits, roots, and seeds all pack a punch. It contains rich amino acids and has antibiotic properties. But the most widespread use of the moringa is for water purification at the household level. Your gift will help a family learn to plant their own trees and produce enough seeds to purify their drinking water." Other non-traditional gifts include, a school meal program for a child ($25); a goat ($50) -- the site says the goat is a best seller; a vegetable garden ($30); a water purifier ($35); a dozen chicks ($40); children's books ($18); soap ($12); a school desk and chair ($35); mosquito nets ($18); or you could build a new school ($1500).

New York Times' op-ed columnist Nicholas Kristof also offers a unique list of organizations to which you could choose to give ["A Most Meaningful Gift Idea," 24 December 2009]. He writes, "After all, nothing says 'happy holidays' like donating in Aunt Tilda’s name to build a composting toilet in Haiti or to deworm kids in Kenya. And a deworming pill will never be regifted!" Of course, you don't have to spend money to give a gift. Giving of your time and service could be a wonderful present for someone in need. In his famous book The Prophet, Kahlil Gibran wrote, "You give but little when you give of your possessions. It is when you give of yourself that you truly give." However you choose to celebrate the season, I hope you find great joy and happiness.

The New York Times' Year in Ideas

For all of the usual reasons, this is my favorite time of the year. One naturally begins thinking more about family, blessings, and giving to others. But I also like this time of year because the New York Times publishes its "Year in Ideas" section that highlights "noteworthy notions of [the current year] — the twigs and sticks and shiny paper scraps of human ingenuity, which, when collected and woven together, form a sort of cognitive shelter, in which the curious mind can incubate, hatch and feather" ["The Ninth Annual Year in Ideas," 11 December 2009]. The article looks at ideas in the areas of: arts, business, culture, design, health, natural science, politics & policy, social science, sports, and technology. It also alphabetizes the ideas from A to Z if that is the way you prefer to surf the ideas. Below I discuss the ideas I found particularly interesting in the areas of business, culture, design, natural science, and technology.

Business Ideas

The Myth of the Deficient Older Employee by Lia Miller - "Although workers who were 45 and older had lower unemployment rates in 2008 than younger workers, they stayed unemployed for longer periods, according to the Bureau of Labor Statistics. This is not surprising. Employers are often reluctant to hire older workers, not only because they have higher health care costs and sometimes command higher salaries but also because of their reputational stigma. Older workers are commonly thought of as being less productive and less willing to learn than younger workers, as well as overly cautious. But this year economists presented a more nuanced picture than the above stereotypes suggest. In The American Economic Review in June, Gary Charness, an economics professor at the University of California, Santa Barbara, and Marie Claire Villeval, a colleague from the University of Lyon, published the results of a study in which they pitted 'seniors' (those over 50) against 'juniors' (those under 30) in three different decision-making tasks. These were formulated to test risk taking, competitiveness and cooperation. As it turns out, the 'seniors' more than hold their own. The seniors were also more cooperative, contributing more to their group during the cooperation test. The seniors outperformed the juniors on one competitive word game — and were only 'very slightly less' competitive overall, Charness says. ... Another welcome finding of the study came during the cooperation portion, when Charness and Villeval found that groups with a mix of ages outperformed homogeneous groups. For an optimum work force, Charness says, it is best to have a range of ages in the office."

I've certainly found this true in my business. A good mixture of experience and youthful enthusiasm produces great results.

Subscription Artists by Clive Thompson - "This summer, Allison Weiss, a 22-year-old singer who writes melodic songs about 'hopeless hope,' wanted to produce a 1,000-CD run of a new album she was recording, but she wasn't sure how to get the money to do it. Then she heard about Kickstarter, a Web site unveiled in April. At Kickstarter, creative types post a description of a project they want to do, how much money they need for it and a deadline. If enough people pledge money that the artists reach (or surpass) their financial goals, then everyone is billed, paying in advance as you would for a magazine subscription. For goals that aren't reached, nobody is charged. In essence, Kickstarter offers a form of market research for artists. For perhaps the first time, an artist can quickly answer a nagging question: Does anyone actually want my art badly enough to pay for it? If the goal is reached, the artist now has a list of subscribers to her vision. And if the goal isn't reached? "It's painful, but it's better to find out early," rather than spend precious time and money on a project nobody wants, says Yancey Strickler, who helped found Kickstarter. More than 1,000 projects have been started on Kickstarter since April, raising money for projects as diverse as a solo sailboat trip around the world ($8,142 raised) and a book by Scott Thomas documenting how he developed the graphic design for Barack Obama's presidential campaign ($84,614 raised). Weiss picked a goal of $2,000, and like many Kickstarter users, offered a clever set of tiered benefits for fans: $40 got someone a signed copy of the album (17 fans paid for that), and for $500, the donor could pick any subject and Weiss would write a song on it. (Two people bit.) Weiss raised the $2,000 in less than 10 hours, and eventually amassed $7,711 from 195 backers, which meant she could pay for more mixing. Perhaps even more important was the validation of her fan base. Weiss says, 'I was surprised to find I had a more dedicated Internet following than I thought.'"

Great idea. Every entrepreneur knows how painful raising capital can be. Kickster is like finding a group of angel investors but investors who aren't looking for the same kind of return normally associated with venture capitalists.

Cultural Ideas

The Advertisement that Watches You by Christopher Shea - "'It happens when nobody is watching.' As the tagline on a poster raising awareness about domestic violence, that's not bad. But it was the poster itself that was truly attention-grabbing — for it brought the issue of being watched (or not) to life. The poster, placed in a bus shelter in Berlin, was a one-time installation sponsored by Amnesty International. When a person in the shelter was looking at the poster, he saw, along with the words, a photograph of an amiable couple: a stocky, professional-looking man in a blue oxford-cloth shirt, his arm around the shoulders of his girlfriend or wife. If no one in the shelter was paying attention to the poster, though, the image switched: now the man was raising his fist against the woman as she leaned away and protected her face. (There was a slight lag in the switch, so viewers could notice that the poster was changing its image.) Designed by the Hamburg-based firm Jung von Matt (which bills itself as being in the business of 'attention warfare'), the ad worked via a camera attached to a computer outfitted with face-tracking software with a working range of about 16 feet. A Potsdam company called Vis-à-pix created the technology. Jung von Matt described the ad as the first of its kind, and it won a silver prize at the 2009 Cannes Lions International Advertising Festival and a gold prize at the New York Festivals International Advertising Awards. The technology has since improved, according to Vis-à-pix. New posters can even identify the sex of onlookers. Consider a poster created for the service counters of the rental-car company Sixt: when a man gets close, he is tempted with an image of a limousine; if the customer is a woman, she sees, instead, a spunky Cabriolet."

Although this clever idea was in the culture section, it could just as easily have been categorized in the business section. Getting noticed in today's world of advertising is difficult -- clever ides can help. The next idea could also have been put in the business section.

Good Enough is the New Great by Robert Mackey - "'Cheap, fast, simple tools are suddenly everywhere,' Robert Capps of Wired magazine wrote this summer in an essay called 'The Good-Enough Revolution.' Companies that had focused mainly on improving the technical quality of their products have started to notice that, for many consumers, 'ease of use, continuous availability and low price' are more important. High-definition televisions have turned every living room into a home cinema, yet millions of us choose to watch small, blurry videos on our computers and our mobile devices. Cameras capture images in a dozen megapixels, yet Flickr is filled with snapshots taken with phone cameras that we can neither focus nor zoom. And at war, a country that has a fleet of F-16 fighter jets that can cover 1,500 miles an hour is now using more and more remote-controlled Predator drones that are powered by snowmobile engines. Lo-fi solutions are now available for a range of problems that couldn't be solved with high-tech tools. Music played from a compact disc is of higher quality than what comes out of an iPod — but you can't easily carry 4,000 CDs with you on the subway or to the gym. Similarly, a professional television camera will produce a higher-quality image than a phone, but when something important happens, from the landing of a jet on the Hudson River to the murder of an Iranian protester, and there are no TV cameras around, images recorded on phones are good enough. In February, a music professor at Stanford, Jonathan Berger, revealed that he has found evidence that younger listeners have come to prefer lo-fi versions of rock songs to hi-fi ones. For six years, Berger played different versions of the same rock songs to his students and asked them to say which ones they liked best. Each year, more students said that they liked what they heard from MP3s better than what came from CDs. To a new generation of iPod listeners, rock music is supposed to sound lo-fi. Good enough is now better than great."

This notion appears to be gaining real traction. Indian innovators have embraced a philosophy called jugaad for some time. Jugaad involves using ingenious ways to overcome obstacles and scarcity. For more information on jugaad, see yesterday's post entitled Innovation, Development, and India.

Design Ideas

The Kitchen Sink that Puts Out Fires by Jesse Ashlock - "House fires are most likely to begin in the kitchen. Yet aside from expensive sprinkler systems, the only tool for fighting kitchen conflagrations is the common fire extinguisher, which some risk assessors consider a fire hazard itself, because it encourages untrained people to battle the blaze rather than to evacuate. What's more, over the last two decades many countries have phased out one of the most effective extinguishers because it uses the ozone-depleting chemical halon. Yusuf Muhammad and Paul Thomas, industrial-design students at London's Royal College of Art, learned this after a school assignment prompted a conversation with members of the Chelsea Fire Station. The firefighters mentioned water mist, a firefighting technology used on oil rigs and cruise ships because of its advantages in a confined space. After picking the brains of specialists at the conference of the International Water Mist Association, the duo began prototyping a low-cost means of taking water mist into the family kitchen. Their patent-pending product, Automist, consists of a ceiling-mounted heat detector that triggers a pump under the sink that sends water to a special unit at the base of the kitchen faucet. There, six high-pressure nozzles emit jets of mist that rapidly turn to steam, creating an inert atmosphere that starves the fire of oxygen and reduces the heat of the room. 'It's almost like being in a wet sauna,' Muhammad says. In tests conducted in a roughly 13-feet-by-13-feet space, the duo found the system could contain any type of blaze (including oil fires) in less than five minutes. After winning the James Dyson Award for emerging designers in September, Muhammad and Thomas are now working to get to market by summer a commercial version of Automist, which a licensed plumber will be able to install with any standard faucet."

This idea is not only clever it could save lives. There is a good animation of how the system works on the New York Times' website.

Natural Science Ideas

Massively Collaborative Mathematics by Jordan Ellenberg - "In January, Timothy Gowers, a professor of mathematics at Cambridge and a holder of the Fields Medal, math's highest honor, decided to see if the comment section of his blog could prove a theorem he could not. In two blog posts — one titled 'Is Massively Collaborative Mathematics Possible?' — he proposed an attack on a stubborn math problem called the Density Hales-Jewett Theorem. He encouraged the thousands of readers of his blog to jump in and start proving. Mathematics is a process of generating vast quantities of ideas and rejecting the majority that don't work; maybe, Gowers reasoned, the participation of so many people would speed the sifting. The resulting comment thread spanned hundreds of thousands of words and drew in dozens of contributors, including Terry Tao, a fellow Fields Medalist, and Jason Dyer, a high-school teacher. It makes fascinating, if forbiddingly technical, reading. Gowers's goals for the so-called Polymath Project were modest. 'I will regard the experiment as a success,' he wrote, 'if it leads to anything that could count as genuine progress toward an understanding of the problem.' Six weeks later, the theorem was proved. The plan is to submit the resulting paper to a top journal, attributed to one D.H.J. Polymath. By now we're used to the idea that gigantic aggregates of human brains — especially when allowed to communicate nearly instantaneously via the Internet — can carry out fantastically difficult cognitive tasks, like writing an encyclopedia or mapping a social network. But some problems we still jealously guard as the province of individual beautiful minds: writing a novel, choosing a spouse, creating a new mathematical theorem. The Polymath experiment suggests this prejudice may need to be rethought. In the near future, we might talk not only about the wisdom of crowds but also of their genius."

In almost every area where people connect, good things happen. I say "almost every area, because, of course, when terrorists connect, bad things happen. But I'm an optimist and believe that most people want to make this world a better place in which to live. I'm inspired when people get together to make something good happen. As Ellenberg implies, it's pure genius.

Weapons of Mosquito Destruction by Lia Miller - "Mosquitoes, though vulnerable as individuals to the swat of a hand, are as a group maddeningly difficult to kill or control. For some of us, this is a source of irritation. But in countries where mosquitoes spread malaria or other diseases, it can be fatal. Though netting and bug sprays offer some help, this year marked the promising advance of higher-tech antimosquito weaponry. Szabolcs Marka, a Columbia University astrophysicist whose main occupation is searching the universe for black holes, received a grant this year from the Bill and Melinda Gates Foundation to develop a kind of futuristic mosquito net. He and two colleagues are working on a project that creates a 'light shield' through which mosquitoes and other airborne insects will not fly. Marka says the project has had promising results. In a series of tests, mosquitoes were released into a box partitioned into halves by a laser beam. The mosquitoes stayed in one-half of the box, treating the laser wall as if it were solid (though it did not constitute an actual physical barrier). Marka envisions his laser shield covering doors and windows or encircling a bed with a cone of invisible light shining down from the ceiling. Other scientists have also seen the future of mosquito combat in lasers — a field of innovation that this year The Wall Street Journal called 'Weapons of Mosquito Destruction,' or W.M.D.'s. The company Intellectual Ventures is developing something called the Photonic Fence. Lowell Wood and Jordin Kare, astrophysicists who have worked on the Strategic Defense Initiative, have conceived and developed this scheme, in which mosquitoes are blasted with lasers. Marka notes that his method has the benefit of not upsetting the ecosystem by killing too many mosquitoes indiscriminately. He says he hopes that before too long he will have 'something practical' for sale for around $10."

High tech gadgets are always fascinating and exciting, but not always practical for use in low tech places. All of the schemes mentioned above require reliable electrical power. Effective and reliable power is not always available in the areas that need it most. Fortunately, a number of people are working on alternative and renewable energy schemes that could provide reliable, affordable power to remote villages. Once that happens, laser window screens could prove very useful and lifesaving. Until then, I expect that a lot of backyard barbequers would love to install laser screens on their decks.

Technology Ideas

Man-Made Greenery by Michael Silverberg - "Nature may well be the art of God, but that isn't keeping mere mortals from trying their hand at it. This year, a group of British engineers recommended building a forest of artificial carbon-filtering 'trees' across the United Kingdom to combat climate change; and a Brooklyn designer completed a working prototype of leafy-looking solar panels that could one day replace ivy on buildings. The treelike devices, which were created by Klaus Lackner, a Columbia University geophysicist, resemble giant fly swatters in one design. They use carbon-capture and storage technology similar to the kind that will be deployed at large power plants, but they aim to absorb carbon from dispersed emissions sources, like vehicles and residences, whose mobility or small size makes individual filters impractical or inefficient. This summer, the Institution of Mechanical Engineers estimated that a forest of 100,000 such trees could mop up half the United Kingdom's carbon emissions, making the forest thousands of times more effective than its natural counterparts. Down the botanical scale from tree to vine is the designer Samuel Cochran's Grow system, a set of leaflike modules that harness both solar and wind energy. Solar panels aren't typically used, as Cochran's are, on the sides of buildings, because they work best when the sun hits them at a 90-degree angle; but Grow's foliagelike shape is designed for capturing oblique light. And when a breeze rustles Grow's leaves, tiny piezoelectric generators in their "stems" create a small charge. Neither project presumes to replace nature with Franken-forests. Because of the limits of carbon storage, artificial trees might be effective for only about a hundred years — long enough, according to Tim Fox of the Institution of Mechanical Engineers, to buy time as we wean ourselves off fossil fuels. And Cochran, nostalgic for the creeping vines of his childhood neighborhood, hesitates to claim Grow's superiority over ivy. 'We haven't been bad-mouthing the actual plant,' he says."

I'm a bit surprised that sky scrubbers are making the 2009 list of ideas; not because the concept is bad but because it's not exactly new. I first mentioned the devices in a 2007 post (see Far-out Ideas for Saving the World). In that post, I noted that over 300 million sky scrubbers would be needed to make the U.S. carbon neutral. There are a lot of other ideas mentioned in the article and I recommend that you read about all them. Great ideas always make interesting reading.

Innovation, Development, and India

Professor C.K. Prahalad, who became famous for asserting that profits could be made by selling products and services to the world's poorest people (i.e., those at the bottom of the pyramid), believes that next wave of innovation will focus on sustainable development ["Next wave of innovations will be driven by sustainability: CK Prahalad," by R. Sridharan, Economic Times (India), 20 November 2009]. If he's correct, that will be good news for those struggling to break free of poverty's grasp. Sridharan reports on the results of an interview he conducted with the famous economist. He introduces his interview this way:

"He’s going green. After core competence and the bottom of the pyramid, the world’s best-known management guru of Indian origin, C K Prahalad, is talking sustainable development. Why? Because, as he argued in a recent article in the Harvard Business Review, 'sustainability is the mother lode of innovations that yield both bottom-line and top-line returns'. In an exclusive interview, the Paul and Ruth McCracken professor of strategy at Stephen M. Ross School of Business at the University of Michigan, talks about sustainable development, the bottom of the pyramid, and his own intellectual journey over the years."

The first question posed by Sridharan had to do with Prahalad's assertion "that for companies there’s no alternative to sustainable development." Prahalad responds:

"I am just recognising the inevitable. If you look at the water shortage, high commodity prices and certainly global warming, then the need for sustainable development is obvious. So, my starting point is, don’t deny the obvious, get on with it and innovate. ... If you deeply understand sustainability, then it’s just like the quality movement some 30 years ago. If you recall, there was a lot of debate about whether quality will increase cost. What did we find? That if you deeply understand quality and you put methodology in place, costs automatically come down. I believe sustainability can be the next quality challenge. It’s going to drastically reduce costs and increase consumer acceptance. Don’t look at sustainability as compliance and regulation, but as an opportunity for breakthrough innovation."

In other words, Prahalad is saying that good business is good for business. When I started Enterra Solutions, I did exactly what Prahalad suggests -- I looked at the complex landscape of compliance and regulation and saw that companies that learned how to navigate that terrain efficiently would have a competitive edge over others. Sridharan questions that assumption and Prahalad responds:

"If you really look at it, the first ones to start developing sustainable technologies as their core strength will have a huge advantage over others. Especially, if they publicise it and get consumer acceptance."

Most regulation and compliance mechanisms were put in place to generate trust in the buying public. If companies can demonstrate that they are fully compliant and profitable, their valuation should increase not decrease. The next subject to which Sridharan turned was the supply chain. He wondered how "you sell sustainability across a value chain that spans hundreds of vendors?" Prahalad responds:

"First, you have to recognise that large companies are allies in sustainable development and not adversaries. And large companies must also recognise how their large footprint allows them to create sustainable development. Take WalMart, for example. There are thousands of suppliers around the world and they touch millions of consumers every week. And it’s a small node called WalMart through which all suppliers go to the consumer. So WalMart is in a position where it can both help establish standards with suppliers and it can also educate consumers by boldly challenging choice and pricing. So large companies can make a great contribution in a relatively short period if they embrace sustainability."

The next subject to which Sridharan turns is what role India should play in this bold, new, sustainable world. He says, "India can argue that it’s not a big polluter compared to developed countries, so the companies here don’t really need to start thinking of sustainable development. What would you tell such companies?" Prahalad replies:

"In India, you don’t have to start (on sustainable development) because you are a big polluter. You can start because there’s a shortage of resources. If I look at a washing machine that recognises when electricity was cut off and starts the wash cycle from there and not the beginning, then it saves energy, it saves water and it is acceptable in India because it is sustainable development and it’s good business. The beauty of this is, if you innovate here, you can take those innovations back to the US."

Sridharan and Prahalad go on to talk about how you get the billions of people at the bottom of the pyramid to join the global middle class without adding unsustainable pressures on the world's resources. It's worth a read. But, I want to stop there because Prahalad's last answer provides a good segue to the next subject I want to address. How India can outsource innovation to the rest of the world. The developed world has both admired and resented India's "outsourcing" success; but some people in India worry that India will be perpetually tagged as a source of cheap labor rather than being respected as economic powerhouse driven by innovation ["In India, Anxiety Over the Slow Pace of Innovation," by Vikas Bajaj, New York Times, 9 December 2009]. Bajaj reports:

"People here are also worried about the future. They fret that Bangalore, and India more broadly, will remain a low-cost satellite office of the West for the foreseeable future — more Scranton, Pa., in the American television series 'The Office,' than Silicon Valley. ... Why, they worry, hasn’t India produced a Google or an Apple? Innovation is hard to measure, but academics who study it say India has the potential to create trend-setting products but is not yet doing so. Indians are granted about half as many American patents for inventions as people and firms in Israel and China. The country’s corporate and government spending on research and development significantly lags behind that of other nations. And venture capitalists finance far fewer companies here than they do elsewhere."

Bajaj insists that there are a number of reasons that India has yet to become a nation known for its innovations. Among those reasons are: "A financial system that is reluctant to invest in unproven ideas, an education system that emphasizes rote learning over problem solving, and a culture that looks down on failure and unconventional career choices." Homegrown innovators who start companies are essential to India's future "because they are more likely to create the next wave of jobs than large, established Indian technology companies, many of which are experiencing slower growth. These companies could also help offset some of the outsourcing jobs the country will likely lose because of greater automation and competition from countries where costs are even lower." Recognizing the challenges faced by entrepreneurs is a lot easier than addressing them. Bajaj continues:

"There are historical reasons that starting a business in India is difficult. During British rule, imperial interests dictated economic activity; after independence in 1947, central planning stifled entrepreneurship through burdensome licensing and direct state ownership of companies and banks. Businesses found that currying favor with policy makers was more important than innovating. And import restrictions made it hard to acquire machinery, parts or technology. Inventors came up with ingenious ways to overcome obstacles and scarcity — a talent Indians used the Hindi word 'jugaad' (pronounced jewgard) to describe. But the products that resulted from such improvisation were often inferior to those available outside India."

As if burdensome government bureaucracies weren't a big enough hurdle for entrepreneurs to get past, they face an even bigger challenge -- raising capital.

"Venture capital funds have flocked to India in recent years, but they are more likely to invest in established businesses than young firms. In the United States, Israel and elsewhere, the initial, or seed, capital for many start-ups comes from rich individuals known as angel investors. But most rich Indians prefer to invest with family members or close friends because its considered safer and provides assurance that the lender will be able to borrow from relatives in the future."

Bajaj is not entirely pessimistic in his report about India's future, however. He says that despite all of its disadvantages India also possesses some important advantages. He concludes his article on a positive note:

"Engineers and biologists are plentiful, though they need to be trained more than their counterparts elsewhere. And operating costs are a lot lower than in the San Francisco Bay Area, which was critical more than two years ago when he and his partners started the company with their own money. There may yet be hope for Indian innovation. Some are looking to fill the venture fund vacuum. ... Another change may augur well. Until early this decade, the Indian market was too small and isolated to make it very lucrative for businesses to develop products here, so most technology companies focused on selling services to the West, said Girish S. Paranjpe, joint chief executive of Wipro’s information technology business. 'That will change dramatically because the Indian market has become bigger,' he said. In the last eight years, the size of the Indian economy has roughly doubled along with the importance of foreign trade. There could still be something to envy and fear."

Bajaj's optimism is decidedly tepid compared to that of Reena Jana writing for BusinessWeek ["India's Next Global Export: Innovation," 2 December 2009 print issue]. Jana looks at India's jugaad philosophy and sees an idea with "attributes just right for these times" whereas Bajaj sees a philosophy that often results in products that are inferior to those available outside India. Rather than demeaning the jugaad philosophy, Jana praises it. She reports:

"On a November afternoon, a dozen executives from companies including investment banks Rothschild and Goldman Sachs and tech research firm Gartner ringed a conference table in a brownstone on New York's Upper East Side. They were there to learn how U.S. businesses could develop products more cheaply and quickly by borrowing strategies from India. Speaker Navi Radjou, who heads the recently formed Centre for India & Global Business at England's Cambridge University, summed up his advice in one word: jugaad."

As Bajaj previously noted, jugaad is an improvisational style of innovation that was developed primarily because Indian inventors wanted to address pressing needs of those around them but had few resources upon which to draw. Jana claims this process is "how Tata Group, Infosys Technologies, and other Indian corporations have gained international stature." Jana is so certain that jugaad represents the future that she says the term will likely "enter the lexicon of management consultants, mingling with Six Sigma, total quality, lean, and kaizen, the Japanese term for continuous improvement." She continues with caution:

"Like previous management concepts, Indian-style innovation could be a fad. Moreover, because jugaad essentially means inexpensive invention on the fly, it can imply cutting corners, disregarding safety, or providing shoddy service. 'Jugaad means "Somehow, get it done," even if it involves corruption,' cautions M.S. Krishnan, a Ross business school professor. 'Companies have to be careful. They have to pursue jugaad with regulations and ethics in mind.' The rise of jugaad raises another question: Do companies really need to pay someone to tell them something that's as elementary as keep it simple?"

In other words, if jugaad is to play a future role in business management, its practitioners are going to have to find a way to balance jugaad's tendency to cut business corners with the public's right to buy quality products. Jana continues:

"Jugaad seems aligned with the times. Recession-slammed corporations no longer have money to burn on research and development. Likewise, U.S. consumers are trading down to good-enough products and services. Meantime, the Indian economy continues to plow ahead despite the global recession—it grew at a 7.9% clip in the third quarter—suggesting its executives have a winning strategy. Already, companies as varied as Best Buy, Cisco Systems, and Oracle are employing jugaad as they create products and services that are more economical both for supplier and consumer. 'In today's challenging times, American companies are forced to learn to operate with Plan Bs,' notes Radjou. 'But Indian engineers have long known how to invent with a whole alphabet soup of options that work, are cheap, and can be rolled out instantly. That is jugaad.'"

Jana notes that a number of respected individuals, companies, and institutions are already incorporating jugaad in their curricula.

"Prasad Kaipa, a former manager at Apple's in-house training university, uses jugaad in the courses he's teaching at Hyderabad's Indian School of Business. The University of Michigan's Ross School of Business, where high-profile Indian-born professor C.K. Prahalad teaches, has opened a research office near Infosys' headquarters in India so faculty members can observe how Indian software companies come up with ideas. McKinsey consultants have begun talking up jugaad principles with clients, too."

In a post entitled America's Competitive Edge, I noted that Amar Bhidé of the Columbia Business School claimed that "what the country needs is better MBAs, not more PhDs." I remarked that the qualifier "better" is extremely important because "I suspect a lot of Americans believe that it was unprincipled executives with MBAs who betrayed their trust and plunged the world into its worst financial crisis in a generation." Indian proponents of jugaad are also skeptical of those holding MBAs.

"Top executives at Cisco, which opened what the San Jose (Calif.) company calls a second global headquarters in Bangalore in 2007, are importing the Indian mindset as they meld teams of U.S. engineers with Indian supervisors. 'The innovation agenda in India is affordability and scale,' says Wim Elfrink, Cisco's chief globalization officer, who moved from San Jose to Bangalore in 2007. 'People are masters of managing costs down, but not creativity. If Indian engineers find out an executive has an MBA, they will say, "Unlearn, and observe."' ... 'Jugaad is an Indian philosophy, but it's not unique to India,' Kaipa says. 'Companies in all parts of the world can learn from it and make it work for them, too.'"

Although I anticipate that India will eventually profit from what has come to be called "reverse innovation," that is, innovation that flows from developing countries into developed countries, its entrepreneurs will continue to face Sisyphean challenges as long as Indian bureaucracies remain bloated, complex, and inefficient. It's time for the Indian government to apply a little of the jugaad philosophy on itself.

An Innovation Agenda

Readers of this blog know that one of my favorite topics is innovation. I have been especially keen on this topic during the recession because I believe that innovative entrepreneurs remain the best hope of getting us out of it. I link innovation and entrepreneurship together because an idea can't be considered really innovative unless someone figures out how to bring it to life. Krisztina Holly, vice-provost for innovation and executive director of the USC Stevens Institute for Innovation at the University of Southern California, and Jim Clifton, chairman and CEO of Gallup, insist that "focusing on unemployment isn't the key to fueling innovation and job growth" ["It's Not the Economy, Stupid," BusinessWeek, 17 August 2009 print issue]. I agree with them. As noted above, I have stated on more than one occasion that focusing on innovation and entrepreneurism is the key to tackling unemployment -- it's not, as Holly and Clifton note, the other way around. They write:

"How can we be expected to grow and create jobs, many executives wonder, when we are shrinking? ... Policymakers and citizens alike are concerned with how we can reduce the rate of unemployment—no easy feat when balanced with the need to slash expenses. However, focusing on unemployment is exactly the wrong thing to do. Yes, the numbers are staggering. But they only tell part of the story, and they do not offer a solution for relieving the economic chaos. Instead, there is a more effective way to grow—a way that is free, does not rely on a government bailout, and has the potential for massive societal impact. American executives should turn to the 140 million who have jobs, and find practical ways to inspire them in their work, to empower them to innovate us out of a mess."

In past posts on innovation, I have written that not all people are creative. You simply can't take a pedestrian thinker and make him or her creative by telling to them to come up with bright ideas. I have also noted, however, that everybody occasionally has a good idea. Holly and Clifton are arguing that companies need to empower their employees so that they are anxious to come forward when they have a good idea. They continue:

"Based on extensive, long-term research, Gallup has determined that less than 30% of the corporate workforce is truly engaged in its work. That's less than 30% of employees who work with passion and feel a profound connection to their companies. Yet employee engagement leads to increased customer engagement, which leads to real revenues and, eventually, more job opportunities for others. Unfortunately, it seems that amid the crush of an urgent economic reality, executives and managers have overlooked some elementary tasks, such as making sure employees know what is expected of them and allowing them to use their talents in their roles. Yet the need to engage employees better is especially crucial during a recession, when mantras such as 'do more with less' can madden employees who must pick up extra duties after their colleagues are laid off, but who are offered no tangible financial incentive to innovate. Engagement serves as an intangible incentive — one that can be more valuable than any money can provide."

To make their point, Holly and Clifton provide a case study.

"Take, for example, one store in the multibillion-dollar electronics retail chain, Best Buy. Executives evaluated employee engagement and discovered the store was middling at best. The poor score was affecting morale, employee turnover, and store profits. After polling the employees for solutions, the management implemented some significant institutional changes, like a 'team close,' so all team members felt jointly responsible for the nightly store closing, and not just an unlucky few. As a result of management's listening and making some bold decisions, employee engagement improved, and the store substantially lowered employee turnover and increased profits. Then, the changes were scaled across the 1,200-store chain. For every one-tenth-of-a-point increase in employee engagement, each Best Buy store increased profits by $100,000 a year. So consider all of those who aren't inspired to put their hearts into their work. Worse, nearly 20% are 'actively disengaged,' trying to undermine others' productive work. This is not merely a caricature of Office Space or Dilbert. Tens of millions of people deliberately clock in every day with the intention of holding back U.S. corporations' ability to compete and innovate. This is a shame—and yet it is an opportunity too. ... Imagine the results if we were to double employee engagement at our organizations within 18 months, from 30% to 60%. Through a disciplined effort to increase the connection and commitment of our employed workers, our organizations can innovate and create new solutions. This is the surest way to lower those devastating unemployment numbers. And we have no excuse—not even a bad economy."

You might call Holly's and Clifton's call to action an innovation agenda for business. New York Times' op-ed columnist David Brooks calls for an even broader national agenda ["An Innovation Agenda," 8 December 2009]. He writes:

"The economy seems to be stabilizing, and this has prompted a shift in the public mood. Raw fear has given way to anxiety that the recovery will be feeble and drab. Companies are hoarding cash. Banks aren’t lending to small businesses. Private research spending is drifting downward. People are asking anxious questions about America’s future. Will it take years before the animal spirits revive? Can the economy rebalance so that it relies less on consumption and debt and more on innovation and export? Have we entered a period of relative decline? The first thing to say is, let’s not get carried away with the malaise. The U.S. remains the world’s most competitive economy, the leader in information technology, biotechnology and nearly every cutting-edge sector. The American model remains an impressive growth engine, even allowing for the debt-fueled bubble. The U.S. economy grew by 63 percent between 1991 and 2009, compared with 35 percent for France, 22 percent for Germany and 16 percent for Japan over the same period. In 1975, the U.S. accounted for 26.3 percent of world G.D.P. Today, after the rise of the Asian tigers, the U.S. actually accounts for a slightly higher share of world output: 26.7 percent. The U.S. has its problems, but Americans would be crazy to trade their problems with those of any other large nation."

Although it is arguable as to whether the U.S. is world's most competitive nation (some indexes give that spot to Switzerland), the optimism expressed by Brooks is both refreshing and needed. Once he raises America's chin, he goes on to write about what it needs to do now that it is once again looking at the horizon.

"There’s a straightforward way to revive innovation. In an unfairly neglected white paper on the subject, President Obama’s National Economic Council argued that the U.S. should not be in the industrial policy business. Governments that try to pick winners 'too often end up wasting resources and stifling rather than promoting innovation.' But there are several things the government can do to improve the economic ecology. If you begin with that framework, you can quickly come up with a bipartisan innovation agenda."

I love to hear that word "bipartisan." Divisive political agendas have exacerbated progress in America. The innovation agenda recommended by Brooks contains nine items. They are:

First, push hard to fulfill the Obama administration’s education reforms. Those reforms, embraced by Republicans and Democrats, encourage charter school innovation, improve teacher quality, support community colleges and simplify finances for college students and war veterans. That’s the surest way to improve human capital.

Second, pay for basic research. Federal research money has been astonishingly productive, leading to DNA sequencing, semiconductors, lasers and many other technologies. Yet this financing has slipped, especially in physics, math and engineering. Overall research-and-development funding has slipped, too. The U.S. should aim to spend 3 percent of G.D.P. on research, as it did in the 1960s.

Third, rebuild the nation’s infrastructure. Abraham Lincoln spent the first half of his career promoting canals and railroads. Today, the updated needs are just as great, and there’s widespread agreement that decisions should be made by a National Infrastructure Bank, not pork-seeking politicians.

Fourth, find a fiscal exit strategy. If the deficits continue to surge, interest payments on the debt will be stifling. More important, the mounting deficits destroy confidence by sending the message that the American government is dysfunctional. The only way to realistically fix this problem is to appoint a binding commission, already supported by Republicans and Democrats, which would create a roadmap toward fiscal responsibility and then allow the Congress to vote on it, up or down.

Fifth, gradually address global imbalances. American consumers are now spending less and saving more. But the world economy will be out of whack if the Chinese continue to consume too little. The only solution is slow diplomacy to rebalance exchange rates and other distorting policies.

Sixth, loosen the so-called H-1B visa quotas to attract skilled immigrants.

Seventh, encourage regional innovation clusters. Innovation doesn’t happen at the national level. It happens within hot spots — places where hordes of entrepreneurs gather to compete, meet face to face, pollinate ideas. Regional authorities can’t innovate themselves, but they can encourage those who do to cluster.

Eighth, lower the corporate tax rate so it matches international norms.

Ninth, don’t be stupid. Don’t make labor markets rigid. Don’t pick trade fights with the Chinese. Don’t get infatuated with research tax credits and other gimmicks, which don’t increase overall research-and-development spending but just increase the salaries of the people who would be doing it anyway.

I know I personally saluted those ideas when Brooks ran them up the flag pole. At one time or another, I have recommended almost every one of those agenda items in my posts on reviving the economy. Brooks concludes:

"This sort of agenda doesn’t rely on politicians who think they can predict the next new thing. Nor does it mean merely letting the market go its own way. (The market seems to have a preference for useless financial instruments and insane compensation packages.) Instead, it’s an agenda that would steer and spark innovation without controlling it, which is what government has done since the days of Alexander Hamilton. It’s the sort of thing the country does periodically, each time we need to recover from one of our binges of national stupidity."

If you think your representative or one or both of your senators is suffering from a case of political stupidity, you might want to forward Brooks article to him or her. The country needs to get back to work and the best way to do that is to innovate our way out of the current crisis.

Promoting Innovation and Entrepreneurship

Michael Arndt, editor of BusinessWeek's innovation and design coverage, reminds us that "innovation requires taking risks, and these are risk-averse times." The good news, however, is that tough times haven't stopped innovative companies and entrepreneurs from pursuing their dreams. The event that motivated Arndt's comment was the October announcement of the 2009 Chicago Innovation Awards organized by Kuczmarski & Associates, a Chicago innovation consultancy firm. The ten winners of the 2009 Chicago Innovation Awards were:

• Aircell for Gogo Inflight Internet Service—Bringing Internet service to passengers on commercial airline flights.

• comScore, Inc. for ComScore Ad Effx Suite—Showing the value of online advertising by quantifying an online campaign’s impact on sales.

• Groupon, for collective buying power—Bringing a new approach to group buying strategies on the Internet.

• EveryBlock, for local news feeds—Keeping people informed about the news right down to the block on which they live.

• Rescue Vac Systems, Inc. for the Rescue Vac 800 Series Rescue Kit—Giving rescue workers a swift system for saving people involved in trench collapse

• Suncast Corporation, for the No Crank Water Powered Hose Reel—Providing homeowners a swift water-powered system for reeling up a garden

• The Art Institute of Chicago, for its new Modern Wing—Offering museum visitors a one-of-a-kind space for the viewing of modern art.

• The Robotic Surgery Program of the University of Illinois at Chicago—Expanding the ways in which robotic surgery is brought to bear in precise surgery with more rapid recovery.

• Tripp Lite, for its ECO Series Uninterruptable Power Supply System—Reducing the environmental impact of a home’s electrical system.

• Visible Vote—Providing citizens expanded access to their elected officials.

Award organizers presented two other awards as well. The inaugural "People's Choice" award went to Abbott Laboratories for its "mom-friendly" design of its Similac® SimplePac™ infant formula packaging. A special "Visionary" award went to Michael Wielgat, a Chicago Fire Department lieutenant, who spent $100,000 of his own money to build "a portable device that can redirect water directly into a flaming structure from the floor below" when fighting blazes in highrise structures ["'Hero Pipe' Wins Chicago Innovation Award," by Michael Arndt, BusinessWeek, 19 October 2009]. As the name implies, the Chicago Innovation Awards go to businesses and individuals in the Chicago area. I suspect that each major urban area could generate a similar list of innovative enterprises in its area. In fact, a recent BusinessWeek article focuses on the fact that "urban science parks are being built to lure the best minds and the industries of tomorrow" ["Innovation Goes Downtown," by Pete Engardio, 19 November 2009]. Engardio writes:

"Say 'science park' to most Americans and they probably will think of beautifully landscaped campuses of low-rise buildings on the outskirts of a city, where researchers commute to their cubicles each morning and fight the evening traffic to return home. For 50 years the prototype was Research Triangle Park—an 11-sq.-mile district snuggled into the piney hills outside of Durham, N.C., with such multinational tenants as IBM and GlaxoSmithKline. No longer. Today's high-tech meccas are being constructed deep inside major cities. Michael Joroff, an urban-planning guru at Massachusetts Institute of Technology, dubs them 'new century cities.' Their goal, says Joroff, an adviser to projects in South Korea, Britain, Sweden, and Abu Dhabi, is to 'kick-start high-priority industries with new spaces where companies and universities can work together and develop the next generation of workers.' Planners also hope to tap into the 'new urbanism' movement by offering plenty of amenities where scientists, entrepreneurs, and creative types from an array of industries can intermingle and, with a bit of serendipity, cross-pollinate ventures."

Engardio covers a lot of ground in those few words -- everything from developing the next generation of workers to multi-disciplinary cooperation. With many urban areas in the U.S. hurting badly as a result of the current recession, municipal leaders should closely examine what is being done in places like Barcelona and Seoul. Engardio continues:

"The scale of some of these urban schemes is jaw-dropping. Spain's 22@Barcelona (the name comes from an industrial zoning designation) involves transforming 115 blocks of the city to house more than 1,000 international media, IT, and medical technology companies that are expected to employ 150,000 in 15 years. Singapore is spending some $10 billion on futurist architecture for a megadevelopment called One North, which integrates new research and development complexes and 'living laboratories' for biotech, advanced materials, and medical services. Seoul hopes Digital Media City, which is rising near an old railroad depot and dump, will have 120,000 workers and 2,000 companies by 2015."

In an earlier post, I discussed an R&D city being built in the UAE (see Abu Dhabi's Masdar Plan). Of course, there are big bucks behind these projects and that is something that America's impoverished urban centers have little of. Engardio points out, however, that not all plans have to be as lavish as those discussed above. He continues:

"Some older U.S. tech clusters are trying to adapt. Industrial parks set up in the 1960s outside San Jose to cater to the then-nascent electronics industry are adding amenities including housing, shops, and bike and hiking trails to turn them into fuller communities. Research Triangle Park is dolling itself up, too. 'This is about making this place consistently more attractive to the brightest minds in the world,' says Rick L. Weddle, CEO of the Research Triangle Foundation, which owns the park. Midsize industrial cities see downtown parks as redevelopment tools. Winston-Salem, N.C., hit hard by the decline of the tobacco, textile, and furniture industries, has converted a building once owned by R.J. Reynolds into the headquarters of a research park specializing in biomedicine. Meantime, Sheffield, England, a cradle of the Industrial Revolution, is launching an ambitious redevelopment to position itself as a hub for advanced manufacturing, design, and new media."

Not all science parks are created equal. I was going to write: "as the old saying goes, 'you can put lipstick on a pig, but it's still a pig.'" But a little research indicates that it's not such an old saying -- it can be traced back to 1985. The oldest similar expression -- "You can't make a silk purse from a sow's ear" -- dates back at least to the mid-16^th century. Both adages adequately express the notion, however, that, unlike the field of dreams, if you build a science park people won't necessarily be attracted to it. Like all real estate, what matters is location, location, location. For every new science park that succeeds, one or more may fail. Engardio continues:

"Skeptics warn the trend is getting overdone and that some science parks will flop. 'Every city and state with a university wants to jump on this bandwagon,' says Peter B. Calkins, who heads the science and technology business of Cleveland-based developer Forest City Enterprises. 'Not all are well-conceived.' Forest City built and manages University Park in Cambridge, Mass., which is filled with biotechnology companies, and is building a major complex near Johns Hopkins University in Baltimore. The payback for such projects can be long, Calkins notes. Despite its proximity to Massachusetts Institute of Technology, University Park needed more than a decade to gain traction with corporate tenants. Many new parks going up in China, the Persian Gulf, and parts of the U.S. are 'just big real estate developments, rather than investments in people and innovation,' says Anthony Townsend, who tracks science parks for the Institute for the Future, a think tank based in Palo Alto, Calif. Often, he says, inventors just need cheap space in a stimulating environment."

Creative people like being around other creative people and when smart people from one discipline get together with smart people from another discipline great things generally happen. That is probably the best argument for clusters. But clusters need not be big to be effective. Universities have effectively established campus clusters that have inspired great ideas and entrepreneurial enterprises, even if they are not located in large metropolitan areas ["Brigham Young's Entrepreneur Factory," by Vanessa Wong, BusinessWeek, 4 December 2009]. Wong writes:

"In an effort to attract dollars, prestige, and top-notch staff, universities have long pushed to commercialize faculty research. That has helped institutions from Massachusetts Institute of Technology to Stanford become hotbeds of entrepreneurialism. The most surprising success, though, may be Brigham Young University. The Provo (Utah) university now ranks first in the country in the number of startups, licenses, and patent applications per research dollar spent, according to the Association of University Technology Managers. BYU-licensed technology led to the creation of nine new companies last year on a research budget of roughly $30 million. Stanford, with a budget of $1.1 billion, spawned the same number of startups."

To beef up its technology transfer department, BYU hired Mike Alder, an Alabama venture capitalist, and Dee Anderson, a lifelong entrepreneur. They set about creating the kind of campus cluster I discussed above.

"Alder and Anderson have put much of their energy into building better relationships. They hold weekly meetings with different departments to discuss research in core areas such as chemistry, computer science, and engineering. In September, Anderson set up a LinkedIn group of BYU grads who want to hear about new technologies. That has resulted in several phone calls a week from people interested in using BYU research. The school also started an Entrepreneur in Residence program earlier this year that recruits alumni and business leaders to help evaluate technologies and identify opportunities for startups. It has so far recruited 28 entrepreneurs. While all are unpaid, they can invest in the business ventures they help put together. One entrepreneur is Eliot Jacobsen, a partner at a venture fund called RocketFuel in Salt Lake City. He plans to license an e-mail encryption technology that he discovered through the program. ... What distinguishes BYU, says Diane L. Palmintera, president of Innovation Associates, a consultancy in Reston, Va., is that it's adopting an approach used by institutions with a much greater focus on research."

The thread that weaves its way through each of these articles is that the future belongs to those with innovative ideas and an entrepreneurial spirit. Even in dark times, the light of creativity manages to shine bright enough to light the way ahead. Over the next couple of days, I'll have a bit more to write about innovation. It's a good topic to help usher in the new year.

Kosovo, Independence, and Nation-Building

A little over a decade ago news about the Balkan region filled the headlines with accounts of ongoing strife, ethnic cleansing, and the break-up of the former Yugoslavia. In the intervening years, the International Criminal Court has tried (or is trying) some of the individuals who committed heinous crimes against humanity during those years of conflict. Political conditions in much of Balkans remain tenuous, including in the small country of Kosovo. Kosovo declared its independence from Serbia last year -- a move Serbia claims was illegal. Serbia is now taking Kosovo to court and the repercussions of the court decision could have broad global impact ["See you in court," The Economist, 28 November 2009 print issue]. The article explains:

"Kosovo is a tiny place. But ... when hearings begin at the United Nations’ International Court of Justice on the legality of its 2008 declaration of independence from Serbia, people from Catalonia to Tibet will be paying it close attention. Serbia persuaded the UN general assembly just over a year ago to ask the court to intervene. Its ruling may have ramifications around the world. Unlike the six former republics that became states after Yugoslavia collapsed in the 1990s, Kosovo was a province of Serbia. But some 90% of its 2m-odd people are ethnic Albanians. In Yugoslav times it had many of the attributes of a republic, with an assembly and government. After NATO’s war in 1999, it became a UN ward. Serbia’s lawyers argue that Kosovo’s assembly had no right to declare independence and the UN should have nullified its act. The Kosovars reply that this is a constitutional question, not an issue of international law, so the court has no business opining on it. They also insist that Kosovo had a right to self-determination, just as much as the ex-Yugoslav republics."

Self-determination is touchy subject. Generally, the subject is raised by ethnic groups that live as minorities. Because ethnicity involves things like race, religion, language, culture, historical ties, etc., determining the exact number of ethnicities in the world is difficult. Suffice it to say that there are thousands of them. If each ethnicity exercised self-determination and tried to carve out a country for itself, the results would be disastrous. Few of the thousands of countries created would be sustainable. The expansion of government bureaucracies would require an increase in the amount of taxes needed to keep government programs afloat thus creating overhead costs (i.e., new tax burdens) on the global economy that could stifle growth. Logic, however, seldom plays a large role on what is primarily an emotional political stage. That is why the outcome of Serbia's day in court will make headlines around the world. The article continues:

"In all likelihood, the opinion of the court (which is not binding) will be vague, because there are many differing views over self-determination. Most Western countries (but not, eg, Spain) accept that Kosovo’s Albanians had that right. Some 63 states have recognised Kosovo’s independence. But Russia says Serbia’s right to territorial integrity has been violated. Admittedly, Russia’s position was weakened when it recognised the independence of Abkhazia and South Ossetia in August 2008—but the West’s refusal to recognise either Georgian territory also seems to conflict with a recognition of Kosovo. The irony is that, even if the court were to find against the Kosovars, Serbia would be quite unable to absorb 2m hostile Albanians. Some senior Serbs concede privately that the real aim of going to court is to be rid of Kosovo, not to get it back. They want to manoeuvre the Kosovars into a position where they feel forced to return to the negotiating table—at which point Serbia might propose an exchange of Serb-inhabited north Kosovo for the Albanian-inhabited Presevo valley in Serbia."

Most countries, I suspect, would have preferred that the Serbs and Kosovars worked out their differences at the negotiating table rather than going to court. Whatever the court's decision is, it will set a precedent that will make a number of people unhappy. That is why the justices are likely to waffle in their opinion. The article reports that, for the most part, Kosovars are ambivalent about the proceedings. They don't believe it will affect their independence, but they do worry that it could affect their economic future.

"Shyqyri Haxha, boss of PTK, Kosovo’s post and telecoms operator, which wants to privatise its profitable mobile arm, says that, unless the court finds clearly for Kosovo, it 'will have implications for foreign investment'. He fears it might 'deter big players from coming.'"

Although Kosovars think of themselves as citizens of an independent country, it is a country still occupied by some 14,000 NATO peacekeepers (which, per capita, is nearly twice as many NATO troops as are deployed in Afghanistan). Those troops, in addition to keeping the peace between Kosovo and Serbia, provide the foundation for nation-building activities ["Despite its troubles, Kosovo offers model for nation-builders," by Craig Whitlock, Washington Post, 1 December 2009]. Whitlock begins his report by detailing the sad state of affairs in which Kosovo finds itself.

"The economy is a basket case, with a 45 percent unemployment rate. Most people are dependent on foreign largess. Kosovo even lacks an international dialing code. Landlines are all cursed with Serbian numbers, even though Serbia refuses to recognize Kosovo's independence. Cellphone numbers are borrowed from Monaco or a Balkan neighbor, Slovenia. And yet, in spite of its problems and growing pains, Kosovo is cited by many diplomats as a credible model of nation-building, a sign -- relevant to the current debate over Afghanistan -- that a determined effort by foreigners can help to build a country from the ashes."

It's clear from Whitlock's description of Kosovo's current situation that patience is required by those providing development support as well as from those receiving it. Economies don't turn around overnight. As retired French general Yves de Kermabon (a former NATO commander) observed, "When you are in the field, it feels like nothing is moving forward. But when you come back after two or three years, you are amazed at the progress." Whitlock continues:

"Few people in Kosovo are predicting an easy road ahead. In interviews, foreign diplomats, government officials and ordinary Kosovars agreed that it will take years, if not decades, for Kosovo to stand on its own. ... But construction cranes rise like green shoots from the skyline of Pristina, Kosovo's capital, which is in the midst of a building boom thanks to foreign aid. In another hopeful sign, Kosovo in mid-November held its first municipal elections since declaring independence on Feb. 17, 2008. Although there were a handful of violent incidents during the campaign, voters cast their ballots in peace and there were no major allegations of fraud. ... 'Kosovo benefits in a way from being more or less forgotten,' said a senior Western diplomat who spoke on the condition of anonymity. 'Nation-building just takes time. This is a slow, painful process.'"

Patience, Whitlock reports, is beginning to wear thin. "Grumbling over the lousy economy and dysfunctional government is getting louder." They also grumble that Kosovo's government is not exactly independent.

"Their actions can be overruled by Pieter Feith, a Dutch diplomat. He serves as the international civilian representative, a viceroy appointed by a group of 25 countries, including the United States, to oversee Kosovo's development. Feith has described Kosovo as a sovereign country operating under 'supervised independence.' In an interview, he said his job would likely remain necessary for two or three more years. He said Kosovo's elected politicians had much to learn. 'The leadership are not experienced and do not have much long-term vision,' he said. 'We need to see the fight against organized crime and corruption taken to a new level of commitment.'"

What Feith describes hardly seems like the template for nation-building. Aside from the fact that peace is being kept by a significant outside presence, which allows for development projects to move forward, Whitlock doesn't provide any reasons that activities there should be used as a model for others. One of things that my company, Enterra Solutions, offers to emerging market government leaders is the kind of long-term vision that Feith says is missing in Kosovo. Governments will likely make some bad choices and waste precious resources if they don't have strategic roadmap to guide them. The fact that Kosovo suffers from significant corruption and organized criminal activities doesn't bode well for its economy taking off. Nevertheless, Kosovo's progress is worth watching.