It's in the genes

In 2000, I took various rather intensive profiling tests to better understand myself.  Being a nuclear engineer, I wanted to understand Sammy a bit more "nuclearly"!

One of the tests was done with Johnson O'Conner Research Foundation.  The outcome for me was that people are not good or bad at things, they are simply born with particular genetic makeup, elevating or demoting the ability to excel at specific activities.

When I read Malcolm Gladwell's "Outliers", I found the fallacy in analytics of causation is correlation repeatedly showcased in the book, though an enjoyable read none the less.

Recent research "Practice Does Not Make Perfect: No Causal Effect of Music Practice on Music Ability" by Dr. Miriam Mosing of Karolinska Institute in Sweden, and Dr. Guy Madison of Umeå University published in Psychological Science provides a bit of demystification of the adage that significant practice always leads to success in a particular activity.  The abstract states:

"The relative importance of nature and nurture for various forms of expertise has been intensely debated. Music proficiency is viewed as a general model for expertise, and associations between deliberate practice and music proficiency have been interpreted as supporting the prevailing idea that long-term deliberate practice inevitably results in increased music ability. Here, we examined the associations (rs = .18-.36) between music practice and music ability (rhythm, melody, and pitch discrimination) in 10,500 Swedish twins. We found that music practice was substantially heritable (40%-70%). Associations between music practice and music ability were predominantly genetic, and, contrary to the causal hypothesis, nonshared environmental influences did not contribute. There was no difference in ability within monozygotic twin pairs differing in their amount of practice, so that when genetic predisposition was controlled for, more practice was no longer associated with better music skills. These findings suggest that music practice may not causally influence music ability and that genetic variation among individuals affects both ability and inclination to practice."

The paper can be read at Research Gate.  For those without access to Research Gate can have a look at the Economist, which covered the paper and states:

"That is not to say practice has no value. Playing an instrument and singing are physical skills, and do take a long time to master. But, though the experiment could not measure this directly, it is a fair bet that only those with high musical ability in the first place can ever hope to master these skills—and Dr. Mosing has shown that musical ability has a big genetic component."

Read the complete article here.

This does not only hold true for music, I believe it is true for various human activities that leverage our senses to using our brains for mathematics and physics.

At a Global 100 company, I tried to institute a small amount of testing to help allocate individuals to the work they excelled at naturally. This would alleviate poor performance, create a happier work force, and productivity would see unimaginable gains. Let's just say, we are far away from the day when 100% of our work force is doing what they are good at.  Question is, are there people who do not excel at anything?  And if so, what would one do if such discoveries were made?

Mobility driven consumer banking disruption

Necessity is the mother of invention!  Perhaps such "necessity" is more obvious in Kenya?  Following is old news but worth revisiting to remember that emergent consumer focused trends and capturing their value is more and more an emerging markets forte.

"SWAHILI continues to creep into the language of global finance. M-PESA, a thriving money-transfer system run by Safaricom, a Kenyan mobile-phone operator, and named after the word for “cash”, has already entered the lexicon. Having persuaded millions of Kenyans to send cash through an SMS network, … . 

Safaricom has nearly as many subscribers as Kenya has adults—19m people from a population of 43m. Almost 15m of them use M-PESA for everything from paying electricity bills to school fees, thanks to a simple text-based menu that is accessible on even the most basic mobile phone. The firm, which is 40%-owned by Vodafone, makes its money through transaction fees when customers withdraw or transfer cash at a network of more than 40,000 M-PESA agents throughout the country."

Read the complete article at the Economist here.

Real estate: Conundrum of property rights and economic growth

I have recently been working on understanding real estate investments, mostly commercial.  It is rather fascinating that I only come to one conclusion; real estate investments over a period of time, in a particular growing region will form a bubble, collapse, and start again.  And that the minority incumbents in a free market system do not come out as winners either.

To validate some of my learning, here is a good analysis on real estate from the Economist:

"There is a strong correlation between economic growth and secure property rights for foreign and elite investors. But when Ms Lawson-Remer looked for a relationship between property security for minority groups and economic growth, she could find none. Nor was there any correlation between property security and a country’s ranking on the UN Development Programme’s Human Development Index. Securing the property rights of minorities seems to have no clear consequences for economic growth."

Read the complete article here.

Reality of energy - now that we have some experience

I am educated as a Nuclear Engineer who barely worked in the industry.  Like many, I left the nuclear industry twenty two years ago.

It was clear back then that the focus on nuclear in the US was non-existent, new plant costs were skyrocketing, with regulatory burden on maintaining and restarting existing ones, becoming cost prohibitive.  There has not been much future in nuclear industry in the US.  Even Mr. Bill Gates is developing the next generation nuclear options with Korea, versus in the US for the above reasons.  Even Georgia Institute of Technology closed its Nuclear Engineering program back in early 1990s, I think I may have been the last graduate!

Here is an article that takes the numbers on various alternate and existing energy sources, and showcases the work of Dr. Paul Joskow of Massachusetts Institute of Technology, and Dr. Charles Frank of Brookings Institute.  The conclusions are interesting.

"If all the costs and benefits are totted up using Mr Frank’s calculation, solar power is by far the most expensive way of reducing carbon emissions. It costs $189,000 to replace 1MW per year of power from coal. Wind is the next most expensive. Hydropower provides a modest net benefit. But the most cost-effective zero-emission technology is nuclear power. The pattern is similar if 1MW of gas-fired capacity is displaced instead of coal. And all this assumes a carbon price of $50 a tonne. Using actual carbon prices (below $10 in Europe) makes solar and wind look even worse. The carbon price would have to rise to $185 a tonne before solar power shows a net benefit."

Read the complete article here.

I would be remiss in not mentioning a few rebuttals.  Unfortunately, I have not found convincing numbers from any that covers multitude of energy sources, hence, not linking them.

Yet one thing has remained constant in all the rebuttals, they have missed the point; that Schumpeter's Creatively Destroying technologies require value realization in a breakthrough fashion; that the investments in alternate energies must continue for them to be viable one day; and that declaring one way over another as the perfect way has always been a fallacy and detrimental to innovation.

TIECON - Energy: Oil & Gas - Entrepreneurial Opportunity Panel

As the Executive Director of Baker Hughes's Palo Alto Innovation Center, I chaired and my company sponsored the first ever Energy: Oil and Gas conference track at TIECON 2014, see here.

A panel discussion on entrepreneurial opportunities in oil and gas sector with Dr. Mario Ruscev, CTO - Baker Hughes; Mr Jim Sledzik, Partner and President, Energy Ventures; and Mr. Art Schroeder, CEO, Energy Valley, Inc. Enjoy!

TIECON - Energy: Oil & Gas - Ram Shenoy

As the Executive Director of Baker Hughes's Palo Alto Innovation Center, I chaired and my company sponsored the first ever Energy: Oil & Gas conference track at TIECON 2014, see here.

Dr. Ram Shenoy, CTO - ConocoPhillips keynote below is a history of the significantly positive impact oil and gas sector has had on the world, and how it is continuing to do so.  Enjoy!

Amazon

Amazon - the name does imply immensity and ability to consume all…!

Hachette, a privately held and significant book publisher, is negotiating pricing terms with Amazon on e-books.

"“In a sense, Michael Pietsch is like ‘Horatius at the Bridge,’ ” says the literary agent and former Amazon executive Laurence J. Kirshbaum, referring to the soldier of legend who single-handedly saved ancient Rome by fighting off an invading army. “He is carrying the rest of the industry on his back.”"

Amazon has been one exceptional example of Schumpeter's Creative Destruction, in the past two decades, let's see what else is in store for the retail world in general.

Read details at NY Times here.

China's energy independence

From Bloomberg:

"China’s effort to catch up with the U.S. in developing shale gas and become more energy independent is coming at a big cost: It’s spending four times as much developing some fields, according to a new report."

Curious about how much of an opportunity this is for the US oil and gas service providers?

Intangible assets

I have been leading efforts on data analytics or the generic term big data, though I focus on the analytics part.  Tobin's Q has been rather an interesting aspect of analyzing the value of information for a company.  Manufacturing companies are valued against their hard assets, but then what about the global giants of the information age, which have come to grow bigger?

A good blog by Mr. Doug Laney, VP Research, Gartner on what is Tobin's Q and how it is impacting the valuations of the companies today.

"… a study by intellectual capital research firm, Ocean Tomo, shows that the portion of corporate market value attributable to intangibles has grown from 17% in 1975 to a whopping 81% in 2010."

Now, if there is any CEO out there still with their head buried in deep productivity gains through automation, and process improvement, they can see the sunset of their companies quickly coming.  The American automakers are the ideal examples.

The question is how do these companies gather data, turn it into information, yet information is not enough.  It is the creation of knowledge from information that leads to extraction of value.  The world is filing up with a plethora of massive data collectors though with minimal idea of how to transition from data to information to knowledge.  Opportunity remains high for analytics providers.

Read the complete blog here at Gartner.

Multilingualism and the business world

Hiring individuals who know more than one language for a multinational is some what a necessity these days.  But does it imply that there is higher value in learning a second or third langauge.

The Economist analyzes the question here, in "Johnson: What is a foreign language worth?"  It seems like there are premiums paid for different second languages.

On monopolies and capitalism

Gigaom writes on "Giants behaving badly: Google, Facebook and Amazon show us the downside of monopolies and black-box algorithms."  Read the complete article here.

Nothing new that we have not seen in capitalism before, though with an interesting 21st century spin.  Though the analysis of Facebook is interesting:

"You can stop using Facebook, but that’s not going to stop a billion or so other people from using it, and therefore it’s not going to stop them clicking on what Facebook decides is newsworthy or not newsworthy, and driving traffic to those sites, and thereby helping to determine whether they live or die. And unlike Google or Amazon, there isn’t even much of a case for antitrust, because it’s not clear what market Facebook dominates."

Brain trust at Apple, Google, Microsoft, Facebook, Yahoo, Twitter,and IBM

Excellent infographic at Wired showing where the hiring is done at most of the San Francisco Bay Area companies.  Perhaps I can look at some of those schools myself.

Interesting how significantly IBM leverages Indian universities, while most companies, other than Google maintain geographically close ties.

Click the image to enlarge.