JimPinto.com - Connections for Growth & Success™
No. 301 : 20 February 2012

Keeping an eye on technology futures.
Business commentary - no hidden agendas.
New attitudes, no platitudes.

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The Coming Tech-led Boom

The following is a summary of a recent article in The Wall Street Journal that got my attention.

The last century saw several transformations: Electrification, telephony, automobiles, radio, electronics and TV, and the dawn of the Internet.

In this new century, three grand technological transformations are led by America: Big data, smart manufacturing and the wireless revolution. The era of near-perfect computational design and production will unleash as big a change in how we make things as the agricultural revolution did in how we grew things. It will be defined by talent, not cheap labor.

Information technology has entered the big-data era. Processing power and data storage are virtually free. A hand-held device, the iPhone, has computing power that dwarfs the 1970s-era IBM mainframe. The Internet is evolving into the "cloud" — a network of thousands of data centers any one of which makes a 1990 supercomputer look like an antique. Astronomical feats of data crunching will enable previously unimaginable services and businesses. We are on the cusp of unimaginable new markets.

Smart manufacturing is the first structural shift since Henry Ford launched the economic power of "mass production." We are just entering an era where the very fabrication of physical things is revolutionized by emerging materials science. Engineers will soon design and build from the molecular level, optimizing features and even creating new materials, radically improving quality and reducing waste.

Devices and products are already appearing based on computationally engineered materials that literally did not exist a few years ago: Novel metal alloys, graphene instead of silicon transistors, and meta-materials that possess properties not possible in nature; e.g., rendering an object invisible.

This era of new materials will be economically explosive when combined with 3-D printing — literally "printing" parts and devices using computer power, lasers and basic powdered metals and plastics, soon leading to "printing" of entire final products.

Finally, there is the unfolding communications revolution where soon most humans on the planet will be connected wirelessly. Never before have a billion people — and soon billions more — been able to communicate, socialize and trade in real time.

The implications of the radical collapse in the cost of wireless connectivity are as big as those following the dawn of telegraphy and telephony. Coupled with the cloud, the wireless world provides cheap connectivity, information and processing power to nearly everyone, everywhere. This introduces both rapid change — e.g., the Arab Spring — and great opportunity. Again, both the launch and epicenter of this technology are based in America.

Few deny that technology fuels economic growth as well as both social and lifestyle progress, the latter largely seen in health and environmental metrics. But consider three features that most define America that are essential for unleashing the promises of technological change: our youthful demographics, dynamic culture and diverse educational system.

Click WSJ - The Coming Tech-led Boom

Click Drucker: The First Technological Revolution and Its Lessons

Click Technological Revolutions, 1770s to 2000s

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Ten Tips for Generating Growth

Who can be so bold as to plan and budget for ambitious automation business growth in these uncertain times?

Consider this: These are exactly the times to plan for innovation and growth, to jump ahead in the competitive rankings.

Here are 10 brainstorming ideas to help your company generate growth:

  1. Culture change: Adapt your business culture to generate new ideas, and tackle new markets. Promote the best and brightest within your company. Recruit new people to spice up the knowledge mix.
  2. Design differently: Have you noticed that all industrial products look alike - bulky, ugly and heavy? Don't dumb-down your products; go way-out, high-tech, with advanced features that will "wow" your customers.
  3. Encourage innovation: Allow novel or different ideas to bubble up. Encourage your staff to join innovative groups and organizations.
  4. Partnerships: Some of the smartest people are not in your company, but somewhere else in the world. Operate with crowd-sourced designs, released under share-friendly licensing. Build virtual teams.
  5. Advanced manufacturing: Reverse offshore outsourcing. Produce cheaper and better at your own facilities. Examine advanced manufacturing opportunities.
  6. Pricing paradigms: Plan for high-tech products with high margins. Consider new and different cost and pricing structures. Pursue high Volume through disruptive products and pricing.
  7. Inbound marketing: Leverage online technology to find and get found by potential customers. Use Internet tools and methodologies to optimize company Web presence and extend reach. Maximize use of social networks to develop and utilize customer feedback and opinions.
  8. Advertising: Stop advertising to the same-old customers the same-old ways. Generate new promotions to attract new customers. Refine your advertising with more frequent, Web-orientated, (pay-per-click) pricing.
  9. Sales channels: Find sales channels that know your target audience and can drive your solution-specific products. Don't go to the same-old, same-old conferences and shows.
  10. Commitment: This kind of change can only start at the top. The champion must be the CEO, demanding fresh thinking with measurable results. Senior managers must be committed, with incentives to adopt innovative behaviors, and disincentives for lack of results. A practical approach is to split off a part of the company, or acquire an innovative start-up, to pursue the new paradigm.
America has the talent and the agility to continue its automation industry leadership. We have a significant level of domestic entrepreneurship and talent. The objective is to nurture new approaches, ideas and innovation as jumping-off points for new, growth-orientated automation businesses.

Click Automation World (Nov. 2011) - Ten Tips for Generating Growth

Click AW (Feb. 2011) - Keep Motivation Up in a Down Economy

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Solar Energy is Coming

SOLAR power has always had a reputation for being expensive, but not for much longer. It is largely down to economies of scale.

In 2011, enough solar panels were produced worldwide to generate 27 gigawatts, compared with 7.7 GW in 2009. Solar power is now cheaper than diesel anywhere that has reasonable sunshine. That means vast areas of Latin America, Africa and Asia could start adopting solar power.

In the US, the solar panel maker Solyndra received a $535 million federal loan guarantee which came from the stimulus package in 2009. The company was supposed to become an American success story of greentech innovation and manufacturing. Instead, it became a high-profile casualty when it was evident that it couldn't compete against solar panels built by Chinese competitors with big government subsidies.

Despite the collapse of Solyndra, early investments in clean energy have begun to pay off. The US solar industry grew 69% in the last year, still representing the fastest growing industry in the nation. More than 100,000 Americans in all 50 states are employed by solar, more than US coal mining or steel production.

The price of solar panels fell by almost 50% in 2011. This is now just 25% of 2008 prices, making solar power a cost-effective option for many people in developing countries.

25% of India's people don't have access to electricity, and those who are connected to the national grid have frequent blackouts. To cope, many homes and factories install diesel generators. But burning diesel has been linked to health problems, plus it contributes to climate change.

In India, solar electricity is now cheaper than diesel generators. This boosts India's "Solar Mission" to install 20,000 megawatts of solar power by 2022, and has implications for other developing nations.

Click The story behind Solyndra's rise and fall

Click Solyndra's failure shouldn't deter government investment in solar power

Click India's solar-panel price crash could spark solar revolution

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Industrial Network Security

The computer worm Stuxnet was discovered in June 2010 in Iran. It was clearly aimed at Iran’s nuclear program and wiped out about 20% of Iran's nuclear centrifuges. This delayed (though it didn't destroy) Iran's ability to make their first nuclear weapons.

The fast-spreading malicious computer program is a prime example of digital warfare and is the first to attack industrial systems. Unlike other cyber attacks, this malware did not stay invisible; it somehow turned up in other industrial processes around the world - India, Indonesia and other countries. If Iran was the primary target, perhaps these other locations were just prototype tests, or decoys.

The industrial cyber-attack trend continued strongly in 2011. Sophisticated threats with exotic names like Night Dragon, Duqu, and Nitro had been running for a year before they were discovered. These were designed to steal valuable information such as control systems and SCADA designs, trade secrets and business data.

Duqu malware used a lot of the same source code as Stuxnet; however, unlike Stuxnet, it stole information rather than attacked PLC systems. Nitro attacked 25 manufacturers of chemicals and advanced materials, collecting intellectual property for competitive advantage.

All of this means that bad guys increasingly know where to find holes in automation products; they are being spoon-fed the software to exploit the holes, and they have public examples of how to cover up their tracks.

There’s plenty of help for companies that want to beef up their security. The National Institute of Standards and Technology has many documents and guidelines, and standards such as ISA 99 and IEC 62443 are the bedrock of many security systems.

In his Predictions for 2012, Industrial Security expert Eric Byres predicts that over 500 vulnerabilities in automation products will be disclosed by freelance researchers and half of the disclosures will include sample attack code.

Eric’s second prediction is that the trend of stealthy industrial malware will continue. The problems will remain undetected for long periods of time and could only be detected after significant damage has occurred. <> There are two bottom lines for industrial systems, says Eric Byres. First, if you think your system has never been penetrated, you have not looked hard enough. Second, keeping malware out is impossible. The only way to avoid expensive business losses or production disruption is to start immediately to protect your system with defense-in-depth measures.

Click Eric Byres - SCADA Security 2012 Crystal Ball

Click A Fresh Look at the Best Industrial Network Security Strategies

Click Greg Hale's free "Industrial Safety & SecuritySource" Newsletter

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The Youtube Phenomenon

Every minute, 60 hours of video are uploaded to YouTube. That's five months of video every hour. That's 10 years of video every day. And the rate is growing by about 20-25% a year. Imagine this: More video is uploaded to YouTube every month than has been broadcast by the 3 big TV networks in the past 60 years.

There's never been anything like YouTube in human history. It gets 4 billion page views a day, which adds up to a trillion a year. It has 800 million users (about the same as Facebook) who watch 3 billion hours of video a month (that's about 340,000 years).

People now generate massive quantities of video. Before YouTube there was no central place where all that could be placed. But now most of it comes to a central location where people can wallow in it endlessly.

It's clear that TV is the competition. But YouTube isn't like television. People can't just turn YouTube on and chill out the way they do with TV. So, while the average American spends nearly 3 hours a day watching TV, the average user spends only about 15 minutes on Youtube per day.

When you turn on a TV, you're presented with a limited number of options, which you know something about and which you can count on to be fairly professional-looking. On YouTube, the search engine is sifting through a billion options, literally, and you hardly know anything about any of them.

The consequence of YouTube's runaway success is that it costs Google (which bought Youtube in 2006) a lot of money to keep the billion-eyed beast alive. It has to keep a lot of servers humming to store all that video, because it needs big, fat expensive pipes to keep those videos streaming non-stop.

YouTube now hosts more than 500,000 educational videos, on a huge variety of topics. The new mobile-friendly iTunes U also offers 500,000 educational resources, with 60% of the viewership from outside the US. This global consumption of U.S.-created online educational content may be part of a radical transformation of global education.

In the meantime, conventional TV (with constant commercial interruptions) is dying. Movies and TV programs are available via AppleTV and GoogleTV and Amazon, whenever you're ready, at a minimal pay-per-view. These days, that's the only way I watch TV.

Click The Beast With A Billion Eyes

Click How YouTube is part of a global economic transformation

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My old friend Bob Schaefer [robws@yahoo.com] has lived and worked in many parts of the world. He was checking off his "bucket list", spending Chinese New Year, in China. His enthusiasm is infectious:
    "The most fascinating part is the "migration". The largest mass movement of people on the planet. Every Chinese person in the world tries to make it home for Spring Festival, and most succeed. I am in Nanning in Guangxi province in the south but apparently, it is the same all over the country. We tried to visit the train station two days before New Year but could only get within about 15 blocks of the place. Incredible.

    "They estimate 14.5 million trips a day during the New Year period (week before and week after) throughout the country, on air, bus, and train systems. And you can double that with cars and motorcycles. Fascinating to watch and really, pretty efficient. They have rendezvous points all over the country where the government will escort motorcades and motorcycles in groups for safety. They escort them with military and police vehicles and helicopters. They added 900,000 special tour buses for this period. I guess I didn't realize there were 900,000 tour buses in the world.

    "I wonder how other countries can manage to govern and watch over a billion people. I am fascinated with this part of the world. "I'm happy to report that JimPinto eNews is not censored or banned in China. You even have a few readers here. I'm recruiting for you and hoping to find you a speaking engagement."

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Dan Trudeau [dtrudeau@prausa.com] waxed eloquent on my point about "asymmetric motivation":

    "When we shifted from the agricultural to the production age, Henry Ford created a scenario where people made more money for less hours at work.

    "The extra money and recreational time created an economic boom America rode through for most of the 20th Century. Now, as we shift from the manufacturing to the digital age, we once again have technologies that create productivity unheard of even a generation ago.

    "The difference is now employers are paying people as little as they can get away with outside specialty fields. So we're reversing the situation that created our last boom. Should it be any surprise we're facing the problems we are? We can talk about job creation all day, but if the average worker is making less money, we can add jobs all year but never create enough economic activity to reverse our slide.

    "I think it all gets back to a serious cultural problem in the USA and Western Europe: we've lost our desire to be great. We replaced it with the desire for wealth.

    "If Henry Ford and Thomas Edison had just wanted to be rich, they would've never made the decisions they did. Ford would've paid people less money for six days of work because he could've gotten away with it. Instead, he changed our society and eventually the world.

    "If your goal is only profit and growth, you miss the ball. They both attained those things as a bi-product of their drive toward greatness. That's the x-factor separating China from the US now.

    "I'm afraid we're too far down the path to correct it for at least a generation or two. Steve Jobs seems to be the last hero from the 'Great America' era. Now we have the Kardashians to represent the 'Wealthy America' era."

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Bob Fritz [fritz@prodigy.net] responded to Dennis Mueller's recent email:

    "Why can foreign car companies successfully and profitably build car plants in the US but GM, Ford, and Chrysler cannot? The answer is simple.

    "Once you have a labor union, you will gradually go out of business if you have to compete against union-free companies. It is practically impossible, legally, to kick out the union - even if the workers want it gone.

    "But if you have a union-free operation, it is relatively easy to keep it union-free. This is not a foreign vs. US management issue. It is an issue about the cold, dead, strangling hand of 1930s-era-thinking labor unions."

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