JimPinto.com - Connections for Growth & Success™
No. 323 : 26 February 2014

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

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Poverty & Wealth in America

Last week I went with 6 other Rotary volunteers to serve breakfast at Brother Benno’s soup kitchen in Oceanside - a 10-15 minute drive from my condo in Carlsbad. The doors opened at 6:30 am and the line stretched out the door; we served about 250 people till 8:00 am. Many seemed like regular folks, embarrassed to be in the line; but they were there to eat something before they went to work because they couldn’t afford breakfast. Others were families with children and senior citizens. There was no difference of color or race - they were all poor Americans.

I’ve written about poverty in America before. I’ve seen the poor in India and other countries. But, somehow this was different. These were people right here in my own backyard.

In November 2012 the US Census Bureau said more than 16% of the population in America lived in poverty, including almost 20% of American children, the highest level since 1993. In 2008, 13.2% (39.8 million) Americans lived in poverty. Starting in the 1980s, relative poverty rates in North America have consistently exceeded those of other wealthy nations. The latest results show the painful declines during the financial crisis and recession.

Among rich countries the US is exceptional in the tolerance of poverty, ranking second highest out of 35 developed countries. 23% of US children live in poverty. Only Romania ranks higher.

As I helped serve breakfast, I wondered how and why this was happening in the world’s wealthiest country.

Here’s why: America has a Supreme Court that consistently privileges the rich. The Senate is more responsive to the needs of affluent constituents. The House of Representatives is controlled by the far right, with PAC money unleashed by the Supreme Court in the perverted "Citizens United" decision.

One of the two major political parties is now dominated by radicals engaged in a crusade of voter suppression aimed at the elderly, minorities and the poor. At the same time, the other party, once the champion of working people, is seriously weakened by its own collaboration with the wealthy through lobbyists and fund-raising.

More than 21 million Americans are still in need of full-time work, many running out of jobless benefits. Meanwhile, the wealthy benefit from a steadily rising stock market with record profits, spend lavishly on campaigns to secure a political order that serves its own interests, and demands that politicians push for further austerity.

Most major US companies have recovered from the recession and accumulated lots of cash. At the same time, about 75% of the jobs created since the recession pay only a bit more than minimum wage. And there is strong opposition to raising the minimum wage to $ 10.10, claiming that it will destroy 500,000 jobs. Meanwhile, America has more millionaires and billionaires than any country in the world.

Think on this: What will happen to this system in the next decade? Can it outlast the burgeoning deficits while poverty increases steadily and the rich get richer? What will be the breaking point?

Click Poverty in the United States

Click Pinto editorial - Poverty: America's blind-spot

Click World's 85 richest people own nearly half of global wealth

Click Wealth distribution In America

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Growth Vs. Decline of Humanity

In the four years since the last recession supposedly ended (for the rich, not the middle class) worker productivity in America has risen dramatically. But, the US has two million fewer jobs than before the downturn. And unemployment is stuck at the highest level in decades.

While American business is prospering, with record amounts of cash, there is a pervasive unemployment problem because automation and computerization has made old-fashioned work obsolete. Employers substitute increasingly cheap computers and automation for expensive labor. What remains are unskilled, low-paying, manual and service jobs.

Limitless growth is the fantasy of economists, businesses and politicians. It’s seen as the measure of progress. Gross domestic product (GDP) has emerged as the dominant concept in our time.

The growth of GDP measures the conversion of nature into cash, commons into commodities.

Nature’s amazing cycles of renewal of water and nutrients are defined as “non-production". A living forest does not contribute to growth - but when trees are cut down and sold as timber, that generates growth.

Healthy societies and communities do not contribute to growth; but Illness and disease creates growth through expansion of treatment centers and sales of proprietary medications at higher prices.

Water, shared freely and protected, does not create growth. But, when Coca-Cola and Pepsi develop factories to fill plastic bottles with sweet water, that creates growth.

The commercialization of water, electricity, health and education generates growth and profits. But it also generates poverty by forcing people to spend large amounts of money on what used to be commonly available. When every aspect of life is commercialized, living becomes more costly and more people become poorer.

The dominant model of economic development has become perverted. When economies are measured only in terms of money flow, the rich get richer and the poor get poorer. The demands of the current economic model are leading to resource wars: oil wars, water wars, food wars.

The current model of growth capitalism is premised upon perpetual economic growth that must ultimately invade all accessible habitat and consume all available resources. Growth capitalism must eventually collapse. It is in fact collapsing for the simple reason that finite resources cannot sustain infinite growth.

Twenty years from now, America will have either successfully transitioned from our current economic growth paradigm to a new model of sustainable Capitalism. If not, we will be suffering the calamitous consequences of our failure to do so.

Click How Technology Wrecks the Middle Class

Click How economic growth has become anti-life

Click Envisioning a Successful Economy without Continuous Growth

Click From Growth Capitalism to Sustainable Capitalism

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Mobile Devices overtake PCs

Benedict Evans writes a weekly newsletter which always provides good information and lots of excellent web links. Here are some extracts from his latest report.

The mobile business has become much bigger than the computer industry. There have been more mobile phones than PCs since the late 1990s. There are now about 3.5 - 4 billion mobile phones, replaced every two years, versus 1.7 - 1.8 billion PCs replaced every 5 years.

Mobile devices have put supercomputers in our hands, representing the largest shift in computing since the PC era. The capacity and power of these devices are in its infancy and all expectations lead to a doubling of capability every 18 months. In the same way that the PC era unlocked the imagination and innovation of an entire generation, we are seeing a repeat pattern with mobile devices at unprecedented scale.

History has shown that as compute capacity becomes available, new applications and programs happily consume the excess. Additional memory, disk, and processing power always lead to substantially better and more innovative products, serving an ever-broader set of consumers. We saw it with the PC, and we will see it with mobile as the number of devices grows well past a billion.

Yet-to-be-developed applications are waiting to take advantage of this processing capability, and it’s going to require mobile operating system innovations to expose this awesome power.

Great operating systems leverage new hardware, provide consistent ways to run applications. They provide a foundation for all interactions with a computing system. For PCs, Windows is the dominant operating system; for servers, Linux is dominant; and for mobile, Android enjoys 82% market share (Gartner, November 2013).

Like Linux (and unlike Windows), Android is Open Source, which means no one company owns the code. Anyone can improve Android by adding new functionality and tools.

One reason why Android is winning is because open source provides more innovation. Because consumers are clamoring for increased personalization and customization options, the Android open source community has been happily taking up the task of fulfilling that demand. <> The growing enterprise trend of BYOD (bring your own device) is here to stay. This will further add to that demand as consumers use their mobile devices at home, at work, and on the road. All this demands more and more customized functionality.

Click Sign-up for Ben Evans' free weekly newsletter

Click What does mobile scale mean?

Click An Operating System for Your Mobile Supercomputer

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More big companies join the IOT bandwagon

The Internet of Things (IoT) is the internet beyond PCs, tablets and Smartphones. It includes devices that have embedded technology to sense either their internal states or the external environment.

The IoT will consist primarily of machines talking to one another, with computer-connected humans observing, analyzing and acting upon the resulting "big data" explosion.

IoT is set to boom over the next decade. IOT devices will dwarf the number of PCs, tablets and Smartphones. According to Gartners’s latest research, IoT will grow to 26 billion units by 2020, an almost 30-fold increase from 0.9 billion units today, resulting in $1.9 trillion in global value.

As the Internet and the worldwide web developed, more and more mobile computing devices became connected. Web servers delivered ever richer content with which they could interact. This first new internet/web revolution has already changed the world profoundly.

But the next disruptive development, in which the majority of Internet traffic will be generated by “things"' rather than by human-centered computers, has the potential to change it even more dramatically.

You may remember a year ago GE announced that it is targeting the "industrial Internet" as the next big growth arena (JimPinto.com eNews 19 March 2013). Well, now everyone else is jumping on the same bandwagon.

Cisco’s CEO John Chambers reflects that you usually see market transitions occur three to seven years out. He says that Cisco started in on IoT at least six years ago. He predicted that most of the computing capability and analytics will be at the edge of the network to turn around data into major leverage points. The bottom line for CISCO: IoT is going to be a $19 trillion profit market in the next few years. That includes $2.9 trillion for manufacturing alone.

IoT is becoming the backbone of Cisco's overall business strategy. John Chambers stresses that Cisco's IoT game plan combines the company's cloud strategy with data analytics, mobile, collaboration, and most important of all, security. He reiterated that it's really about how quickly can you get the desired business outcomes.

Click GE targets “Industrial Internet”

Click Internet of things will dwarf number of PCs, tablets and smartphones

Click Cisco CEO: Internet of Things poised to be $19 trillion market

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Book: Big Oil & The IT Industry

Energy companies will face significant changes over the next decades - greater demand for different types of energy sources, continued mega mergers, consolidation of services and reduction in costs.

As these changes take place, there will be ongoing investment in new computing technologies. The key going forward will be to filter technology developments and target those that deliver the greatest value to the organization.

New IT solutions benefit Oil & Gas companies in a variety of ways, from integrating siloed operations data to enable broader, deeper insights, to providing better tools to manage assets, production, and institutional knowledge, and using mobile devices and applications to help executives make better decisions more quickly and to enable more effective safety and training programs.

I met Byron Wallace at a recent Automation Control Products (ACP) Conference which was introducing the new Relevance software for mobile Devices in the factory. My prognostications included the demise of big IT, and this generated significant discussions.

In his new book, "Big Oil and the IT Industry", Byron Wallace explores ways that IT innovation is valuable and helpful for companies in the petroleum industry.

Byron discusses how information technology has developed over past decades, how it can benefit businesses and can be incorporated into business structures, and how it can be used effectively in petroleum companies to create the digital oil field of the future. He shares stories, statistics, historical facts, and conducts an informative journey into the world of IT, its place in petroleum production, and its global future.

Dr. Byron Kurt Wallace has an undergraduate degree in Electronics Engineering Technology from Grambling State University and holds both a master’s degree in Information Systems Management and a doctoral degree in Management and Organizational Leadership, with specialization in Information Systems Technology, from the University of Phoenix.

Byron teaches at Liberty University, Indiana Wesleyan University and Everest College. He is an enthusiastic public speaker, good mentor and friend, devoted husband, and loving father to his two boys. He strives to attain his big dreams no matter how hard it may seem.

Click Big Oil & The IT Industry: When Two Giants Shake Hands

Click How Information Technology is Helping to Boost Oil Production

Click Big data in the oil patch

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James Fox is a self-proclaimed “retired rebel”. He brings up a few significant issues and some opinions:
    "I am now retired on Social Security, small pension, smallish teachers pension and happy. Thank God for our socialist systems! Thank God for my two awesome unions, UAW and Illinois Teachers Union.

    "I got double vision just after Christmas, had just signed up for Obamacare for $75/mo after the $420/mo stipend. Thank God for Obamacare.

    "I left my college after 35 years in disgust. The 'new' school management decided to remove most of the hands-on machining classes and rely on testing for certification. You simply cannot learn to machine from a book. Impossible. These students must perform safely and accurately. They cannot learn physical operations from a book. They must run machinery, including CNC. In short, it was a sad joke.

    "Our school system is broken. I have completed extensive online curriculum very satisfactorily, but need the hands on time to both initially develop my skills and to finally perfect them. Hands-on was a definite requirement in both my apprenticeships, and it helped immensely while I continued working on my engineering degree.

    "Our political system is also broken. Republicans have developed ‘the lie' into a mindset. Just watch Fox TV to see the foolish behaviors and backward ideas about everything. Free trade and Capitalism rule this nation as we slip into a third world mentality, surely to be followed with our demise as a strong leadership nation.

    "We would have a better nation if we nationalized the oil companies (that should raise some feathers). And legalize, control and tax drugs to take the cash away from the gangs and cartels.

    "Finally, this earth is overpopulated by a factor of ten. We are doomed already. Look at climate change; pollution. nuclear damage (Japan) and China's expanding coal use. And somehow living longer is a good thing?

    "I guess when you are near the bottom you know what goes on in the street. Those living in fancy homes with foreign bank accounts are clueless about this."

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Rick Lamb [relamb@midtechv.com] writes regarding my discussion on Singularity - when computers become smarter than humans:

    "Your examples of Watson and self driving cars being smarter than humans are incorrect. Those machines are just faster at processing information, and reacting to it, than humans.

    "Is it a fair comparison to take a machine developed by dozens if not hundreds of our smartest humans, then pack it with millions of human-produced and entered facts, and compare it against one or two men in a contest? It’s about as fair as allowing two students to take the same test, one open book and the other not.

    "Machines have always done things faster/better/cheaper than people, starting with a wheel being easier than carrying a load.

    "It will be quite a long time before smart humans are not needed to conceive, design, produce, and program computers. Computers are still just tools.

    "The question is not, 'will computers become smarter than humans’: it’s ‘will computer and machines become better at doing your job, than you?’. The first is a very long time down the road; the second could come at any time - and for many humans it already has."

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Via LinkedIn, Satishkumar Balasubramanian comments on the future of IT:

    "I agree with the transformation of an IT department but feel it may not be a demise of the department. Looking at cloud, it reminds me more of the mainframe age, centralized processing with dumb terminal clients.

    "I have an Android tablet with which I am trying to connect to my windows Azure VM whenever I need high-end application access (somewhere I read about content consumers who need just a tablet and content providers who may need powerful desktops/laptops).

    "IT departments in large organizations may have to cater to their private cloud infra rather than the individual desktops / laptops with these evolutions."

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