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An Alternative to Davos: interview with Michael Aminian

2013-11-08T08:57:29Z

Back in June 2013, a G8 meeting was imminent, announced by a flood of editorial coverage, political declarations and alter-globalization protests advocating the rights of the “Rest” over the “West”. The G8 was to take place in London—under UK presidency for the first time since Gleneagles in 2005— and spoke particularly to a country that had seen globalization raise all sorts of questions in the previous year, from multinationals’ tax avoidance scandals to the murder of a British soldier in the streets of London that revived anti-immigration sentiments.

Yet this time around, there was novelty among the predictable: personalities such as Paul Collier, David Miliband, Mary Robinson and Baroness Amos came together at Tate Modern to debate various facets of “global citizenship” as part of a two-week long ‘Cultural Forum’. Highlights included Nigerian novelist Ben Okri’s eloquent argument in favour of (re)inventing a language of globalization that would more accurately reflect current trends and identities; and Unilever CEO Paul Polman’s compelling presentation of his grand vision for sustainable businesses. The Global Journal speaks to the man behind the Cultural Forum and founder of Zamyn, Michael Aminian. His organisation has a powerful vision for an alternative to Davos: a cultural forum that aims to reconcile globalization with its true agents, the citizens of the world.

Zamyn means ‘ground’ in Farsi. What is Zamyn and how does its name relate to its purpose?

Zamyn is a sociocultural analytical organisation that was created by myself with a group of artists. We actively started in 2004, but the idea was there long before—it got delayed because of 09.11, as the focus then was on other issues. We wanted to give the organization a name that was truly global, bottom-up, and that acknowledged of the role of the individual in globalization. ‘Zamyn’ means ‘ground’ in both Farsi and Urdu, and we felt it reflected our aim of opening up the discussion of globalization to a wider population. While the cultural side of globalization is much discussed in academic circles, artists are the ambassadors of culture, and that is why Zamyn is structured around them. And, while businesses are also crucial and need to be aware that they are shifting the way culture shapes and reshapes itself, those who can explain this change are the academics, artists and writers. Therefore, Zamyn is not a consultancy but an analytical agency, which works with these individuals to analyse, document and define how culture is shaped by globalization and vice versa.

What personal journey led you to found the organisation?

As you can tell from my surname, I was born in Iran, but my family left the country in 1962. We stayed in Germany and France first, and ended up in UK. My comfort zone had been torn: I came from a totally alienated part of the world, and had to switch from a Middle-Eastern to a European culture. I was leading something of a double life between my parents’ traditional mentality and my British life. Those of us who lived like that at the time were like the guinea pigs of globalization.

Like a lot of second-generation immigrants, I faced the difficult responsibility as a child of fulfilling the hopes of my parents. I ended up studying biochemistry, yet I had no interest in continuing with research, nor in working with the family agricultural business, as at that point, my identity had shifted away from the traditional Iranian way of life. I spent about 10-15 years writing for both the Mail on Sunday and for Teheran Times, and continued to wonder where my loyalty lied. Psychoanalysis, in particular the Lacanian School, gave me the right vocabulary through which to understand my identity. I therefore began having analysis, which in the Middle-Eastern culture is unusual—people would ask me whether there was something wrong with me and I would say: ‘I am just a protégé of globalization, I am puzzled by my identity.’ I think psychoanalysis gave me a vision, an idea of the way forward.

Then, I was diagnosed with cancer, and that was a wake-up call. I had to grow up at that point and ask myself: what am I really going to deliver? I was an art collector, but I knew I was not an artist, nor a writer. However, what I did have was this experience of a global existence. Globalization was very much coming to the forefront at the time and, while it belonged to the individual, the public, economic globalization threatened to highjack it. How could we come up with a formula that prevented this from happening? We decided to create an organisation that allows the individual to be heard and recognises that they are the real asset and agent of globalization. If you look at who has been invited to be part of Zamyn, they have all either written about, or lived the process of, globalization.

Next came the challenge of how to communicate with the public: at the beginning, academic institutions expressed a lot of interest, because in a sense globalization was a very academic notion and academia consciously or unconsciously did not want to let go of its ownership of it. So we began with the London School of Economics in 2005, through a series of seminars about Culture and Globalization, chaired by Professor Henrietta L. Moore. It was a success from an academic perspective, but stopping there would defeat Zamyn’s purpose. We therefore decided on an intellectual cultural forum that would complement Davos’ World Economic Forum, would happen biennially and would be based in London. Historically, it is the place to be: it was the capital of colonisation, and London has to take ownership of its past to move forward.

What do you believe prompted such diverse personalities such as Sir Anthony Giddens, Baroness Amos or Anish Kapoor to join Zamyn?

The reason why Anish Kapoor, who is a good friend, and other theorists, analysts, artists or visionary business leaders—which is rare—were identified was because they are addressing the issue of globalization through their work. Also, I made sure that they knew that the Zamyn platform would function at the most rigorous level. These people have spent years unveiling their own theory, perfecting their work whether it is a book, a lecture, or an installation. We cannot allow the standard of an Anish Kapoor or a Steve McQueen to drop, and many organisations that approach them do not uphold this standard.

Zamyn aims at « challenging powerful categories » of centre and periphery, and creating a « shift in social attitudes ». Why is a change in consciousness so important? How does the arts contribute to it?

The West needs to develop a different approach to the so-called ‘peripheral’, ‘developing’ regions of the world. It is archaic and patronising, and unhelpful on a cultural, economic and political level. Given the current crisis in the West, it is even farcical from an economic point of view. The only way forward is by the inclusion of the rest of the world. Where Zamyn, the analysts and the artists come in is in the rephrasing, the reshaping of identity, taking it out of the intellectual space to a grass-roots level. When someone gets murdered for political or religious reasons, the attacker’s motivation sometimes stems from being degraded by those who are dominant. Zamyn aims to interrogate this relationship of dominance and rebellion.

More recently, we have started using the term “new emerging countries”, which is quite interesting linguistically: some consider this denomination an honour, but I feel it is a misrepresentation. Indeed, from a cultural point of view, how can they be “new” or “emerging”? They are built upon timeless civilizations! Once again, it fits from an economic point of view, it is another way of saying they are “fertile ground” for business from the West to move in. And, when that sort of approach is taken, it breeds bad feelings, the wrong flavour of working together. We do not believe in that at all here at Zamyn.

The Cultural Forum 2013 was on the theme of « Global Citizenship » in the lead up to the G8 summit in Ireland. Why is global citizenship important when thinking about the G-s?

The original theme was going to be migration and immigration. Migration is often a very healthy process, but one that the majority of the West does not understand. And when they do, they only handpick the aspects of it that they see as beneficial. However, as it was a difficult sell at the beginning, we decided to translate it into something softer, namely global citizenship.

Zamyn’s Chair, Sir Mark Moody-Stuart, made some excellent contributions at the final “Lessons for the G8” event, available online on the Zamyn Forum website. The G8 as a concept is defunct: eight leaders trying to run the world is a formula that does not fit in an era of globalization. To paraphrase our panellist Ian Bremmer, the world is more of a « G-zero » at the moment, rather than a G8, 7 or 20. One suggestion for the G8 that came out of the various debates is that they should at the very least try to include the rest of society, perhaps as through a sort of think tank, rather than keep a top-down, elitist form of decision-making.

What would be for you a criterion of success in the coming years?

It is a tough question, because I have such high standards. After eight years of psychoanalysis, I believe you never really arrive at an end product! However, if we can put on the map a real intellectual cultural forum, that truly embraces the process of globalization and allows the public to take an ownership of it, if we achieve 50% of that, I will regard it to be successful.

Laura Bullon-Cassis

www.zamynforum.org

www.zamyn.org

When is Prime Time?

2013-11-06T07:55:22Z

When open source started, techies revolutionized not just the info tech space but also some of the rules of doing business and providing services and products to customers. In other words, they transformed economics.

In the last decade, technology in general and information technology more specifically has not only given jaw dropping sci-fi style gadgets and Daily Prophet like interfaces but has also broken some long standing rules about how much businesses can charge for what and how. Dis intermediation is one outcome of this open source culture, but for some industries its more than dis intermediation, it is changing the production process, delivery mechanism and consumption patterns.

Some prominent examples of this in a snapshot are:

Music sharing for free that challenged the Music industry’s business model ending up with Apple’s I-tunes as the model of choice.

Hollywood’s traditional distribution methods are being challenged, with the likes of Netflix rapidly becoming the new way of delivering programming and film content.

Tailored and on demand news and information sharing by platforms like Zite and Slate etc. which send push through multimedia articles and domain specific content to readers from a wide variety of sources.

Kick-starter and Bit coins and a whole range of financial alternatives and financing models being currently tested and tried successfully that are seriously challenging an already brow-beaten financial services industry.

These technologies are powerful, seriously powerful things. Open source culture and now crowd sourcing have become ubiquitous. As open source allows many people to use available technologies to create and sell their products at low prices, there is considerable competition in things like gaming and entertainment and information, which means that the mechanics of charging customers have changed. Crowd sourcing in finance not only allows people to raise funds for an invention or a project without having to borrow or go to a major financial institution or a rich uncle but also allows producers to understand what products have a market. The customer is involved right from the start. The click is certainly mightier than the brick. The most significant revolutions and ‘regime changes’ that have happened in recent years started on social media, the famous social media led uprising in Tunisia followed by the Arab Spring being a case in point.

There’s been talk for a long time of how social media will change advertising, but most social media companies had so far failed to really tap into this. This too is now however set to change with social media companies’ especially Facebook’s Advertising and boosting options offering very powerful advertising options to businesses. This is a big threat to traditional broadcast media advertising. With targeted, referral based and cheaper alternatives available, small businesses, start-ups and individuals can reach the right psychographic and demographic across the globe without spending too much. Competition for advertising revenues coupled with cheap and free information and news that is delivered through multiple sources into our inboxes, hand-held or palm tops and soon into our sunglasses (think Google Glass), its about time broadcast and broadsheet media really considered their options and business approach going forward.

Alongside these seismic changes in access and distribution, there are dramatic developments in data visualization, information presentation, graphics and analytics. All these mean that not merely the messenger but the message is changing. While good journalism, creative writing, talented music composition and content creation is valuable and will perhaps always remain so, the tools of producing content, the mechanism of expressing an opinion and the very means of production and laws of economics and sociology are changing. While it will take academics years to perhaps piece together all the elements of this puzzle if at all they ever completely understand its implications, there is some very insightful work that has already been done by some academics viz Chris Anderson, Ethan Zuckerman, Robert Fisk etc. to name a few.

While we wait to get a grasp of what really is the true and lasting impact of these developments, there are things that media professionals can already do to better reflect and adapt to these changes. To start with, creating more interactive, creative content and deploying newer design elements and graphics and incorporating crowd-sourced content into mainstream reporting is essential. Too often one sees publications take a puritanical and conservative attitude to these inevitable changes. These are incredible opportunities for serious journalism to deliver hard-hitting and meaningful content. Up-skilling journalists to deploying these technologies while expressing themselves is another aspect of journalism that needs far greater attention. Rather than hire techies to work separately and journalists to continue in the traditional way, the two need to work together to develop stories and present them. Matrix structures for reporting as opposed to the classic approach of journalists chasing stories and analysts working separately to bolster the views and news with statistics may not be the most efficient way of telling a story anymore. How can a journalist for instance report on a news story accurately only through interviews and on ground observation, when multiple developments and aggregate actions of people influencing the story are being tracked through algorithms and when the key actors themselves are acting online and impacting developments on ground. A 3 dimensional news experience presented in simple formats while conveying all the complexity that goes into a situation is a tractable challenge with the aid of these technologies. One sees television studios transformed into many a different type of data visualization sets during elections for instance. While that is a start, it needs to be incorporated in everyday media interactions. While software is becoming increasingly available and simpler for everyone to use and design their presentation and analysis, media companies need to embrace this head on and explore the possibilities to the fullest degree as they happen. Like gaming and other industries, engaging customers now comes before asking them to pay. The model therefore needs a rethink. This needs to be a media revolution as much as it is a technological one.

Opinions voiced by Global Minds do not necessarily reflect the opinions of The Global Journal.

The New Industrial Revolution

2013-06-28T10:53:29Z

The world is on the cusp of another industrial revolution. New technologies allied with fresh thinking, increased customization and the leveraging of global networks connecting knowledge and materials are transforming traditional industries. In Sheffield - a center of past industrial glories - this latest evolution suggests a new role for the manufacturing sector in high-cost nations that have seen such business move offshore.

In a small factory in the British city of Sheffield, Brian Reece is buzzing with energy. A spare, intense 61 year-old with a background in tool making, Reece started Sheffield Precision Medical three years ago by acquiring an existing company making orthopedic implants. After spending £1.5m on new machines tools, he has pushed up the annual sales of his business threefold to £2.5m last year, in the process increasing employment from 13 to 30.

With the company’s products including highly accurate pieces of titanium and other metals used in artificial joints including hip replacements, Reece is preoccupied in installing a series of “web-cameras” inside the company’s workshops. “It’s so we can show our customers – which could be large medical device manufacturers anywhere in the world – precisely what we are doing at any time of the day and without them leaving their own headquarters,” he explains. Reece describes his company – with its roots in Sheffield’s long history of metalworking – as a “resurgent remnant.” He adds, “we are taking an age-old technology [metal-cutting] and refreshing it with modern ideas.”

Sheffield is one of the best places in the world to get a sense of how new thinking allied with clever technology and global marketing can transform traditional industries. I was in Sheffield to talk to Reece – and a number of other leading industrialists – in a visit geared partly to promoting my book The New Industrial Revolution, an account of the past, present and future for manufacturing that paints a fairly bright picture for this part of the global economy over the next 50 years.

In my book, I set out my case for the world moving through a new industrial revolution – the fifth such period of change to alter the field of manufacturing. I suggest this revolution will have a profound affect on boosting the capabilities of manufacturing businesses all around the world, but with a special impact in the high cost nations that have been somewhat disadvantaged in production industries over the past 15 years. The first industrial revolution took place over about 80 years from 1780, and involved a combination of technical changes in fields such as textile engineering, metallurgy and power systems (chiefly new steam engines) to deliver a competitive boost mainly in the United Kingdom and the rest of Europe, infiltrating the United States later.

The second industrial revolution took place between 1850 and 1900. It was brought about by a set of technology changes involving communications systems such as the railway, iron or steel hulled steamship and telegraph. The third industrial revolution occurred between 1870 and 1930. It was triggered by the stimulus of a number of new industries made possible by key science based discoveries, including ways to make metals such as steel and aluminum and other products (including pharmaceuticals) cheaply and in high volumes, with the new era greatly helped by the then-novelty of low cost and readily available electricity.

The fourth industrial revolution took place over half a century from 1950 and was based on the powerful impetus that cheap electronic computer processing provided to a huge part of the global economy, including manufacturing. The new industrial revolution started around 2005, and will probably last for about 50 years. It is characterized by seven principal themes.

These include: the intertwining and blending of a great many new and different technologies, taking in disciplines such as novel materials, automation and bio processing; the increasing separation of industry into pockets of specialty or niche activities; the growing importance of making products not on a mass scale but in a customized or personalized manner, where the characteristics of the item are suited to just a small number of users, or even a single person or organization; the evolving role of complex intellectual or material networks linking the world either with new thinking and ideas, or proving a conduit for the transfer of products and materials; the growth in importance of what might seem to embody the antithesis of the last feature but which is in fact complementary, and which concerns the effect of small concentrations of businesses and other organizations in specific geographic areas and which help each other to achieve greater global impact through cluster effects; the way in which China's recent and rapid re-emergence as a world economic superpower has not only helped companies and other groups inside this country but has also benefited other organizations around the world; and finally, the way manufacturers are using the power of their products (or the way the products are made) as a means to help the world to lessen the negative impact of other parts of human activity on the environment.

Sheffield – Britain’s fifth largest urban center by population – was known for decades as “steel city.” Iron-making has been important in the area since medieval times. In the 19th century, Sheffield became one of the cradles of the first industrial revolution – the set of changes in factory organisation and technology that radically altered life in Europe and the United States by boosting manufacturing productivity and increasing wealth. Probably the most famous episode in Sheffield’s history came in 1859.

Henry Bessemer, the prolific English inventor, chose the city as the place for the first of his ‘Bessemer converters’ – a system for making steel that cut enormously its price by increasing the metal’s rate of production and reducing the need for labor. It was in Sheffield where cheap steel – a commodity that has driven the global economy for the past 150 years – was made for the first time.

In the days when I was visiting, a resplendent mural was being unveiled in the city center to depict another of Sheffield’s favorite sons – Harry Brearley, a metallurgist who grew up and worked in the city and is credited with having discovered how to make stainless (or “rust-less”) steel 100 years ago. Later in the 20th century, Sheffield stainless steel became famous the world over, in applications such as cutlery and surgical instruments.

Today, Sheffield is still a place where – unlike in most other large British cities – manufacturing remains a highly visible part of everyday life. Outside the city center, factories remain well in evidence, even if many look rather shabby and have far smaller workforces than 50 years ago. The urban area, taking in the adjacent city of Rotherham, remains home to about 500 metals and engineering businesses, most of them with fewer than 100 employees, and many having connections to the area’s long production traditions.

Take London & Scandinavian Metallurgical (LSM), a maker of specialist metal alloys set up in 1938 in the Sheffield area by a trio of German engineers fleeing the Nazi regime. The company’s managing director is an outgoing Brazilian businessman Itamar Resende whose motto is “where others conform, we innovate.” The business is also highly international, with 87 percent of its £220m sales last year exported. By focusing on highly engineered forms of alloy with applications in sectors such as aerospace, automotive and machine tools, the privately owned company has doubled its revenues over the past seven years.

David Beare, LSM’s Corporate Director, told me “we have to keep finding new ways to use our metals, then we feel we are in with a chance.” The company has, for instance, been expanding recently in areas such as making new additive materials for use in tin-foil in the packaging industry, and in the field of high-power magnets.

Among other Sheffield companies, many have followed a similar path, avoiding commodity areas of industry and focusing on niche areas of production with fairly small numbers of competitors and where sales are made on the basis of original ideas and performance, rather than price. Another example is Gripple, a producer of specialist connectors for use in factory applications and fencing, which work by ‘gripping’ pieces of wire in unusual ways. Gripple was started in 1989 by Hugh Facey, a larger than life former wire salesman who remains in charge of the business as Chairman.

Facey has based his business philosophy on continually finding new forms of connection through encouraging experimentation. Nowadays the key work in this area is done in a 12-person “innovation centre” at his company’s headquarters. Referred to as “the madhouse” by Facey, the interior of the innovation centre is painted bright orange, with a key feature being a big red button displayed prominently on one of the walls. "When the people here come up with a particularly good idea they press the button,” confides Facey. He likes to surprise visitors by trying it out, triggering a loud screeching sound.

But for all the go-ahead demeanor of people such as Facey, it would be wrong to depict the city as without economic problems. Manufacturing in Sheffield has faced challenges, as indeed has the same branch of industry in much of the rest of the United Kingdom and further afield. The share of manufacturing in the GDP last year was only about 11 percent, down from almost 30 percent in 1970. Over this period the number of workers in manufacturing has fallen by about 5 million, to a little more than 2 million.

With manufacturing historically having represented a larger share of the local economy than in other parts of the country, Sheffield has found it hard to adapt to the new conditions for industry globally where smart thinking, rapid deployment of technology and a global mindset are all highly important. Unemployment in the city – as measured by the numbers claiming social security allowances on the grounds of long-term joblessness – is a fifth higher than the national average. Average wages are 16 percent lower than in the United Kingdom as a whole. This is a measure of the fact that – even with a relatively large number of engineering-related businesses in the city – overall employment remains skewed towards low-remuneration industries such as services or unskilled manufacturing.

A report by Sheffield First, a public/private organisation in the city geared to efforts to boost the economy, states: “Sheffield does not make sufficient use of the skills in its population, with a lower density of highly skilled private sector jobs than in other parts of the UK.”

While most of the local manufacturers are eager to link themselves to the long traditions of the city, not everyone among the city’s industrialists believes accenting the Sheffield link is a good idea. In the vanguard of this thinking is Andrew Cook, the idiosyncratic chairman and owner of William Cook, a Sheffield company that is the country’s largest maker of steel castings, used in industries such as railways, military vehicles and sub-sea engineering. One of the great survivors, Cook has been running William Cook since 1981 after he ousted his father from the job in a bitter family quarrel.

Today, William Cook employs 800 people and had sales last year of £90m, 90 percent of this exported. Cook always likes to speak of his company as being based in Yorkshire – the wider region where Sheffield is located – rather than in the city itself. He speaks witheringly of what he refers to as the “Sheffield manufacturing establishment.” The outspoken Cook reckons local business people do not do enough in adapting to new thinking and are too keen to look back at the “glory days” of past success. “They [other Sheffield manufacturers] have a misplaced belief in their embedded superiority,” he says.

However Peter Birtles, a director of Sheffield Forgemasters – another big metals business in the city – rejects this view. He says that his company, along with most of the other important manufacturers in the city, would not still be in business were Cook’s criticisms correct. “We [at Sheffield Forgemasters] have had to adapt to new pressures and become increasingly innovative in order to keep ahead of rivals from around the world – not just from countries such as Germany and the United States, but from new competitors including China and India.”

With sales last year of £100m and 800 employees, Sheffield Forgemasters – which can trace its roots back to some of the pioneering metals businesses in Sheffield of the 18th century – makes large metal parts for industries such as nuclear power and production systems for gas and oil fields. Some four fifths of its annual sales are exported. Since 2005, the company has spent more than £50m on new capital investments, such as improvements to its massive steel forging presses, while also putting £10m over the past four years into developing new production techniques and materials. For instance, to find more accurate manufacturing methods.

“We feel we have to do this if we are to have a future,” says Birtles. “Everyone keeps telling us the Chinese and Indians are catching up [in western know-how and technology]. Of course in 10 years time they will be up to the level we are now. So what we have to do is to move ahead over this period so that – when this time comes – we will be perhaps three or four years in front of where they’ve got to then.”

Having talked to people such as Birtles – part of the modern breed of European industrialist who shows a mixture of innovative verve mixed with resilience and technological acumen – my visit to Sheffield gave me some optimism about the future for the city in manufacturing. Sheffield made its name as a key center in the first industrial revolution that started to shake up the world 150-200 years ago. There is every reason to think Sheffield could have an equally big impact during the new industrial revolution that is now evolving.

Photo © Global Manufacturing Festival: Sheffield.

When Profit Meets Purpose

2013-05-13T10:11:35Z

As the first Internet stock bubble neared its popping point in 1999, IBM chief executive Lou Gerstner famously dismissed the dot-com start-ups of his day as “fireflies before the storm—all stirred up, throwing off sparks.” The Internet would truly achieve its disruptive potential, Gerstner argued, when thousands of big institutions around the world started using the new communication and technology platform to transform themselves. He was right. Although many of the dot-com players did not survive the 2000 market crash in technology stocks, they were indeed harbingers of a coming business revolution.

Nearly 15 years later, we see a new set of fireflies before a different storm. This time, an explosion of creativity in social entrepreneurship has unfolded against the backdrop of a crisis in global capitalism. Barely half of Americans polled in 2010 by GlobeScan said they believed in the free-market system, down from 80 percent in 2002. A large majority had lost trust in government. The most recent Edelman Trust Barometer found that trust in business has been below 50 percent for 8 of the past 12 years. Throughout Europe, only small minorities said they believed in free-market capitalism.

Meanwhile, social entrepreneurs are developing innovative business models that blend traditional capitalism with solutions that address the long-term needs of our planet. They are tackling chronic social problems, ranging from healthcare delivery in sub-Saharan Africa to agricultural transformation in East Asia and public-school funding in the United States. Social entrepreneurs are working in close collaboration with local communities, incubating groundbreaking (and often lifesaving) innovations; modeling synergistic partnerships with governments, companies, and traditional charities; and building business models that deploy technology and enable networking to create wins for investors and clients alike. “Social entrepreneurs are mad scientists in the lab,” says Pamela Hartigan, director of the Skoll Centre for Social Entrepreneurship at Oxford University. “They’re harbingers of new ways of doing business.”

We believe this collaborative approach offers intriguing hints about how enterprises of all sizes can deliver value for themselves and society. Below we suggest four ways in which social entrepreneurs are showing the way forward.

Using profit to fund purpose

Many of today’s leading social entrepreneurs have created organizations that are neither businesses nor charities, but rather hybrid entities that generate revenue in pursuit of social goals. While not entirely new (the Girl Scouts have been selling cookies for many years), this desire to blend purpose with profit has more recently been formalized in structures such as the US “benefit corporation” (B Corp), a corporate entity legally required to create benefit for society as well as its shareholders.

While B Corps are still rare, many nonprofit organizations generate revenue to advance the parent organization’s social goals. VisionSpring, for example, is a social venture that provides eye tests and glasses to lower-income customers in more than 20 countries, including Bangladesh, El Salvador, India, and South Africa. Initially, VisionSpring distributed its eyeglasses through a dedicated sales force of microentrepreneurs. Like many business owners before him, founder Jordan Kassalow soon learned that pushing a limited range of products through a single sales channel was a tough way to make a living. “There wasn’t enough money coming in to support our operations,” he says. “We realized we could either be a really nice, perpetually subsidized nongovernmental organization, or—better yet—change our business model so we wouldn’t need subsidies.”

Today VisionSpring operates vision stores that generate income via programs in which higher profit margins on more expensive glasses subsidize basic eyewear for the poorest customers. Kassalow also distributes eyeglasses and vision testing through large organizations like BRAC, a philanthropy in Bangladesh with a huge existing network for distributing healthcare services. VisionSpring calculates that one pair of its glasses increases the average recipient’s labor productivity by 35 percent, which works out to $216 in additional income over two years—a 20 percent rise. Kassalow plans to continue operating on a nonprofit basis while working toward profitability in every country where VisionSpring operates. (All profits are poured back into the organization.) His El Salvador unit is already profitable, and he expects VisionSpring’s India operations to achieve profitability by 2015.

Kassalow’s blended approach to value creation is increasingly common. Living Goods, for example, is a US-based nonprofit that sells essential products such as fortified foods, pharmaceuticals, and high-efficiency cookstoves through an Avon-like network of microfranchisees in Uganda. According to founder Chuck Slaughter, this model provides a modest income to the franchisees while helping to fund his operating costs. “Avon has five million agents,” he says. “My thought was if you can make that kind of money selling discretionary stuff, imagine what you can do selling absolutely essential, life-changing goods.”

Similarly, Riders for Health is a UK-based organization that sells logistical services to health ministries in seven African countries. It runs a fleet of some 1,500 vehicles that deliver medical services to between 11 million and 12 million rural Africans. The organization funds its operating expenses in part by charging local health ministries a cost per kilometer that covers fuel, maintenance, replacement parts, and logistical costs. Originally founded to service health-ministry motorcycles in Lesotho, Riders for Health now operates in several African countries and has added a slew of logistical services to its product mix. The organization maintains ambulances and hospital generators, transports medical samples from rural clinics to labs for analysis, and manages compliance programs for patients taking medication. “We don’t charge profit of any kind,” says cofounder Andrea Coleman. “But from the beginning, our mission has been to earn as much money as possible from different income streams.”

Delivering individualized products that marry need and want

Successful social ventures leverage their small scale and intense customer focus to create products and distribution models that precisely match the needs and desires of the communities they serve. In this sense they are modeling a much broader economic trend. In a 2010 McKinsey Quarterly article, Shoshana Zuboff argued that the capitalist mode of production was going through a historic transition from mass consumption to the wants of individuals, a phenomenon that she called “distributed capitalism.” Obvious examples include various personalized shopping experiences enabled by interactive technology, also known as mass customization.

While we often associate distributed capitalism with digitized consumer transactions, the concept has broader application in the world of social entrepreneurship. Caerus Associates, for example, is a small consultancy that uses a combination of big-data analytics and local community knowledge to assess development trends, often in societies suffering from violent conflict. In an article that appeared last year in McKinsey’s special volume on social innovation, Caerus founder David Kilcullen explained how his social venture advises governments, corporations, and local communities on what he calls “designing for development.” The main idea here is that development programs must be designed with input from local actors because they call the shots on the ground.

Education delivery is another area where we can see the principles of distributed capitalism at work. In Bangladesh, a social entrepreneur named Mohammed Rezwan operates a fleet of solar-powered floating schools that provide mobile education to rural schoolchildren who are often isolated during the monsoon floods. Rather than building a school and asking children to show up, Rezwan brings school to the children, when and where they need it. Similarly, Pakistan’s Pehli Kiran School System is a network of schools for the children of impoverished migrant workers living in illegal settlements, or katchi abadis. Local authorities frequently raid and dismantle these settlements, forcing the families to move. Pehli Kiran schools move right along with them, with the goal of ensuring that students can continue their education no matter what happens to their homes.

Or consider how two social entrepreneurs have managed to customize the delivery of agricultural-development services in rural Myanmar. Jim Taylor and his partner Debbie Aung Din operate Proximity Designs, a social venture that develops innovative, low-cost products designed to raise agricultural productivity. Proximity Designs employs ethnographers and product designers who work closely with subsistence farmers in the countryside to develop products like solar-lighting systems and foot-operated irrigation pumps.

Proximity Designs funds its operations in part by selling the products through a network of for-profit agricultural supply dealers in small towns in Myanmar. To ensure that farmers can afford to buy its goods, Proximity Designs also developed a financing program that advances small loans at modest rates. “We look through the lens of what impact we can have,” says Taylor. “One farmer I met had piglets that were like children—they wouldn’t sleep at night unless the lights were on. He used to stay up all night with a lit candle because he was worried about burning the house down. Now that the farmer has our solar lights; the pigs are happy and he gets to sleep.”

It would be difficult to gather such granular insight from a product design lab in, say, California. By virtue of their small size and engagement with the communities they serve, social ventures like Proximity Designs are well positioned to deliver products that meet both the needs and the wants of their clients.

Crowdsourcing the solution

In a 2008 article, communications scholar Daren C. Brabham defined crowdsourcing as “an online, distributed problem-solving and production model.” Today we see crowdsourcing applications in many different realms, from open-source software development to financial-prediction markets and funding for creative projects through Kickstarter and similar sites. Crowdsourcing has been a particular boon to social entrepreneurs, who can use it to create disproportionate impact with modest resources.

Charles Best is the founder and CEO of DonorsChoose.org, a Web-based platform that raises money to fund class projects in American public schools. Individual donors contribute an average of $50 apiece to projects that typically cost about $500. DonorsChoose.org vets every project, pays all project costs directly, and makes sure that the teachers write thank-you letters to every donor. Best covers his operating costs by charging each donor an optional 15 percent administrative fee. “We’re one of the few charities that doesn’t go hat in hand seeking donations,” he says.

Best crowdsources quality control as well as fund-raising. He used to hire college students to vet all the projects, which he says was costly and often ineffective. Today he uses a network of trusted teachers who have already received DonorsChoose grants and volunteer their time to make sure that all new projects deserve funding. This year, DonorsChoose expects to receive at least 150,000 project submissions from public schools all over the United States, and it plans to disburse about $50 million in grants, 85 percent of them to teachers working in high-poverty schools. Best’s organization has been entirely self-sustaining since 2010. Since inception, a total of 145,000 teachers at nearly half the public schools in America have received grants through the site.

In recent years, we’ve also seen a boom in prize competitions that crowdsource solutions to difficult social problems. Information technology and social media now enable cheap and easy collaboration. For social ventures, this dramatically expands the pool of potential problem solvers and lowers the cost of developing solutions. Ashoka’s Changemakers initiative, for instance, is an idea factory that encourages social entrepreneurs to develop concepts that transcend the competition itself, essentially building a marketplace for innovation in an issue area in just a few months. Changemakers judges are also potential investors. By requiring participants to post their ideas and selecting a relatively large pool of finalists, Changemakers and similar competitions can help match competitors to new funding.

Working themselves out of a job

One important test of any social venture is whether it can create sustainable impact beyond its own projects. Some of today’s most farsighted social entrepreneurs have created business models that allow them to effectively work themselves out of a job by creating sustainable, lasting change in the communities that they serve.

I-DEV International, for example, is a New York–based impact investment firm that’s in the business of what it calls “market-based sustainable development.” In Peru, I-DEV helped impoverished farmers build an international business out of tara, a native tree species whose fruit had historically been consumed locally for medicinal purposes. However, plant researchers had developed new applications for tara in the global food, pharmaceutical, leather, and pet-food industries. I-DEV helped some 200 Peruvian farmers to organize a farming co-op that today is the largest and most successful supplier of unprocessed tara in Peru.

The co-op generates nearly $4 million a year in revenue for its members. I-DEV is currently gathering investors to help the farmers build a tara processing plant. Managing director Jason Spindler says the deal will be structured as a joint venture in which the farmers take the majority stake while I-DEV and equity participants are minority shareholders. “Nothing we do is for charity,” he says.

Other social ventures scale innovation by partnering with local governments. Ned Breslin is the CEO of Water For People, an international nonprofit that works with local communities to install water pipes, latrines, and other sanitation infrastructure in Africa, Latin America, and South Asia. His goal is to ensure that nobody in a district where Water for People works will ever need sanitation assistance from another international development organization.

To do that, Water for People mobilizes local authorities from the community level all the way up to the national government. It insists that all levels of government invest their own money alongside Water for People. The local communities are also asked to participate as investors, and their contributions must take the form of cash rather than sweat equity. Breslin maintains a low public profile for his organization, with the goal of ensuring that communities and local governments get the credit for improving sanitation and therefore feel ownership in the programs. “What we’re really challenging is the endless project-by-project approach of philanthropy,” he says. “The point of our investment is not to do another project. It’s to get the water flowing at scale so they never need another project.”

Social entrepreneurs and capitalism

Despite their early successes, social ventures in this new generation are still entrepreneurial start-ups. Some may survive and grow into major organizations. Others may disappear. Regardless of their individual fates, we believe these organizations demonstrate a way forward for the capitalist mode of production, one in which economic and social value creation are no longer seen as antithetical.

Social entrepreneurs are part of a broader conversation about the relationship between business and society that has been gathering steam since the Great Recession. In a recent Harvard Business Review article, McKinsey global managing director Dominic Barton argued that global capitalism was at a turning point. “We can reform capitalism, or we can let capitalism be reformed for us, through political measures and the pressures of an angry public,” he writes. Barton suggests that capitalism should return to the values of its founding philosopher Adam Smith, who believed that business and society were profoundly interdependent.

Similarly, Harvard Business School professor Michael Porter argues that capitalism has betrayed its promise by focusing on the narrow equation of value with short-term economic returns. Porter urges companies to think in terms of “shared value,” which involves generating economic value while at the same time creating value for society by addressing its needs and challenges.

Meanwhile, the author and consultant Dov Seidman makes a business case for ethical capitalism. Globalization, he argues, has made it increasingly difficult for companies to offer unique value propositions based on their products and services alone. At the same time, the ubiquity of electronic communication and the rise of social media have created a transparent business world in which bad behavior is more difficult to hide than ever before. As a result, ethical behavior has become a point of competitive differentiation. Companies that “outbehave” their competitors will eventually outperform them as well.

We can cite many examples of large organizations that are already putting these principles into practice. Elsewhere in this volume, leaders from The Coca-Cola Company, Hindustan Unilever, and Royal DSM explain how their companies blend profit and social purpose by deploying advanced supply-chain technologies that deliver lifesaving goods and services to some of the world’s poorest people. Meanwhile, the social ventures that we have profiled in this essay are testing many ideas about the proper relationship between business and society, some of which may eventually scale up and become standard practice for organizations of all sizes. While the solutions are diverse, most are based on the working assumption that profit and purpose need not conflict.

Social ventures that create new value chains while generating profit in pursuit of social goals are a direct challenge to Milton Friedman’s dictum that the social purpose of a business is to generate profit for its shareholders. With public cynicism about business at record levels, we may well see more organizations following their lead.

The article originally appeared in McKinsey's online publication Voices on Society

The article was co-authored by Danielle Sachs, Director of Social Impact for McKinsey & Company, and Richard McGill Murphy, the managing editor of Voices on Society a print and online publication from McKinsey & Company.

Opinions voiced by Global Minds do not necessarily reflect the opinions of The Global Journal.

Photo © DR

Are Start-ups Solving Problems?

2013-04-17T11:33:29Z

The late 1990’s witnessed the growth of Internet-based companies. Start-up companies became the next big thing for venture capitalists to invest in. Silicon Valley was the hub for technological innovation and the home of most of Internet start-ups. Start-ups like Facebook, Pinterest, Zynga and Groupon have gained great momentum and have not disappointed their investors. There is a lot of hype surrounding the start-up culture but are they doing more than just creating games and apps to pass the time? Social networking sites allow people around the world to connect but can they do more than just bring old friends back together? Can start-ups address issues like poverty, inequality, access to education and medical care?

This week will be the fourth session of the Power Sessions, a joint venture by Apex Communications and VentureVillage. A series of workshops have been held in Berlin for the tech community since December 2012 and the most recent one will be on April 17 answering the question “Are Start-ups Really Solving Problems?”

What actually constitutes a start-up company? Not every new business can be classified as a start-up company. What sets it apart is the growth rate. Although there can be start-up companies that are not primarily focused on technology, the last two decades that the term has gained momentum has shown that technological innovation is a big part of it. A start-up company is intended to grow fast. As Ari Stein, Co-founder of Apex Communications also says “The term has become synonymous with the tech scene. When you mention the word start-up, it works within the technology ecosystem.” This ecosystem has found a new home in Berlin.

Still in its infancy, the Berlin start-up scene has started to grow, attracting young entrepreneurs. Stein commented that Berlin was “listed in the start-up genome top twenty start-up cities in the world. The city itself is a start-up because it came out of the Berlin Wall coming down and had to reset itself and start building from scratch. The start-up scene is very creative, exciting and experimental. Every day there are new meetups and interactions going on and new ideas being worked on. The reason we’re doing these events is we want to kick off a maturation process in the Berlin start-up scene. For this specific event we want to make people aware that there is more to the start-up scene than ‘exit’ strategies and finding the latest and greatest IOS developer to work on something that’s a little bit more trivial.”

Are great minds really just working to solve problems of a more trivial nature? Millions of apps have been created just to provide an escape from boredom and very few start-ups have actually attempted to solve real world issues. What if the brilliant young minds of the tech community actually started asking real questions and contemplating how their start-up could better society in some way? The percentage of start-ups that are socially aware and addressing critical issues is very low and here are a few that are on the right track, the start-ups that are actually solving problems.

Political participation and social engagement constitute the agenda for Purpose, a company that creates “21st century movements.” Established in 2009, by Jeremy Heimans, Andre Banks and David Madden, Purpose connects people, consumers, companies and organizations to launch movements that will have social or political impact. One such movement created by Purpose is The Rules, addressing issues of poverty and inequality around the world. Funded by Purpose itself, the New Venture Fund and crowd-funding, The Rules aims to create campaigns to change the policies and practices to serve the interests of the majority instead of the minority. Purpose has also launched movements like the LiveStrong Action and Meu Rio.

Addressing the problems in education is a United States company founded by Stanford computer science professors; Coursera is collaborating with a group of top universities to offer courses online. Working together with more than 60 universities, Coursera’s courses are provided to anyone, anywhere, for free. In February, the company expanded its reach and added lectures in French, Spanish, Italian and Chinese. Although Coursera does not offer college degrees it provides education from top universities, mainly from the US, to those who previously did not have any access. It is set up as a for-profit company that has focused its attention on a real problem we face; access to education.

Betterplace.org and knowable.org are two other start-ups that address real problems and provide innovative solutions. Till Behnke founded betterplace.org in 2007, which is a crowd funding platform. Currently there are over 5000 projects on its database and it aims to increase donations to the social sector by making it easier to donate and reducing costs on donations. It is a more effective way to engage with the social sector and citizen organizations around the world. Knowable.org focuses on providing step-by-step guides for DIY projects. Founded in Berlin, knowable.org solves everyday problems through collaboration between crafters and makers.

The amount of start-ups that address social issues and are socially aware are far too small when compared with the total amount of start-ups out there. Start-ups need to start thinking of ways to make their businesses more socially and environmentally aware, because in the end it is the opinion of the consumer that will determine the rate of success or failure and consumers have enough games to pass the time. Now they need real innovation and change.

Founded by Ari Stein and Jordan Michaeli, the Power Sessions aiming to “take the hot air out of the Berlin start-up scene,” addresses the issue of socially aware start-ups in its fourth session. The German capital is witnessing the growth of a vibrant start-up scene and the Power Sessions are there to provide a platform for open discussion on issues that are relevant. Talks will be given by the Co-founder and Managing Director of Purpose Europe Simon Willis, the European Co-leader and Director of Ashoka Germany Felix Oldenburg and the founder of betterplace.org Till Behnke. The sessions will be held at the newly opened Google HQ in Berlin.

For more information about Power Sessions click here.

Photo © DR

Climate Change Expedition Ready For The Atlantic

2013-03-26T15:25:18Z

Last October, the Deepwater Project, led by Nobel laureate Martin Beniston, was the winner of the first ever GLOBAL+5 Innovation Award. Thanks to support from the University of Geneva, the Dudley Wright Foundation and private donors, The Global Journal is proud to announce that PlanetSolar - the largest solar catamaran ever built – will set off at the beginning of April from La Ciocat in the south of France on its very first mission to conduct a unique three-month scientific expedition. Operating with zero carbon emissions, the boat will collect data along the relatively unexplored Gulf Stream, documenting the behavior of the ocean atmosphere interface and the current’s role as a climate regulator. Gerard d’Aboville, a veteran navigator and French adventurer of the North Pole, is the captain of the solar catamaran during the expedition. With its mission base in Geneva, The Global Journal spoke to Beniston ahead of PlanetSolar’s departure.

How did this project come about?

Everything started exactly a year ago with Arnold Schwarzenegger’s visit to Geneva, where he inaugurated the R20 – his association of regions to find technological solutions to climate questions. At the time, we thought that with the imminent return of PlanetSolar we could perhaps convince Schwarzenegger to come back as part of the Cannes Film Festival because the boat would have been in Cannes at that moment. Notwithstanding this idea to create media interest in the event, the University of Geneva was in any case already present in the mind of Schwarzenegger given he organized the R20 inauguration conference here.

Eventually, I was asked if we could finally do something scientific together and from this moment the idea was born to use the boat to measure the Gulf Stream in quite unique conditions as PlanetSolar operates with zero emissions. Usually, in the part of the atmosphere where such experiments take place, we cannot use measures free from entropic pollution. That is why we are certain we can obtain more accurate results using measures from natural origins uncontaminated by pollution.

Were the measures developed previously? And as a scientist, what kind of link do you expect to find between these measures and climatic changes?

The Gulf Stream has been a climate regulator for a long time, especially in the North Atlantic and more particularly in Europe. What is quite innovative is that on the one hand we will measure all the trajectories of the Gulf Stream – from Florida just beyond the point of Ibiza towards Europe. We will go further north into colder zones. At the same time we will measure physical, chemical and biological properties linked to the atmosphere of the ocean and this is really something totally new.

You have expeditions that have measured certain physical properties in certain places – others have measured chemical properties in other places. But in general, having a boat do this experiment is something that is extremely expensive and demanding. That is why the best-case scenario is to have a boat at your disposal for perhaps 15 days or three weeks to see if you can target something in particular. Then, you have all the liberty and all the time to see a process connected to the Gulf Stream but also all processes in other areas.

In terms of physical properties, there are quite standard measures such as temperature, humidity, pressure, wind-speed and direction in the atmosphere, but also thermal properties, salinity and density. What we will be looking for is to better understand the exchanges that occur between the surface layers of the ocean and the lowest layers of the atmosphere – what is happening there?

When we use all these mechanisms that modulate the climate on a larger scale, we can try to really understand the interface between the ocean and the atmosphere. We can have a better idea of the energy fluxes and aerosol fluxes, which consist of solid or liquid particles that are suspended in the atmosphere. They also play a direct or indirect role on climate change either from sunlight or their part in nucleus condensation, where mini particles make the process of condensation more efficient. So we know very little about what is going on. Why does the ocean like this quantity of aerosol in the atmosphere? So it will be interesting to see which part of the Gulf Stream likes which type of aerosol. Is it the sulfate aerosols or other aerosols that contain a biological signature?

Are you talking about evaporation of water?

No, it is more related to wind friction against the surface of the ocean that can lift up droplets. The waves that crash, however, release a very large quantity of aerosol. For instance, we estimate that around a third of sulfate aerosols are produced in mass when we burn carbon and petrol – which contain sulfur – and the ocean consumes 30 percent of all such sulfur aerosols from the atmosphere. These are immense quantities even independent of all human activity. We will try to see whether this is uniform in the ocean or whether there are zones emitting these types of sulfur aerosols that are more concentrated in the warm area of the Gulf Stream or in the cold area. We don’t know the answer in advance, but it would be interesting to quantify all of this to better understand the mechanisms of exchange between the ocean and the atmosphere.

Does this particular type of boat and scientific expedition pose any security problems?

For security I should direct you to the technician of Planetsolar. But in my view it doesn't pose any more security problems than a regular plane to the extent that this boat has proven itself during its world tour, sometimes in difficult weather. It was tested in a tropical storm and a monsoon between Australia and Asia, in the Philippines. It is an extremely stable boat with quite a particular catamaran technique where it attacks the waves – the buoys stay in the water even if the waves break underneath.

So for the team who are not necessarily seamen this will be quite a comfortable experience. In theory, I do not have any concerns about security in terms of the boat. We may have some other doubts about the boat because during its world tour it did not stay long between the two tropics of the equator where there is maximum sun. But according to the assessment by our partner Meteo-France, which has developed a routing program for the boat that can position it in accordance with optimal sun conditions – during storms for example, in the season in which we will navigate north of Iceland – it is completely feasible. There is no large risk – they doubt that we will break down because of a lack of sun.

We could potentially encounter delicate conditions in terms of a storm in the North Atlantic. Effectively, however, we are not going to encounter hyper-extreme conditions as if, for instance, we were trapped in the Antarctic ice. We will leave the Tropic of Cancer practically just at the polar circle with a change in the weather and behavior of the ocean. We will pass into an ocean just before the hurricane season in Florida – we hope – and we will pass through to the north of Iceland and in principle avoid Titanic-era icebergs.

What equipment do you need on board?

There are several types of instruments. There are the instruments that are submerged – the instruments that will measure the content of physicochemical oceanic properties, like temperature, salinity and density. We will make two stops per day in order to carry out surveys, at a depth of around 250-300 meters. We will survey morning and evening the deep layers of the ocean to see not only what is happening close to the surface, for example, but equally different points of depth that account for the basis of change in water mass. In addition, we have standard meterological measures that are part of the package provided by Meteo-France for the boat and we also have two instruments developed by the Physics Department here at the University of Geneva, which will measure solid aerosols. This is a commercial device.

We also have a device that was developed by the University to detect biological aerosols, bio-aerosols. This is an instrument that measures pollen in the atmosphere. Since these atmospheric pollens are a little bit similar in size to marine micro-organisms, we decided it is worth a try to use this instrument called the Box Corer in oceanic conditions. It is an instrument that collects the air hopefully containing all types of aerosols and is able to determine the types of micro-organisms and their abundance.

We also think we will be able to detect the biological signature of water mass transitions, for example warm or cold water masses. We have turbines that break away in the main area of the Gulf Stream, which start to twirl in the ocean. One of the roles of these turbines is to channel the heat but also trap phytoplankton, that is marine organisms. We think we can detect the presence, absence or abundance of these organisms with these atmospheric instruments, which coat the atmosphere.

China: Hotbed of Innovation For Our Planet in the 21st Century?

2013-03-25T12:38:18Z

Never has the world witnessed a large market emerge so quickly as China. As the economy grows, it is also changing. China is fast climbing the value curve, transitioning from low-cost manufacturing to innovation-led growth. In telecommunications, supercomputing, life sciences, non-fuel energy sources and “green-tech” in general, there is already a vibrant innovation/research and development (R&D) scene.

Over the past 20 years, investment in R&D has more than doubled in percentage terms, rising from 0.73% of GDP in 1991 to 1.77% in 2011. The plan is to reach 2.5% — today’s average for the countries of the European Union — by 2020. In absolute terms, given the rapid growth of China’s GDP, the numbers are even more impressive. Between 2000 and 2010, the volume of R&D investment expanded 6.6 times, reaching RMB 700 billion in 2010 (EUR 84 billion). At this rate, China could soon go from being the world’s biggest factory to becoming a main laboratory for the planet. Indeed, in the area of innovation, what is key is not so much the amount of inputs, but the quality of output. Yet, this rate of growth is spectacular and will cause a substantial shift to the East of the world’s innovation scene.

Ever since the founding of the People’s Republic of China in 1949, the ruling Communist Party has seen science and technical innovation as crucial for growth and job-creation, and few countries have worked so diligently to translate a policy priority into reality. China produces more than 700,000 engineering graduates each year. Nevertheless, in some areas, appropriate personnel are scarce. In a massive program, China is encouraging students to go abroad to study. In 2010, there were more than 360,000 Chinese students in universities outside China.

Patents and Other Evidence of Innovation

Patent applications, a pointer to the pace of innovation in an economy, are growing at 20% per year and totaled 500,000 in 2010. Many institutions offer monetary rewards to staff filing patent applications, which probably accounts for part of the surge. And, of course, when it comes to patents, quality counts more than mere numbers. Nevertheless, they are impressive figures. There has also been a jump in patent litigation between Chinese concerns. Gradually, the courts are getting tougher in applying intellectual property (IP) laws introduced after China joined the World Trade Organization (WTO) in 2001. As Chinese technology firms, such as Huawei, ZTE, Lenovo and Haier, go global, they are pushing for a more rigorous application of IP laws by Chinese courts.

China counts close to 700 high-tech ‘incubators’, which provide financing, facilities and advice for businesses start-ups. About 10% of these incubators, which are often linked to major universities, form part of the Government’s Torch program for promoting high-tech industries. Launched in 1988, the latter was especially designed to boost the R&D efforts of start-ups and small- and medium-sized enterprises (SMEs). The largest such incubator is the 232-sq km Zhongguancun Science Park in Beijing. It has several specialized ‘sub-parks’, including Electronics City and Changping Park, which specializes in medical technology and biotech engineering, along with several universities.

… some 800 non-Chinese companies have established R&D laboratories in China.

Attracted by such developments, some 800 non-Chinese companies have established R&D laboratories in China, including such companies as Nokia, Orange, Alcatel and Motorola, as well as a number of pharmaceutical giants. It is no surprise that international telecommunications companies figure prominently because China has already shown significant capacity for innovation in this area: for example, it has created its own standard for 3G mobile technology, TD SCDMA. One of the most important companies in the sector is equipment-maker Huawei, which devotes 20% of its sales volume to R&D. The company, with a workforce of 140,000, has rapidly developed a strong international presence. In their quest for global markets, Chinese multinational companies have already begun to establish R&D centers in Europe.

Computing is another area of remarkable innovation. In October 2010, China’s Tianke 1A supercomputer broke the world record for computing power. With its massive investments in nanotechnologies, China aims to overtake the United States in this field by 2020.

In the life sciences, as well, significant research progress is being made in many universities; with Shanghai/Suzhou, Guanzhou and Beijing are all vying to become world centers. In non-fuel energy sources and ‘green-tech’ in general, China shows sustained commitment. Chinese producers of voltaic solar panels already have 40% of the world market. Actors in this sector include Suntech, Yingli and JASolar. It is a similar story in wind power, with companies Goldwind and Sinovel ranking among the world’s top five.

Watch Out Silicon Valley

Any ‘Western’ firm interested in innovation, and which does not yet have an R&D presence in China, must be asking itself whether the time has not come to have one. The ongoing collaborative project ‘Innovation in China’, in which IMD is a key actor, looks at questions around forming effective partnerships between China and ‘Western’ firms for mutual benefit, with particular reference to medium-size companies. These questions include the following: what path will China follow and at what pace? How does the rate at which the value curve is climbed vary from industry to industry? Can China turn itself into a hub of innovations for the world, and how soon?

On the last question, a recent survey of managers saw China displacing the celebrated and market-savy Silicon Valley in California as early as 2016. This may seem somewhat rapid, but in China, everything is moving so fast…

Originally published in InnovationManagement.Se.

Opinions voiced by Global Minds do not necessarily reflect the opinions of The Global Journal.

Photo © DR

The Top 100 NGOs 2013

2013-01-28T16:22:33Z

The Global Journal is proud to announce the release of the second edition of its annual Top 100 NGOs special issue. The only international ranking of its kind, this exclusive feature reflects the increasing global influence of NGOs in all facets of modern life, in the process shining a light on a dynamic, innovative and inspiring sector estimated by the Public Interest Registry (PIR) to encompass close to 10 million organizations. In the multilateral context alone, the number of UN-accredited NGOs had risen from 40 in 1945 to 3,536 by the end of 2011. The Top 100 NGOs ranking will inform policy-makers, business, academics and non-profit leaders.

Continuing to refine its evaluation methodology, The Global Journal considered a pool of approximately 450 NGOs this year based on three key criteria: impact, innovation and sustainability. For some organizations, these changes have resulted in a climb up the ranking, for others, a no doubt unwelcome slide. Beyond the fortunes of individual NGOs, however, the following are some key takeaways from the 2013 list:

While the overall top 10 continues to be dominated by major international development and humanitarian NGOs, the most innovative NGOs reflected a more diverse mix of education, peacebuilding, environment and health activities.

The best represented sub-sectors overall were Development (23), followed by Health (17), Education (15), Children & Youth (13), Environment (10) and Peacebuilding (10).

While the United States again outpaced other countries in geographical terms – with one-third of the NGOs headquartered there – another third of the NGOs featured were based in developing countries, led by India (6), Brazil (5) and Kenya (4). Only the United Kingdom (11) and Switzerland (9) outperformed these emerging actors, while major donors like France (2) and Germany (1) were only a marginal presence in the list.

Beyond profiles of the 100 NGOs that made it into the 2013 edition of the ranking, The Global Journal’s Top 100 NGOs special issue also features a fascinating history of international NGOs by Thomas Davies, an eyewitness account of the ‘dark side’ of NGOs in post-earthquake Haiti by Jonathan M Katz, a thought-provoking essay on the globalization of ideas by Harvard professor David Armitage, a worrying report from Laurent Vinatier on Europe’s ‘last dictatorship’ in Belarus, an exclusive interview with leading historian Mark Mazower on the past and future of global governance and an evocative photo essay by Daniel Blaufuks capturing the everyday beauty of today’s Iran.

Further information – including regarding the evaluation methodology – is available here.

Clicks and Bricks: Preparing for Continuous Change

2012-11-14T19:29:08Z

What is the new game in town? Out of competing theories and views, there tends to emerge a certain winner, a dominant argument that shapes the entire new paradigm. In a world of diversity and disparate values and social systems, its not always easy to know what this emerging paradigm is. A lot of the times our views on who the winner might be are shaped by our own context and where we live.

What world do you live in? The world has probably always been as varied and multifarious as we find it now. Its population always separated by distance, context and perspective. There always were, and perhaps always will be, technologically advanced and not so advanced societies that co-exist. The crisis of our time though is somewhat different. It almost seems as if post-modernity has only just arrived in its truest sense. Choices about careers, investments, politics and social systems are all a lot more difficult.

As the world transitions towards multi-polarity, the shortcomings of all systems come sharply into focus. As the speed of technological innovation accelerates, skills, careers and products of today will become very rapidly obsolete tomorrow. As capital is attracted to a large spread of commercial centers across the world, and as start-ups and innovations drive economic growth, the world is growing much more competitive. This is probably an era of a million renaissances. As the worldwide web forged a global market, increasing numbers of people began selling their arts, skills, crafts, cultures and products to individuals all over the world, breathing life into many otherwise marginalized or unknown communities.

Despite the incredible variety in the lifestyles of the 7 billion people living on earth, there are at times some seminal events or discoveries that seem to reach across these vast differences and affect the lives of nearly all of us. It isn’t, however, always easy to spot such events in their early stages or to predict what their subsequent effects may be. As an increasing number of people gains access to information and research across the world, several different interpretations are brought to bear on these events. Post-modernity, perhaps by definition, implies a certain ambiguity and plurality of perspective embedded in context specific interpretations of the world, rather than a single monolithic understanding of it.

There are still, however, writers, thinkers and theorists whose views seem to envelop a large swathe of human understanding. Clay Shirky’s views, for instance, on collective human action through enabling technologies better known as ‘crowd sourcing’ is one area that is now seeing incredible growth and activity. Kick Starter – the start-up platform that ‘crowd funds’ creative projects and innovations of aspiring entrepreneurs and originated in the US in 2009 – has already funded US $350 Million in projects as of October 2012, and just launched in the UK last month. ‘Unbound’, a UK-based publishing house, aims to crowd source book publishing by taking away the middleman. Several such projects and start-ups are beginning to render the intermediary actors in entire sectors redundant.

The words and actions of such leading thinkers point to a very significant and rapid change in the way society functions. Yet in the midst of revolutionary ideas and innovations from people such as Paul Graham and Steven Pinker, you still, however, observe the old world views centered in geographic identities and ‘war of civilizations’ type mentalities fighting for survival in the writings of the likes of Niall Ferguson. Nonetheless, the inevitability of change is bound to creep into all our lives and it behooves us to listen and adapt to these changes as individuals, communities and as a society at large.

Happily enough, the developments we are observing are for the better, pointing to a more exciting and promising time ahead. With the corruption and inefficiencies in banking and other leading industries of the 20th century spilling out, the new breed of open-source and crowd sourced businesses is taking over, increasing transparency and leveling the playing field. The online shift of the world economy has opened avenues for growth to those who adapted fastest. However, the next generation of change is already upon us, and a new set of technologies are again on the anvil. We have already transitioned web-based business to mobile platforms resulting in incredible innovations in telephony. But there is a different class of innovations now taking shape.

The inventor Marcin Jacobowski built a tractor in just six days, and made the designs available to everyone. He is now creating a ‘starter kit for civilization,’ which includes simple designs for 50 machines he considers important for modern life. All of these are being made available open-source to unleash the potential for others. He is not alone, however, with this open source philosophy and idea sharing spreading far and wide. Marcin is also not alone in focusing on manufacturing. Time magazine’s best inventions list for 2012 featured, alongside his tractor, a motion-activated screwdriver, solar water distiller, a ‘liquislide’ compound material for aiding fluid flow that can be used in anything ranging from ketchup bottles to airplane wings, self inflating tires, a new space suit design, and James Cameron’s Deepsea Challenger Submarine. In sum, the list includes a host of objects that represent innovations in design of physical space. There is an unmistakable trend towards manufacturing and hardware after a burst of software and web-enabled innovations. These developments are transformative and will realign industries and economic power.

According to Chris Anderson, Editor in Chief at Wired and best-selling author, the next significant development will be linked to the democratization of the tools of creation and distribution. At his talk in London for Intelligence Squared, Anderson singled out 3D printing as the next major revolutionary step, which will impact and drive manufacturing over the coming decades. According to Anderson, ten years ago businessmen from developed western countries had to travel half way across the globe to China, network with local officials and obtain permits to have their products manufactured in cheap local factories. Now the same transaction takes a couple of clicks on the Internet through online payment and data sharing services.

The methods of production and the mechanics of doing business internationally have changed dramatically. The global supply chain or ‘factory in the cloud,’ has not only made it easier for Chinese factories to secure overseas contracts, but has also empowered inventors in the West to become entrepreneurs by helping them convert their designs into products, reducing barriers to entry. But that too is now fast becoming par for the course. According to Anderson the game is already set to change once again with the advent of 3D printing, which essentially enables users to print ‘things’ instead of documents at home from their computer. That is, providing the means for individuals to design their own product and ‘manufacture’ it in on their own 3D printer.

While still nascent, the potential impact of this technology on how we consume products, design our physical space and personalize our world is significant. For instance, 3D printing could be a challenge to Chinese dominance of production processes. If spread widely enough, people might design and tailor their products to their own taste and build them at home rather than buying mass-produced goods off a factory floor. In this vein, Anderson wrote in his earlier books Long Tail and Free about the revival of barter and exchange of value over the net, resulting in new rules for finance and economics in the information age. All these developments rupture existing structures, creating space for new ideas and systems.

How far economies go in internalizing these concepts and developments into their social fabric and their culture is pivotal in marking out the main beneficiaries of such developments. While this notion of adapting to the latest technology is not new, the extraordinary rate of progress now is itself a major game changer. Slow moving, entrenched and rigid structures, large corporations and monopolies will find themselves less and less competitive in a world of crowd-sourced solutions, networked start-ups and rapid technological advances. The shifts in global politics, the shifting of economic power, rapid and irresistible technological changes and evolving social and cultural paradigms mean that nimble-footed and adaptive institutions and individuals will lead the way and benefit most from coming changes.

Smaller start-ups and flexible networks rather than large companies, and adaptive individuals rather than commoditized, unresponsive workers are destined to survive better. Flexibility, the ability to start afresh and continuously innovate is the new normal. Given this new set of rules, creating industries that are adaptive and systems that are responsive is the order of the day. It is perhaps not a war of civilizations anymore, but a competition between networks: the wider, broader and nimbler the network, the better the chances of surviving to the next hurdle. Societies that are able to look beyond political and religious identities towards more collaborative and result-oriented associations across the globe will lead the way. That, really, is the new game in town.

Papandreou Joins GLOBAL+5 Jury

2012-10-02T17:45:03Z

Former Greek Prime Minister, George Papandreou, and other renowned global actors join the Jury of GLOBAL+5 for the first ever festival of global governance.

The Global Journal is proud to announce the launching of GLOBAL+5, the first ever festival of global governance to be held from 9-10 October at the Four Seasons Hôtel des Bergues, in Geneva. GLOBAL+5 is a unique and exciting opportunity to identify and award innovative and visionary projects, addressing some of the most pressing global challenges the world will be facing in the next five years. The platform is a powerful force for individuals, groups and organizations from the public, private and non-profit sectors to exchange their ideas and catalyze positive change.

Twenty projects out of 75 selected projects have made the final-cut for the competition. The Global Journal has asked the Jury to focus on the potential impact of each project over the next 5 years (+5), the ability to empower and engage citizens, and the innovation that will drive enthusiasm and support for stakeholders. Our next Press Release will be dedicated to the projects in more detail.

The Jury consists of leading global actors from a wide variety of backgrounds. The former Greek Prime Minister, George Papandreou, will be the keynote speaker at the awards ceremony.

The esteemed jurors are:

Mr. Jacques Attali, French economist, writer and senior civil servant
Mr. Thomas Biersteker, Director, Programme for International Governance, IHEID
Ms. Laurence Boisson de Chazournes, Director of International Law and International Organization, UNIGE
Mr. Paul Clements-Hunt, Founder, The Blended Capital Group
Mr. Fred Dust, Partner, IDEO
Ms. Jo Guldi, Historian Junior Fellow, Harvard Society of Fellows
Ms. Karin Hagemann, Director, Public Sector, International Organizations and Civil Society, KPMG
Mr. David Held, Professor of Politics and International Relations, Durham University
Mr. Pascal Lamy, Director-General World Trade Organization
Mr. Peter Marsh, Manufacturing Editor, Financial Times
Ms. Eva-Maria Nag, Executive Editor, Global Policy Journal
Mr. George Papandreou, former Prime Minister of Greece
Ms. Angela De Wolff, Founder & CEO of Conser Invest

The specially selected Jury will convene to assess projects and discuss them with representatives in Geneva on 9 October, while the final results will be announced at a concluding press conference on 10 October.