Short takes – 9-29-06

One of the great information resources the Internet Scout Report. Here are three items from today’s report which might be of interest:
The Global Technology Revolution 2020 [pdf]
The RAND Organization never shies away from complex or difficult questions,
and in one of their most recent publications, they have taken on a weighty
topic indeed. Released earlier this year, this report authored by a team of
experts addresses the ongoing technology revolution in a variety of sectors,
including biotechnology, nanotechnology, and information technology. In this
316-page work, the authors assess a sample of 29 countries across the
spectrum of scientific advancement with respect to their ability to
implement a number of key technology applications, including cheap solar
energy and wireless communications. Along with the work’s four primary
chapters, visitors can also make use of the eleven appendices, which include
explorations of related themes, such as technology and terrorism and leading
trends in information technology. [KMG]
An Agenda for Harnessing Globalization [pdf]
Getting a handle on what the phrase “globalization” means can be a bit like
trying to lasso a fast-moving cloud. Does globalization mean the cross-
pollination of different musical styles? Is it the vast geographical
expansion of major multinational corporations into remote locales? Well, of
course, it’s both of these things and quite a bit more. In a paper that
appeared in the Autumn 2006 edition of The Washington Quarterly, two
Brookings Institution colleagues articulated an agenda for harnessing the
power of globalization. In their 14-page work, Ashraf Ghani and Clare
Lockhart offer their own appraisal of globalization’s appeal (and potential
shortcomings) in terms of creating opportunity for many of the world’s
people. The paper will be of great interest to persons concerned with or
interested in substantial policy issues, political economy, and economic
development. [KMG]
Private Sector Development
The World Bank is perhaps one of the world’s premier organizations regarding
development opportunities, and they are widely recognized for their work in
the developing world. With this latest outing, they have created the Private
Sector Development (PSD) Blog, which is designed to be both quirky and
opinionated, qualities which are never in short supply as one wanders around
the web. Having said that, the site is rather erudite, as it provides
intelligent comments on topics that include disaster recovery, foreign
direct investment, and corporate governance. New users will want to browse
through some of the recent posts, and then perhaps look at the “Categories”
section on the left-hand side of the page for future explorations. As might
be expected, each post also contains links to external readings from a
diverse set of publications, such as the Financial Times and like-minded
ventures. [KMG]
From The Scout Report, Copyright Internet Scout Project 1994-2006.

Tech in schools

From eSchool News online – Study: Ed tech has proven effective:

When implemented carefully–with adequate attention paid to training, support, and evaluation–technology has been found to have a significant positive impact on student learning across all areas of the curriculum, according to a new report. So, why do critics of educational technology still decry the billions of dollars being spent on ed tech in schools across the nation? For one thing, many educators have “miscalculated” the difficulty of implementing technology effectively, the report says–and ed-tech advocates also might have “over-promised” their ability to deliver a learning return on their investment.

The story goes on to talk about a new study Technology in Schools, prepared by the Metiri Group and commissioned by Cisco Systems. The report finds that:

Researchers find that extracting the full learning return from a technology investment requires much more than the mere introduction of technology with software and web resources aligned with the curriculum. It requires the triangulation of content, sound principles of learning, and high-quality teaching—all of which must be aligned with assessment and accountability.

Not exactly earth shattering news. But maybe we can move the debate now away from its techno-centric focus (“what is the effect of the technology”) to a learning focus (“what information/skills do people need and what is the best way for them to learn”).
Note that I said learning, not teaching. Teaching is the means – learning is the goal. New methods (and technologies) for teaching are fine. But it should be all about what the learners need (I hate to call them students, because that puts them in the passive situation) – not what the teachers need.
So lets start talking about learning styles, use of technology to enhance learning (including serious games) and access to information. Please?

Patent reform in 2007?

One piece of innovation/competitiveness legislation that will not be finished this year is patent reform. However, as the blog Intellectual Property Watch points out, US Patent Reform: Could 2007 Be The Year?:

US information technology companies’ push to overhaul their country’s patent system made little progress in the US Congress in 2006 due to pushback from the pharmaceutical and biotechnology industries. But the hiring of a trio of well-connected lobbyists with a history in the tort reform movement promises to amplify the debate in 2007.

What they are talking about is the creation earlier this year of the Coalition for Patent Fairness – which has authored an industry consensus white paper.
Much of the current problem revolves around the differences between the pharma/biotech and IT industries. Changes in the law that would help one could make things less attractive for the other. There is the beginning of a discussion on changing that. Today and tomorrow, the University of Michigan Law School is hosting a conference on “Patents and Diversity“:

The current debate over patent reform exposes critical differences in the way that patents are used and viewed in different sectors – especially in the difference between discrete product technologies (pharmaceuticals) and complex product technologies (IT) The present “unitary” patent system is limited in its ability to account for such differences. Yet as the patent system expands in scope and significance, with many billions of dollars at stake, the assumption that one size fits all appears increasingly untenable and costly. This international conference examines the differences among innovation environments, how they are currently addressed, implications of uniform vs. differentiated treatment, and options for optimizing the functioning of the patent system across fields and environments.

The combination of political and academic may provide the horse power to get something done next year.

Congress update

On Tuesday, Senate Majority Leader Frist and Democratic Leader Reid introduced the competitiveness bill – S. 3936. A bill to invest in innovation and education to improve the competitiveness of the United States in the global economy. As of yesterday, the bill had almost a third of the Senate as cosponsors from both sides of the aisle.
The bill was placed directly on the Senate calendar – which means it could be taken up by the full Senate at any time. However, there was talk about moving the bill “at the appropriate time.” As I mentioned earlier, I think it is doubtful that the Senate will get to it before the election. But we will see.
In any event, the Senators are to be commended for moving the issue along. Having worked as Senate staff, I know how rare it is to get a bill on such a major issue sponsored by the leaders of both sides.

Design and mangement II

Apropos my final comment in my last posting, Bruce has usefully pointed us to A Story You Need To Read About Innovation.
That story is by Roger Martin – Tough Love:

Design, in short, is becoming an ever more important engine of corporate profit: It’s no longer enough simply to outperform the competition; to thrive in a world of ceaseless and rapid change, businesspeople have to outimagine the competition as well. They must begin to think–to become–more like designers.
Even as design gets its due, however, some business types wish the clock could be turned back to a time before all those designers were running around urging people to let their creative juices flow. And they resent that even as design is forced upon them or insinuated into their work, the designers themselves are often not held accountable for meeting firm revenue and profit targets–the primary form of business discipline.

How we train people to constructively bridge that tension is the key to sustained competitive advantage:

Managing the yin and yang of business-as-usual and business-by-design means striking a balance between any number of countervailing impulses: Give people the freedom to follow their nose, but hold them accountable for their performance. Set a high bar, but recognize that failure is an unavoidable consequence of pushing into new territory. Do everything possible not just to thrill your customers but also to wring costs and efficiencies out of vendors and suppliers. The biggest challenge for all of us, designers and businesspeople alike, is to become equally adept at quantifying the now and intuiting what’s next. There’s simply no other way to win.

So, where are the government programs – like all the (necessary) math and science education programs – to facilitate the creative new business-design thinking and education?

Competitiveness, part III

Bruce Nussbaum’s take – Why The World Economic Forum Is Wrong About US Competitiveness.

Despite conventional economic wisdom, which believes this stuff, there has been no tight correlation between interest rates/dollar strength and the twin deficits. I should know because I wrote about this for a dozen years when I ran the editorial page of Business Week.
The fact is that the innovative/entrepreneurial prowess of the US attracts as much capital is it needs from around the world and its deep capital markets allow China and others to recycle their surplus dollars. We get their goods, they get our paper–and jobs and growth. So far, this has worked out. It could end, sure, if a political crisis occurred but it hasn’t yet.
I do think that US competitiveness is eroding and it is because Brand USA is eroding. However you think about the Iraq war, it has generated the worst anti-Americanism around the world in many decades. The Pew polls show horrendously high percentages of people really mad at the US and not just in the Middle East but in major markets in Europe, Asia and Latin America. Are they likely to take our their anger in their buying decisions? You bet. In their investment decisions? You bet.
If you want really want to worry about US competitiveness, worry about our visa policy since 9/11 that keeps out many of the best and brightest students, scientists and immigrants. This is the very lifeblood of our innovative

I hate to disagree with Bruce, but on this one he has a good point – but is wrong on the others. His good point is that Brand America is in trouble – something I have been righting about for awhile. But the twin deficit – dollar/interest rate linkage still exists. Just because we haven’t crashed yet doesn’t prove we haven’t fallen off the cliff (of course it doesn’t prove we have either — but the signs are beginning to look worse, see the data on investment incomes.

And I have to disagree that the most important thing is our visa policy. Yes, it is a problem. But I can think of a dozen more — including a federal government the refuses to invest in innovation, an education system based on a 19th Century model and a patent system that has been described as “sand in the gears.”
Oh and by the way, while attracting talent from outside is good, educating the talent we have is better – see my next discussion.

Competitiveness, part II

Steven Pearlstein has an interesting take on the new competitiveness rankings in No Longer No. 1, and No Wonder – Pearlstein juxtaposes the WEF report with a recent NAM report:

One, the annual ranking from the World Economic Forum — the elite business organization that runs the annual winter schmooze-fest in Davos, Switzerland — finds that the United States has fallen from No. 1, a position it shared with Finland for most of a decade, to an unsettling sixth place.
And the National Association of Manufacturers, along with the Manufacturers Alliance, is scheduled to release an update of an earlier study today showing that the burdens of regulation, taxation, litigation and health care are even greater than they were in 2002, when the “cost gap” between U.S. companies and those of our largest trading partners was 22.4 percent.
The predictable response from the business community will be to use these studies to warn of impending economic ruin unless the government adopts the Republican agenda of less regulation, lower taxes, tort reform, and relieving companies of health-care and pension costs.
Don’t be fooled. These reports speak to the embarrassing failure of a decade of Republican rule in improving U.S. competitiveness. Business taxes, as a percentage of anything you want to measure, are at their lowest level in decades. The Bush White House has subjected new regulations to rigorous cost-benefit analysis. Several reforms make it less attractive for shareholders, workers and consumers to file frivolous lawsuits, but not necessarily for businesses. And in case you hadn’t noticed, businesses have already made tremendous strides in shifting health-care and pension costs to workers.
In fact, an alternative reading of the new reports suggests that the business community needs to do some serious thinking about competitiveness and economic policy.

Amen to that! I would also point out the juxtaposition of what the business community (or at least its Washington representatives) often talks about and what businesses are doing strategically. Most of business gets it — this new era is about innovation in business models and processes, not just new gadgets. It is about finding creative ways to meet customer needs – and helping customers discover new needs. Washington’s discussion is about the same old solutions.
Pearlstein also makes an interesting point about the new rankings:

Indeed, a reasonable inference from the World Economic Forum rankings is that the best way to compete is to adopt the Nordic model of high taxes, a generous social safety net and lightly regulated labor markets. Scandinavian government spending accounts for more than half the economy, as opposed to a third in the United States.

I don’t advocate that position — but you have to look carefully at what other countries are doing right. And one of the things that these countries are doing right is an emphasis on government programs to compliment private sector actions on innovation. While the Nordic countries are investing in innovation, the US is eliminating programs such as the Advance Technology Program.
Go figure.

Budget deficits, health care and competitiveness

The latest World Economic Forum (WEF) competitiveness rankings are out – and the US has slipped to number 6. Business Week – Is the U.S. Losing Its Competitive Edge? points to the core problem:

While the U.S. excelled in such business categories as market efficiency and innovation, its score in the World Economic Forum’s annual ranking was dragged down by government-related measures. Out of 125 countries, the U.S. was 40th in health care and primary education and a lowly 69th in macroeconomy, reflecting its large budget and trade deficits. In macroeconomy, the U.S. scored lower than such nations as Vietnam, Venezuela, Uganda, the Philippines, Peru, and Nigeria. (Ouch.)
. . .
Was the deck stacked against the U.S.? That depends on whether you agree with the forum that the U.S. deserves big demerits for being the world’s biggest debtor, running a large budget gap, and having a current account deficit amounting to a record 6.5% of gross domestic product. Nouriel Roubini, a New York University economist who worked on the rankings, said that the U.S. score was probably also hurt by the government’s mishandling of Hurricane Katrina, relatively high infant mortality and low life expectancy, and the prevalence of AIDS.

The Wall Street Journal focused on the budget deficit:

“The U.S. remains a very competitive economy,” said Augusto Lopez-Claros, the Forum’s chief economist. “It leads in innovation and patent registrations, has some of the best universities in the world, and it has extremely high level of collaboration between universities and industry,” he said. “However, how you manage your public finances is very important.”
Serial budget deficits in the U.S. have led to rising public debt, which means an increasing portion of government spending goes on debt service. That means less money is available for spending on infrastructure, schools or other investments that could boost productivity. Heavy government borrowing, by competing for funds in financial markets with the private sector, also tends to drive up businesses’ borrowing costs.

As the New Economist blog points out, Lopez-Claros summarized the keys:

The top rankings of Switzerland and the Nordic countries show that good institutions and competent macroeconomic management, coupled with world-class educational attainment and a focus on technology and innovation, are a successful strategy for boosting competitiveness in an increasingly complex global economy.

While we should not put too much stock in these types of composite rankings, the WEF Competitiveness Report should be seen as a shot across the bow – especially to Washington.
1. Switzerland
2. Finland
3. Sweden
4. Denmark
5. Singapore
6. U.S.
7. Japan
8. Germany
9. Netherlands
10. U.K.
11. Hong Kong
12. Norway
13. Taiwan, China
14. Iceland
15. Israel
Source: Global Competitiveness Report, World Economic Forum

Innovation in unlikely places

On the Business Week blog – Learning from Informal Urban Economies: “If necessity is the mother of invention, then the residents of squatter cities will have much to teach us about resourcefulness and innovation.”
From a conversation with Stewart Brand on innovation in squatter cities:

Have you witnessed a business actually tapping into a squatter city and devising an innovative product or service as a result?
Yes. The AES Corporation, a leading power company, asked me to give a talk in Latin America. While I was there, I learned that squatter cities steal their power…there are illegal power chords siphoning electricity strung for miles. In Buenos Aires, stolen power is better than no power, but it has problems. It’s dirty power because it’s not regulated. It can be too strong and fry a fridge or a TV. The power is flaky. And dangerous. In Caracas, four people a month are killed stealing power.
So AES sent people into the field. They wanted to see how to convert thieves into customers. They realized there are consumers in squatter cities. And people were interested in getting clean power regularly. The problem was that squatters’ incomes are burst-y: They have some weeks with no money coming in, or others when they suddenly have it.
So paying a bill monthly doesn’t work. So AES came up with a token system, and squatters could use power meters fed by tokens. Folks can buy power tokens when they can. This system is now in progress. And squatters are now part of the formal economy in parts of Latin America.

By the way, the electricity by token system is an old idea – and was still in use in England when I encountered it a decade ago. Sometimes, reviving an old idea is a great innovation in a new context.

Design and management

This from Bruce Nussbaum’s blog – NussbaumOnDesign:Is Design The New Management Consultancy?. The answer is “almost but not quite.” As he notes, some serious work is being done at both d-schools and b-schools. As I’ve noted before, North America has the potential for a breakthrough in this area, led by the trio of Roger Martin, Dean of the Rotman School of Business at the University of Toronto; David Kelly, the Design Engineering Professor at Stanford and founder of the D-School; and Patrick Whitney, the Director of the Institute of Design at the Illinois Institute of Technology, But policymakers aren’t there yet in giving this change the boost it needs.
Also – check out the latest issue of Inside Innovation, the new Business Week magazine that Nussbaum edits.