Creative destruction: Self-driving cars

Fast Company article "Self-Driving Cars Will Be The Biggest Auto Safety Innovation Ever" here states:

"… autonomous vehicles could reduce traffic accidents by 90%, according to a new report from McKinsey. In the process, our new robot cars will save us $190 billion in wrecked cars, broken bones, and other costs incurred by plowing into things with our current fleet of brain-driven cars."

Large corporations are incremental improvement bound.  Let's remember that the self-driving car did not emerge from any of the large automotive companies.  I am looking forward to the automotive future.  It will disrupt the complete supply chain associated with automotive.  Schumpeter's Creative Destruction will manifest itself here rather quickly.

Airlines: Customer service matters

US airlines when compared to their international rivals lag so significantly that one dares not put up a comparison chart.  As an international traveler, I always opt for one of the airlines from the (Persian) Gulf countries, give it a try once to experience what air travel should be like.

The USA Today article "U.S. airlines contend Gulf rivals are subsidized unfairly" here discusses a report by the big three US Airlines that contends subsidies to the Gulf airlines to the tune of $42 billion.  As a customer, I want good service and a comfortable flight, and I am willing to pay for it.

Just for fun, have a look at the 2014 World's Top 100 Airlines ratings on SKYTRAX here.  First US airlines Delta shows up at no. 45.  When you are so far down, simple subsidies are not the only reason.

Nuclear power and the US

One educated as a Nuclear Engineer and having to leave it for its speed in implementation, design, regulatory oversight, lack of innovation, etc., the article on Fox Business "Delays for SC nuclear plant further pressure industry" here, further highlights how the US continues to lag the rest of the world.

Nuclear will be an essential ingredient in the success of energy for all.  The article on WSJ details the various concerns here.

Google and robotics

Google had removed the company Schaft, Inc. it had bought in late 2013 from the DARPA Robotics Challenge, details on the Challenge here.  Details on Schraft on BBC here, and for a perspective see WSJ article on the topic here.

Opposing behaviors deliver reality?

Ms. Julie Beck of The Atlantic ponders - "Could it be that none of us are who we think we are?" in her article Faking it here.

The article is a packed full of study of studies, worth a read, reinforcing Dr. Dan Ariely's claim that we are Predictably Irrational beings.

Indirect pollution from EVs

The reality of electric vehicles is a bit stark today, though it will continuously improve with technological progress.  A study by Dr. Christopher Tessuma, Dr. Jason Hill, and Dr. Julian Marshall of University of Minnesota published in the Proceedings of the National Academy of Sciences analyzes the complete life cycle of electric vehicles and compares it to more traditional ICE.  Note that life cycle implies inclusion of all that went into making the EV to its daily use and charging.

The report's abstract states:

"Commonly considered strategies for reducing the environmental impact of light-duty transportation include using alternative fuels and improving vehicle fuel economy. We evaluate the air quality-related human health impacts of 10 such options, including the use of liquid biofuels, diesel, and compressed natural gas (CNG) in internal combustion engines; the use of electricity from a range of conventional and renewable sources to power electric vehicles (EVs); and the use of hybrid EV technology. Our approach combines spatially, temporally, and chemically detailed life cycle emission inventories; comprehensive, fine-scale state-of-the-science chemical transport modeling; and exposure, concentration–response, and economic health impact modeling for ozone (O3) and fine particulate matter (PM2.5). We find that powering vehicles with corn ethanol or with coal-based or “grid average” electricity increases monetized environmental health impacts by 80% or more relative to using conventional gasoline. Conversely, EVs powered by low-emitting electricity from natural gas, wind, water, or solar power reduce environmental health impacts by 50% or more. Consideration of potential climate change impacts alongside the human health outcomes described here further reinforces the environmental preferability of EVs powered by low-emitting electricity relative to gasoline vehicles."

"Air quality health impacts in the United States for each scenario: attributable increases in annual mortality (upper scale) and the resulting monetized health impacts (lower scale)."

legend - 03: Ozone, PM2.5: Fine particulate matter

Enjoy the complete analysis here. 

Price of making a plastic bottle

From The Economist.

The Atlantic - "All advertising is manipulation"

Mr. Derek Thompson's article "Turning customers into cultists" in The Atlantic states: "… all advertising is manipulation".

What is a brand? "… to economists, the definition is simple: a brand is a signal, good or bad, that influences a consumer’s decision to buy a product."

This is an interesting article with a plethora of perspectives, yet leaving the amorphous concept brand as it is.

I believe that a brand is a singularity deposited in an individuals mind at a specific point in time in their lives based on their socio-demo-econo-graphic status, and cultural influences.  Excellent examples exist among immigrants to the United States who have had brand images imprinted on their minds and when they can afford it, buy the imprint, no matter how lousy the product.

Marketing is the realization of the singularity with products focused on specific segments of the brand's competition field.  Advertising is a means to market.  According to the article:

"Advertising thrives in markets where consumers are essentially clueless, often because quality is hard to assess before you buy the product (medicine, mattresses, wine). But on sites like Amazon or eBay, and across social media, information from other sources—ratings, reviews, comments from friends—is abundant. We’re more likely to trust these signals precisely because they aren’t beamed from corporate headquarters."

What about the cult of brand's personality:

"In 1984, the British sociologist Eileen Barker published The Making of a Moonie, a seven-year investigation of the Unification Church, based on interviews with members of one of America’s most popular cults. While many cults are portrayed as preying on the poor and uneducated, and particularly people from broken homes, Barker discovered that Moonies tended to be middle-class, with college degrees and stable families. The cult inculcated new members through simple techniques: weekend retreats, deep conversations, shared meals, and, most seductive, an environment of love and support."

And regarding Apple:

"From its famous hammer-smashing “1984” ad against IBM to its 1998 commercial “Crazy Ones,” Apple has been deliberate in reinforcing an us-against-the-world ethos. The fact that it has preserved its devoted following while becoming larger than its opponents “shows that culting is useful, even when it’s misleading,” Escalas says."

I believe the answer is well discovered and articulated by Mr. Douglas Atkin, author of The Culting of Brands:

"“The common belief is that people join cults to conform,” Atkin wrote. “Actually, the very opposite is true. They join to become more individual.”"

What other brands in the world have a cult following, empowering the individual to feel … "empowered"!?

Enjoy the article here.

Killing a breakthrough opportunity?

"... [FAA] appears keen to protect special interests, including established aircraft manufacturers and pilot unions."

States The World in 2015 from the Economist in the article "A bumpy take-off".

Consumer focused, and at times consumer driven invention to innovation has been the driver for bigger breakthroughs.  Automation and controlled automation in flight, and what I would call micro-flyers, domain of the enthusiasts to begin with has opened up a new arena of opportunity for application of technology.

"Drones also bring improvements and cost-cutting to film-making, news-gathering, search and rescue, forensic photography, firefighting, archaeological surveying, smokestack inspection and the monitoring of pipelines, volcanoes, pollution and wildlife. The benefits to an economy like America’s could be worth $27m a day, says the Association for Unmanned Vehicle Systems International (AUVSI) in Arlington, Virginia."

Yet, one way leap frog opportunities have been thwarted is regulation, which is overbearing and at times non-sensical.  To highlight the extent of it, the article states:

"… in June the FAA issued a “tremendously rigid” policy interpretation that even expands the definition of aircraft it has the authority to regulate to include boomerangs, frisbees and hand-tossed balsa gliders, says Paul Voss, an engineering professor at Smith College in Massachusetts."

Will the growth of this sector emerge outside of the US due to the constraints being put upon the creativity?  I will be watching these developments closely.  It reminds me of the onerous regulations the Nuclear Regulatory Commission put in place making it cost prohibitive to do anything nuclear in the USA.  For now:

"All this suggests that the FAA’s future rules will not bring America economic benefits on the scale some countries are starting to see, says Brendan Schulman of Kramer Levin Naftalis & Frankel. In August the New York law firm filed three suits against the FAA for regulatory over-reach. The way things are heading, he says, the FAA might require a drone to be flown by two licensed operators with medical certificates who keep it within sight. This would be costly, and might outlaw flights around a leafy tree. Until the autumn of 2015 the issue will remain, unlike the drones themselves, up in the air."

Ghost in the machine

"Phones turn into mind readers."
"This technology is going to be everywhere."

To think on behalf of a smart device's owner, to guide, to suggest, to recommend, to predict, has been the holy grail for marketers such as Procter & Gamble and Unilever for over a century.  The World in 2015 by the Economist declares that this is the year when it all will hit mainstream. And as all marketers know, when a human mind does not have an analogy for a situation, providing a suggestion to ground the mind, and then recommending based on rating is an ideal way to make the consumer an advocate of the recommended product or service.

According to the article:

"… tension between usefulness and creepiness will intensify in 2015 as anticipatory-computing systems extend their reach in three ways."

"First, they will start drawing on more sources of data, beyond the current analysis of browsing history, e-mail, calendar and location."

"… the second area of expansion, as anticipatory computing spreads, like other consumer technologies before it, into the workplace."

"Third, anticipatory computing will move beyond the smartphone to other devices."

Where will be discovery, ability to be lost and learn?  Will this in the end take away the human ability to anticipate and predict, develop deeper experience based neural net?  Only the future will tell.  For now, the inevitability of anticipatory computing is here.

The complete article here concludes:

"Companies will let users decide what to share “and try their best not to cross the digital creepiness line”, says Mr Yamnitsky (Forrester, a consultancy). You might, for example, wish to exclude access to your browsing history or your children’s personal details. “But the issue is you risk being a second-class citizen if you don’t have the tools other people have,” says Mr Tuttle (chief executive of Expect Labs, a startup)."

Middle East: Recipe for a state's health and prosperity

The World in 2015 by the Economist provides insights and foresights for the Middle Eastern countries in its article "It's not all bad" here.

One perspective:

"… the misery of others helps some to thrive. So it is with Dubai. Although the Gulf emirate’s rulers have worked long and hard to make the city-state a better place to live and work, the failure of other regional governments has also driven Dubai’s phenomenal success. Whenever Saudi Arabia or Iran hurl more dissidents in jail, whenever India or Pakistan overtax business, whenever wars and revolutions erupt nearby, entrepreneurial talent and capital gush into Dubai."

Another perspective:

"Since it joined the OECD in 2010, Israel has outperformed the rest of the rich-country club on many measures. GDP per person matched Italy’s in 2013. After decades of reliance on foreign aid, Israel now has a healthy trade balance as well as a stock of some $80 billion in investment overseas. Energy dependence is also a thing of the past: Israel has been quick to exploit abundant offshore gas reserves, which already fuel most electricity generation. Meanwhile a virtuous circle involving high-quality universities, strong government backing and dynamic entrepreneurs generates continued innovation and success in the high-tech sector, exemplified in 2014 by Intel’s decision to expand its already large manufacturing presence with an additional $6 billion microchip factory."

Let's see how 2015 unfolds.

Africa: Entrepreneurs driving growth, yes?

"Young entrepreneurs and those they inspire are the lifeblood of Africa’s rise."

I have long held the belief that an entrepreneur is different from a businessman or a business woman.  I also believe that entrepreneurs cannot be trained, and through experiential learning become who they are.

Mr. Tony Elumelu, chairman of Heirs Holdings states as much and ties Africa's success, if it is to be, with the entrepreneurial lot, in an article here from The World in 2015 by the Economist.  Following is a keen insight from him:

"… we are already seeing how entrepreneurship is transforming Africa. But in Africa, business growth alone is not the full story. It is perhaps not even the most important part. Entrepreneurship matters especially for its potential to transform society."

The only point I disagree with Mr. Elumelu is that though young entrepreneurs do buck the trend, and redefine and create new business models through shear risk taking, Africa's entrepreneurism must also rely on the middle aged and old for their deep and rich experience of Africa's cultural and commercial history.

An economically healthy and growing Africa is a need for the world today, was yesterday, and must be tomorrow.