Mapmaking for the masses, online

On the Web, anyone can be a mapmaker

With the help of simple tools introduced by Internet companies recently, millions of people are trying their hand at cartography, drawing on digital maps and annotating them with text, images, sound and videos.

In the process, they are reshaping the world of mapmaking and collectively creating a new kind of atlas that is likely to be both richer and messier than any other.

They are also turning the Web into a medium where maps will play a more central role in how information is organized and found.

Already there are maps of biodiesel fueling stations in New England, yarn stores in Illinois and hydrofoils around the world. Many maps depict current events, including the detours around a collapsed San Francisco Bay area freeway, and the path of two whales that swam up the Sacramento River delta in May.

Increasingly, people will be able to point their favorite mapping service to a specific location and discover many layers of information about it: its hotels and watering holes, its crime statistics and school rankings, its weather and environmental conditions, the recent news stories and historical events that have shaped it. A good portion of this information is being contributed by ordinary Web users.

James Lamb of Federal Way, Washington, created an online map to illustrate the spread of graffiti in his town and asked other residents to contribute to it. “Any time you can take data and represent it visually, you can start to recognize patterns and see where you need to put resources,” said Lamb, whose map now pinpoints, often with photographs, nearly 100 sites that have been vandalized.

In aggregate, these maps are similar to Wikipedia, the online encyclopedia, in that they reflect the collective knowledge of millions of contributors.

“What is happening is the creation of this extremely detailed map of the world that is being created by all the people in the world,” said John Hanke , director of Google Maps and Google Earth. “The end result is that there will be a much richer description of the earth.”

This fast-growing GeoWeb, as industry insiders call it, is in part a byproduct of the Internet search wars among Google, Microsoft, Yahoo and others. In the race to popularize their map services – and dominate the potentially lucrative market for local advertising on maps – these companies have created the tools that are empowering people with minimal technical skills to do what only professional mapmakers were able to do before.

“It is a revolution,” said Matthew Edney, director of the History of Cartography Project at the University of Wisconsin at Madison. “Now with all sorts of really very accessible, very straightforward tools, anybody can make maps. They can select data, they can add data, they can communicate it with others. It truly has moved the power of map production into a completely new arena.”

Online maps have provided driving directions and helped Web users find businesses for years. But the Web mapping revolution began in earnest two years ago, when leading Internet companies first allowed programmers to merge their maps with data from outside sources to make “mash-ups.” Since then, for example, more than 50,000 programmers have used Google Maps to create mash-ups for things like apartment rentals in San Francisco and the paths of airplanes.

Yet that is nothing compared with the boom that is under way as mapping tools are opened up to everyone. In April, Google introduced a service called MyMaps that makes it easy for users to create customized maps. Since then, users of the service have created more than four million maps of everything from where to find good cheap food in New York to summer festivals in Europe.

More than one million maps have been created with a service from Microsoft called Collections, and 40,000 with tools from Platial, a technology start-up. MotionBased, a Web site owned by Garmin, a maker of navigation devices, lets users upload data they record on the move with a Global Positioning System receiver. It has amassed more than 1.3 million maps of hiking trails, running paths, mountain bike rides and other adventures.

On the Flickr photo-sharing service, owned by Yahoo, users have “geotagged” more than 25 million pictures, providing location data that allow them to be viewed on a map or through 3-D visualization software like Google Earth.

The maps sketched by this new generation of cartographers range from the useful to the fanciful and from the simple to the elaborate. Their accuracy, as with much that is on the Web, cannot be taken for granted.

“Some people are potentially going to do really stupid things with these tools,” said Donald Cooke, chief scientist at Tele Atlas North America, a leading supplier of digital street maps. “But you can also go hiking with your GPS unit, and you can create a more accurate depiction of a trail than on a USGS map.” Cooke was referring to the United States Geological Survey.

April Johnson, a Web developer from Nashville, Tennessee, has used a GPS device to create dozens of maps, including many of endurance horse races – 50-mile, or 80-kilometer, treks through rural trails or city parks.

“You can’t buy these maps, because no one has made them,” Johnson said. Her maps on the MotionBased site include things like the distance, speed and elevation of her rides.

Angie Fura used one of Johnson’s maps to help organize the Trace Tribute, an endurance ride on trails in Tennessee, and distributed the map to dozens of other riders. “It gives riders an opportunity to understand what the race is like, and it allows them to condition their horses in accordance,” Fura said.

 

Until recently, most Web maps were separate islands that could only be viewed one at a time and were sometimes hard to find. But Google and Microsoft, which have been the most aggressive in pushing new Web mapping technologies, have developed tools that make it possible for multiple layers of data to be viewed on a single map. And Google is working to make it easier to search through all online maps, whether or not they were created with its tools.

Now, a tourist heading to, say, Maui can find the hotels and restaurants on the island and display them on a map that also superimposes photos from Flickr and users’ reviews of various beaches.

The same information is quickly moving from two-dimensional to three-dimensional renderings. Microsoft, for example, has created 3-D models of 100 cities worldwide and plans to have 500 models in the next year.

“You will have a digital replica of the world in true 3-D,” said Erik Jorgensen, general manager of Live Search at Microsoft.

For the Internet search companies, these efforts are part of a race to capture the expected advertising bonanza that will come as users browse through these maps on their computers or cellphones in search of businesses and services. In the process, they are creating technologies whose effect could be similar to that of desktop publishing software, which turned millions of computer users into publishers.

“The possibilities for doing amazing kinds of things, to tell stories or to help tell stories with maps, are just endless,” said Dan Gillmor, director of the Center for Citizen Media, a project affiliated with the Harvard University Berkman Center for Internet & Society and the journalism school at the University of California at Berkeley.

Some of Gillmor’s journalism students are working with a Dartmouth University researcher to add photographs, videos and interviews to a map project documenting the house-by-house reconstruction of a section of New Orleans. Gillmor wants local residents to contribute to the project, which uses Platial’s map service.

“The hope is that the community will tell the story of its own recovery with the map as the dashboard,” he said. “We have just seen the beginning of what people are going to do with this stuff.”

SF Gate

 

Marketers get in touch with web feelings

New field of sentiment analysis is crunching emotions into hard data to serve the bottom line

Computers may be good at crunching numbers, but can they crunch feelings?

The rise of blogs and social networks has fuelled a bull market in personal opinion: reviews, ratings, recommendations and other forms of online expression. For computer scientists, this fast-growing mountain of data is opening a tantalizing window into the collective consciousness of Internet users.

An emerging field known as sentiment analysis is taking shape around one of the computer world’s unexplored frontiers: translating the vagaries of human emotion into hard data.

This is more than just an interesting programming exercise. For many businesses, online opinion has turned into a kind of virtual currency that can make or break a product in the marketplace.

Yet many companies struggle to make sense of the caterwaul of complaints and compliments that now swirl around their products online.

As sentiment analysis tools begin to take shape, they could not only help businesses improve their bottom lines, but also eventually transform the experience of searching for information online.

Several new sentiment analysis companies are trying to tap into the growing business interest in what is being said online.

“Social media used to be this cute project for 25-year-old consultants,” said Margaret Francis, vice-president for product at Scout Labs in San Francisco. Now, she said, “top executives are recognizing it as an incredibly rich vein of market intelligence.”

Scout Labs, backed by the venture capital firm started by the CNet founder Halsey Minor, recently introduced a subscription service that allows customers to monitor blogs, news articles, online forums and social networking sites for trends in opinions about products, services or topics in the news.

In early May, the ticket marketplace StubHub used Scout Labs’ monitoring tool to identify a sudden surge of negative blog sentiment after rain delayed a Yankees-Red Sox game.

Stadium officials mistakenly told hundreds of fans that the game had been cancelled, and StubHub denied fans’ requests for refunds, on the grounds that the game had actually been played. But after spotting trouble brewing online, the company offered discounts and credits to the affected fans. It is now re-evaluating its bad-weather policy.

“This is a canary in a coal mine for us,” said John Whelan, StubHub’s director of customer service.

Jodange, based in Yonkers, N.Y., offers a service geared toward online publishers that lets the firm incorporate opinion data drawn from more than 450,000 sources, including mainstream news sources, blogs and Twitter.

Based on research by Claire Cardie, a Cornell University computer science professor, and Jan Wiebe of the University of Pittsburgh, the service uses a sophisticated algorithm that not only evaluates sentiments about particular topics, but also identifies the most influential opinion holders.

Jodange, whose early investors include the National Science Foundation, is currently working on a new algorithm that could use opinion data to predict future developments, like forecasting the impact of newspaper editorials on a company’s stock price.

In a similar vein, The Financial Times recently introduced Newssift, an experimental program that tracks sentiments about business topics in the news, coupled with a specialized search engine that allows users to organize their queries by topic, organization, place, person and theme.

Using Newssift, a search for Wal-Mart reveals that recent sentiment about the company is running positive by a ratio of slightly better than two to one. When that search is refined with the suggested term “Labour Force and Unions,” however, the ratio of positive to negative sentiments drops closer to one to one.

Such tools could help companies pinpoint the effect of specific issues on customer perceptions, helping them respond with appropriate marketing and public-relations strategies.

For casual web surfers, simpler incarnations of sentiment analysis are sprouting up in the form of lightweight tools like Tweetfeel, Twendz and Twitrratr. These sites allow users to take the pulse of Twitter users about particular topics.

A quick search on Tweetfeel, for example, reveals that 77 per cent of recent tweeters liked the movie Julie & Julia.

But the same search on Twitrratr reveals a few misfires. The site assigned a negative score to a tweet reading “julie and julia was truly delightful!!”

That same message ended with “we all felt very hungry afterwards” – and the system took the word “hungry” to indicate a negative sentiment.

While the more advanced algorithms used by Scout Labs, Jodange and Newssift employ advanced analytics to avoid such pitfalls, none of these services works perfectly.

“Our algorithm is about 70 to 80 per cent accurate,” said Francis, who added that its users can reclassify inaccurate results so the system learns from its mistakes.

Translating the slippery stuff of human language into binary values will always be an imperfect science, however.

“Sentiments are very different from conventional facts,” said Seth Grimes, the founder of the suburban Maryland consulting firm Alta Plana, who points to the many cultural factors and linguistic nuances that make it difficult to turn a string of written text into a simple pro or con sentiment. “`Sinful’ is a good thing when applied to chocolate cake,” he said.

The simplest algorithms work by scanning keywords to categorize a statement as positive or negative, based on a simple binary analysis (“love” is good, “hate” is bad).

But that approach fails to capture the subtleties that bring human language to life: irony, sarcasm, slang and other idiomatic expressions.

Reliable sentiment analysis requires parsing many linguistic shades of grey.

Source: TS

 

Thinking negatively can boost your memory, study asserts

Bad moods can actually be good for you, with an Australian study finding that being sad makes people less gullible, improves their ability to judge others and also boosts memory.
The study, authored by psychology professor Joseph Forgas at the University of New South Wales, showed that people in a negative mood were more critical of, and paid more attention to, their surroundings than happier people, who were more likely to believe anything they were told.

“Whereas positive mood seems to promote creativity, flexibility, cooperation, and reliance on mental shortcuts, negative moods trigger more attentive, careful thinking paying greater attention to the external world,” Forgas wrote.
“Our research suggests that sadness … promotes information processing strategies best suited to dealing with more demanding situations.”

For the study, Forgas and his team conducted several experiments that started with inducing happy or sad moods in their subjects through watching films and recalling positive or negative events.
In one of the experiments, happy and sad participants were asked to judge the truth of urban myths and rumors and found that people in a negative mood were less likely to believe these statements.
People in a bad mood were also less likely to make snap decisions based on racial or religious prejudices, and they were less likely to make mistakes when asked to recall an event that they witnessed.

The study also found that sad people were better at stating their case through written arguments, which Forgas said showed that a “mildly negative mood may actually promote a more concrete, accommodative and ultimately more successful communication style.”
“Positive mood is not universally desirable: people in negative mood are less prone to judgmental errors, are more resistant to eyewitness distortions and are better at producing high-quality, effective persuasive messages,” Forgas wrote.
The study was published in the November/December edition of the Australian Science journal.

Source: Reuters

 

What Makes Beautiful Minds

Some forms of creative genius seem unfathomable. But as Sylvia Nasar the author of A Beautiful Mind tells us, that doesn’t mean we can’t learn from them.

 J. Nash and T. kaczynski

In Ron Howard’s movie based on my biography, A Beautiful Mind , Russell Crowe plays Princeton mathematician and economics Nobel laureate John Forbes Nash Jr. From the first frame, the young Nash — driven, brilliant, odd — is obsessed with finding the truly original idea that will reveal reality’s “governing dynamics” and, not coincidentally, win him mathematical stardom.

Clueless as Nash is about social dynamics, he correctly senses that it is ideas, as much as money, power, or sex, that make the world go round. That, of course, is what economic thinkers from Friedrich Hayek to Joseph Schumpeter, John Maynard Keynes, and Robert Solow have argued all along. The explosion of creative thinking in the past century and a half or so is the main reason living standards have risen eightfold, market economies have outperformed socialist ones, corporations have become innovation labs, and work has become more interesting.

And so we’d all love to understand, harness, and enhance that kind of thinking. How nations can promote creativity is the subject of many studies, including one by Edward C. Prescott, who just won a Nobel Prize in economics. But how the minds of truly original problem solvers such as John Nash work remains pretty much a mystery. While most of us can imagine writing a book and maybe painting a picture, very few of us can imagine composing Mahler’s Ninth Symphony, or proving Fermat’s Last Theorem. Such inventions strike us as magical, perhaps the reason one synonym for creativity is “wizardry.”

The 21-year-old John Nash was certainly a bit of a wizard to have come up with the first theory of nearly everything. That’s no exaggeration, either. Most theories apply to just one specific discipline. But game theory, the subject Nash is best known for tackling, applies to any situation involving a mix of competition and cooperation — corporate rivalry, competition for votes, Darwinian struggles among species. Nash’s thesis was just one of a spectacular string of problems that he solved before he turned 30 and the onset of delusions and hallucinations sapped his creative powers. In fact, most of the mathematicians I interviewed insisted that Nash’s contribution to game theory was the most “trivial” of his accomplishments.

His theory of noncooperative games won him a Nobel Prize in 1994, more than 30 years after he fell ill with schizophrenia. When I began working on Nash’s biography, I was very clear about spending most of the book telling the story of his twenties and his great burst of achievement, not his descent into madness. I found his ambition, focus, and obsession with originality extremely impressive. I was especially intrigued by the way he worked: what he chose to learn or ignore, how he picked problems, his strategies for solving them. At first, some of his work habits — not reading, for example — seemed merely eccentric. Now I realize that he was mostly trying hard to maintain his creative momentum and protect his unique way of seeing things. And as seemingly magical and unfathomable as his mathematical genius was, his methods for husbanding and marshaling it are likely to resonate with anyone who’s striving to do something that hasn’t been done before.
“His methods for husbanding and marshaling genius are likely to resonate with anyone who’s striving to do something that hasn’t been done before.”

Nash absolutely believed in learning by doing. “Classes dull the mind,” says Russell Crowe in one of the opening shots in the movie, reflecting Nash’s sentiments completely. At 15, Nash was making pipe bombs, mixing beakers of nitroglycerin, and re-proving theorems by Fermat. Once he got to Princeton, “it was as if he wanted to reinvent, for himself, 300 years of mathematics,” said the mathematician John Milnor, who was a freshman when Nash was a first-year grad student. Nash was also always primed for inspiration, no matter where or when it came. He quizzed well-known visiting lecturers, and carried a clipboard and jotted down ideas in illegible scribbles. Some of his best ideas came from trying to reconstruct arguments from his own indecipherable notes. Within a semester, he had invented something new — a beautiful game played on a rhombus with Go stones — that instantly established his reputation as a pure mathematician. Within 14 months, he had also started on the thesis that would win him the Nobel.

Nash thought of mathematics as a ferociously competitive sport. “I imagine that by now you are indeed used to miscalculation,” sneers Russell Crowe’s Nash to a rival. The rival taunts him back as he beats Nash at Go: “What if you never come up with your original idea? What if you lose?” For Nash, who craved recognition, mathematics was about winning. He wasn’t alone, either. “Competitiveness — it was sort of like breathing,” another graduate student told me. “We thrived on it.” Nash may have skipped lectures, but he never missed afternoon tea. That’s where the graduate students and professors played Go and Kriegspiel, the elaborate variant on chess, and traded insults and mathematical gossip. “Trivial” was Nash’s pet put-down. “Hacker” was another. Ranking students and professors — with himself on top — was a favorite pastime. He was by no means a brilliant chess player, only an unusually aggressive one. “He managed not just to overwhelm me but to destroy me by pretending to have made a mistake,” recalled a man who had made the error of challenging Nash to a game.

Winning didn’t mean much, though, unless the stakes were high. Nash was always looking for big, unsolved problems. At MIT in the early 1950s, Nash on a dare took up a problem that had baffled mathematicians for a century. The experts in the subject predicted he’d get nowhere. They were wrong. He succeeded by simplifying the problem and then pursuing a strategy that seemed bizarre only because it was novel. It was just another example of Nash’s tendency to trust his own instincts over received wisdom. “Everyone else would climb a peak by looking for a path somewhere on the mountain,” one of Nash’s supporters said later. “Nash would climb another mountain altogether and from a distant peak would shine a searchlight back on the first peak.” Or as Nash himself put it, he tended “to think that the thing to do is to get away from what other people are doing and not to follow directly in anyone’s recent work.”

But Nash was no loner. As eccentric and competitive as he was, he was remarkably good at recruiting other people to join his coalition. “Some mathematicians like to work by themselves,” another graduate student said. “He liked to exchange ideas.” At MIT, for example, Nash finished what some regard as his most important work by persuading half a dozen colleagues to spend months collaborating with him to fill in gaps in his proof. “It was like building the atom bomb,” recalled one. Even in graduate school, Nash’s “beautiful mind” motivated other students to look out for someone they regarded as “obnoxious, a brat.” One insisted that Nash claim credit for his Nobel Prize-winning proof by immediately publishing a version in the National Academy of Sciences journal. “He was spacey,” said David Gale, now emeritus professor of mathematics at the University of California in Berkeley. “He never would have thought of doing that.”

Making a movie that tries to take the audience inside Nash’s head confronted the filmmakers with a different kind of creative puzzle: translating thoughts and ideas into visual images. Akiva Goldsman, who wrote the screenplay, had the brilliant idea of letting the audience see the world through Nash’s eyes in the movie’s first half. The director, Ron Howard, invented scene after scene of carefully choreographed details to communicate the gist of Nash’s original idea — and later his delusions. Crowe exploited a chance encounter with Nash on the second day of filming to conjure up, eight weeks later, a perfect evocation of Nash in his seventies. Crowe wore the same red cap and tan raincoat, adopted the same tentative air, and repeated verbatim Nash’s monologue about Ceylonese versus Indian teas. It became one of the most affecting scenes in the movie. For me, that was the most extraordinary example of an actor’s wizardry.

The most surprising reaction to the movie came from high school students who told me they were intrigued by the world of mathematics, that they thought it was cool. It’s like F. Scott Fitzgerald’s definition of what makes a first-rate mind: the ability to hold two opposing ideas at the same time. I think it’s great that they think of mathematics and Russell Crowe together. Great stories do inspire, and a story that can spark an interest in pursuing original ideas is about as creative as anything I can think of.

Sylvia Nasar’s best-selling biography about John Nash, A Beautiful Mind (Simon & Schuster, 1998), inspired the Academy Award-winning movie. She holds the Knight Chair in Business Journalism at the Columbia University Graduate School of Journalism and is currently working on a book about 20th-century economic thinkers.
 
 
Copyright © Gruner + Jahr USA Publishing.

Friedman’s euro crisis is proving to be improbable

The discussion over the future of the Euro continues, here is one view from Barry Eichengreen, professor of economics at the University of California, Berkeley

Many euro skeptics have argued that the worst is yet to come, but given recent events, it is now they who bear the burden of proof

The global financial crisis has breathed new life into hoary arguments about the euro’s imminent demise. Such arguments often invoke Milton Friedman, who warned in 1998 that Europe’s commitment to the euro would be tested by the first serious economic downturn. That downturn is now upon us, but the results have been precisely the opposite of what Friedman predicted.
Unemployment is rising — and with it populist posturing. In countries like Italy, already suffering from Chinese competition, and Spain, which is experiencing a massive housing bust, the pain will be excruciating. Yet neither country shows any inclination to abandon the euro.

They understand that even whispering about that possibility would panic investors. They see how countries like Denmark that maintained their own currencies have been forced to raise interest rates to defend their exchange rates when the US Federal Reserve and the European Central Bank are cutting interest rates. They see how, if there was still a lira or a peseta, they would be experiencing capital flight. They understand that they would have to fend off an old-fashioned currency crisis at the worst possible time. They appreciate that there is stability and security in numbers.

Similarly, the euro-collapse scenario in which such countries successfully pressure the European Central Bank (ECB) to inflate, compelling Germany to abandon the euro, has shown no signs of developing. The ECB, protected by statutory independence and a price-stability mandate, has shown no inclination to accede to pressure from French President Nicolas Sarkozy or anyone else.

One can argue that the worst is yet to come — that there will be more inflation and unemployment down the road — and that, when they come, the euro area will collapse. Euro skeptics always make this argument. But, given recent events, it is now they who bear the burden of proof.

What neither Friedman nor anyone else anticipated in 1998 was that the first serious downturn following the advent of the euro would coincide with the mother of all financial crises. Runs by panicked investors have required central banks to undertake unprecedented lender-of-last-resort operations. Extensive loan losses have required expensive bank recapitalization operations.

There have been predictions that governments stretched to the limit by the financial crisis might respond by abandoning the euro. They might resort to the inflation tax and inject the national currency to restore liquidity to their banking systems and financial markets.

In fact, the response has been the opposite. The ECB has provided essentially unlimited amounts of liquidity to euro-area financial systems. The Stability and Growth Pact has been relaxed in order to increase governments’ capacity to borrow to recapitalize their banks.

It is European countries outside the euro area, still with their own currencies, that have suffered the gravest difficulties. Because their currencies are not widely used internationally, many of their bank liabilities are in euros. This renders them dependent on interest rate hikes to attract — via the market and on swap lines from the ECB — the euro liquidity that their banks desperately need. So far, those swaps have been forthcoming, but with delay and political baggage attached.

The implication is clear. National banking systems need a lender of last resort. In small countries, where a significant share of bank liabilities is in someone else’s currency, the national central bank lacks this capacity. The only options are then to slap draconian controls on the banking system or join the euro area.

Given the difficulty of rolling back the financial clock and the constraints of the Single Market, it is clear which way European countries will move. One already sees a shift in public opinion toward euro adoption in Denmark and Sweden. Poland has reiterated its commitment to adopting the euro. Hungary is certain to do likewise.

Obviously, the crisis will be economically and financial challenging for Eastern Europe. It will heighten the difficulty of meeting the convergence criteria for euro adoption. But it will also heighten the will to succeed.

The implication, then, is a larger euro area, not a smaller one, as more countries see the writing on the wall. Indeed, there are already signs of countries not even in the EU, notably Iceland and Switzerland, contemplating accession as a step toward adopting the euro and resolving their financial dilemma.

The one exception is probably Britain, whose currency is used internationally as a legacy of its history. In any case, Britain has always had one foot in Europe and one foot out. It is conceivable, therefore, that Europe will have two currencies, the euro and sterling, in the long run. But having three currencies, much less three dozen, is out of the question.

COPYRIGHT: PROJECT SYNDICATE

Airlines lose seat appeal

Federal regulators in Canada have received a green light from the country’s top court to force major airlines to provide free extra seats to disabled or obese passengers who need them.

 The Supreme Court of Canada, in a decision released without comment today, rejected an application by Air Canada, Air Canada Jazz and WestJet for permission to appeal the move by the Canadian Transportation Agency.

 The court decision, in effect, upholds the agency’s finding that the three carriers were discriminating against the disabled. The agency ordered the companies last January to adopt a policy of “one person, one fare.”

 That would mean, for example, that a disabled person who needs additional room for a wheelchair, or an obese person who needs an additional seat, couldn’t be charged extra.

 It would also mean that, if a disabled person has to be accompanied by an attendant, the attendant would ride for free.

 ”This is going to make a huge difference for those people,” said David Baker, the Toronto lawyer who fought the case on behalf of disabled passengers.

 ”They are going to be able to travel now. . . . It’s a great thing for people with disabilities, it’s a great thing for Canada.”

 The Council of Canadians with Disabilities, which participated in the case, also welcomed the ruling Thursday.

 ”We celebrate this decision and are thrilled to see the removal of another long-standing barrier to our mobility and travel,” said Pat Danforth, speaking for the council.

 The transportation agency’s order technically applies only to Air Canada, Air Canada Jazz and WestJet, but their share of the domestic airline market is estimated at over 90 per cent.

 Baker said the ruling suggests that complaints against other airlines would be virtually certain to succeed. He expressed hope, however, that federal authorities will save people the bother of launching further complaints by simply issuing industry-wide regulations.

 Air Canada and WestJet said they will comply with the transportation agency’s order, which set a deadline of Jan. 9, 2009, for implementing the new policy.

 Both airlines noted, however, that the order applies only to their domestic flights, not to international ones.

 WestJet spokesman Richard Bartem said his airline would consider extending the policy to international flights but hasn’t decided whether to do so. Peter Fitzpatrick of Air Canada said he couldn’t speculate on that point.

 Both carriers also said they will have to develop detailed eligibility rules about precisely what kind of disabilities qualify for free seats and train their staffs on the subject.

 Bus, train and ferry companies have long made arrangements for free extra seats, but the airline industry had argued it would lose too much money by doing the same.

 The transportation agency rejected claims that providing extra seats would impose an “undue hardship” on airlines, saying they can afford the financial burden.

 The agency estimated the cost to Air Canada at abut $7 million a year and to WestJet at about $1.5 million a year. That amounts to about 77 cents a ticket for Air Canada and 44 cents for WestJet.

 To put it another way, the agency said the cost would be 0.09 per cent of Air Canada’s annual passenger revenue and 0.16 per cent of WestJet’s revenue.

 THE CANADIAN PRESS

Marketing: Toronto hotel boasts own honey from rooftop hives

Royal York luxury hotel

The term greenwashing is often used to describe companies that make ambiguous or flat-out erroneous claims to being eco-friendly – think of British Aerospace, who in 2006 attempted to green their ammunitions with reduced-lead bullets and recyclable explosives, or such paradoxical food products as organic TV dinners.

But on the flip-side of this are the companies who are so concertedly, over-the-top green, it seems almost farcical.
Take Ben & Jerry’s, the ice cream makers from Vermont who recently launched a Fair-Trade vanilla flavour.
The launch, however, didn’t just consist of churning out the new ice cream and taking out some ads in local media – it included a comprehensive website outlining all the official Fair Trade regulations as well as an online photo album showcasing the company’s vanilla-bean growing operations in India, Paraguay and Ecuador.

On top of this, the website explains, Ben & Jerry’s are also working on a prototype for thermoacoustic fridges, which are powered by sound waves, as well as asking all their employees to offset their air travel and ensure their climate “hoofprint” is carbon neutral. They also use free-range eggs, strictly monitor their dairy farms, order all their brownie bits from a kitchen that teaches cooking to the homeless and they’re currently looking at converting their ice cream waste into energy with something called a bio-gas digester.

It gets to the point where consumers could argue that eating a tub of Half-Baked every weekend effectively offsets the drive to the cottage.
Here in Canada, too, there are businesses and organizations that are going ridiculously above and beyond when it comes to the green movement.
Evergreen, for example, the non-profit that’s headed by Geoff Cape and has been around since 1991, has been handed the reins to the development of Toronto’s Don Valley Brick Works.

In a couple years’ time, say the organizers, the heritage site will officially reopen to the public as “the greenest building in North America.” There will be pesticide-free educational gardens, a native plant nursery, a producers-only farmers market, community programming workshops and youth training services, urban wilderness camps, office space for socially responsible businesses and a slow-food restaurant with a seasonal, local menu, focused on public education and chef training.
Needless to say, all the buildings will also be LEED-certified with rainwater-capturing systems, solar panels, living walls, geothermal heating and green roofs.

But of course, in the world of eco-extremes, green roofs are nothing. These days, to impress most eco-buffs, you have to have a fully functioning rooftop garden, complete with seasonal herbs, fruit and vegetables, maybe even some hops, a few grape vines and a bee hive or two in order to produce as-local-as-possible booze and honey.

This may sound like it’s feasible only for those who live in the country and make gardening a full-time hobby, but in fact, the Fairmont Royal York hotel in downtown Toronto is doing all of this, with enough time leftover to offer guests daily rooftop tours with their afternoon tea.
And don’t even think about joking, “What’s next, livestock?” to executive chef David Garcelon – he’s already considered that possibility.
“I had someone suggest last week that we put chickens up here,” he said one recent Saturday morning, while up on the hotel roof inspecting his hives and zucchini plants, “but it’s illegal – plus we wouldn’t want any roosters waking up our guests. I think we’re going to stay away from the crazy ideas for at least another six months.”

The honeybees – who live in three designer hives called The Royal Sweet, the Honey Moon Suite and the V.I.Bee Suite, complete with the official hotel logo – are a new addition to the rooftop garden, managed by Garcelon, his apprentices and members of the Toronto Beekeepers Cooperative.
“The interesting thing about bees and the Royal York set-up in particular is that the honey will be specific to this location,” said Mylee Nordin, one of the TBC members. “They feed off the closest food source so they’re going to be feeding off the garden a lot and it’ll be kind of a taste-picture of the hotel itself.”

By keeping hives on the roof, chef Garcelon and the rest of the Royal York staff are not only ensuring that one of their restaurant’s most versatile ingredients is extra-local – the honey will be used in everything from salad dressings to soup, as well as cocktails and ice cream – but that surrounding green spaces like the ravine and the island are kept pollinated so the biodiversity of the city, as a whole, is further enriched.
Urban beekeeping is obviously a significant eco-friendly initiative, but it’s one that the average Canadian can’t exactly start up on a whim. There are various laws against operating hives within certain distances of people’s homes, rules and procedures that must be followed in terms of set-up and maintenance, a provincial apiarist to consult and inspections to undergo.

That said, in the race amongst sustainably minded corporations to be the greenest biz on the block, it appears no idea is too outlandish or impractical.
Perhaps over the next few years, the Royal York will get around to installing wind-powered hair dryers and composting toilets, maybe even a solar oven.
The more green initiatives a company takes on, the better – that goes without saying. It really is impossible to be too environmentally conscious these days. However, the more we’re deluged with list upon list, adjective upon adjective, detailing every single way an organization is green, the faster we may get sick of hearing about it.

As well, just because one business has gone to the extreme on the environmental front, doesn’t mean its competition should be shunned. Ben & Jerry’s may take the green prize, but buying a tub of Kawartha Dairy’s pralines and cream at the supermarket instead won’t exactly destroy the planet.
So let’s try to applaud all those who are leading the way and making enormous changes for the benefit of the earth, without brushing off the others who prefer to take baby steps.

Source: National Post

All raged up with no nose to punch

With a mixed bag of bad news and less job security, no wonder the mood can be sort of mute, to say the least, in and around the workplace. So it was no big surprise reading Reuters account of how employees are feeling the pinch. We have to be cool under pressure……

- Amr

Get out of the way, road rage. Here comes desk rage.

(Reuters) Anger in the workplace — employees and employers who are grumpy, insulting, short-tempered or worse — is shockingly common and likely growing as Americans cope with woes of rising costs, job uncertainty or overwhelming debt, experts say.

“It runs the gamut from just rudeness up to pretty extreme abusive behaviors,” said Paul Spector, professor of industrial and organizational psychology at the University of South Florida. “The severe cases of fatal violence get a lot of press but in some ways this is more insidious because it affects millions of people.”

Nearly half of U.S. workers in America report yelling and verbal abuse on the job, with roughly a quarter saying it has driven them to tears, research has shown.

Other research showed one-sixth of workers reported anger at work has led to property damage, while a tenth reported physical violence and fear their workplace might not be safe.

“It’s a total disaster,” said Anna Maravelas, author of “How to Reduce Workplace Conflict and Stress.” “Rudeness, impatience, people being angry — we used to do that kind of stuff at home but at work, we were professional. Now it’s almost becoming trendy to do it at work.

“It was something we did behind closed doors,” she said. “Now people are losing their sense of embarrassment over it.”

Contemporary pressures such as rising fuel costs fan the flames, said John Challenger, head of Chicago’s Challenger, Gray & Christmas workplace consultants.

“People are coming to work after a long commute, sitting in traffic watching their discretionary income burn up. They’re ready for a fight or just really upset,” he said.

Added to that, he said, are financially strapped workers having to cut back on paying for personal pastimes that might serve as an antidote to work pressures.

LET OFF STEAM

“That means people come into work after a weekend and they haven’t been able to let off any steam,” he said.

Spector said his research has found 2 percent to 3 percent of people admit to pushing, slapping or hitting someone at work. With roughly 100 million people in the U.S. work force, he said, that’s as many as 3 million people.

Maravelas said she conducted a seminar this week in rural Iowa, where she asked participants if they thought anger was increasing at their workplace.

Everyone raised their hands, she said, which is typically the response she gets. She cited research showing 88 percent of U.S. employees think incivility is rising at work.

“Many of us sense we’re losing ground economically and socially. The safety net is unraveling. Hence, anxiety and unease are skyrocketing,” she said.

People reassure themselves by blaming others and “find comfort in believing their suffering is caused by a callous, incompetent or selfish organization, leader, supplier, union or regulatory body,” she said.

The worst offenders are overachievers, said Rachelle Canter, a workplace expert and social psychologist. “The usual profile is Type A, really, really smart, with impossibly high standards they set for themselves as well as for other people.

“They are so invested, I would say maybe over-invested, in success and in everyone being every bit as driven as they are that they just lose their sense of perspective, and they can lash out at other people,” said Canter, author of “Make the Right Career Move.”

But desk rage extends across industry and class lines, from top white-collar jobs to gritty blue-collar work, and companies pay dearly in terms of lost productivity, sagging morale and higher absenteeism, Spector said.

The worst cases end in violence, he said.

“Somebody didn’t just come to work one day and shoot somebody,” Spector said. “There’s probably been a pattern of less extreme behaviors leading up to it.”Desk rage spoils workplace for many Americans

The Price Of Time

Time is the most valuable commodity. We never seem to have enough of it. Everyone is time-strapped, time-poor, time-starved. Choose your cliché.

Most of us don’t make the most of our time. We wish we did. A self-help industry has flourished on the hope that even if we can’t make more time–the 24 hours in a day remain immutable–we can at least make the most of what we have. Yet even the most ardent makers of “to-do” lists fritter time away.

Which raises this question to fill an idle moment: Why don’t we value time as we do any other good or service? We could then decide what we do with ours in the most cost-effective way: rationally maximizing our “return on time invested” (ROTI), if you will.

First, we’d need to be able to price time. Any hackneyed consultant can repeat Benjamin Franklin’s advice to a young tradesman that time is money, and then tell you to divide your annual income by 8,760 to get a per-hour value (make the denominator 8,784 this leap year). More sophisticated versions adjust for taxes and cost of living.

But mostly, that just reveals a depressingly low number: An hour of labor from the average U.S. chief executive, based on Bureau of Labor statistics, is worth only $16.

An economist might approach the problem from the starting point of a paradox that baffled Adam Smith in the 18th century: We cannot exist without water, but can get by without diamonds–and yet we value diamonds so much more highly than water.

Later economists, notably Menger in Austria and Jevons in the U.K., found an explanation in the notion that value is not inherent but subjective. In other words, prices are determined by the ability of a product to satisfy a human want, not what it costs to produce. To be technical, the actual value of a product depends on how useful its least important use is, its so-called marginal utility.

A product that exists in abundance, like water, will readily be used in unimportant ways. As it becomes scarcer, the least important uses are abandoned, and greater utility, and thus value (and prices), will be derived from the new least-important use.

The marginal utility theory of value is the foundation of most pricing in free markets. The classic textbook example of this is the marginal utility of corn to a farmer who has harvested five sacks of it.

The farmer needs the first sack just to survive until the next harvest. The second sack will ensure he eats well. The third sack he would use to feed poultry to provide variety in his diet. The fourth sack he would use to make whiskey. The fifth sack he would use to feed pet birds.

In these circumstances, the value of the fifth sack of corn is low to the farmer (although not to the birds). If he lost it, he wouldn’t pay much to replace it, if at all. He would just stop the use that provides him with the least value–feeding his pet birds.

As the farmer loses each successive sack of corn, the value rises. By the time he has only a single sack of corn, its value–and its price–is extremely high. Losing it may mean that he starves to death.

Applying the theory of marginal utility to time would lead most of us to value it cheaply. Our least important use of time is to do nothing. In short, time is more like water than like diamonds.

Yet in another sense, time is more like diamonds than water. While it seems infinite, it is actually scarce. Each individual has a finite allocation–without ever knowing what that allocation will turn out to be. As William S. Burroughs said: “No one owns life, but anyone who can pick up a frying pan owns death.”

Time is a curious good economically in other ways, too. It is highly perishable. Were it a bank account, time would pay no interest, close itself out each night, carry over no balances, and allow no overdrafts. What does that mean for the value of time?

It is also tradable in particular ways. We can reallocate time, but we can’t increase our supply. I can shop for food rather than grow it myself (or order in dinner rather than cook), using the time I save to undertake higher-value activities that will let me pay for my outsourcing. 

At least then I am making some attempt to determine the value of my time by reckoning its utility on an opportunity-cost basis. Franklin had a view on that, too: “He that can earn Ten Shillings a Day by his Labour, and goes abroad, or sits idle one half of that Day, tho’ he spends but Sixpence during his Diversion or Idleness, ought not to reckon That the only Expence; he has really spent or rather thrown away Five Shillings besides.”

A modern behavioral economist would take issue with Franklin, or at least argue that the subject of Franklin’s admonition was making a rational choice, albeit not one that fits the neoclassical economist’s view of utility-maximizing economic man.

The Homo sapien isn’t just homo oeconomicus. Human beings make apparently irrational decisions because they value “diversions and idleness”–activities lacking market prices. Time spent in cultural pursuits, playing games, chatting with a spouse is time well and wisely spent, even if it is difficult to put a price on it.

Or, as T. S. Eliot put it, “Time you enjoyed wasting is not wasted time.”

Source: Forbes Magazine

Why Is CFO Turnover So High?

With the job getting tougher, one in four Fortune 1000 companies bid adieu to their finance leaders in 2007 alone.

For large-company finance chiefs considering job switches, the good news is that a lot of CFO positions are opening up. The bad news is that those who land one of them might not have it for long.

In 2007, almost a quarter of the CFO posts at Fortune 1000 companies – 234 of them, to be precise – were open at some point during the year, according to new data from executive search firm Heidrick & Struggles.

To be sure, only about 22 percent of those remained unfilled at the beginning of 2008, and more were filled shortly thereafter. But the churn rate continues to be high, with 33 new openings in just the first few weeks of the year. As of Feb. 29, 47 of the big companies were seeking a new CFO.

Turnover at smaller companies isn’t nearly as brisk. According to Liberum, a research firm that tracks management changes, at the approximately 16,000 public companies in the United States and Canada, there were 2,313 CFO changes of all kinds in 2007. But Liberum counts every promotion, resignation, hiring, and firing as one change. The actual turnover rate was a bit less than 10 percent.

Even within that larger database, however, activity has picked up markedly; the number of CFO changes last year was up 24 percent from 2005, the first year for which Liberum collected data. The industry sector with the greatest turnover in 2007 was banking, followed by pharmaceuticals/biotech and metals/mining.

Being a CFO at a very large company is a precarious position indeed. “The average tenure of a [Fortune 1000] CFO right now is less than three years,” Michele Heid, co-managing partner of the finance practice at Heidrick & Struggles, told CFO.com. “Five years ago, it was closer to five years.”

The reasons for this are many. But put simply, the job of such a CFO is getting bigger and harder at the same time the risk inherent in the position is rising. That results in more departures, both voluntary and forced.

The bigger uptick has been among those leaving voluntarily, according to Bill Behn, president of SolomonEdwardsGroup, a firm that provides technical and staffing services for corporate finance and accounting departments. The increased regulatory demands that were triggered by Sarbanes-Oxley certainly have influenced some of those decisions. “The workload has gone up 20 to 25 percent just because of the new regulation,” Behn told CFO.com.

Also because of the altered the regulatory environment, CFOs’ legal liability for errors has skyrocketed. Behn said a shift in their value systems is under way, whereby more are coming to believe that the financial rewards just aren’t as attractive in the face of this elevated risk.

As CFOs get older, their wariness may grow sharper. “Increased exposure has been very dramatic, and CFOs may be thinking that the longer they stay, the greater the potential that there will be some kind of issue,” Jonathan Schiff, a professor in Fairleigh Dickinson University’s graduate accounting program and a longtime advisor to large global corporations, told CFO.com. “So people are leaving their CFO positions not at 65, but at 50 or 55.”

Those who soldier on and become embroiled in Securities and Exchange Commission investigations and financial restatements – not to mention those who backdate stock options – are almost invariably tainted beyond repair. “Even if you win your case, you’re finished,” said Schiff. “The reputational issue is much worse than it used to be.”

Another effect of the heightened regulatory demands, for some CFOs, is that they spend more time on technical accounting issues and less on strategic planning and decision making, which may have been the opportunity that moved them to take a particular job. “They don’t even get to do the fun stuff. When you know that carrot is out there but you can’t grab it, there can be a lot of frustration,” said Behn.

At other companies the opposite situation prevails, where the level of strategic performance demanded of CFOs is so high that fewer executives today are up to the challenge.

Also a factor in the high turnover rate is “the robustness of private equity,” said Heid, “which is recruiting CFOs out of public companies to run their portfolio companies.”

For many CFOs, their span of control across the organization has increased, with functions such as information systems and human resources now reporting to them. “That puts a strain on someone whose sweet spot is finance, accounting, and treasury,” Schiff said.

Similarly, globalization is turning up the heat. Since it’s not uncommon now for Fortune 1000 companies to have half of their finance and accounting staffs abroad, CFOs must acquire a grasp of, or at least an appreciation for, diversity and cultural issues – something else that may be out of their comfort zones, according to Schiff.

Finally, there’s that great big bear called ERP. Many of the enterprise-resource-planning systems on the market the past several years showed a lot of promise up front but ended up being highly problematic in their delivery, according to Schiff. “There was a very pressured sell on these systems,” he said. “But their level of difficulty and complexity were often understated. Many CFOs signed onto enormous projects that violated their own rules of capital budgeting and planning. If these projects had been coming out of their own businesses, they would have been scrutinized much more.”

The result was that implementations that should have taken two or three years in some cases took five, six, or more. “That tends to burn a person out,” observed Schiff.

Source: CFO Magazine March 2008

Global Finance has new bosses

This week The Financial Times published two pieces reviewing the newly emerging global finance lansdscape. No analysis of how new players are contributing to the stability of the world economy, but a mere view of what is taking place in markets, and some caution ahead of what is shaping to be a new model in global finance:

The fall of a financial model

Recent changes in the world economy and financial markets mark the end of the present standard model of financial capitalism, built up over the last decade or so. In this model, financial stability is mainly based on the self-regulation of the financial sector, which alone assesses the risks produced by its financial innovations.

Moreover, the link between finance and the real economy hinges on an adequate return on investment for shareholders, who punish poor management by making share prices fall, leaving the company open to takeover. The only role assigned to governments is to guarantee free circulation of capital between companies and between countries. As alternative economic models collapsed over the past two decades, public opinion came to accept this model of financial capitalism. Today, governments and labour unions accept profit as the most relevant criterion for assessing a company’s efficiency. This model is experiencing three crises, all of which refer to changes in the relationship between governments and markets.

The first concerns the significant, yet silent, return of governments to the economic playing field. Three of the five richest nations by total gross domestic product have become de facto neo-mercantilist, setting their sights on trade surpluses. China is keeping its currency artificially low in order to increase its trade surplus and lower its costs of production vis-a-vis competitor countries. Japan is pursuing government-oriented policies to bolster its position in high-technology markets. Finally, and to a lesser degree, Germany has been carrying out reforms to restore industrial competitiveness. In addition, countries that have access to natural resources, notably oil and gas, have revenues that serve as both an instrument and aim of their international policy. Trade surpluses have resulted, demonstrating the capacity of governments to acquire massive amounts of foreign assets through sovereign wealth funds. The problems that arise are not economic, but political. Governments may use technology transfer or control of strategic national assets as a means to increase bargaining power in international affairs.

The second change involves company ownership. Three transformations should be noted. The first relates to the emergence of active shareholders, who build up significant stakes with the aim of exerting strong influence on management. The second relates to activist shareholders and their demand for short-term returns, resulting in decisions that are not in the company’s long-term interests. The third involves leveraged buy-outs, closely linking the interests of managers and shareholders and taking advantage of easy credit.

These shifts in the distribution of power raise questions: what is the relationship between shareholder meetings and boards? To what extent should companies be allowed to protect themselves from hostile bids or creeping takeovers? In what form and how frequently should accounting information be provided to shareholders?

Company ownership has not yet found a new balance, as shown in Europe by the absence of agreement on the takeover directive and on one share/one vote rather than multiple voting rights. Regulators’ desire to increase supervision of creeping takeovers is telling. The trends are risky: a shareholder can pursue speculative or self-interested aims to the detriment of other shareholders and against the company’s best interest by breaking up the business or by avoiding taking risk.

The third crisis is the one rocking financial markets. Unlike the internet bubble, this is not a crisis based on irrational behaviour but one of sophistication and disintermediation. The new risks produced by financial innovation were left to a sector that alone was considered able to understand its instruments. The crisis demonstrates the costs to the real economy and lack of an efficient self-regulating system.

All these risks call for a new relationship between the workings of financial markets and regulatory actions of governments. Democratic governments will have to deal for a long time with less democratic economies that use financial market mechanisms for political ends. Each sovereign investor must clarify its intentions and define its code of conduct. Governments must also define with greater precision the sectors they consider strategic.

The changes in company ownership also call for greater transparency in order to prevent actions that offend business ethics, such as creeping takeovers and speculative strategies that undermine companies’ long-term interests. The board’s role of defining solutions that satisfy shareholders’ divergent interests will have to be strengthened. It should allow for corporate governance that encourages long-term strategies while satisfying shareholder interests. Finally, regulators should supervise the whole of financial markets to assess systemic risk, eliminate off-balance-sheet ambiguities and bring within the scope of supervision actors that have eluded market authorities.

How governments deal with these crises will depend on their national interests. These issues will be difficult to deal with in Europe where country responses will diverge. One can expect to see the co-existence of various models, varying by level of government intervention in financial markets. There is a great distance, however, between co-existence and compatibility.

—————————— 

Jean-Louis Beffa is chairman of Saint-Gobain and co-president of the Cournot Centre for Economic Studies. Xavier Ragot is associate professor at the Paris School of Economics

A new force in global finance

How can it be that Merrill Lynch, Citigroup, Morgan Stanley, Bear Stearns, UBS and other big banks have been turning to foreign governments for financial lifelines with so little public controversy? Perhaps it is because the dangerous broader context of what is happening – the rise of “state capitalism” – is not sufficiently recognised. Indeed, the reality may be that the era of free markets unleashed by Margaret Thatcher and reinforced by Ronald Reagan in the 1980s is fading away. In place of deregulation and privatisation are government efforts to reassert control over their economies and to use this to enhance their global influence. It is an ill wind that blows.

Exhibit A is a quantum increase of regulation nationally and globally. The issues of product and food safety will spawn new and highly complex trade regulations in the US, the European Union, China and the World Trade Organisation. The blizzard of energy and environmental legislation in a number of countries is mind-boggling. The subprime debacle will probably lead to new rules for every type of institution that securitises debt.

Evidence of the rise of state capitalism can also be found in increasing public sector ownership of natural resources. Government-run energy companies from Saudi Arabia, China, India and Brazil now own more than 80 per cent of the world’s reserves. Their reach is growing. Russian and Chinese government entities also look poised to make a run for global domination of aluminium and iron ore.

Finance is being taken over too. Beijing’s state-controlled banks are now moving into the US and taking large stakes in important banks such as South Africa’s Standard Bank . Last year sovereign wealth funds in the Gulf and east Asia invested more than $60bn in foreign financial institutions and the amounts are rising rapidly. Assets in these funds will, in the years ahead, exceed the combined capital in private equity and hedge funds.

We should not be surprised by these trends. Since the mid-1980s the world economy has been on steroids, resulting in exceptional growth and wealth creation. Now governments are reacting against the excesses of free markets. A lot of people were left behind as soaring income inequality accompanied the boom. In trade, product quality went unsupervised. In finance, risk management was neglected by bankers, regulators and credit agencies. The 27-nation EU, being more prone to intervention in markets than the US, has taken the lead in reasserting a robust role for regulation. China and India, neither of which has any deregulatory DNA, have also become influential in changing the global gestalt .

Government officials also turned a blind eye towards dangerous financial imbalances. The very countries that had little history of free markets accumulated massive reserves, while the US accepted large deficits and became hungry for money from anywhere it could find it. In a world economy where power has become highly de­centralised and in which international institutions are weak, governments backed by huge reserves have dis­covered they have significant leverage in global markets. That is especially true in downturns, such as now.

The implications are worrying. While prudent regulation in selected areas can be justified, the new zeitgeist is likely to produce too much government intervention, too fast. We can expect less productivity, less innovation and less growth, since governments have many goals that the private sector does not. These include employment generation, income redistribution and the aggrandisement of political power. The expansion of regulation will also open up new possibilities for trade disruption. For example, countries may block the importation of goods that do not meet their precise national environmental standards.

Beyond that, trade and finance will become more politicised as governments leverage the companies they control as instruments of their foreign policies. Russia’s president, Vladimir Putin, has used Gazprom’s natural gas to influence his neighbours’ economic and political directions. China has provided aid to repressive regimes to open up opportunities for companies such as Sinopec. President Nicolas Sarkozy seems poised to use the combination of France’s Atomic Energy Commission, the state-controlled nuclear power company Areva and the national engineering champion Alstom to sell civilian nuclear power in the Gulf and China.

Unfortunately, the trend is unstoppable. But officials from market-friendly finance ministries could acknowledge the momentum behind the rise of state capitalism to demand their own governments produce impact statements that spell out all the costs of new laws and regulations. They could commission reviews in the International Monetary Fund and the WTO of all the implications of growing government intervention. Think-tanks and universities should gear more research to the costs and benefits of state capitalism.

When it comes to foreign investment by state-owned companies or from sovereign wealth funds, the US and the EU need to set common standards for transparency, ownership and reciprocity. The rules should be enforceable – not milk-toast, voluntary guidelines.

In the late 18th century, capitalism was replacing feudalism. In the 20th century, freer markets won the day. Now the world is flirting with another big transformation in the philosophy and rules of global commerce. Unlike the changes of the past, this new trajectory does not represent progress.

 ————————————

Juan Trippe professor of international trade and finance at the Yale School of Management

Source: The Financial Times Limited 2008

__ Amr  

Stop Speaking in Jargon

Too often, business people communicate in jargon and buzzwords. They’d be more effective if they spoke in plain English

 

Inspiring business communicators speak in clear, understandable language. The language of motivation is free of meaningless gibberish. Unfortunately, somewhere along the way the wheels came off, and business professionals began speaking in vague terms that fail to connect with listeners. The other week I read a magazine interview with an analyst who had been asked about his forecast for technology spending in 2008. His reply: “Expect commoditized processes to be optimized and varying instances to be consolidated and standardized on middleware platforms.” Words like “optimized,” “commoditized,” and “standards” are buzzwords that mean nothing to most listeners, but the use of such language does serve a purpose-to elevate a person in his own mind. Wikipedia says “buzzwords are typically intended to impress one’s audience with the pretense of knowledge.”

Anyone who thinks using buzzwords will make them sound intelligent is wrong. Clarity impresses. Buzzwords confuse.

Don’t get me wrong. Some jargon serves a purpose. Intuit  founder Scott Cook once reminded me that using jargon isn’t bad if it’s understood by your audience. For example, if a chief financial officer is speaking to investors, then EPS (earnings per share) is acceptable jargon. It’s “customer-preferred.” But in most cases where persuasion must take place, like selling a product to a customer or an idea to your boss, a compelling discussion should be largely free of jargon. Your goal as the speaker is to help listeners follow your message, not to leave them more confused. Here are several ways to make sure you are understood.

Answer the No. 1 Question

On my first day of journalism school at Northwestern, I was taught to answer the one question on the minds of my readers: What’s in it for me? Your pitch or presentation might have impressive data, eye-popping charts, and compelling case studies, but if it’s not clear how your product or service improves the lives of your listeners, you will lose their attention and their business.

A recent Dilbert cartoon poked fun at the hot buzzword in technology these days, “server virtualization.” It’s comical to hear IT (information technology) professionals explain it. Dilbert creator Scott Adams does as a good a job as anyone. Dilbert’s boss has read about virtualization in a magazine and instructs Dilbert to get right on it. In one strip, the boss is told, “there is no need to worry about the server virtualization project. In phase one, a team of blind monkeys will unplug unnecessary servers. In phase two, the monkeys will hurl software at whatever is left. Voilà!”

The actual definition is very confusing. Imagine trying to promote server virtualization throughout a company by saying, “Server virtualization is the masking of server resources, including the number and identity of individual physical servers, processors, and operating systems, from server users.” That’s a technically accurate definition but so full of jargon that it is meaningless to most people. Now imagine if an IT professional told the CEO, “I’d like to show you how we can save money on our energy bills by consolidating our sprawling server farms into fewer pieces of hardware.” What’s the difference? This version answers the question, What’s in it for me? (in this case, for the CEO and the company). Answer the No. 1 question quickly and clearly.

Paint Verbal Pictures

WMware, a leading consulting company specializing in virtualization, has launched a Web site called Ain’t That the Truth, which provides examples of how much money and energy a company can save by “virtualizing” their servers with VMware technology. With the help of a “savings calculator,” the site offers a visual representation of the benefits.

For example, if a company virtualized its 100 servers, the calculator shows that it could reduce more than 1,000 tons of carbon dioxide emissions each year, the equivalent of planting nearly 5,000 trees, taking 250 cars off the road, and eliminating the emissions from nearly 500 cows. (Yes, the calculator tracks cow emissions. How’s that for a visual?) And the company saves more than $153,000 in server-related energy costs.

VMware’s site succeeds because it takes a complex technology and paints a vivid picture of the benefits. You must do the same in your discussions. Replace buzzwords and jargon with tangible examples, analogies, comparisons, and real-world case studies to paint a verbal picture for your listeners.

Find the “Wow”

Meaningless jargon and buzzwords are so common they have become a national joke. On a YouTube clip from NBC’s The Office, the former temp turned boss, Ryan Howard, explains a new initiative this way: “It’s convergence, viral marketing, we’re going guerrilla. We’re taking it to the street while keeping an eye on the street. I don’t want to reinvent the wheel. It is what it is.” Funny, yes. But you hear this kind of thing all too often. Eliminate overused language or esoteric jargon from most of your conversations, especially with listeners who don’t live and breathe your field.

I was once helping a CEO prepare for a major investment conference. I asked him how he planned to describe his company for analysts. Without flinching, he said: “Our company is the premier developer of intelligent semiconductor intellectual-property solutions that dramatically accelerate complex SOC designs while minimizing risk.” At that point, I knew it was going to be a very long day. I kept urging him to simplify his message by asking him to “wow” me.

After 30 minutes, the exasperated CEO turned to me and said, “Look, do you have a cell phone?” “I sure do,” I replied. “Our technology makes cell phones that are smaller, have longer battery life, and allow you to do fun things on your phone like play music and video.” Now there’s the wow. The difference, of course, is that he eliminated industry-specific jargon. He also won over his audience.

“A Touch of Genius and a Lot of Courage”

We can put an end to jargon-filled communications, but it will take commitment. Some people are afraid to make the change. Financial guru Suze Orman once told me, “People criticize simplicity because they need to feel as though the topic is more complicated. If everything were so simple, they think their jobs could be eliminated. It’s our fear of extinction, our fear of elimination, our fear of not being important that leads us to communicate things more than we need to.”

Albert Einstein once said: “Any intelligent fool can make things bigger and more complex. It takes a touch of genius and a lot of courage to move in the opposite direction.” Let’s be courageous and put our ideas into plain language we can all understand.

Source: Business Week