T R O J A N

I N N O V A T I O N

McDonald's is always where you "expect" it. Carrefour is "not" a retailer . . . Trojan Innovation is a term created by my friend Mr. Martin Ertl, CIO of Bombardier Transportation resulting from our in-depth analysis on innovation practices.

The concept is that the innovator chooses a perceived benefit (PB) as the prime (tried and proven) method of business, while capitalising on a real benefit (RB) as the strategic business approach. The two companies mentioned above are real estate plays i.e. RB first and food industry and retail industry leaders i.e. PB second.

Interestingly, McDonald is one of the first companies to use predictive modeling to map population growth and hence the "M" where one wants it.

More details to follow soon ...

Singapore + China - Free Trade Agreement

"China is Singapore's third-largest trading partner and Singapore is China's eighth-largest trading partner."

The article cited above is here and goes on to discuss the Free Trade Agreement reached after two years of working on it between Singapore and China.

Singapore is a fascinating experiment that has remained ahead of its time in being a successful, let's say a terribly successful, city state when compared to the other current sovereign city states of the World - Monaco, San Marino and Vatican City. Today, Dubai and other Gulf megalopolis are attempting to build their "Singapore". Other close competitors to Singapore (non-sovereign) city states are Hong Kong and Macau, perhaps City of London.

Click here to read about some inspiring quantitative details on Singapore from The World Fact Book, a small place with a population that is less than that of Denmark.

The FTA between Singapore and China will resolve/cover some of the sticking points as cited in the article:

"... the deal covers trade in goods, rules of origin, trade remedies, trade in services, movement of persons, investment, customs procedures, technical barriers to trade, sanitary measures and economic cooperation."

At a population of approximately 4.5 million, $62 billion in trade with China shows that Singapore's strengths cover more than manufacturing. Here is an example of what Singapore was thinking and doing about four years ago - unrestricted research for bioscientists. With such foresight, I believe Singapore will continue to lead all sovereign and non-sovereign city states of the World for at least half if not all of the 21st Century.

Dubai - Financial Health

A good article here (by way of Dharm Kapadia) evaluating the concerns and possible ramifications of Dubai's current financial leverage and the US economic crisis. The article states:

"Dubai's biggest risk is its daring reliance on debt to drive its breath-taking building boom. Last week, Moody's estimated that in 2006, the most recent year for figures, Dubai's government and public sector company debt was at least $47 billion, a staggering 103% of Gross Domestic Product. The investment rating agency said it expected Dubai's debt to continue outpacing GDP for another five years, exposing Dubai to pronounced financing and geopolitical risks."

Yet the article goes to conclude in positive terms providing regional insights and a little bit of history of Dubai and Abu Dhabi's relationship:

"An underlying reason for the relative lack of panic so far is that Dubai real estate remains a financial haven for wealthy individuals from riskier nearby countries like Iran and Pakistan. What's more, Dubai's real estate sector is dominated by a handful of major companies — collectively dubbed "Dubai Inc." — that are directly or indirectly owned and controlled by the government. This means, analysts say, that Dubai authorities could effectively stave off a bubble burst by keeping finished projects off line until market conditions improved. In the event of a systemic threat, Dubai can probably rely on super-rich Abu Dhabi for a bailout. "We consider it highly likely that the authorities will step in at some level to support entities that are strategically important for the economy," Moody's analyst Tristan Cooper tells TIME."

UPDATE: The above article on TIME online has sparked exciting and interesting conversations among my friends in Dubai. The insight is that over 90% of the demographic represented by my friends engaged in the discussion (male-70% and female-30%) (1) South Asians, Middle Easterners and North Africans, (2) Are between the ages of 28 and 44, (3) Married (or about to be), (4) Educated in the West (or equivalent Western University in the region) and lived there prior to moving to Dubai, and (5) Have lived in Dubai for over 2 years - (a) Are not planning to leave Dubai, (b) Are happy to see "small timers", "short timers" leave or "Go Dubizzle" (as one person stated), (c) Are confident in Dubai claiming and taking the place of being "The Financial Center" of "Middle Earth" (as one person put it).

I like to suggest ~10% margin of error to the above qualitative analysis to what the individuals actually do.

Could it be that Dubai "may" have created the method of capturing the Knowledge Worker? See my future post on challenge from Qatar in the from of Qatar Foundation, see here.

Artificial Intelligence

The word "never" does not exist in a scientists vocabulary. Will Wright (see biography here) stated that "Machines will never achieve human intelligence." I believe this to be a strong assumption. Mr. Wright further states, "Intelligence is whatever we can do that computers can't." See the text and video of the interview on Popular Mechanics here.

This has rekindled a long standing discussion with Franz Dill again, see his post "Prophecies about AI" here.

Computing is currently limited, yet moving at exponential speeds (in gaining speed). As soon as the silicon wafers in integrated circuits are replaced with diamond wafers, we will have a factor of 10 increase in the ability to withstand heat in an IC. What does this do to speed? Currently the science has pushed the existing formula (in practice) to roughly state that (in CMOS based technologies) the heat generated by a processor is approximately proportional to its clock rate, see detailed paper here. So Tera-Hertz is not far.

With such speeds more data processing occurs faster. Generically speaking, human brain stores all, applies patterns of learned behavior and hence the decisions - the key to move from one node to the next in the decision tree, or jump, or, etc. With increase in computational speeds, machines could be preloaded with "human" patterns - resulting in human like decision making. Excellent primer on human brain functionality here.

Yet, with Quantum Computing and organic memory storage and processing available one day... I have to go back to the word "never" as stated by Mr. Will Wright... I am tempted to say that there is never such a thing as never!

Virtual Worlds - Second Life

Second Life (SL) is one of the more successful virtual (online) worlds. I met with SL folks at SIGGRAPH when they first handed out T-shirts! I have one of the original green hand shirts...

I experimented with SL and found it lacking as my expectations are to incorporate all the human senses into an experience... hence, I await haptics. See details on Haptic Technology here. Yet, I feel that generation X/Y/Z are perhaps more apt at relinquishing some of the sensical facilities to establish virtual/online communities.

See detailed reviews and discussion on SL from my friend and colleague Franz Dill here. See Second Life virtual world here.

Report Card for U.S.A.'s Infrastructure

America's infrastructure boom occurred roughly with the industrial age and continued till after World War II. Similar activities are taking place today in places like Dubai, Macau, Beijing, Mumbai, Banglore, parts of Africa, etc.

One of the keys to economic development for a region is quality of life and of various lifestyles that attract the top paying knowledge worker and retains them. America's "report card" on this subject here developed by the American Society of Civil Engineers (details here) is indepth and educational.

World Perspective / Photo - 3 [India Institute of Technology]

Above is the picture of Hijli Dentention Camp at Kharagpur established during the British Colonial Rule in 1930 to accommodate those who were involved in the armed struggle for freedom of the Indian Sub-Continent or the non-cooperation movement.

On the same grounds of the infamous detention camp on the right is the picture of the first Prime Minister of India, Mr. Jawaharlal Nehru (see biography here), laying the foundation stone for the first of India Institute of Technologys (IIT) at Kharagpur.

At the ceremony on April 21st, 1956, Mr. Nehru said:

"Here I stand at this place and my mind inevitably goes back to that infamous institution for which this place became famous not now but 20 to 30 years ago- the Hijli detention camp. Here in the place of that Hijli detention camp stands this fine monument of India (IIT) today representing India's future in the making."

Read historical details of the Hijli Detention Camp and IIT Kharagpur here.

IIT Kharagpur today (see the University website here)  is ranked among the top Universities of the World and continues to gain ground in delivering the best in class talent.

[Below is the renovated detention camp serving as part of IIT]

As I post this blog I find it difficult to imagine the pride that the students and alumni of this institute must feel - to deliver and create knowledge through the passion and persistence of humans from the place of human misery created by humans. At the same time, I am confident that the experiences of these student's grand fathers and great grand fathers must reach deep within their hearts to kindle the desire to be the best that only the results we see in the World today can show. I will attempt to obtain a list of IIT Kharagpur alumni conducting the business of the World to post here in the near future.

The statement I make here is not that India has achieved such. The insight is for the astute - that if this has been achieved in such a short time then what is to come in a shorter time from South Asia?

Japan - International Growth Through Purchases / Acquisitions

"Thanks to conservative managers and years of record profits, Japanese public companies are sitting on cash reserves of more than ¥60 trillion, estimates Nikkei, a financial-news company."

States the article in the Economist "The Japanese are coming (again)" here. The figure below gives a visual insight on how Japanese companies have done this at the end of the last two decades also:

Another good article on the subject here from the International Herald Tribune. An excerpt:

"But aggressive expansion also presents challenges, especially cultural ones. Traditionally, Japanese firms emphasize seniority and stability over individual incentive and profits."

Aren't individual incentives and profits couple of the key ingredients to breakthrough innovation?

The Economist's explanation of market destabilization

Excellent diagnosis and analysis of the current economic downturn by the Economist in their special report "When fortune frowned" here.

Wired: Jagdish Bhagwati - Keep Free Trade Free

I wrote a review here of Mr. Parag Khana's letter to the next President of the USA. Below are some of my thoughts on a similar letter to the next President of the USA from Dr. Jagdish Bhagwati, see here.

In one word "brilliant". Or is it because he shares or states insights that are similar to how I look at the global market place? Here is an excerpt:

"... China may never be as innovative as the US, which has a stable venture-capital model and an entrepreneurial culture that promotes creativity. Globalization helps nations discover their unique strengths."

[Portrait on right of Dr. Bhagwati by Mario Hugo]

Dr. Bhagwati discusses IP in his article in context of constrained free trade, NAFTA being his example where he states:

"Agreements like Nafta are for free trade among members but increased protection against nonmembers."

Economic constraints (or sometimes protectionism) have an interesting quality that for a short period of time they benefit the ones within the boundary(s). If such continues, different models of conducting business emerge outside the boundary(s) that directly compete with the constrained model.

An extreme example of this would be the difficulties Israel faces in bringing its IP and ideas to the global market place, due to the reasons that are. As the US is one of the most open and international business friendly places for new ventures, at times trumping politics when the economic will is stronger, the US has benefited from a plethora of Israeli breakthroughs using it as the global launch pad. I wonder of the economic impacts if this IP had Asian launch pads for success?

I believe "Political will" to be perception and "Economic will" to be reality - both must be leveraged and managed with a balance. An unfortunate example of the imbalance is the Kyoto Protocol (details here).

[Click the figure above to maximize]

Further emphasizing my thoughts on this subject is a current example of yet another unsuccessful attempt to drive towards free trade and economic models of conducting business on agriculture, industry and services - the Doha Round (details here). An excerpt on the Doha Development Round from Wikipedia:

"As of 2008, talks have stalled over a divide on major issues, such as agriculture, industrial tariffs and non-tariff barriers, services, and trade remedies.[1] The most significant differences are between developed nations led by the European Union (EU), the United States (USA) and Japan and the major developing countries led and represented mainly by India, Brazil, China and South Africa. There is also considerable contention against and between the EU and the U.S. over their maintenance of agricultural subsidies—seen to operate effectively as trade barriers."

Dr. Jagdish Bhagwati brings to the forefront the key driver for all decisions that politicians face... economic will. It drives global trade and its leverage can help create better conditions for humanity and development of sustainable products and services.

See Dr. Bhagwati's website here.

Join the Online Debate: "The Value of H20"

The Economist puts forth a proposition for an online discussion:

"Water, as a scarce resource, should be priced according to its market value"

Join the debate here.

TheFunded.com - VC Evaluation

Are you an entrepreneur? If so, do you know about TheFunded.com? A decent place to look at evaluations of VCs across the globe and more being added daily.

See details in a Wired article here.