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21 posts from January 2010

January 29, 2010

A Post on the Light Side

Fear of the dark has always gripped men's souls. I'm sure that our earliest ancestors worshiped fire as much for its light as its warmth. The old adage "it's always darkest before the dawn" instills in us both a sense of fear about the dark and sense of comfort about the light. When we finally see a solution to a particular problem, we finally "see the light." When the world stagnated during the middle ages, it was the age of darkness. The creation of the electric light was heralded as man's triumph over darkness. Over the past couple of hundred years, mankind has learned a lot more about light. But it was only 50 years ago that magic of Light Amplification by Stimulated Emission of Radiation (or LASER) was discovered ["Laser light proves to have many uses in business, health, communications," by How and Why, Washington Post, 19 January 2010]. There are few people in the developed world whose lives aren't daily touched by lasers. The article calls the discovery of laser "one of the most portentous events in the history of science." It continues:

"Like many a transformative development, it was met initially with thunderous public indifference, although there were a few mutterings about 'death rays.' A number of techno-pundits regarded the upstart gizmo as basically a glorified parlor trick, a 'solution looking for a problem,' as Charles Townes, who won the Nobel Prize for pioneering the idea, later wrote. Half a century later, lasers check out our groceries, read and write CDs and DVDs, guide commercial aircraft, enable eye surgery and dental repairs, target weapons, provide worldwide communications, survey the planet, print documents, cut fabric for clothing and metal for tools, make powerful pointers for PowerPoint slides and are now poised to ignite nuclear fusion, among scores of other uses."

In past posts, I have often voiced support for basic science as well as applied science. The laser was a result of basic scientific research that obviously has created solutions in fields of human endeavor that were never dreamed of by those who first fiddled around with it. As the article says, "Who knew?" It continues:

"Certainly not Albert Einstein, who had predicted the laser effect way back in 1917. By then, physicists understood that virtually all the light you see is produced by a process called spontaneous emission. Zap a few atoms with the right amount of energy -- including energy from light itself -- and their electrons will absorb the energy and jump up to excited levels, the original 'quantum leap.' But they won't stay there. That's because, as the parent of any teenager can tell you, it is the natural tendency of things in this universe to preferentially seek the lowest energy condition, which is why water always flows downhill, shoelaces never re-tie themselves and your check is still in the mail. So the excited electrons soon drop back to lower levels; in the process, they spontaneously shed the surplus energy in the form of photons, the smallest individual units, or quanta, of light. The size of the drop determines the wavelength of the emitted photon. That's how light emerges from a flickering campfire, the surface of the sun, the bulb in a lamp or the screen of your TV."

According to the article, Einstein predicted "that there could be a second, very different kind of emission in certain types of materials -- not spontaneous, but stimulated." The light emitted in this excited or stimulated state would be quite different than normal light.

"It would work like this: Suppose that you had already excited the electrons in the material's atoms until they were trembling on the brink of emitting photons. But before they did so, what would happen if you whacked those atoms with incoming photons from another source that were exactly equal in energy to the ones the electrons were about to emit? In that case, Einstein figured, instead of absorbing the incoming photon, each atom would be stimulated to give off a photon identical in every way to the incoming photon while leaving the original unchanged. Not only would the emitted photon be precisely the same wavelength as the one that stimulated it, but its wave peaks and troughs would be perfectly in phase (a condition called coherence) and it would be traveling in the same direction. Those twin photons would then fly off to stimulate more nearby atoms, which would emit yet more photons in a glowing profusion of luminous clones."

You can see how that description of a laser could produce "thunderous public indifference." It was, however, an idea that a theoretical physicist could love.

"By the mid-1950s, scientists had identified several excellent materials and had recognized that putting a mirror on each side of the laser medium would drastically increase the output, reflecting the photons back and forth, and producing more stimulus and more emissions on each transit. If one of the mirrors was partially transparent, a stream of photons would emerge from that end -- the now familiar laser beam. Finally in May 1960, Theodore Maiman, a physicist at Hughes Research Laboratories, constructed the first laser that emitted light in the visible range. Today there are dozens of designs exploiting all three of the distinctive properties of laser light. The narrowly defined wavelength allows a laser scanner at the grocery store to bounce its beam off a bar code and read the result when the store lights are on. Indeed, the outputs of different lasers are so sharply differentiated that you can run signals from a bunch of them through the same fiber optic cable simultaneously and still separate them easily at the end. The unidirectional tightness of laser light makes it ideal for surveying because, unlike a flashlight beam, it doesn't diverge much over distances. Even really long distances: Laser light from the surface of the Earth, bouncing off a reflector placed on the lunar surface by Apollo astronauts, has revealed that the moon is receding from our planet by about an inch and a half a year. Finally, the beam's coherence makes it stunningly powerful. A laser drawing a couple of kilowatts (slightly more than your home hair dryer) can cut through an inch of carbon steel. But that's nothing compared with another device you own, along with every other American taxpayer. Out in California, researchers at the Department of Energy's National Ignition Facility are about to concentrate 192 laser beams totaling 500 trillion watts on a capsule of hydrogen the size of a pencil eraser. If it works, the power of the lasers will shove the hydrogen atoms together hard enough to ignite nuclear fusion, creating (if you could see it) a microscopic star -- and with it, some people believe, the prospect of limitless energy for society using the same energy source that fires up the sun. One of these days. Perhaps."

The article concludes by calling the laser "civilization's leading light," and, because of the breadth of its utility, it probably is. However, despite the fact that lasers can create amazing nighttime light shows, when it comes to replacing darkness with light, lasers fall short. In a previous post entitled LED to the Future, I discussed how light emitting diodes (or LEDs) are being touted as the future of the lighting industry because of the energy they can save. LEDs, however, remain almost prohibitively expensive for household use. Fluorescent bulbs remain the energy-saver bulb of choice; but makers of incandescent bulbs haven't given up. They are hoping that new innovations will help them make a comeback ["Incandescent Bulbs Return to the Cutting Edge," by Leora Broydo Vestel, New York Times, 5 July 2009]. Vestel reports:

"When Congress passed a new energy law [several] years ago, obituaries were written for the incandescent light bulb. The law set tough efficiency standards, due to take effect in 2012, that no traditional incandescent bulb on the market could meet, and a century-old technology that helped create the modern world seemed to be doomed. But as it turns out, the obituaries were premature. Researchers across the country have been racing to breathe new life into Thomas Edison's light bulb, a pursuit that accelerated with the new legislation. Amid that footrace, one company is already marketing limited quantities of incandescent bulbs that meet the 2012 standard, and researchers are promising a wave of innovative products in the next few years. Indeed, the incandescent bulb is turning into a case study of the way government mandates can spur innovation."

Innovations generally don't come cheap -- at least in the beginning -- and the new incandescent bulbs are no different. According to Vestel, "the first bulbs to emerge from this push, Philips Lighting’s Halogena Energy Savers, ... sell for $5 apiece and more, compared with as little as 25 cents for standard bulbs." The up-front cost, however, is offset by long-term savings. The new bulbs are 30 percent more efficient than older bulbs and last about three times as long. According to Vestel, even though the new bulbs meet the 2012 standard they are not as efficient as fluorescent bulbs. On the other hand, the new incandescent bulbs don't suffer from slow start-up times or hazardous mercury content. Here's how the new bulbs work:

"Normally, only a small portion of the energy used by an incandescent bulb is converted into light, while the rest is emitted as heat. Deposition Sciences applies special reflective coatings to gas-filled capsules that surround the bulb’s filament. The coatings act as a sort of heat mirror that bounces heat back to the filament, where it is transformed to light. While the first commercial product achieves only a 30 percent efficiency gain, the company says it has achieved 50 percent in the laboratory. No lighting manufacturer has agreed yet to bring the latest technology to market, but Deposition Sciences hopes to persuade one."

Vestel reports that technologies similar to those used by Deposition Sciences are being worked on by "the big three lighting companies — General Electric, Osram Sylvania and Philips — ... as is Auer Lighting of Germany and Toshiba of Japan." Vestel continues:

"A wave of innovation appears to be coming. David Cunningham, an inventor in Los Angeles with a track record of putting lighting innovations on the market, has used more than $5 million of his own money to develop a reflective coating and fixture design that he believes could make incandescents 100 percent more efficient."

Lasers, even though they aren't used to provide light, may play a role in reinvigorating the incandescent bulb. Vestel explains:

"Both Mr. Cunningham and Deposition Sciences have been looking into the work of Chunlei Guo, an associate professor of optics at the University of Rochester, who announced in May [2009] that he had used lasers to pit the surface of a tungsten filament. 'Our measurements show that the treated filament becomes twice as bright with the same power consumption,' Mr. Guo said."

Others are also conducting research:

"A physics professor at Rensselaer Polytechnic Institute, Shawn-Yu Lin, is also seeing improved incandescent performance by using a high-tech, iridium-coated filament that recycles wasted heat. 'The technology can get up to six to seven times more efficient,' Mr. Lin said."

Why all of this interest in incandescent bulbs? Vestel reports that "despite a decade of campaigns by the government and utilities to persuade people to switch to energy-saving compact fluorescents, incandescent bulbs still occupy an estimated 90 percent of household sockets in the United States." The reason, of course, is that "old-style incandescents have the advantage of being remarkably cheap." The cheapest bulbs, however, are going to be hard to find after the new 2012 standard kicks in. Even more innovation in lighting is likely to result from a contest offering a significant prize for developing a better bulb ["Build a Better Bulb for a $10 Million Prize," by Eric A. Taub and Leora Broydo Vestel, New York Times, 24 September 2009]. The "L Prize" is being offered by the U.S. Department of Energy "to the first person or group to create a new energy-sipping version of the most popular type of light bulb used in America." Taub and Vestel report that a winner may already have submitted the winning bulb. Philips claims that it has developed an LED light bulb that uses one-sixth the energy of a standard 60-watt incandescent bulb. If true, the new bulb exceeds the requirements of the prize. Taub and Vestel report that the $10 million is not the biggest prize the company could win.

"The $10 million is almost beside the point. More important, the contest winner will receive consideration for potentially lucrative federal purchasing agreements, not to mention a head start at cracking a vast consumer marketplace. The L Prize has garnered significant attention in the lighting industry because 60-watt incandescent lamps represent 50 percent of all the lighting in the United States, with 425 million sold each year. The Energy Department says that if all those lamps were LED equivalents, enough power would be saved to light 17.4 million American households and cut carbon emissions by 5.6 million metric tons annually."

Philips LED light bulb might win the contest, but it won't win the hearts, minds, and pocketbooks of consumers until the price of LED lights can be significantly reduced. Even though LED lights save money in the long-term, most people opt for near-term bargains over long-term savings.

January 28, 2010

Food and Fumes

In a recent post entitled Sewage and Cleantech, I indicated that I would be writing about the challenges of dealing with animal waste in a future post. This is that post. Voltaire once wrote, "Nothing would be more tiresome than eating and drinking if God had not made them a pleasure as well as a necessity." We all know that the pleasures of food are only available because of a lot of hard work by those in the agricultural sector. Today, along with having to worry about the volatility of the futures market, credit availability, and the weather, farmers and ranchers have to deal with environmental issues such as the release of greenhouse gases and the disposal of waste. Everyone wants food, but no one wants a hog farm or stockyard next door. In several past posts, I've noted that cattle are often pointed to as a major source of greenhouse gases. Cows aren't the only source of greenhouse gases produced in the agricultural sector, however. Twenty-one countries are now collaborating to study how reductions in such emissions can be made ["U.S., 20 other nations team to research greenhouse gas emissions from farms," by David A. Fahrenthold, Washington Post, 16 December 2009]. Countries that have committed to collaborate include: Australia, Britain, Canada, Colombia, Chile, Denmark, France, Germany, Ghana, India, Ireland, Japan, Malaysia, the Netherlands, New Zealand, Spain, Sweden, Switzerland, the United States, Uruguay and Vietnam. Fahrenthold reports:

"The United States will join 20 other countries in a 'research alliance' to better understand -- and prevent -- greenhouse-gas emissions from farms, Agriculture Secretary Tom Vilsack announced. ... [He] said the Agriculture Department will increase its spending on farm-emissions research by $90 million over four years, to a total of $130 million. The research, Vilsack said, will be shared with the other countries in the alliance."

In addition to the well-know belching of cows, Fahrenthold indicates that farm-related sources of greenhouse-gas emissions include the burning of crop residues, methane released from decaying manure, and gases emanating from fertilized soil. He continues:

"Together, agricultural sources account for about 6 percent of all U.S. emissions and 14 percent of missions worldwide, U.S. figures show. The department said the research money would be used to find new ways of tending fields and treating animal manure, to reduce their emissions.

The Department of Agriculture had previously announced "an agreement with an association of dairy farmers intended to create a 25 percent reduction in emissions from dairy farms by 2020. The department said the agreement would involve efforts to increase the use of manure 'digesters,' which use the methane produced by decaying waste to generate electricity." Farmers and environmentalists alike are thrilled when solutions to waste disposal can be found that are both eco-friendly and cost effective. For farmers, dealing with waste is just another matter that demands around-the-clock attention ["Down on the Farm, an Endless Cycle of Waste," by Henry Fountain, New York Times, 29 December 2009]. Fountain reports:

"Proper handling of [waste] material is one of the most important tasks faced by a dairy operator, or by a cattle feedlot owner, hog producer or other farmer with large numbers of livestock. Manure has to be handled in an environmentally acceptable way and at an acceptable cost. In most cases, that means using it, fresh or composted, as fertilizer. 'It’s a great resource, if used properly,' said Saqib Mukhtar, an associate professor of biological and agricultural engineering at Texas A&M University and an expert on what is politely called manure management. But as the increasing incidence of environmental and health problems linked to agriculture makes clear, when manure is mismanaged the nutrients in it can foul streams, lakes and aquifers; the pathogens in it can contaminate food products; and the gases it produces, including ammonia, methane and bad-smelling volatile compounds, can upset neighbors and pollute the atmosphere. Even with best practices, manure can cause environmental headaches. So researchers are working on ways to improve its handling, to modify the nutrients in it and to develop alternative uses."

Fountain begins his article with an example of how one farmer deals with the problem:

"Day and night, a huge contraption prowls the grounds at Frank Volleman’s dairy in Central Texas. It has a 3,000-gallon tank, a heavy-duty vacuum pump and hoses and, underneath, adjustable blades that scrape the surface as it passes along. In function it is something like a Zamboni, but one that has crossed over to the dark side. This is no hockey rink, and it’s not loose ice being scraped up. It’s cow manure. Lots of cow manure. A typical lactating Holstein produces about 150 pounds of waste — by weight, about two-thirds wet feces, one-third urine — each day. Mr. Volleman has 3,000 lactating Holsteins and another 1,000 that are temporarily 'dry.' Do the math: his Wildcat Dairy produces about 200 million pounds of manure every year."

What does Mr. Volleman do with all that waste material? Fountain continues:

"When the tank is about half full, the worker drives it to a nearby patch of dirt, opens a valve and spreads — sprays, really — the manure out to dry. Twice a week, the solids are scraped into windrows and then spread on fields as fertilizer. Even dried, manure contains a lot of water, so it is not economical to truck it very far — beyond about 10 miles, it is cheaper for a farmer to buy inorganic fertilizer. Some dairy producers compost their manure, making it more valuable as fertilizer, but composting costs time and money. Mr. Volleman’s manure is spread only on his fields and those of nearby farmers. 'We bring the manure to their fields, they spread it out to grow crops, we bring the crops back to feed the cows,' he said. 'So it’s kind of a circle — a closed circle.'"

Relatively speaking, manure is easier to deal with than liquid wastes. Fountain explains:

"The liquids in the manure are part of a closed circle as well. Everything at the dairy is sited with gravity in mind, so that all liquids — the runoff from the drying area, wet manure left behind in the alleys, wastewater from the milking parlor and rainwater — drain into the first of three interconnected lagoons that are lined with compacted clay. The first lagoon is bubbly and dark, with anaerobic bacteria digesting the organic matter to reduce odor. By the third lagoon, the water is clear and dilute enough to be pumped to irrigation equipment on Mr. Volleman’s fields."

Those holding tanks must occasionally be drained so that the waste material (i.e., the sludge) that has settled to the bottom can be responsibly disposed. By now you should have a pretty good idea about why the handling and disposal of agricultural waste products is such a concern and why it deserves the attention it is receiving. Fountain continues:

"The margin for error in handling both the solids and liquids is thin. Farmers must plan where and when they spread dried manure, both to avoid odor complaints from downwind neighbors and to avoid overapplying nutrients that may run off in a rainstorm. ... One problem, said Robert T. Burns, a professor in the department of agricultural and biosystems engineering at Iowa State University, is that manure typically has more phosphorous than needed. 'Manure is an unbalanced fertilizer from the plant’s view,' Dr. Burns said. Diet modification can help, to some extent. Phosphorous is added to dairy feed as a supplement, and research has shown that it tends to be added in excess, said William P. Weiss, a professor in the animal sciences department at Ohio State University. 'You can get good milk and good health at much lower levels,' Dr. Weiss said. 'And every gram less they feed is a gram less excreted.' Nitrogen, on the other hand, comes from protein, and a lactating cow needs to consume a lot of protein. 'Decrease it a bit, and then milk production falls off,' Dr. Weiss said. With nitrogen, the problem is usually not that there is too much, but that much of it is eventually lost from the manure in the form of gaseous ammonia. The bacteria in feces contain an enzyme, urease, that breaks down urea in urine into carbon dioxide and ammonia. As with phosphorous, diet can affect the amount of nitrogen retained in the manure. As corn-based ethanol production has increased in the United States, many dairies and feedlots now give their animals a large amount of so-called distillers’ grains, the waste corn after fermentation, which are plentiful and cheap. A recent study of feedlots in the Texas Panhandle, by scientists with the United States Department of Agriculture, showed that feeding a diet high in distillers’ grains produced significantly higher ammonia emissions from the manure."

Problems that appear straight forward, like disposing of animal waste material, almost always turn out to be more complicated than anticipated. Even if you manage to balance animal diets and collect and handle waste materials properly, there are still challenges to be faced -- like emissions released during plowing and fertilization. People are working on solutions in that area as well. Fountain explains:

"Emissions problems can also be reduced by changing how the manure is applied. Tilling the soil immediately after application of dried manure can help reduce odors, Dr. Mukhtar said. And if manure is directly injected into the soil in slurry form, Dr. Burns said, the ammonia can better bind with the soil. Currently in Iowa, a major hog-producing state, about 80 percent of hog manure is injected. When it comes to the liquid end of things, there are delicate balances to be maintained as well. Regulations vary by state, but in Texas, manure lagoons have to be big enough to handle a severe rainstorm of the type that occurs, on average, only once every quarter-century. The danger is that an overflow from a lagoon, with its high concentration of organic matter and nutrients, could eventually reach a creek or some other body of water and kill fish."

One only has to recall the severe flooding in North Carolina following Hurricane Floyd that threatened to release some 37 billion gallons of toxic waste from hog farms into the water systems of that state to understand why dealing with agricultural waste is becoming a top priority. Fountain concludes:

"Controlling solids is crucial, said Dr. Mukhtar, who has evaluated other methods for doing so, including a 'weeping wall' system, manure storage areas with porous walls that filter the solids from the liquids. Even when solids are controlled, Dr. Mukhtar said, sludge builds up in a lagoon and eventually has to be removed. Neglecting to do so results in less water, and less bacteria, in the mix. 'All of a sudden this is not a properly functioning lagoon,' he said. 'That’s where we have odor issues.' Another option is to digest the manure in a tank (or, alternatively, put a cover over a lagoon) to produce gas that can be burned for heat or electricity. Another approach, gasification, heats the manure to collect combustible gases. Those options, however, are expensive."

There are, of course, natural tensions that exist between farmers who want to make a profit and consumers who want to buy cheap food and between environmentalists who want reductions in greenhouse gas emissions and controlled toxic wastes and farmers who see such efforts as eating away at their already slim profit margins. Consumers are not bystanders in this area. We all eat. We all want a clean environment. We all want affordable food. Let's hope the consortium of researchers from 21 countries mentioned above can help ease the tensions by coming up with some effective and affordable solutions.

January 27, 2010

Entrepreneurs, Innovators, and Immigrants

Back in September of last year, Bill George, a professor of management practice at Harvard Business School and author of the new book, 7 Lessons for Leading in Crisis, wrote an article for BusinessWeek in which he discussed his ideas for creating sustainable jobs ["Putting America Back to Work," 28 September 2009 print issue]. Among other things, George wrote:

"Instead of clinging to yesterday's economy, we should use this opportunity to rally around the cause of making the U.S. fully competitive. But what will it take to create sustainable jobs? We need to refocus on America's great strengths: innovation, entrepreneurship, small business, and new company formation. These were the engines that drove job growth in the 1980s and '90s. We can do it again by unleashing these powerful forces. The biggest job creators are small businesses and companies that are expanding, like my former company, Medtronic, which has created 35,000 jobs in the past 25 years. Yet our national policies, unlike those in many European and Asian nations, often work against them."

As George mentions, he is the former chair and CEO of Medtronic. Currently he serves on the boards of ExxonMobil and Goldman Sachs and, previously, he has served on the boards of Novartis and Target. His business credentials, in other words, go beyond the classroom. Later in his article, he recommended that the U.S. invest heavily in "renewable energy, information technology, and health care—three of America's greatest strengths." He also recommended that the country renew its investments in human capital. He wrote:

"With so many workers who lack the skills for tomorrow's jobs, we should institute massive retraining and education programs to prepare workers for the high-tech jobs where the U.S. has a competitive advantage."

I don't disagree with anything George writes. I, too, believe that "innovation, entrepreneurship, small business, and new company formation" are needed to create more good paying, sustainable jobs. Although we need to do everything we can to keep American's fully employed, one thing that George doesn't mention is how "new blood" might be able to help us do that. Hiring immigrants may not sound like a good way to create sustainable jobs in the U.S., but don't be too quick to judge. Before discussing the possible benefits of hiring immigrants, let's face the fact that doing so could be controversial. A December article in BusinessWeek notes that U.S. businesses are still looking for good foreign talent despite the fact that "continued hiring of workers from abroad may stoke controversy" ["Still Wanted: Foreign Talent—and Visas," by Moira Herbst, 21 December 2009 print issue]. She reports:

"Even as job losses in the U.S. mount, employers have stepped up the hiring of skilled workers from abroad, according to data from the U.S. Citizenship & Immigration Services. The acceleration in recent weeks has put companies close to exhausting the 65,000 visas allotted each year for foreign hires under what's known as the H-1B program. Some 61,500 visas had been used as of Dec. 8, and the last visas are likely to be claimed within weeks. Once that happens, companies won't be able to use the program to bring in additional workers until October, the start of the government's fiscal year."

Herbst quotes an associate professor of public policy at Rochester Institute of Technology, Ron Hira, who probably reflects the thinking of many Americas. "With 15.4 million people unemployed in the U.S.," he states, "employers should be able to find qualified workers here." The fact, however, is that hiring immigrants often reflects their entrepreneurial character, not just their job qualifications. The Wall Street Journal asserts that "it's crazy to drive away talented young scholars" ["Immigrant Scientists Create Jobs and Win Nobels," by Susan Hockfield, 20 October 2009]. She writes:

"Of the nine people who shared this year's Nobel Prizes in chemistry, physics and medicine, eight are American citizens, a testament to this country's support for pioneering research. But those numbers disguise a more important story. Four of the American winners were born outside of the United States and only came here as graduate or post-doctoral students or as scientists. They came because our system of higher education and advanced research has been a magnet for creative talent. Unfortunately, we cannot count on that magnetism to last. Culturally, we remain a very open society. But that openness stands in sharp contrast to arcane U.S. immigration policies that discourage young scholars from settling in the U.S. Those policies come at a high price. Graduate and postgraduate student immigrants are essential to creating new, well-paid jobs in our economy. Of the 35 young innovators recognized this year by Technology Review magazine for their exceptional new ideas, only six went to high school in the United States. From MIT alone, foreign graduates have founded an estimated 2,340 active U.S. companies that employ over 100,000 people. Amazingly, if as incoming students they had told U.S. immigration authorities that they hoped to stay on as entrepreneurs after graduation, they would have been turned back at the border. Our immigration laws specifically require that students return to their home countries after earning their degrees and then apply for a visa if they want to return and work in the U.S. It would be hard to invent a policy more counterproductive to our national interest."

At a time when the U.S. is continuing to shed jobs, welcoming people with the skills and disposition to create hundreds of thousands of jobs simply makes sense. Dr. Hockfield is not a reporter; she is president of the Massachusetts Institute of Technology and a noted neuroscientist whose research has focused on the development of the brain. She certainly advocates, along with Professor George, aggressively developing "more homegrown talent"; but, she notes (with more than a little frustration) that the U.S. has lost its lead in education. "In education, the world is accelerating while we are standing still," she writes. This post, however, is about jobs, not education. Dr. Hockfield concludes by noting that the two subjects are intricately interwoven.

"Today, discovery and innovation increasingly spring from a creative network of the finest talent everywhere across the globe. From new advances in medicine to scientific breakthroughs that spawn new industries and sustainable jobs, the work of science and engineering is being done by individuals who can live almost anywhere. To be part of that global creative network we must inspire more young Americans to pursue scientific careers, and we must rapidly reform U.S. immigration policies that drive away talented young scholars who would otherwise decide to live, work and innovate here. We should be proud of our Nobel Prize winners. But we should also craft policies that make it more likely that future Nobel laureates will do their work inside the U.S."

In later Wall Street Journal article, the paper argues that "immigrant entrepreneurs are an engine of jobs and growth. We need more of them." ["Start-up Visas Can Jump-Start the Economy," by Paul Kedrosky and Brad Feld, 2 December 2009] Kedrosky and Feld write:

"While fast-growing companies have long been the main source of new jobs and innovation, this country makes it outrageously difficult for immigrants to launch new companies here. This doesn't make any sense. After all, Google, Pfizer, Intel, Yahoo, DuPont, eBay and Procter & Gamble are all former start-ups founded by immigrants. Where would this country be today without their world-changing innovations? Immigrants have not only founded big, well-known companies. Foreign-born residents made up just 12.5% of the U.S. population in 2008. But nearly 40% of technology company founders and 52% of founders of companies in Silicon Valley. Yet we don't seem to care."

Like Dr. Hockfield, Kedrosky and Feld are not reporters either; they are investors. Mr. Kedrosky is a senior fellow at the Kauffman Foundation and an investor. Mr. Feld is a managing director at Foundry Group, a Boulder, Colo.,-based venture capital firm that invests in start-up companies in the U.S. Analysts have predicted that the U.S. recovery will be jobless; that is, that unemployment will remain high for several years. Kedrosky and Feld argue that it doesn't need to be that way. They continue:

"In the 21st century those opportunities don't wait for our interminable, employment-based visa programs. As a result rather than saying 'Come and create jobs here' we, in effect, tell them to shove off. Come back when you have a few million in sales— at which point they will be rooted elsewhere and creating jobs somewhere else. That needs to end now. Immigrants who come here to create companies create jobs. We need the jobs."

Rather than relying on H-1B visas, Kedrosky and Feld recommend creating a new type of visa they call a "start-up visa." They explain:

"It might work like this: If immigrant entrepreneurs want to start a company in the U.S. and are able to raise a moderate amount of money (perhaps as little as $125,000) from an accredited U.S.-based venture capital firm or qualified U.S.-based angel investors, we should let them start a company here. It could be a couple of founders with an idea—that's it. We would give visas to the founders and welcome them in to our country. Would it work every time? Of course not. It would fail more often than not. Start-ups often fail. But having failed, the immigrant entrepreneurs could try again, and again. And as long as they are trying, raising money, creating jobs, and making sales, we would let them stay here. Founders of new companies are precious for a vibrant economy, and we should welcome them. Indeed, the country would be better served to find more of them. Some will say a start-up visa program will be abused. They will say that it will become a way to end-run immigration rules, to jump the queue if you have money. There are at least two answers to these objections. First, to get such a visa you would have to raise money from real investors. Second, Canada and other countries already allow entrepreneurs to start a company in their country. Shouldn't the U.S. stop worrying so much about keeping these people out, and start worrying about bringing them in?"

They agree with Dr. Hockfield that we should welcome foreign scholars and that "science and engineering graduates should get visas stapled to their diplomas" because they are the individuals who are going to "create jobs, innovate, and grow the economy." The message, they write, should be: "Uncle Sam wants you, if you're a prospective entrepreneur." In a recent op-ed piece, former Tennessee congressman Harold Ford, Jr., while chiding Democrats for losing the public's confidence, agreed that immigrants can play a critical role in our economy ["Democrats, Get Down to Business," New York Times, 25 January 2010]. He writes that America "should reform [its] immigration policy to ensure that those who contribute to [the U.S.] economy, especially foreign math and science graduates of American universities, have a clear path to citizenship."

While Kedrosky and Feld want to welcome foreigners who seek investment money in the United States, there is already a program that offers visas to foreigners willing to invest in U.S. companies ["Immigrants invest in U.S. businesses in exchange for visas," by N.C. Aizenman, Washington Post, 10 January 2010]. Aizenman writes:

"The number of foreigners willing to invest $500,000 to $1 million in a U.S. business in exchange for a visa roughly tripled in the past fiscal year, as dozens of cash-strapped enterprises and local governments scrambled to attract wealthy foreign backers through a previously obscure provision of immigration law. Under the EB-5 visa program, immigrants who can demonstrate that their investment created or preserved at least 10 U.S. jobs after two years are granted legal permanent residency along with their spouses and children. Although immigrants are allowed to establish businesses under the program, most prefer to invest in 'regional centers' -- public or private enterprises that are certified by the government to receive funds from EB-5 investors and that can count jobs indirectly created by the investment toward the 10 required. The minimum outlay mandated is $1 million, but immigrants can reduce that to $500,000 by investing in a regional center or establishing businesses in areas designated as economically disadvantaged."

At a time when small businesses are still having difficulty raising capital, hooking up with a foreign investor seems like a good idea. These are obviously not economically disadvantaged individuals who are going to be a drain on scarce government resources. They are people who can help create jobs for people who will pay taxes and bolster local economies. Are there downsides to the program? Aizenman admits that even "some avid proponents of the EB-5 program ... worry that a profusion of fraudulent or ill-advised ventures might soon flourish alongside legitimate ones." On the whole, however, the benefits seem to outweigh the risks. Another point made by Aizenman is that we are not talking about big numbers. He reports:

"Stephen Yale-Loehr, a professor at Cornell University's law school and executive director of a trade association of regional centers, said the number of EB-5 visas being granted falls well short of the maximum 10,000 allowed each year."

In a surprising twist for Congress, where it has been said that the aisles are getting wider and politicians arms are getting shorter, the EB-5 program has attracted cross-aisle, bipartisan support. The reason: the politicians realize that the program creates jobs. I suspect that there are a lot of unemployed workers who would gladly have an immigrant employer if he or she could promise a steady paycheck and livable wage.

January 26, 2010

More on Persistent Ocean Surveillance

In a post entitled Persistent Ocean Surveillance, I noted that Enterra's Executive Vice President of International Security Affairs Practice, Admiral H.G. “Harry” Ulrich III, USN, (Ret.), shared in an award with the Volpe Center of the U.S. Department of Transportation’s Research and Innovative Technology Administration that recognized their work setting up a system that could track ship activity in the crowded Mediterranean Sea. That effort began in 2005 and remains a critical component of the security picture in the Mediterranean today ["Mediterranean Navies Look To Win Information War", by Tom Kington, Defense News, 11 January 2010]. In the post mentioned above, I noted that the initiative includes participation by over 50 countries and tracks over 14,000 ships in a real-time environment. Early efforts were so successful that they have been expanded by the Europeans. Getting one's arms around all of the data collected by such a system requires the constant upgrading of collection and analysis capabilities. Kington reports:

"As it brings new frigates and an aircraft carrier into its fleet, the Italian Navy is investing in one asset it considers crucial to maintaining maritime security in the crowded Mediterranean Sea: information. Four years after linking with other regional navies to share information over the Internet on merchant vessel movements, the Navy’s Virtual Regional Maritime Traffic Center (V-RMTC) today links with 29 navies that together input more than 40,000 entries a week. The center is based [in Rome]."

During the Cold War, the U.S. Navy kept a large naval presence in the Mediterranean as part of the Sixth Fleet. Although the Cold War is over and the U.S. naval presence is greatly diminished, threats to European and global security remain. Kington reports that the new focus is on "drugs and weapon smuggling, terrorist movements and clandestine migration, rather than hostile navies." He continues:

"Now planners are looking to take the V-RMTC scheme global by linking it to similar schemes launched by navies on other continents through a Trans-Regional Maritime Network (T-RMN), plans for which were drafted in December 2008. In an address to fellow naval chiefs last year, Adm. Paolo La Rosa, the Italian Navy’s chief of staff, said trial links had been successfully established between the V-RMTC and Brazil’s SISTRAM system, Singapore’s OASIS and India’s MSIS. 'A technical agreement is now expected to be signed in 2010 by 26 navies,' an Italian naval source said. The V-RMTC, which was launched in October 2006, involves an online register of movements of merchant vessels of 300 metric tons or more in the Mediterranean and Black seas. Information that hitherto had been stored by individual nations and port authorities was pooled, spanning a busy maritime area that links 25 countries and 80 ports, from Georgia in the east, the Atlantic in the west and the Arabian Gulf to the south via the Suez Canal. Data inputs on vessels leaving or entering ports or those identified at sea, supplied by port authorities and navies, contain the vessel’s name, tonnage, call sign, owner, origin, destination and possibly cargo. By January 2007, soon after launch, about 2,000 movements were passing weekly through the system’s main server here."

Kington confirms what I noted at the beginning of this post; namely, "the V-RMTC is supplied with data by navies within the Wider Mediterranean Community (WMC), which includes the United States, Germany, the United Kingdom, the Netherlands and Senegal, in addition to Mediterranean navies. U.S. Navy vessels in the Mediterranean provide radio data received from merchant vessels’ Automatic Identification Systems. Russia is not a member." The V-RMTC is not the only network that gathers European maritime data.

"In a parallel but separately handled network, five of the European partner navies — Italy, France, Malta, Spain and Portugal [—] are swapping data with five North African countries — Algeria, Libya, Mauritania, Morocco and Tunisia. The '5+5' network posts 30,000 movements a week. The main V-RMTC network posts 40,000, said the source. With the five North African nations and Lebanon, which has established a bilateral arrangement with Italy, the nations involved now total 29. 'A new community is also currently being developed to connect eight European navies with six gulf navies within an "8+6" Initiative,' said the naval source."

Interestingly, the United States Navy is not a part of the TRMN global initiative because it has "not yet adhered" to its requirements. Although the U.S. is keen on gathering as much information as possible, it is not so keen about sharing information with others. Kington notes that even if the U.S. adhered to TRMN requirements, "it would likely input its Mediterranean data only." One of the reasons that the V-RMTC was able to get functioning as quickly and cost effectively as it did (and the reason it won an innovation award) was because it is an open system. Kington explains:

"'Navies are increasingly involved in patrol work in the Mediterranean to counter criminal activity and immigration, which has a high profile, even if numbers are small,' said Stefano Silvestri, president of the Istituto Affari Internazionali, a think tank here partly funded by the Italian Foreign Ministry. 'All of which means an extra focus on controlling maritime space,' he added. 'The big themes now are drugs, arms, terrorism and immigration,' a second analyst said, 'meaning better awareness of asymmetric threats through improved radars and information control. The advantage of the V-RMTC is that it is all based on commercial technology and is not exclusive.'"

Commenting on how maritime domain awareness has improved in the years since he helped establish a tracking system in the Mediterranean, Admiral Ulrich told me:

"While I am delighted we have reached a tipping point to share locating data on ships, this is but part of the information sharing protocols needed to provide real maritime security. The next step is to take these 'one off,' ad hoc arrangements and formalize an internationally-recognized arrangement. While I am sure we will eventually get to such a point, I recommend we do so sooner rather than later."

Information and intelligence have always been prized commodities in the security arena. The dawning of the information age only strengthened the requirement for good information. It also exponentially increased the difficulty of analyzing such data because there is so much of it. As the Christmas Day terrorist attempt in Detroit underscored, even when information is available connecting the dots to make it actionable intelligence remains a significant challenge.

January 25, 2010

Sewage and Cleantech

Like every other segment of the economy, the cleantech sector took a hit last year. Compared to other sectors, however, it fared relatively well -- at least when it comes to attracting venture capital ["Clean tech gets big piece of funding pie," by Julie Schmit, USA Today, 7 January 2010]. Schmit reports:

"Venture-capital funding for clean-technology firms fell 33% in 2009 from the year before, but the sector fared better than others amid a dismal economy. ... More than $5.6 billion in venture-capital investment went to clean-tech firms — including solar, wind, energy efficiency, transportation and biofuels — last year, say preliminary data from market researcher Cleantech Group and finance firm Deloitte. Total venture-capital investment has retreated to 2003 levels, but clean tech has reset only to 2007 levels, the Cleantech Group says. ... In 2004, the sector accounted for about 3% of venture-capital investment. That expanded to about 25% in 2009. The sector last year, for the first time, received more private venture capital than any other sector, including software, Cleantech Group says."

Just as the cleantech sector fared better than some other areas of the economy, some sub-sectors of cleantech also fared better than others. Schmit continues:

"The top clean-tech recipient in 2009 was solar, which got 21% of it. But solar investment was down 64% from the previous year, while the transportation and energy-efficiency sectors had record years. The drop for solar stems from several factors, including the big amounts of money needed to commercialize technologies, says Dallas Kachan, managing director of the Cleantech Group. Meanwhile, energy-efficiency firms — those concentrating on everything from lighting to green building materials — often need less money to bring products or services to market, may rely on more proven technologies and may pose less risk to investors. 'They're not reinventing the wheel,' Kachan says. Last year, venture capital for transportation — for such things as electric cars and new battery technology — rose 47% to $1.1 billion. Investment in energy efficiency rose 39% to $1 billion."

In past posts about clean technologies, I've written about companies all over the world that are contributing research and innovation. Schmit reports that although North America still dominates the sector, that domination may be slipping. She continues:

"The region is still dominant for clean-tech venture capital, but it's getting a smaller share than it used to. Last year, North America received 62% of clean-tech venture-capital dollars, down from 72% in 2008, the Cleantech Group says. Europe and Israel took in 29% of 2009 dollars, up from 22% in 2008. That Europe and Israel increased their share of venture-capital funding may reflect the desire for investors to pursue less risky deals in markets where clean tech is already more widely deployed, Lesser says."

Schmit's article strictly dealt with the venture capital side of clean technologies. As I've noted in past posts, countries like China are also investing heavily in clean technologies; but many of the research efforts there are funded internally by corporations or by the government. Venture capitalists don't get involved. Besides the obvious attraction for venture capitalists (i.e., clean technologies are generating government support), I believe that they are drawn to the sector because people in it remain creative. I'm thinking, for example, of the creative people who are trying to turn sewage into energy ["The seat of power," The Economist, 2 January 2010 print issue]. I was drawn to article both by its tongue-in-cheek title and the equally amusing graphic that accompanied it. The editors might have taken the joke a bit too far, however, when they titled an accompanying figure, one showing how much energy is generated by sewage, "Flushed with pride." The article begins:

"Where there’s muck, there’s brass—or so the old saying has it. The cynical may suggest this refers to the question of who gets what, but thoughtful readers may be forgiven for wondering, while they are recovering from the excesses of Christmas in the smallest room in the house, what exactly happens when they flush the toilet. The answer is encouraging. Less and less waste, these days, is actually allowed to go to waste. Instead, it is used to generate biogas, a methane-rich mixture that can be employed for heating and for the generation of electricity. Moreover, in an age concerned with the efficient use of energy, technological improvements are squeezing human fecal matter to release every last drop of the stuff. Making biogas means doing artificially to faeces what would happen to them naturally if they were simply dumped into the environment or allowed to degrade in the open air at a traditional sewage farm—namely, arranging for them to be chewed up by bacteria. Capturing the resulting methane has a double benefit. As well as yielding energy, it also prevents what is a potent greenhouse gas from being released into the atmosphere."

Discussing human fecal material may sound unpleasant (I hope you haven't just eaten), but all organisms, including humans, generate waste. Dealing with that waste, if only for health reasons, is of significant importance. To learn more on that subject, read my post entitled Infrastructure and Disease. Turning sewage into energy opens entirely new ways for communities to foster energy security. The article continues:

"Several groups are testing ways of making the process by which faeces are digested into methane more efficient. GENeco, a subsidiary of Wessex Water, a British utility company, uses heat. Instead of running at body temperature, the firm’s process first stews the excrement at 40°C for several days. It then transfers the fermenting liquid to a tank that is five degrees cooler. This two-tank system produces more methane than conventional methods because different strains of bacteria, which chew up different components of faeces, work better at different temperatures. The result of giving diverse groups of bugs a chance to operate in their ideal environments is, according to Mohammed Saddiq, GENeco’s boss, about 30% more methane from a given amount of excrement. In Germany a team at the Fraunhofer Institute in Stuttgart, led by Walter Trösch, is using a different approach. Dr Trösch has reduced the amount of time it takes to digest sewage from two weeks to one, by employing a pumped mixing system. This works faster than traditional methods for two reasons. The first is that stirring the sludge causes methane to bubble to the surface faster. From the bacterial point of view, methane is just as much of a waste product as faeces are from the human viewpoint. Encouraging this poison to escape allows the bacteria to survive longer and thus produce yet more methane. The second reason is that mixing the sludge moves bacteria away from chunks that they have been digesting and on to 'fresher' material that has not had as much bacterial contact. The result is a quicker digestion of the whole. The Fraunhofer pump system, which has already been deployed in 20 sewage plants in Brazil, Germany and Portugal, needs to operate for only a few hours a day, so does not require a large amount of energy. Sadly, that is not true of the approach used by researchers at the Tema Institute in Linkoping University, Sweden. They are developing a technique that employs ultrasound, rather than pumps, to break up the sludge. This increases methane yields by 13% but, at the moment, the process of generating the ultrasound consumes more energy than it yields."

Historically, communities have treated sewage to prevent the spread of disease and to recapture increasingly precious water resources. Simply making the treatment plants energy self-sufficient would be a boon to communities. Generating excess power that can be sold is an extra bonus, like fudge frosting on a chocolate cake. The article concludes:

"The consequence of techniques such as these is that an ever-larger proportion of sewage is being used as a raw material for energy generation. Germans already process about 60% of their faeces this way, and the Czechs, Britons and Dutch are close behind. GENeco reckons the figure in Britain by the end of 2010 will have leapt to 75%—enough, when converted into electricity, to power 350,000 homes. And the latest thinking is to improve yields still further by cutting out the middle man. Faeces are food that has been processed by the human digestive system to extract as much useful energy as possible. An awful lot of waste food, though, never enters anyone’s mouth in the first place, and this is an even more promising source of biogas. In America in particular numerous sewage plants have begun processing undigested food in large quantities over the course of 2009. This is the result of a collaborative policy by the country’s Environmental Protection Agency and its Department of Energy, to encourage the recycling of waste food in this way. In Britain, alas, public policy actually discourages such activity. Waste-water facilities there must pasteurise food scraps before they are processed, according to Michael Chesshire, the head of technology at BiogenGreenfinch, a company that modifies sewage digesters to use food scraps. That is a serious waste of brass."

Methane produced by animals, like cattle, contributes significant amounts of methane into the atmosphere. In a future post, I'll talk about the challenges farmers have dealing with animal waste. Capturing and using the methane produced by human byproducts to generate cleaner power is a good idea. Since we know that as long as humans eat they will do the "number two," it's about time we got over our sensitivities about how we dispose of fecal material. People will feel a little better about themselves if they understand they are part of the renewable energy sector. I already feel flushed with pride.

January 22, 2010

Can Haiti Really Become Resilient?

The outpouring of concern for Haiti has been remarkable. The American Red Cross, for example, has been amazed at the amount of money that has been donated through mobile phone contributions (over $22 million was the last figure I heard). There is a nagging suspicion, however, that once the bodies are buried, the wounded attended to, the streets cleared of rubble, and the rebuilding process begins, that Haiti will return to its status as a failing and fragile state. New York Times' op-ed columnist Nicholas Kristof reports that some people have actually had the courage to state what many others are obviously thinking ["Some Frank Talk About Haiti," 21 January 2010]. He writes:

"On my blog, a woman named Mona pointed to Haitian corruption and declared: 'I won’t send money because I know what will happen to it.' Another reader attributed Haiti’s poverty to 'the low I.Q. of the 9 million people there,' and added: 'It is all very sad and cannot be fixed.' 'Giving money to Haiti and other third-world countries is like throwing money in the toilet,' another commenter said. A fourth asserted: 'Haiti is a money pit. Dumping billions of dollars into it has proven futile. ... America is deeply in debt, and we can’t afford it.'"

Despite Haiti's long-term prospects, the moral and ethical thing to do when people are suffering is to help relieve that suffering. The corrupt nature of Haitian politicians is not a legitimate excuse for withholding assistance from innocent sufferers. The outbreaks of violence and general lawlessness experienced in Port Au Prince reminds us that all recipients aren't innocent; but even the violence doesn't let us off the hook to help. Kristof, however, believes that Haiti is not a hopeless case. He continues:

"For those with doubts, let’s have a frank discussion of Haiti’s problems: Why is Haiti so poor? Is it because Haitians are dimwitted or incapable of getting their act together? Haiti isn’t impoverished because the devil got his due; it’s impoverished partly because of debts due. France imposed a huge debt that strangled Haiti. And when foreigners weren’t looting Haiti, its own rulers were. The greatest predation was the deforestation of Haiti, so that only 2 percent of the country is forested today. Some trees have been — and continue to be — cut by local peasants, but many were destroyed either by foreigners or to pay off debts to foreigners. Last year, I drove across the island of Hispaniola, and it was surreal: You traverse what in places is a Haitian moonscape until you reach the border with the Dominican Republic — and jungle. Without trees, Haiti lost its topsoil through erosion, crippling agriculture. To visit Haiti is to know that its problem isn’t its people. They are its treasure — smart, industrious and hospitable — and Haitians tend to be successful in the United States (and everywhere but in Haiti)."

I agree with Kristof that Haiti's troubles have nothing to do with the intelligence of the people living there. It may, however, have more to do with the local culture than Kristof is willing to admit. See my post entitled The Challenge of Building or Re-building Impoverished Communities in which I comment on an article by David Brooks that discusses some of the reasons for Haiti's poverty besides crushing debt and lack of trees. Kristof continues:

"Can our billions in aid to Haitians accomplish anything? After all, a Wall Street Journal column argues, 'To help Haiti, end foreign aid.' First, don’t exaggerate how much we give or they get. Haiti ranks 42nd among poor countries in worldwide aid received per person ($103 in 2008, more than one-quarter of which comes from the United States). David Roodman of the Center for Global Development calculates that in 2008, official American aid to Haiti amounted to 92 cents per American. The United States gives more to Haiti than any other country. But it ranks 11th in per capita giving. Canadians give five times as much per person as we do. As for whether aid promotes economic growth, that’s a bitter and unresolved argument. But even the leading critics of aid — William Easterly, a New York University economist, and Dambisa Moyo, a banker turned author — believe in assisting Haiti after the earthquake. 'I think we have a moral imperative,' Ms. Moyo told me. 'I do believe the international community should act.' Likewise, Professor Easterly said: 'Of course, I am in favor of aid to Haiti earthquake victims!'"

I'll discuss the Wall Street Journal article mentioned by Kristof at the end of this post. At this point, I think Kristof is confusing humanitarian assistance with developmental aid. Only the most calloused soul would opt to withhold humanitarian assistance to a suffering nation. Humanitarian assistance, however, is in intended to relieve suffering not foster development. Even though Kristof claims that the debate about whether foreign aid fosters development remains "a bitter and unresolved argument," most people in the development community understand that foreign direct investment is much more important than aid in helping a country grow its economy. That is not to say that foreign aid doesn't play a role. Kristof continues:

"So, is Haiti hopeless? Is Bill O’Reilly right? He said: 'Once again, we will do more than anyone else on the planet, and one year from today Haiti will be just as bad as it is right now.' No, he’s not right. And this is the most pernicious myth of all. In fact, Haiti in recent years has been much better managed under President René Préval and has shown signs of being on the mend. Far more than most other impoverished countries — particularly those in Africa — Haiti could plausibly turn itself around. It has an excellent geographic location, there are no regional wars, and it could boom if it could just export to the American market. A report for the United Nations by a prominent British economist, Paul Collier, outlined the best strategy for Haiti: building garment factories. That idea (sweatshops!) may sound horrific to Americans. But it’s a strategy that has worked for other countries, such as Bangladesh, and Haitians in the slums would tell you that their most fervent wish is for jobs. A few dozen major shirt factories could be transformational for Haiti."

Kristof is correct in stating that most Haitians wish fervently for jobs. Unemployment in Haiti, before the earthquake, hovered around 70 percent. "A few dozen major shirt factories" would be nice, but they wouldn't come anywhere near providing the over two million jobs that are needed in Haiti. For more on Haiti's pre-earthquake economy, see my post entitled The Conundrum of Haiti. Kristof concludes:

"So in the coming months as we help Haitians rebuild, let’s dispatch not only aid workers, but also business investors. Haiti desperately needs new schools and hospitals, but also new factories. And let’s challenge the myth that because Haiti has been poor, it always will be. That kind of self-fulfilling fatalism may be the biggest threat of all to Haiti, the real pact with the devil."

In the end, Kristof admits that it will be investment more than aid that will help Haiti pull itself out of poverty; and, that's really the point of the Wall Street Journal article mentioned above ["To Help Haiti, End Foreign Aid," by Bret Stephens, 19 January 2010]. Stephens writes:

"In the days ahead, Haitians will undergo another trauma as rescue efforts struggle, and often fail, to keep pace with unfolding emergencies. After that—and most disastrously of all—will be the arrival of the soldiers of do-goodness, each with his brilliant plan to save Haitians from themselves. 'Haiti needs a new version of the Marshall Plan—now,' writes Andres Oppenheimer in the Miami Herald, by way of complaining that the hundreds of millions currently being pledged are miserly. Economist Jeffrey Sachs proposes to spend between $10 and $15 billion dollars on a five-year development program. 'The obvious way for Washington to cover this new funding,' he writes, 'is by introducing special taxes on Wall Street bonuses.' In a New York Times op-ed, former presidents Bill Clinton and George W. Bush profess to want to help Haiti 'become its best.' Some job they did of that when they were actually in office. All this works to salve the consciences of people whose dimly benign intention is to 'do something.' It's a potential bonanza for the misery professionals of aid agencies and NGOs, never mind that their livelihoods depend on the very poverty whose end they claim to seek. And it allows the Jeff Sachses of the world to preen as latter-day saints."

Stephens may be going over the top taking personal potshots at former presidents and respected professors. It's clear from the remainder of his article, however, that he is frustrated with the status quo and needs to vent. He continues with his polemic:

"For actual Haitians, however, just about every conceivable aid scheme beyond immediate humanitarian relief will lead to more poverty, more corruption and less institutional capacity. It will benefit the well-connected at the expense of the truly needy, divert resources from where they are needed most, and crowd out local enterprise. And it will foster the very culture of dependence the country so desperately needs to break. How do I know this? It helps to read a 2006 report from the National Academy of Public Administration, usefully titled 'Why Foreign Aid to Haiti Failed.' The report summarizes a mass of documents from various aid agencies describing their lengthy records of non-accomplishment in the country. Here, for example, is the World Bank—now about to throw another $100 million at Haiti—on what it achieved in the country between 1986 and 2002: 'The outcome of World Bank assistance programs is rated unsatisfactory (if not highly so), the institutional development impact, negligible, and the sustainability of the few benefits that have accrued, unlikely.' Why was that? The Bank noted that 'Haiti has dysfunctional budgetary, financial or procurement systems, making financial and aid management impossible.' It observed that 'the government did not exhibit ownership by taking the initiative for formulating and implementing [its] assistance program.' Tellingly, it also acknowledged the 'total mismatch between levels of foreign aid and government capacity to absorb it,' another way of saying that the more foreign donors spent on Haiti, the more the funds went astray."

Stephens' arguments against aid actually help strengthen arguments for aid (at least for aid of the right type and amount). Even Stephens can't reasonable argue that a country is better off without a functioning government. Somalia is a great example of how anarchy creates chaos, poverty, and death. But businesses are not going to invest in improving governments. Only governments, NGOs, and international organizations are going to do that. Companies interested in investing in a country are encouraged to do so when they know they are dealing with a competent and honest government, but helping improve the government generally doesn't help improve their bottom line. Aid can help build capacities of which investments can take advantage. Stephens continues:

"But this still fails to get at the real problem of aid to Haiti, which has less to do with Haiti than it does with the effects of aid itself. 'The countries that have collected the most development aid are also the ones that are in the worst shape,' James Shikwati, a Kenyan economist, told Der Spiegel in 2005. 'For God's sake, please just stop.' Take something as seemingly straightforward as food aid. 'At some point,' Mr. Shikwati explains, 'this corn ends up in the harbor of Mombasa. A portion of the corn often goes directly into the hands of unscrupulous politicians who then pass it on to their own tribe to boost their next election campaign. Another portion of the shipment ends up on the black market where the corn is dumped at extremely low prices. Local farmers may as well put down their hoes right away; no one can compete with the U.N.'s World Food Program.' Mr. Sachs has blasted these arguments as 'shockingly misguided.' Then again, Mr. Shikwati and others like Kenya's John Githongo and Zambia's Dambisa Moyo have had the benefit of seeing first hand how the aid industry wrecked their countries. That the industry typically does so in connivance with the same local governments that have led their people to ruin only serves to help keep those elites in power, perpetuating the toxic circle of dependence and misrule that's been the bane of countries like Haiti for generations."

To learn more about arguments along this line, read my post entitled Will Money Solve Africa's Problems? I concluded that post by writing: "Development does take money, but it also takes courage, creative thinking, and solid principles upon which to act." Those "solid principles" are what Stephens discusses next:

"A better approach recognizes the real humanity of Haitians by treating them—once the immediate and essential tasks of rescue are over—as people capable of making responsible choices. Haiti has some of the weakest property protections in the world, as well as some of the most burdensome business regulations. In 2007, it received 10 times as much in aid ($701 million) as it did in foreign investment. Reversing those figures is a task for Haitians alone, which the outside world can help by desisting from trying to kill them with kindness. Anything short of that and the hell that has now been visited on this sad country will come to seem like merely its first circle."

In the end, Brooks, Kristof, and Stephens really come to the same conclusion: Haiti will only break poverty's grasp when it starts attracting foreign direct investment. Unfortunately for Haiti, the earthquake and its aftershocks happened amidst one of history's biggest economic downturns. Companies are shedding jobs, not creating them. I noted above that development takes money and creative thinking. Some of that creative thinking has to come from Haiti's politicians. They need to clean up the business environment and foster a climate conducive to entrepreneurism. People and organizations that want to follow up humanitarian assistance with developmental aid should bypass the government and find entrepreneurs with the ideas, skills, and ambitions necessary to succeed. Entrepreneurs create jobs and jobs create futures. Author Mark Danner, who has written extensively about Haiti, provides his own prescription for the country's future ["To Heal Haiti, Look to History, Not Nature," New York Times, 22 January 2010]. He writes:

"America could start by throwing open its markets to Haitian agricultural produce and manufactured goods, broadening and making permanent the provisions of a promising trade bill negotiated in 2008. Such a step would not be glamorous; it would not 'remake Haiti.' But it would require a lasting commitment by American farmers and manufacturers and, as the country heals, it would actually bring permanent jobs, investment and income to Haiti. Second, the United States and other donors could make a formal undertaking to ensure that the vast amounts that will soon pour into the country for reconstruction go not to foreigners but to Haitians — and not only to Haitian contractors and builders but to Haitian workers, at reasonable wages. This would put real money in the hands of many Haitians, not just a few, and begin to shift power away from both the rapacious government and the well-meaning and too often ineffectual charities that seek to circumvent it. The world’s greatest gift would be to make it possible, and necessary, for Haitians — all Haitians — to rebuild Haiti. Putting money in people’s hands will not make Haiti’s predatory state disappear. But in time, with rising incomes and a concomitant decentralization of power, it might evolve. In coming days much grander ambitions are sure to be declared, just as more scenes of disaster and disorder will transfix us, more stunning and colorful images of irresistible calamity. We will see if the present catastrophe, on a scale that dwarfs all that have come before, can do anything truly to alter the reality of Haiti."

Haiti will have to rebuild; but it shouldn't rebuild with the rubble of its past. Its buildings can be made more resilient and so can its economy -- Kristof and Danner are correct about that. But Stephens and Brooks are also correct that the people of Haiti bear a large burden concerning their own future as well. If they take advantage of the current situation by pulling together and demonstrating a national character epitomized by hard work and a willingness to change, they will begin to see the dim rays of a brighter future.

January 21, 2010

The Curse of Silo Thinking

One of the characteristics of industrial age enterprises is that they are organized around functional departments. This organizational structure results in both siloed information and siloed thinking. For nearly a hundred years, the culture of siloed thinking permeated almost every organization -- including national intelligent services where information was protected like a miser's gold rather than shared as a common good. We all know the devastating consequences of this lack of shared data. The intelligence world isn't the only arena of human activity where the absence of a cross flow of information can prove devastating. Another recent case in point is the collapse of Lehman Brothers ["The dangers of silo thinking," by Gillian Tett, Financial Times, 15 December 2009]. Tett writes:

"When Larry McDonald, a former bond trader at Lehman Brothers, wrote an exposé of that broker’s collapse, it seems that his main intention was to reveal the extraordinary folly and ineptitude of the former Lehman bosses. In practice, though, his colourful tale also highlights – almost inadvertantly – another crucial problem that haunts the modern financial world: the curse of silos."

The silo is an apt image but it's not the only one that is used. In some government circles, like the military, they talk about stovepipes. Regardless of what you call it, organizations that fail to share information across artificial boundaries will inevitably suffer as a result. Tett continues:

"As McDonald narrates, several years before the Lehman collapse in the autumn of 2008, its own fixed-income department was already so alarmed by the American real estate market that they were hunting for ways to go 'short'. However, while one department of Lehman was exceedingly bearish, other departments, such as the mortgage securitisation team, were so aggressively bullish that they were increasing their exposure – and the different departments were in such rivalry that they barely knew what the other was doing, with disastrous consequences. It is a saga that raises a wider moral, not just for bankers, but for investors too. Vats of ink have been spilt to explain all the macro-economic and regulatory reasons for the financial crash. But one issue that has received less attention is the trend towards fragmentation in the financial industry, not just in a structural sense (ie departments that do not talk), but a mental sense too (ie financiers operating in tunnel-vision mode). This fragmentation fuelled many of the recent failures of public policy."

Whenever information is not shared within an organization, that organization becomes a house divided against itself. Tett reports, however, that it is not just siloed information within organizations that can create problems. Problems can also be created when information is not shared between organizations. She continues:

"Just look at how the activities of groups such as AIG 'fell through the cracks' because there were numerous competing regulatory bodies in the US. Look too at how British policy-makers tried to separate out the conduct of monetary policy (managed by the Bank of England) from financial regulation (handled by the Financial Services Authority) with equally disastrous effect. However, the problem of fragmentation has also been central to the disaster in private-sector institutions. Lehman was certainly not the only bank marked by internal tribalism. Institutions such as UBS, Merrill Lynch and Citi demonstrated similar problems. And this sense of fragmentation has not just hampered information flows around banks, but has also prevented information flowing across the market too. That, in turn, has fuelled a sense of tunnel vision among some investors, with equally dismal results."

Tett notes that "the financial crisis has highlighted with painful clarity just how dangerous such tunnel vision can be," but she's encouraged by the fact that more and more people are engaging in "lateral thinking." She continues:

"The good news is that some financiers, investors and policymakers are belatedly trying to combat it. The hot new fad among regulators, for example, is macro-prudential surveillance (a posh phrase for proactive regulation that tries to join up all the dots). Investment banks are scurrying to beef up their risk management functions, and stressing the importance of holistic oversight. Meanwhile, a host of asset managers are champions of lateral thought, and are trying to understand what is happening in seemingly disconnected silos – be that in the Chinese auto industry, carbon trading markets or credit default swaps."

Tett is not naive, however, and she understands that "the curse of silos will not be easy to beat." The reasons, she asserts, are two-fold. First, bad habits are hard to break. Second, the information age brings with it a crush of data that requires experts to make sense of it. The problem is that most experts only talk to other experts in the same field. Tett concludes:

"For one bizarre paradox of the modern age is that while technology is integrating the world in some senses (say, via the internet), it is simultaneously creating fragmentation too (with people in one mental silo tending to only talk to each other, even on the internet.) And as innovation speeds up, this is creating a plethora of activities that are only understood by 'experts' in a silo – be that in finance or in numerous other fields. That pattern implies there is now a big need for 'cultural translators', who can explain what is happening in those silos to everyone else. But the cadre of cultural translators in today’s world is pitifully small (and may even be shrinking, as institutions such as media organisations and rating agencies find their business models under threat)."

Long-time readers of this blog know that I'm a strong proponent of cross-sector interaction. Breaking down barriers and establishing dialogs between experts in different arenas almost always leads to positive consequences. When I began Enterra Solutions, one of the goals I had in mind was creating a system that would help companies break down the silos that were hampering their operations. I called the system Enterra's Resilient Technology Architecture™, which I envisioned as a next-generation architecture that could establish the infrastructure for resilience on an organization-wide basis. Although Enterra's business model has evolved to focus on other areas in addition to RTA, it remains a viable solution to silo thinking.

A Resilient Technology Architecture would take advantage of the features of a service-oriented architecture to deploy dynamic, automated processes, encoded in standards-based languages and technologies, -- such as BPEL, XML, and Java, across multiple IT systems and layers within the architecture stack. A Resilient Technology Architecture would provide for the encoding of extremely complex rules, including those governing contingencies and other multi-faceted processes operating across the full breadth of the organization. The processes involved in a Resilient Technology Architecture would call data from existing data repositories, thus supporting one of the major goals of Enterra's Enterprise Resilience Management™ solution – breaking down information silos and allowing data to flow across the organization.

As I envisioned it, a Resilient Technology Architecture would also provide a mechanism to serve decision-support information to managers and senior leaders. That information would be delivered by Transparent Intelligent Interfaces™ -- rich Internet applications -- which would consolidate data about processes in progress, and present it in context so that it could serve as the basis for individual and organizational decision-making. Complex event processing (CEP), which involves the continuous processing and analysis of high-volume, high-speed data streams from inside and outside an organization to detect business-critical issues in real-time, would be an important part of architecture. Enterra's envisioned approach differs from traditional intelligence processes, which generally provide delayed analysis. The vast majority of event processing applications used today are custom-coded. Much of this custom coding effort, however, can be eliminated by using commercial-off-the-shelf CEP engines. The CEP layer would be a critical component of the RTA because it would allow the architecture to filter, correlate, and react to events in real-time or near-real-time. Events in CEP can be business, external, or system events.

The linkage between Transparent Intelligent Interfaces and automated processes would also enable automatic real-time alerts to appropriate managers in the event of a process failure, a threat event, or an emerging competitive opportunity. A Resilient Technology Architecture would establish the basis for consistent application of automated best practices, and for near-real-time updating of automated rules in an event driven service-oriented architecture. An RTA would have a dynamic knowledge base containing a repository of pre-configured business-process and best-practice templates. The knowledge base would include industry-standard rule set collections that encode automated processes that apply across an entire industry – established compliance documentation procedures and standard practices – and it would include a custom rule set collection of client-specific processes.

Because rules maintain linkages back to their source documents in this kind of architecture, they can be easily updatable to account for changing regulations, new best practices, and changes in standard operating procedures. The update capability inherent in the knowledge base establishes a system that, much like antivirus software, keeps an organization always current with regulatory requirements and performance standards – a capability that is key to resilience, and is a central element of Enterprise Resilience Management. Because a Resilient Technology Architecture is only part of broader enterprise system, Enterra now includes the concept under a broader business philosophy we call an Advanced Enterprise Management System™. Enterra's most advanced segment of AEMS involves helping Consumer Packaged Goods manufacturers with their order fulfillment process. It is one part of Enterra's drive to help create "Intelligent Supply Chains" that reduce inefficiencies and increase profitability.

January 20, 2010

The Age of Cyberwars

Nations and corporations generally think about security in significantly different ways. Since the turn of the century, however, nations and corporations are finding themselves vulnerable to the same kinds of attacks -- be they from terrorists or hackers. The headlines continue to be filled with stories about Google's threat to pull out of China over cyber attacks on its system (see, for example, "Google, Citing Attack, Threatens to Exit China," by Andrew Jacobs and Miguel Helft, New York Times, 13 January 2010, and "Google threatens to leave China after attacks on activists' e-mail," by Ellen Nakashima, Steven Mufson, and John Pomfret, Washington Post, 13 January 2010]. According to Jacobs and Helft:

"Google linked its decision to sophisticated cyberattacks on its computer systems that it suspected originated in China and that were aimed, at least in part, at the Gmail user accounts of Chinese human rights activists. Those attacks, which Google said took place [in early January], were directed at some 34 companies or entities, most of them in Silicon Valley, California, according to people with knowledge of Google’s investigation into the matter. The attackers may have succeeded in penetrating elaborate computer security systems and obtaining crucial corporate data and software source codes, though Google said it did not itself suffer losses of that kind."

Nakashima and her co-authors provide a similar story:

"The company said it has evidence to suggest that 'a primary goal of the attackers was accessing the Gmail accounts of Chinese human rights activists,' but it said that at least 20 other large companies, including finance, media and chemical firms, have been the targets of similar attacks. Google said it discovered the attack in December. It's clear that this attack was so pervasive and so essential to the core of Google's intellectual property that only in such a situation would they contemplate pulling the plug on their entire business model in China,' said James Mulvenon, a China cyber expert with Defense Group Inc."

I have written before that China is on the wrong side of the censorship battle and its continued paranoid attempts to censor the availability of information will not only ultimately fail but prove unproductive to its economic growth in the long run. New York Times' op-ed columnist Thomas Friedman believes the same thing ["Is China an Enron? (Part 2)," 20 January 2010]. He writes:

"If China forces out Google, I’d like to short the Chinese Communist Party. Here is why: Chinese companies today are both more backward and more advanced than most Americans realize. There are actually two Chinese economies today. There is the Communist Party and its affiliates; let’s call them Command China. These are the very traditional state-owned enterprises. Alongside them, there is a second China, largely concentrated in coastal cities like Shanghai and Hong Kong. This is a highly entrepreneurial sector that has developed sophisticated techniques to generate and participate in diverse, high-value flows of business knowledge. I call that Network China. What is so important about knowledge flows? This, for me, is the key to understanding the Google story and why one might decide to short the Chinese Communist Party. John Hagel, the noted business writer and management consultant argues in his recently released 'Shift Index' that we’re in the midst of 'The Big Shift.' We are shifting from a world where the key source of strategic advantage was in protecting and extracting value from a given set of knowledge stocks — the sum total of what we know at any point in time, which is now depreciating at an accelerating pace — into a world in which the focus of value creation is effective participation in knowledge flows, which are constantly being renewed. ... Therefore, the more your company or country can connect with relevant and diverse sources to create new knowledge, the more it will thrive. And if you don’t, others will. I would argue that Command China, in its efforts to suppress, curtail and channel knowledge flows into politically acceptable domains that will indefinitely sustain the control of the Communist Party — i.e., censoring Google — is increasingly at odds with Network China, which is thriving by participating in global knowledge flows. That is what the war over Google is really all about: It is a proxy and a symbol for whether the Chinese will be able to freely search and connect wherever their imaginations and creative impulses take them, which is critical for the future of Network China. ... Command China has thrived up to now largely by perfecting the 20th-century model for low-cost manufacturing based on mining knowledge stocks and limiting flows. But China will only thrive in the 21st century — and the Communist Party survive in power — if it can get more of its firms to shift to the 21st-century model of Network China. That means enabling more and more Chinese people, universities and companies to participate in the world’s great knowledge flows, especially ones that connect well beyond the established industry and market boundaries. Alas, though, China seems to be betting that it can straddle three impulses — control flows for political reasons, maintain 20th-century Command Chinese factories for employment reasons and expand 21st-century Network China for growth reasons. But the contradictions within this straddle could undermine all three. The 20th-century Command model will be under pressure. The future belongs to those who promote richer and ever more diverse knowledge flows and develop the institutions and practices required to harness them. So there you have it: Command China, which wants to censor Google, is working against Network China, which thrives on Google. For now, it looks as if Command China will have its way. If that turns out to be the case, then I’d like to short the Communist Party."

I agree with Friedman that holding on to power seems to be an overpowering motivation for the regime in Beijing. Since Google's threat was made public, other stories have been written that claim China is not just going after activists but has mounted a massive cyber espionage campaign ["Google China cyberattack part of vast espionage campaign, experts say," by Ariana Eunjung Cha and Ellen Nakashima, Washington Post, 14 January 2010]. They report:

"Computer attacks on Google that the search giant said originated in China were part of a concerted political and corporate espionage effort that exploited security flaws in e-mail attachments to sneak into the networks of major financial, defense and technology companies and research institutions in the United States, security experts said. At least 34 companies -- including Yahoo, Symantec, Adobe, Northrop Grumman and Dow Chemical -- were attacked, according to congressional and industry sources. ... Human rights groups as well as Washington-based think tanks that have helped shape the debate in Congress about China were also hit. Security experts say the attacks showed a new level of sophistication, exploiting multiple flaws in different software programs and underscoring what senior administration officials have said over the past year is an increasingly serious cyber threat to the nation's critical industries."

This is not, however, the first shot fired in the age of cyberwars. Read, for example, my post entitled Virtual War in Estonia that written back in June of 2007. The seriousness of these security threats should not be underestimated. The global economy relies on international trust, including trust in electronic transactions of all sorts. With each new breach of security, that trust erodes. The Wall Street Journal calls cyberspace "the new front among cold war foes" ["Web Is New Front Among Cold War Foes," by Siobhan Gorman, 14 January 2010]. Gorman writes:

"In the new cyber war, the targets are U.S. companies as much as embassies or spy services, because corporations hold giant repositories of sensitive information and can be easier to crack. Companies are responding in kind, often launching their own intelligence operations to counter the spies. ... While Chinese hackers dominate much of the cyber spying against governments and companies, Russian hackers have specialized in cyber crime, tapping bank accounts, holding personal computers for ransom, selling stolen U.S. government information and attacking the Web sites of political opponents of the Russian government, security specialists say. U.S. intelligence officials acknowledge that they also engage in cyber spying against China, Russia and other countries, but they decline to provide details."

McAfee, the cyber security company, agrees with the Journal that cyber warfare is here to stay ["McAfee warns of Cold War-style computer attack," by Alejandro Martínez-Cabrera, San Francisco Chronicle, 18 November 2009]. Martínez-Cabrera reports:

"[McAfee,] the Santa Clara computer security firm concluded that countries like Russia, China, France, Israel and the United States have the technological capabilities to coordinate state-to-state online attacks and are quietly building their computerized arsenals. 'We believe we're seeing something a little like a cyber-Cold War, where these nations have the ability to integrate these capabilities to their military strategies but are still very hesitant to launch these attacks,' said Dmitri Alperovitch, vice president of threat research at McAfee. 'They know the Internet is the ultimate equalizer, and there's still a great chance of a strategic attack blowing back and affecting the country that launched it.' As the digital arms race threatens to escalate, the report's authors expressed the most concern for the vulnerability of privately owned critical infrastructure, such as power grids, transportation, telecommunications, and health and financial services."

The U.S. Government is treating this new front seriously and has announced that it will establish a new joint cyber command. Maryland is mounting a stiff campaign to be designated home of this command which could bring with it some 25,000 jobs. Gorman continues:

"The ambitions of China's People's Liberation Army in cyberspace have been growing, as detailed in an October report from the U.S.-China Economic and Security Review Commission, a bipartisan panel appointed by Congress. Cyber attacks have become of such concern among the U.S. military and its allies in the North Atlantic Treaty Organization that, as a part of an overhaul of NATO's guiding strategy, the alliance is expected to debate whether a cyber attack should be covered by the NATO charter, which dictates that an 'armed attack' on one ally must be treated as an attack on all. Several Chinese military departments are responsible for components of cyber spying, such as the General Staff Department Third and Fourth Departments, according to the U.S.-China Commission. Together these divisions oversee electronic spying and attack efforts, as well as research and development. Some Western analyses of the Third Department say it maintains a staff of 130,000 people. The PLA's cyber warfare militia units—which draw on civilians in the telecommunications and technology sectors and on academia—both defend and attack computer networks and conduct psychological warfare and deception operations. One prominent Chinese hacking group called Javaphile, which mounted a cyber attack on the White House, has a formal consulting relationship with a Chinese government security office."

If all that sounds a bit "out there" for you, you might recall that last July the U.S. and South Korea experienced a number of cyber attacks ["Cyberattacks Jam Government and Commercial Web Sites in U.S. and South Korea," by Choe Sang-Hung and John Markoff, New York Times, 9 July 2009]. Those attacks were "aimed at 27 American and South Korean government agencies and commercial Web sites." The attack was launched by "50,000 to 65,000 computers [that] had been commandeered by hackers and ordered to flood specific Web sites with access requests, causing them to slow or stall. Such robotic networks, or botnets, can involve more than a million computers. The Web sites of the Treasury Department, Secret Service, Federal Trade Commission and Transportation Department were all affected." A year earlier, "Russian hackers hijacked American identities and U.S. software tools and used them in an attack on Georgian government Web sites during the war between Russia and Georgia" ["Hackers Stole IDs for Attacks," by Siobhan Gorman, Wall Street Journal, 17 August 2009]. The attacks on Georgia were significant because they occurred simultaneously with military operations that involved people fighting and dying. The attacks "significantly disrupted Georgia's communications capabilities, disabling 20 Web sites for more than a week." Gorman continues:

"Cyber-warfare has outpaced military and international agreements, which don't take into account the possibility of American resources and civilian technology being turned into weapons. Identity theft, social networking, and modifying commercial software are all common means of attack, but combining them elevates the attack method to a new level, said Amit Yoran, a former cybersecurity chief at the Department of Homeland Security. 'Each one of these things by itself is not all that new, but this combines them in ways we just haven't seen before,' said Mr. Yoran, now CEO of computer-security company NetWitness Corp."

Not just nation-states and large corporations are subject to cyber attacks. Small U.S. firms have also come under attack ["European Cyber-Gangs Target Small U.S. Firms, Group Says," by Brian Krebs, Washington Post, 25 August 2009]. He reports:

"Organized cyber-gangs in Eastern Europe are increasingly preying on small and mid-size companies in the United States, setting off a multimillion-dollar online crime wave that has begun to worry the nation's largest financial institutions. ... Because the targets tend to be smaller, the attacks have attracted little of the notoriety that has followed larger-scale breaches at big retailers and government agencies. But the industry group said some companies have suffered hundreds of thousands of dollars or more in losses."

Returning to the story that started this post, analysts claim that Google's threat to stop doing business there puts Chinese authorities on the horns of a dilemma ["China's Google dilemma: Soften on censorship or anger millions of Internet users," by Steven Mufson, Washington Post, 14 January 2010]. Mufson lays out the dilemma:

"Google's threat to shut down its Chinese Web site and offices over cyberattacks and censorship puts the government here in the awkward position of having to choose between relaxing restrictions and raising the ire of the roughly 80 million Chinese people who use the search engine. Few political and Internet analysts appear to doubt that China will stick to its tough stance and reject Google's proposal to stop censoring search results on its Chinese sites. But Google's audience of Chinese 'netizens,' a few of whom placed flowers outside the company's Beijing, ... is large enough to make such a reaction risky."

As noted above, I agree with Mufson and Friedman that China is unlikely to back down in this dispute. Google insists it will try to negotiate with Chinese leadership; but I'm not hopeful that they will succeed in achieving any major softening in the Chinese position. That's too bad. China's future holds much promise, but its aging political philosophy will eventually be seen as an anchor to progress. There is no reason that China couldn't change. Over the past 30 years it has demonstrated remarkable political flexibility on the economic front. Although censorship is an artifact of an even more authoritarian regime, it lingers in the Chinese system because those in authority understand that information is power -- and they want to keep that power.

January 19, 2010

Robots You Can Love

Have you ever wanted a fluffy, baby animal for a pet -- especially one that stays forever young, never has to be fed, house-trained, spayed or neutered? Well the Japanese think they have just the animal for which you are looking. They call it PARO and it's a loveable replica of harp seal, "the same adorable little creatures that are clubbed to death in their tens of thousands by Canadian fishermen each year" ["The serious truth behind the adorable PARO baby seal-bot," by Loz Blain, Gizmag, 7 January 2010]. Blain reports that "PARO is an animatronic baby seal companion robot designed by some very clever people with one simple purpose in mind - to make you love him. From everything we've seen, he's exceptionally talented at his job, melting the hardest hearts and bringing a big silly smile to everyone who meets him." You might think the "serious truth" behind PARO is to get people to stop clubbing baby harp seals; but, you'd be wrong. Blain continues:

"Although he mightParoroboticsealcompanion be a wonderful toy, PARO's real purpose is to address a serious problem that's affecting Japan right now, and will soon spread across much of the Western world. Japan is facing serious demographic problems in the next 30 years - a slow birth rate in recent decades means that the population is aging at an alarming rate. Put simply, the Japanese tend to live longer than almost anyone in the world, but they're having very few children - and it's expected that by 2030, nearly a third of all Japanese citizens will be over the retirement age of 65. Nobody knows this better than the Japanese themselves, who are arming themselves with technology at a furious rate; they're developing an astounding array of robotics to keep the country producing as the size of its workforce dwindles - they're light years ahead of the West on things like lightweight, safe personal transport solutions, powersuit-style exoskeletons for the weak and infirm and domestic automation. There's a massive economy developing to produce all sorts of technology that can help the elderly and disabled get on with a good quality of life while freeing up the younger generation to keep the country running. And while that's going to be big business in Japan in the near future, it's going to be big business across the western world in the longer term, because all the trends are pointing to lower birthrates across the first world that will put us all in a similar position."

This is not the first post in which I've pointed out that Japan's fascination with robotics stems from its desire to remain productive as its population ages. As one of the world's most xenophobic countries, Japan doesn't want an influx of immigrants to replace its aging work force (see my post entitled Demographics and Robots). For a more in depth discussion about global demographic changes, see my recent post entitled A New Year's Look at Demographics. Returning to the subject at hand, the Japanese are developing robotic pets because studies have shown that animal-assisted therapy can reduce stress-induced symptoms. People who own pets require less medical care and live longer. One site that promotes such therapy reports:

"A study of 92 patients hospitalized in coronary care units for angina or heart attack found that those who owned pets were more likely to be alive a year later than those who did not. The study found that only 6 percent of patients who owned pets died within one year compared with 28 percent of those who did not own pets. The therapeutic use of pets as companions has gained increasing attention in recent years for a wide variety of patients -people with AIDS or cancer, the elderly, and the mentally ill. Unlike people, with whom our interactions may be quite complex and unpredictable, animals provide a constant source of comfort and focus for attention. Animals bring out our nurturing instinct. They also make us feel safe and unconditionally accepted. We can just be ourselves around our pets."

Blain continues:

"As the Blues Brothers sang, everybody needs somebody to love. The therapeutic effect of companionship and affection is well understood to enhance both physical and mental wellbeing - it's one of the reasons so many people keep pets. But pets can be a difficult proposition when you're talking about the elderly. For starters, a significant proportion of elderly or disabled folk aren't able to properly care for a pet - then there's the fact that you can't take them with you into a nursing home or hospital situation, because of all the fluff and fur and poop and mayhem and allergies they cause. Which is why animatronic pets like PARO, designed purely to tickle the nurturing and affection circuits in your brain, are starting to pop up - it's less a matter of the Japanese being obsessed with everything 'Kawaii' (cute), and more to do with the fact that there will soon be a lot of lonely older folk around whose kids must, for society's sake, be too busy working to give them as much time and affection as they need."

Japan's National Institute of Advanced Industrial Science and Technology (AIST) calls PARO a "mental commitment robot." I would have thought that "companion robot" would have made PARO a bit more attractive! The AIST web site states that "Mental Commitment Robots are designed to provide 3 types of effects: psychological, such as relaxation and motivation, physiological, such as improvement in vital signs, and social effects such as instigating communication among inpatients and caregivers." If everyone agrees that animal-assisted therapy is such a good idea, you might wonder why AIST selected a seal instead of a dog or a cat. Blain explains:

"AIST originally experimented with building animatronic cats and dogs as the obvious companions of choice, but quickly found that while such familiar animals were initially charming, they lost their appeal when people automatically started comparing them with real animals. The baby seal form is familiar enough to be cute and adorable, but because most people don't know exactly how real baby seals behave, it's easier to get across the comparison boundary and just enjoy the fluffy little robots for what they are. And what they are is exceptionally compelling, considering that this is very early days. Although real baby seals are nocturnal, PARO is awake during the morning and afternoon and gets 'sleepy' in the evening. It has five senses, and uses them to perceive touch, light, sound, temperature and posture. He's programmed to behave as much as possible like a real animal, waking up a little dazed and confused, enjoying cuddles and pats, complaining if he wants attention or 'food' (a battery charge), and reacting with fear and anger to being hit. He gradually learns to respond to whatever name you keep calling him, as well as various other audio cues like greetings and praise. PARO knows where you're patting him and reacts accordingly, nuzzling up to your hand or wriggling away if you're touching him in places he doesn't like. He closes his eyes and snuggles up when he's happy and content, and gets angry if he feels mistreated. He blinks and bats his big eyelashes at you and meeps pitifully for affection. He particularly likes being treated and petted in familiar ways, which is a crucial part of developing a long-term relationship with his owners."

That all sounds a bit too time-consuming for a harried business person, but PARO isn't designed for them. It was designed for people with a lot of time on their hands. Blain reports, however, that at trade shows even the hard hearts of businessmen were softened. He concludes:

"We were lucky enough to watch PARO work his charms on a stream of very serious-looking Japanese businessmen at a robotic trade show in Tokyo. One after another, they looked at the little baby seal with consternation, then touched him or patted him once or twice, and then absolutely melted, each one walking away with a big goofy smile and generally feeling all the better for meeting him. Job done. PARO's remarkable ability to cheer you up (yes, you, whether you like it or not. This little fella really gets under your skin) is disturbingly powerful right now - and of course, there's going to be a version 2, 3, 4 and 5 in the next few years that will be even better at the job. Robot pets with all the emotional and wellbeing advantages of real pets, but that never poop, bite, scratch, dig holes, get sick or run away. They're well on their way - and for an aging Japanese population, it's not a moment too soon."

Undoubtedly, robotic pets will find their way into the arms of children as well the elderly. Some less sophisticated versions of "pet" robots are already favorites with children, including uncuddly pets like Pleo the robotic dinosaur. Companion robots might one day even catch on with business people who decide that having a cuddly pet running around a high-stress office is good for morale.

January 18, 2010

The Challenge of Building or Re-building Impoverished Communities

The tragic aftermath of events in Haiti remind us how fragile manmade communities can be when faced with the awesome power of nature. Yet we know that some communities prove more resilient than others when crises occur. The general rule, unfortunately, is that resiliency directly correlates with wealth. The more money a community can spend on hardening its infrastructure the better it does. New York Times' op-ed columnist David Brooks recalls how much better San Francisco fared than Haiti when it was hit by an earthquake of similar magnitude ["The Underlying Tragedy," 15 January 2010]. He writes:

"On Oct. 17, 1989, a major earthquake with a magnitude of 7.0 struck the Bay Area in Northern California. Sixty-three people were killed. This week, a major earthquake, also measuring a magnitude of 7.0, struck near Port-au-Prince, Haiti. The Red Cross estimates that between 45,000 and 50,000 people have died."

The purpose of Brooks' column is not discuss how devastating natural disasters can be. He wants people to know that it is poverty that makes some disasters worse than others. He continues:

"This is not a natural disaster story. This is a poverty story. It’s a story about poorly constructed buildings, bad infrastructure and terrible public services. On Thursday, President Obama told the people of Haiti: 'You will not be forsaken; you will not be forgotten.' If he is going to remain faithful to that vow then he is going to have to use this tragedy as an occasion to rethink our approach to global poverty."

As a right of center moderate, Brooks' voice is more likely to gain an audience than commentators on either the liberal or conservative fringes. He's not necessarily pointing a finger at the Obama administration since no administration (Republican or Democrat) has managed to break the code about how to reduce global poverty. If he's accusing the President of anything, it's hyperbole. I suspect Brooks believes that in a few weeks or months the tragedy of Haiti will be old news, like Hurricane Katrina or the tsunami that leveled Banda Aceh. Haiti's best hope lies in the fact that, geographically speaking, it sits in America's front yard. Brooks asserts that if the President's words are to be more than rhetoric, "he’s going to have to acknowledge a few difficult truths." He continues:

"The first of those truths is that we don’t know how to use aid to reduce poverty. Over the past few decades, the world has spent trillions of dollars to generate growth in the developing world. The countries that have not received much aid, like China, have seen tremendous growth and tremendous poverty reductions. The countries that have received aid, like Haiti, have not."

There are reasons, of course, that countries like China fare better economically than countries like Haiti. Education (Haiti has 53% literacy compared to China's 91%) and healthcare (a Haitian's life expectancy is 61 years compared to a Chinese individual's 73.5 years) come to mind. But such differences alone can't explain why programs to reduce poverty have failed generally. Brooks continues:

"In the recent anthology 'What Works in Development?,' a group of economists try to sort out what we’ve learned. The picture is grim. There are no policy levers that consistently correlate to increased growth. There is nearly zero correlation between how a developing economy does one decade and how it does the next. There is no consistently proven way to reduce corruption. Even improving governing institutions doesn’t seem to produce the expected results."

I have written a lot about corruption over the past few years. My opinion is that fighting corruption is the single most important thing that needs to be done before serious development efforts are undertaken. The rub, as Brooks points out, is that while improving governance institutions and practices is important, corruption lives and breeds in the hearts of individuals not organizations. Science fiction writer David Brin remarked, "It is said that power corrupts, but actually it's more true that power attracts the corruptible." Changing the hearts of men is much more difficult than tinkering with policies and organizational structures. The only approach that can root out corruption is creating a system where people are forced to govern in the bright light of public scrutiny. Unfortunately, that is easier said than done. Brooks continues:

"The chastened tone of these essays is captured by the economist Abhijit Banerjee: 'It is not clear to us that the best way to get growth is to do growth policy of any form. Perhaps making growth happen is ultimately beyond our control.'"

Ouch! No one in the development field wants to believe that spurring development defies good plans and policies. I have consistently promoted the idea that development progresses on the backs of entrepreneurs. The logical implication of that assumption is that policies that promote a better climate for entrepreneurs also foster a better climate for development. A number of analysts have noted that the simple publication of the World Bank's Doing Business Index spurred countries to make their laws and regulations more business friendly. As a result, numerous countries have improved their ability to attract foreign direct investment. Attracting foreign direct investment is critical if sustainable development is going to be achieved. Brooks continues with his list of hard truths:

"The second hard truth is that micro-aid is vital but insufficient. Given the failures of macrodevelopment, aid organizations often focus on microprojects. More than 10,000 organizations perform missions of this sort in Haiti. By some estimates, Haiti has more nongovernmental organizations per capita than any other place on earth. They are doing the Lord’s work, especially these days, but even a blizzard of these efforts does not seem to add up to comprehensive change."

On this point I agree with Brooks. What Haiti needs is real jobs not make-work projects. Entrepreneurs, not NGOs, create jobs. NGOs can help foster the conditions that help entrepreneurs get started, but they are not in the business of business. Brooks continues:

"Third, it is time to put the thorny issue of culture at the center of efforts to tackle global poverty. Why is Haiti so poor? Well, it has a history of oppression, slavery and colonialism. But so does Barbados, and Barbados is doing pretty well. Haiti has endured ruthless dictators, corruption and foreign invasions. But so has the Dominican Republic, and the D.R. is in much better shape. Haiti and the Dominican Republic share the same island and the same basic environment, yet the border between the two societies offers one of the starkest contrasts on earth — with trees and progress on one side, and deforestation and poverty and early death on the other. As Lawrence E. Harrison explained in his book 'The Central Liberal Truth,' Haiti, like most of the world’s poorest nations, suffers from a complex web of progress-resistant cultural influences. There is the influence of the voodoo religion, which spreads the message that life is capricious and planning futile. There are high levels of social mistrust. Responsibility is often not internalized. Child-rearing practices often involve neglect in the early years and harsh retribution when kids hit 9 or 10. We’re all supposed to politely respect each other’s cultures. But some cultures are more progress-resistant than others, and a horrible tragedy was just exacerbated by one of them."

Haiti, of course, is not alone is having to overcome cultural challenges to achieve progress. India's lingering caste system is also holding that country back. Ethiopia and Yemen are plagued by a culture held back by the widespread use of Qat, a narcotic leaf. Brooks is correct, however, that when culture is a problem, the problem should be corrected not tolerated.

"Fourth, it’s time to promote locally led paternalism. In this country, we first tried to tackle poverty by throwing money at it, just as we did abroad. Then we tried microcommunity efforts, just as we did abroad. But the programs that really work involve intrusive paternalism. These programs, like the Harlem Children’s Zone and the No Excuses schools, are led by people who figure they don’t understand all the factors that have contributed to poverty, but they don’t care. They are going to replace parts of the local culture with a highly demanding, highly intensive culture of achievement — involving everything from new child-rearing practices to stricter schools to better job performance. It’s time to take that approach abroad, too. It’s time to find self-confident local leaders who will create No Excuses countercultures in places like Haiti, surrounding people — maybe just in a neighborhood or a school — with middle-class assumptions, an achievement ethos and tough, measurable demands."

Hear, Hear! Business people are naturally goal- and result-oriented. If you've never heard about the Harlem Children's Zone, or the results it has achieved, I recommend you click on the link and read about its stunning success. Brooks concludes:

"The late political scientist Samuel P. Huntington used to acknowledge that cultural change is hard, but cultures do change after major traumas. This earthquake is certainly a trauma. The only question is whether the outside world continues with the same old, same old."

Not every past approach has failed (see my post entitled Programs that Fight Poverty), but that is not really Brooks' point. The underlying point of his column is that scalability is hard to achieve. The Harlem Children's Zone works because the entire community is behind it. Parents whose children aren't selected in lotteries to participate in some of the programs are devastated. That kind of commitment and passion is required to make communities successful and resilient. Is it possible to scale up a program like that for an entire country? Probably not. The key is community involvement. If programs can be found and implemented that allow Haiti to rise Phoenix-like, community by community, out of the rubble so that, a generation from now, it stands as a beacon of progress in the Caribbean, then President Obama's promise that Haiti "will not be forgotten" would prove to be more than political rhetoric.