united states | Paul Wallbank - Communications Professional

Crowdfunding the energy revolution

As technology changes so to do business and investment rules. The solar energy market is a good example.

“We have no shortage of investors,” says Tom Nockolds of Sydney community solar farm group Pingala in an Australian Broadcasting Corporation’s report on small business power projects.

The ABC’s report focuses on Bakers Maison, a suburban Sydney bakery that raised 400,000 dollars to extend its solar solar electricity system to slash its power bills and promises investors a seven percent return on investment.

Seven percent is very good in these days of low yields so it’s not surprising investors are lining up for projects.

It’s also an indictment on the modern banking system that smaller businesses like Bakers Maison have to issue debt directly to the market rather than getting a loan, which would have been normal a generation ago but today Australian banks would rather lend to property speculators than productive businesses.

This isn’t to say such fund raising is without problems as there is a real risk of fraud which Australia’s prescriptive fund raising laws are designed to avoid, even at the cost of stopping genuine investments.

“We’ve had to duck and weave our way through the regulations to set up this kind of operation,” says Warren Yates of Clear Sky Solar Investments – another volunteer group – about the laws which were developed after the financial scandals of the 1960s mining boom and the 1980s entrepreneur period.

As a consequence, the ABC story points Australia is lagging jurisdictions like Germany, Denmark and Scotland in developing these schemes.

With the banking system having left the field of funding growing businesses and responsibility largely falling on volunteers to provide services, reforms encouraging community crowdfunding need to be developed to provide capital to industry and local initiatives.

That many of the current reforms in this area such as America’s Jobs Act or Australia’s Innovation Agenda focus on a narrow set of industries – specifically the tech startup sector – which means we’re missing most the value in an evolving economy. A bakery, factory or hotel deserves the same investment advantages as the next potential tech unicorn and they could employ just as many people and deliver even more benefits to the broader economy.

New technologies have always demanded new investment and business rules and we’re seeing those pressures developing today, all of us have to demand regulators and politicians pay attention to the changing needs of our economy.

With investors clamouring for new opportunities and businesses wanting capital, it would be a tragedy to miss the possibilities of today’s technological, financial and energy revolutions.

Breaking the small business drought

The small business sector is essential to the broader economy’s health and diversity but in many countries it’s shrinking. How do we reverse the trend?

In most developed countries the small business community is shrinking. What can governments and communities do to grow what should be the most vibrant sectors of their economies?

What happens when a whole industry shuts down overnight? Australia is about to find when its motor industry effectively comes to an end this week.

The fallout for the workers is expected to be dramatic with researchers reporting the soon to be laid off staff being totally unprepared for their predicament.

So worrying is the predicament of those auto workers that Sydney tech incubator Pollenizer is offering small business workshops for laid off workers.

Those workshops will be needed. One of the striking things about the research is just how few of the workers are interested in launching their own ventures despite their poor employment prospects in other industries.

While the auto workers are a group with relatively low levels of education and work experience, their reluctance to starting a business is shared by most Australians with the nation’s Productivity Commission 2015 enquiry on business innovation reporting the number of new enterprises is steadily falling.

Despite Australia’s population increasing twenty percent since 2004, the number of new business is falling. The country is becoming a nation of risk averse employees, something not unsurprising given the nation’s crippling high property prices which puts entrepreneurs at a disadvantage.

Australia’s reluctance to set up new ventures isn’t unique, it’s a worldwide trend with most countries not having recovered since the great financial crisis.

The tragic thing with this small business drought is that it’s never been cheaper or easier to set up a venture as Tech UK and payment service Stripe show in their list the software tools being used by ventures.

The #StartupStack from Stripe

Accessibility of tools or even government taxes and regulation isn’t the barrier in Australia. As the World Bank reports, the country is the eleventh easiest place in the world to start a new venture.

In United States experience shows there’s a range of other factors at work dissuading prospective small business founders – interestingly the United States comes in at a mediocre 47th as a place to start a venture in the World Bank rankings.

A healthy and vibrant small business sector is important to drive growth and diversity in the broader economy. The challenge for governments and communities around the world is to find a way that will spark the small business communities, in a world awash with cheap capital that shouldn’t be impossible but we may have to think differently to the ways we are today.

Hillary Clinton’s bid for the future

Hillary Clinton’s Initiative on Technology & Innovation shows politicians are beginning to take the challenges of a changing economy seriously

As the 2016 US Presidential election settles down into a competition between Republicans and Democrats, Hillary Clinton has released her vision for the American tech industry.

Hillary Clinton’s Initiative on Technology & Innovation is a comprehensive document laying out the candidate’s plans to increase the American workforce’s skills and the nation’s infrastructure.

What’s particularly notable about the Clinton plan is her aim of “building the tech economy on main street,” which is “focused on creating good jobs in communities across America.”

Spreading the tech industry’s jobs, and wealth, beyond a few middle class enclaves is an important objective for all nations in the twenty-first century and Clinton’s objectives are an indication that the US political establishment is beginning to understand this.

Other countries should be noting Clinton’s objectives to raise the skills of workers, build the tech infrastructure and get investment into smaller communities as something they too have towards.

In an Australian context, Clinton’s initiatives highlight the missed opportunity of the Turnbull government’s Innovation Statement, a narrowly focused and weak document that has done little to encourage investment and even less to reform skills training.

The Clinton move though shows technology, training and stimulating new businesses will be one of the imperatives of nations as they deal with a rapidly changing economy.

Silicon Valley and the rise of Chinese innovation

Uber CEO Travis Kalanick thinks China could overtake the United States in being innovative

Silicon Valley could be soon surpassed by China warns Uber’s Travis Kalanick.

While sceptics could dismiss Kalanick’s claim as his simply sucking up to his hosts in Beijing where he made the comment, or put the statement down to a PR campaign for his company’s renewed push into China, there may be a kernel of truth.

If for nothing else, the Chinese diaspora across the Pacific Rim is known for its entrepreneurial drive. From Bangkok to San Francisco and Sydney, Chinese communities have a reputation for being full of smart and hardworking business people.

Added to the Chinese cultural aspect is history. Fifty years ago car makers in Detroit and motorbike manufacturers in Birmingham, England, scoffed at the idea that their Japanese competitors could overtake them.

Within a quarter of a century they were proved wrong.

Another concern for Silicon Valley is that it could be losing its edge. As veteran journalist Tom Foremski points out, increasingly workers in the Bay Area live in a privileged bubble.

Foremski discusses how younger, creative and innovative workers are finding opportunities in cheaper and more diverse American cities like New York’s Brooklyn.

America’s diversity, and depth of its economy, will continue to be a strength for the foreseeable future but Americans, particularly those in the Bay Area, shouldn’t be resting on its laurels.

Travis Kalanick’s warning might be dramatic, but it isn’t beyond the realms of possibility.

Cutting the broadband cable

The latest Pew Internet survey shows America’s changing attitude to broadband

It appears the penetration of home broadband has peaked in the United States report the Pew Research Centre.

Since the organisation’s last home broadband survey in 2013, the proportion of adults living in a household with a fixed high speed connection has fallen from 70% to 67% while those relying solely on a smartphone connection has gone from 8 to 13 percent.

This also coincides with 15% of respondents reporting that they’ve cancelled cable or satellite TV subscriptions as they can now get the content they want from the internet. It’s clear the shift away from broadcast is now firmly on.

One of the jarring notes from the Pew survey is the digital divide developing with nearly half those without a home broadband connection citing cost, either of the Internet service or that of a computer, being the main barrier to going online.

According to Pew, Americans are acutely aware of the problems of not having broadband with two-thirds of those surveyed believing not having a home high-speed internet connection is a major disadvantage to finding a job.

The Pew survey shows how attitudes to Internet accessibility is changing, increasingly we’re seeing it as an essential like power and the telephone. Increasingly access to broadband is going to be a political issue.

A day trip to the Grand Canyon

The Grand Canyon is a long, but doable, day bus tour from Las Vegas

Las Vegas exists as a fleecing machine for tourists and for the impoverished freelancer stuck in the town over a weekend, the best idea is to get out of it.

So the Grand Canyon sounded like a good idea, despite being a long day – departing at 6.30am and returning after 9pm – the price of $79, plus gratuities to the driver, sounded like a good way to spend the Sunday.

The day didn’t start out well with the connection bus not showing up, the Mandalay Bay separate Tour Lobby on a different floor to the main lobby where I was standing. It was apparently beyond the ken of the connecting driver to call my number to check if I were around.

Adding to the irritation was calling the Grand Canyon Tour company directly, as instructed, five minutes after the scheduled time only to be told ‘he’s running late, just wait”. Twenty minutes later on calling the company again I was told I wasn’t there for the pickup, something they could have told me earlier.

Panicking, angry and anxious about missing the bus I jumped in a cab to get to their depot. Fortunately my hotel wasn’t too far from the company’s depot and the fare was only $15, for other passengers it could have been substantially more.

Long check in queues

It turns out there was little need to be stressed about missing the, the tour company’s shuttle buses drop passengers off at a central check in place where the queue was literally out of the door. After check in you can pick up a complimentary breakfast Danish and a coffee of tea and buy bottles of water before boarding the bus.

Bottled water isn’t available in the Grand Canyon park area so bring your own container, or buy some for a dollar each at the Las Vegas check in terminal, you can refill them in the park or at Williams railroad station at the lunch break.

The right hand side of the bus is best for views, particularly in the desert during the first two hours before a refreshment break just outside of Kingman, Arizona. Castle Peak Bar and Grill is the quirky desert truck stop that acts as a refreshment stop and the food isn’t recommended.

Running commentaries

As the tour continues, the driver gives a running commentary of the sights on the way accompanied with videos on the Grand Canyon and Hoover Dam. If you’re doing the Hoover Dam journey another time, it’s worthwhile to do it after this tour as one of the videos is a documentary on the building that will help you appreciate the project even more.

The videos help while away the ten hours of travel and the bus also has Wi-Fi although you’ll probably find a better signal with your own mobile device. The seats also have power sockets available although I didn’t get to test them.

One thing to remember when booking the tour is gratuities are not included and the driver expects a tip. Budget for five or ten dollars each.

After Kingman, the next step is Williams, Nevada, a tourist town that features the oldest diner on Route 66 and the terminus for the privately operated Grand Canyon Railroad where the company puts on a complimentary lunch.

Enjoying a lunch

Lunch is a surprisingly good buffet featuring soups, salads and hot dishes with a soft drink thrown in, the swirl icecream cones are nice touch. If you have a water bottle to fill, there’s a filling station outside the restrooms at the other end of the station from the restaurant.

Williams is an hour from the Grand Canyon and the tour stops twice. It’s worth getting off the bus at Mather Point, the first stop, and then taking the Rim Walk around to the main Village which is the collection point. If you do this, let the driver know and find out the time he expects to leave.

In our case the bus was late due to several people being lost. This is a problem when the return to Las Vegas is well into the evening. There is a dinner break at the Kingman Carls Jr on the return leg.

Good for a quick tour

Overall, the Grand Canyon tour is a good trip if you’re in Las Vegas and on a short schedule. However it’s certainly better to give the canyon more time and stay overnight.

If you can find accommodation in the main village – when I attempted it was fully booked – then taking the tour company’s one way option each day or hiring a car would be far better given the National Parks runs evening tours and both sunset and sunrise are spectacular times with the opportunities to see more wildlife.

Should you have several days, having a car to explore Boulder, the Hoover Dam and Williams along with spending one or two nights in the park would be highly recommended.

For those time poor and based in Vegas, the Grand Canyon tour is a good option, however the big gripe with Grand Canyon Tour Company is its organisation. To avoid future customers having the incredibly irritating experience of missing the shuttle due to being in the wrong place, the company could do with more streamlined procedures and even a better use of technology – such as SMS notifications.

Peace in our time

An agreement between the US and China to curb commercial cyber espionage is welcome but difficult to see working

Presidents Obama and Xi have agreed to curb economic cyber espionage between the two countries during the Chinese Premier’s state visit to the United States today.

It’s a welcome move, but one suspects neither country will resist the opportunity to get a commercial advantage and increasingly the divide between a state and corporate interests has become blurred.

China goes on the tech offensive

The meeting between US and Chinese leaders later this month could mark the pivot of China’s economy

The most important economic relationship in today’s economy is that between China and the United States, despite bellicose chest thumping by both sides their wealth and well being of their industries is inextricably linked.

Against the backdrop of that chest thumping and a slowing Chinese economy, the Chinese and US Presidents are due to meet in two weeks time where trade and security relations between the two countries are at the top of the agenda.

China’s leaders though plan to emphasise their nation’s tech prowess and its importance to the US’s sector, something the New York Times reports has irritated the Obama administration.

What would almost further irritate the US leadership is that US tech giants including Apple, Facebook, IBM, Google and Uber have been invited to attend a Chinese tech summit hosted by Microsoft and the PRC President will be dining with Bill Gates before flying to Washington to meet Obama.

Redmond gets on board

Microsoft’s role in the China Forum is interesting, the company is extending the hand of friendship not just to nations but also to companies that were fierce rivals in the past, just last week the company announced a partnership with VMWare despite deep rivalry in recent years and CEO Satya Nadella is due to appear at next week’s Salesforce conference.

Coupled with Microsoft’s battle to keep offshore customers’ email records out of the reach of US legal jurisdiction, it’s clear Microsoft are playing a long global game with their business plans so the support of China’s initiatives isn’t surprising.

Given China’s strength as an emerging tech powerhouse and its administration’s ambition to move the economy up the value chain, it’s also not a surprise that other US technology companies are reluctant to join the politicians’ games.

Choosing Seattle

The choice of Seattle is interesting as well, while the city is a major tech centre with companies like Amazon and Microsoft based there, it’s far more integrated with the Pacific Rim economies than San Francisco and Silicon Valley. Again this is a loud message to the US tech community.

For China, the success of showing off their technological strengths is an important in sending a message to its East Asian neighbours and the US that the nation is diversifying and shouldn’t be underestimated, a process that Chinese Premier Li described as “a painful and treacherous process” at a World Economic Forum event in Dalian today.

The meeting between Xi Jinping and Barack Obama in two weeks time, and the associated events in Seattle, could well prove to be the marker of where China moved into the next phase of its economic development and its relationship with the United States.

The Internet’s Pax Americana

The US dominates the Internet but will it do so forever?

Tech journalist Kara Swisher has a twenty-five minute interview with President Obama on his relationship with the technology industry and Silicon Valley, it’s an interesting snapshot on how the United States sees its role as custodian of the internet.

In talking about European agencies’ efforts to reign in the power of companies like Google the President is dismissive; “we have owned the Internet. Our companies have created it, expanded it, perfected it, in ways they can’t compete. And oftentimes what is portrayed as high-minded positions on issues sometimes is designed to carve out their commercial interests.”

Obama is absolutely correct to say the Internet currently belongs to the United States, it was the US that developed the technologies and built the initial infrastructure for the global network in a similar way it did for the GPS system.

The internet probably won’t remain the US’s sole domain as China, Indian, Russia and other powers find control of the global communication network resting with the US isn’t in their interests and develop work arounds or rival technologies.

Just as Spain and then the English once dominated the world’s shipping and communications, it may well be the US’s dominance of the Internet is not permanent.

Rebuilding American Manufacturing

The US textile industry’s recovery is an economic story of our times, it’s also one of our future.

US manufacturing is undergoing a resurgence, just without the jobs reports the New York Times in its story on the textile mills of South Carolina.

The decline and recovery of US manufacturing is a story of our times – the industrialisation of Asia, trade treaties such as NAFTA and China’s joining the World Trade Organisation all saw Western producers move their operations overseas.

A weakness with that business model are the extended global supply chains as goods spend months on ships following long manufacturing and design lead times, the exact opposite of what modern consumers are looking for.

Coupled with domestic manufacturers’ increased investment in automated systems which makes labour costs a smaller factor and the sums start adding up for making things in the United States.

Unfortunately for the workforce, those automated plants don’t require anywhere near the staff older factories employed and the skills required in today’s mills are substantially different from those needed in those of earlier times.

Most industries are encountering the same change and new technologies make the modern factory very different to that of a few decades ago.

The jobs aren’t going to come back in the numbers that were once employed, as the New York Times story illustrates with the decline in the working population.

Despite the recovery in US manufacturing, today’s industry is very different to what it was last century, something that’s missed by those advocating a return 1950s style government policies to protect jobs in sectors like car manufacturing.

Even if they are successful in rejuvenating local car factories, cotton mills or coal mines, the days of these plants employing tens of thousands of grateful cloth capped workers are over.

Those politicians whose ideology is based on the old model, or businesspeople who want to work in the old ways, are going to find the modern economy very difficult and challenging.

Image of cotton threads on a weaving machine through jbeeby on sxc.hu

Revolution and disconnected leaders

Revolutions are unexpected, but the causes are often obvious to all. The West shouldn’t be too smug about the economies of other nations.

China expert Patrick Chovanec has a provocative blog post on What Causes Revolutions, building upon the Financial Times’ description of how the Chinese Communist Party is struggling with corruption.

In his article Chovanec quotes Richard Pipes’ Three “Whys” of the Russian Revolution which looked at how the fall of the Tsarist government was largely unexpected.

This is true with the fall of all great regimes, in the late 1980s the idea that the Soviet Union would cease to exist within a decade was unthinkable.

Chavonec quotes a key part of Pipes’ book;

In 1982 [Pipes writes], when I worked in the National Security Council, I was asked to contribute ideas to a major speech that President Reagan was scheduled to deliver in London. My contribution consisted of a reference to Marx’s dictum that, when there develops a significant disparity between the political form and the socio-economic context, the prospect is revolution.

“A significant disparity between the political form and social-economic context” could be just as applicable to Western democracies.

The Economist article makes a point about the French revolution “the widely accepted theory now is that the French Revolution was one of rising expectations that eventually could not be met.”

As Stratfor’s George Freedman pointed out last week, a generation of Americans have expectations that are not going to be met. The same is true in Europe.

While there’s no doubt the China’s political structures – like those in all totalitarian nations – are more brittle than those in established democracies, it might not be a good idea for those of us in the West to be smug and complacent about our own systems.

Zapata image is courtesy of Ferferfer through SXC.

Bringing manufacturing home

How GE is reviving its American manufacturing operations

In the 1980s General Electric, like most US companies, sent most of its appliance manufacturing offshore.

Now its coming home.

The Atlantic Magazine looks at how General Electric is resuscitating manufacturing at Kentucky’s Appliance Park as management finds US workers are more skilled and productive than their equivalents in Mexico or China.

An important part of the article is how critcal supply chains are; manufacturing hubs rely upon having a community of skilled service providers and suppliers around the factories while being close to customers improves and simplifies logistics.

In the latter case, it now take hours or days to deliver products to customers’ stores or warehouses rather than the five weeks it takes from China.

The cost of those goods is lower too, the Kansas made GeoSpring heater sells for $1299 while the Chinese product sells for $1599.

What is most notable though is how designers and managers now have a better understanding of the manufacturing process; where under the oustourced model the difficulties in assembly were none of their business, now they are far more deeper and directly involved.

This really goes to the core of what an organisation does – in the 1980s it was fashionable to talk of the “virtual corportation” where everything the business did was outsourced except for the managers who were employed solely to pocket their bonuses.

In the 1990s and early 2000s that “virtual corporation” became a reality as manufacturing and customer support were offshored and logistics was outsourced.

One of the best examples was customer support where looking after the needs of those who buy the company’s products were secondary to the need to cut costs.

This focus on cost cutting over customer service hurt Dell badly in the 2000s and it continues to hurt many organisations – particularly telcos and banks – today.

The weakness in the “virtual corporation” model was the company ended up adding little more value than the brand name and eventually those offshored manufacturers and call centres took control of the business’ goodwill and intellectual property.

Eventually the hidden costs of offshoring became too obvious for even the most craven, KPI driven manager to ignore and suddenly manufacturing in the Western world became competitive again.

Sadly, the fixation on dirt cheap labour has damaged many industries beyond the point where they can be salvaged with too many skilled workers lost and the ecosystem of capable suppliers destroyed. These are costs where tomorrow’s managers will rue the short sighted actions of yesterday’s corporate leaders.