JimPinto.com - Connections for Growth & Success
No. 111 : February 14, 2003
Keeping an eye on technology futures.
Business commentary - no hidden agendas.
New attitudes, no platitudes.
- Impending war - the Orange alert
- Automation Insights
- Invensys faces tough year-end
- Rockwell not acquired - yet
- The new global job shift
- The future needs us
- Man vs. Machine chess match ends in tie
- Who is the bully?
- Reaction against the 2013 tech-office
- Tech-trends have positive significance
Impending war - the Orange alert
In this increasingly polarized world, it is evident that terrorists
are plotting and scheming to wreak havoc wherever and whenever they
can. The un-nerving thing is that no one knows when, nor where, nor
how the next attack will come. The surprise and shock of 9/11 has
irretrievably changed our lives in this new century.
As I write this, the color-coded terrorist alert status in the US
has been raised a notch to Orange alert, or HIGH, the second-highest
possible (the highest is Red-alert or SEVERE). Paradoxically, we are
advised to go about our normal business keeping an eye open for
suspicious activities. One wonders how much extra wheel-spinning
an over-anxious populace generates for the FBI.
The administration claims that there is indeed significant evidence
for raising the level of alert, that these are not just-to-be-safe
tactics. We were caught by surprise on 9/11, and no one wants another
incident to occur without at least some kind of forewarning.
Supposedly, the higher alert status is not due to the impending war
with Iraq. However, anti-war extremists around the world are clearly
generating increased terrorist activity.
As the war clouds gather, there is still considerable doubt regarding
whether or not it is acceptable for the US to attack Iraq without UN
approval. With domestic anti-war polls uncomfortably high, some
observers wonder whether the increased alert is perhaps just a
scare-tactic that will push more people into accepting that the war
is justified. What does it do for you?
And what will it be like to move to Red-alert? Would that be the
equivalent of wartime conditions? Surely we recognize that an attack
on Iraq, even a quick win, will cause repercussions - not only from
those few who are loyal to the Saddam regime, but from other
extremists who feel that the US is simply bullying its way into
territorial supremacy and control of oil. Indeed, in a human sense,
a rapid victory will humiliate the enemy and exacerbate the backlash!
The era of controlling populations with tanks, guns, missiles and
fighter aircraft is declining with the passing of the past century.
The US is clearly the most powerful force in the world and its
military power can conquer any country. But, the omni-present media
makes the process instantly visible to the world and pushes
ever-increasing numbers of extremists into violent re-action.
Bombs and missiles, however powerful or plentiful, cannot stop
individuals from rebellion and terrorism. In the current Mid-East
conflict, the tanks and guns that Israel sends to wreak revenge after
suicide bombings do nothing to stop the next suicide bomber.
In a world with millions of intercontinental air travelers every day,
even with the utmost vigilance will seem powerless to stop a hundred
suicidal passengers like the maniacal shoe-bomber. And what can be
done to stop increasing numbers of desperate people from infiltrating
and undermining our open society?
A universal war on all forms of terrorist violence can be the only
memorial to its victims. Killing thousands more innocent Iraqi
victims, even in a righteous quest to depose their dictator, will
not reduce terrorism but increase the specter. The cancer of terrorism
took several decades to develop and it is clear that it will take a
long time to eradicate. It involves changing the mindsets of whole
generations. A sustained international coalition against all forms
of terrorist violence would be the only true memorial to the
already-too-many victims of transnational terrorism.
Website - US Dept. of Homeland Security
Cato Institute - One year later: Orange Alert
CNN - What's Behind Latest Orange Alert
Invensys faces tough year-end
Rick Haythornthwaite had better come up with some results for Invensys
by fiscal year-end (March 30) or face a serious decline of the already
hard-hit stock. At the end of trading on Thursday, 13 Feb. 03 Invensys
stock dropped to 37p, among the biggest decliners in the UK FTSE 100.
This is now some 60% below the level of Haythornthwaite's own stock
options (100.35p, July 02). One wonders how long he will stay.
On 9 Feb. 03, the UK Sunday Telegraph commented (summarized):
"Plunging worldwide industrial demand has overshadowed the
restructuring by Invensys CEO Rick Haythornthwaite. Sadly, we fear
there is further bad news in the pipeline: Invensys has a serious
pension fund deficit - estimated to be £250m, the weak dollar is a
problem, and fears (perhaps unjustified) that the company could be
hit by a string of asbestos claims. Invensys faces a tough few months,
despite Haythornthwaite's best efforts. Advice to stockholders: Sell."
Invensys had planned to be listed on the New York Stock Exchange last
year. But according to a recent release, listing will be deferred
until there is an improvement in the market. Indeed, with the recent
stock decline, there is danger that Invensys will lose its UK FTSE
Invensys insists that its year-end forecasts remain unchanged, though
many analysts don't believe that can happen. To avoid having to issue
a profits-warning, the remaining core companies are being asked to
deliver earnings no matter what it takes - the end-of-the-year crunch
that was always Yurko's game. One insider complained: "The prognosis
is death by a thousand cuts. Employees are engaged in a real life
version of the TV game 'Survivor'."
UK Guardian - Profit warning talk dogs Invensys
Invensys weblog - commentary, feedback
Rockwell not acquired by Eaton - yet
Well, my prediction that Rockwell would be sold to Eaton in January
2003 did not come to pass. People who joined-the-dots to make the
guess, including many insiders, are insisting that something is
still brewing - with Eaton, or perhaps someone else.
Many close associates think that Don Davis (64) wants out, and is
simply holding out for the best price. Don had previously stated to
insiders that his target price is in the 30's - but the stock still
remains at about 21. A surge to almost 24 in early January fuelled
some speculation that something was afoot. But, not yet.
In the meantime, (3 Feb. 2003) Rockwell acquired Interwave
Technology, an independent Manufacturing Enterprise Solutions (MES)
consulting integrator. Terms of the transaction were not disclosed.
A leading industry observer commented:
"In my opinion, Rockwell has acquired a pig in a poke. And this after
letting Ron Wichter and everybody at GMS go. Interwave is a troubled
Wonderware integrator. I know of three integrator firms who are making
a living going around after Interwave and cleaning up their projects."
To stay tuned, read the JimPinto.com Rockwell weblogs.
Rockwell weblog - commentary and feedback
Rockwell Automation acquires Interwave Technology
The new global job shift
Business Week (Feb. 3, 2003) has an excellent article "The New Global
Job Shift". Here is a summary, which includes some of my own tweaks
The latest round of globalization is moving more and more upscale
jobs offshore. The exported work include basic research, chip design,
engineering, financial analysis and many other high-income jobs that
were previously considered key local positions. Can America lose
these jobs and still prosper?
This movement of knowledge-work is one of the biggest trends reshaping
the global economy. The first wave of job export started two decades
ago with the exodus of manufacturing jobs - shoes, cheap electronics,
toys - to developing countries. After that, simple service work like
processing credit-card receipts and writing tedious software code
migrated to low-labor-cost countries.
These days, a lot of higher level engineering hardware and software
design jobs are going offshore as part of corporate downsizing. But
layoffs aren't just happening because demand has dried up - there is
an underlying drive for lower costs and higher productivity. Analysts
predict that by the year 2015, at least 3.3 million white-collar jobs
and $136 billion in wages will shift from the US to low-cost
The driving forces are digitization, the Internet, and high-speed
data networks that girdle the globe. Today, jobs that previously
seemed truly leading-edge, like designing a revolutionary
microprocessor, can easily be performed overseas. That's why Intel
and Texas Instruments are hiring Indian and Chinese engineers to
design chips. Dutch consumer-electronics giant Philips has shifted
R&D on most televisions, cell phones, and audio products to Shanghai.
Virtually every sector of the financial industry is undergoing a
similar revolution. Processing insurance claims, selling stocks,
and analyzing companies can all be done in Asia for one-third to
half of the cost in the US or Europe. Wall Street investment banks
and brokerages, under mounting pressure to offer independent research
to investors, are buying equity analysis, industry reports, and
summaries of financial disclosures from financial analysts in India.
By mining web databases, offshore staff can scrutinize credit
histories, access corporate financial disclosures, and troll oceans
of economic statistics. Even Wall Street jobs paying $80,000 are
getting easier to transfer; big brokerages are starting to use
Indian financial analysts for number-crunching work.
What makes this trend so viable is the explosion of college graduates
in low-wage nations. The Philippines, with a population of 75 million,
churns out 380,000 college grads each year, with an oversupply of
accountants trained in US accounting standards. India already has a
staggering 520,000 IT engineers, with starting salaries of around
$5,000. US schools produce only 35,000 mechanical engineers a year;
China graduates twice as many.
Bangalore (India), Manila (Philippines), Shanghai (China), Budapest
(Hungary) and many more tech-centers in developing countries have
become the new back offices for Corporate America, Japan, and Europe.
Even Bulgaria, Romania, and South Africa, which have a lot of educated
people but remain economic backwaters, are tapping the global market
US engineers, accountants and other professionals are headed for
a tough readjustment. Things will not bounce back to "the good old
days"; the trend is clearly downward. Just two years ago, senior
software engineers were paid up to $130,000 a year; the same jobs
now pay less than $100,000. Computer help-desk jobs used to make
about $55,000; now they get $30,000. Companies like Dell have
located most of their telephone tech-support to India. The trend
is spreading to virtually every kind of knowledge-work.
We must recognize that many jobs cannot go offshore because they
require face-to-face contact with customers. Americans will continue
to deliver medical care, negotiate deals, audit local companies.
The US will become primarily a financial and distribution center.
Talented and innovative people will adjust, as they always have.
Some analysts (including me) think that the US will see a net gain
from this shift - as with previous globalization waves. The US labor
force and capital will simply be redeployed to higher-value industries
and cutting-edge R&D. Silicon Valley gurus are already talking about
the next wave of US innovation coming from the fusion of software,
nanotech, and life sciences. The waves of change will continue to
increase the levels of productivity and value.
Business Week (Feb. 3, 2003) - The New Global Job Shift
When back-office work moves overseas
Peter Drucker: Managing in the Next Society
The future needs us
Freeman Dyson (Professor of Physics Emeritus at Princeton) has written
an interesting review of Michael Crichton's novel PREY - and goes on
to present his own arguments against control of technology to avoid
Dyson points out that we might enjoy the novel as a story, without
worrying whether it might come true. Or, we may read it as an urgent
warning of dangers lying ahead, which is how Michael Crichton intended
it to be read; it's scary because it may be real in the techno-future.
Dyson recognizes that biotechnology in this new century is as
dangerous as nuclear power was in the last. The dangers do not come
from any particular technology (such as nanorobots or autonomous
agents) but rather from the possibilities of moving forward without
fully understanding the consequences. The problem is the inexorable
quest for progress, with impatience that causes incomplete knowledge
and understanding of the complexities of life. The message is that
technology, irresponsibly applied, spells danger and even death.
Freeman Dyson agrees that the basic message of PREY is true - the
growth of nanotech and biological knowledge will bring grave dangers
to human society and to the ecology of our planet. The rest of his
excellent and insightful essay is concerned with the question of
what can be done to mitigate the dangers.
Bill Joy, in his by-now famous Wired magazine article: "Why the Future doesn't need us"
became a spokesman for the precautionary view: any technology that brings with
it a risk of major disaster must be prohibited, regardless of the
costs of prohibition. Here was a high-tech leader arguing passionately
for a slowing-down of technology that might become dangerous. Read
that article (weblink below) - it is significant.
Dyson takes the opposite, libertarian view: risks are unavoidable,
and no possible course of action will eliminate risks. Action must
be based on the balancing of risks against benefits and costs.
When any prohibition or control of dangerous science and technology
is contemplated, one of the costs that must be considered is human
freedom. And clearly, uncontrolled activity will progress (in
uncontrolled nations) no matter what.
In January 2001, at the annual meeting of the World Economic Forum
in Switzerland, Bill Joy and Freeman Dyson debated the question:
Is our technology out of control? Bill Joy took the precautionary
side, and Dyson took the libertarian side. In this review, Dyson
provides excerpts and quotations from Bill Joy's comments, and
summarizes both points of view.
Dyson's essay is a superb and enlightening review of the importance
and dangers of future technologies in the development, and possible
destruction, of life in this new century. In these uncertain times,
technology will bring "inflection points" that cause revolutionary
changes. Read Freeman Dyson's article to understand the issues.
Freeman Dyson - The Future needs us
Bill Joy's famous Wired Mag. article -
Why the Future doesn't need us
Jim Pinto on Nanotech & Self-organizing systems
- Michael Crichton's PREY:
Man vs Machine - chess match ends in tie
Russian chess grandmaster Garry Kasparov, rated No. 1 by the World
Chess Federation, agreed to a draw in the last game of his match with
Deep Junior, a computer created by two Israeli programmers that beat
18 other programs in a worldwide competition last summer.
The six-game series between Deep Junior and the grandmaster
finished 3-3, which Kasparov felt was a good result. The
"dangerous reminiscences" of his previous loss to Deep Blue,
the IBM supercomputer, weighed heavily on Kasparov's mind.
While he was playing Kasparov knew that, unlike a machine, he could
not forget the five previous games; he felt this was a terrible
burden. He played himself into a superior position but offered a
draw on the 23rd move, surprising chess experts. Deep Junior turned
down the offer, but presented its own draw five moves later.
Kasparov readily accepted.
Kasparov said he played better than Deep Junior in the deciding game
and would have pressed for a win in a similar position against a human
opponent. But, he feared that even a tiny mistake that would have been
severely punished by the computer. So he acquiesced to a draw.
Efforts to create an omnipotent chess supercomputer have been ongoing
since the founding fathers of artificial intelligence began plotting
at a Dartmouth University conference in 1956. But there has been
little to show for it until Kasparov collapsed spectacularly against
IBM's Blue. He is still openly bitter that IBM mothballed Blue rather
than agreeing to a rematch. He also contends the refrigerator-sized
machine cheated by getting advice from human experts during the games.
Man vs. Machine Chess Match Ends in Tie
Ray Kurzweil comments on the Human vs. Computer trends
Lance Ruetimann [LRuetimann@swissinfo.org] responded to Dave Rapley's
comment (eNews Jan. 31, 2003) that only thing a bully understands is
"Have you thought that the US may be seen as the bully here?
You should stand on the outside and experience the world-view of
the US as a nation which feels it is their "sovereign right" to do
"darn well as they please". This arrogance has cost the lives of
over 5,000 Afghan civilians, which is TWICE the number of people
who died on 9/11.
Warwick Kinscher [firstname.lastname@example.org] from Australia reacted
to the tech-forecast about "A day in 2013":
"Bullies are those unhappy individuals that feel they have to dominate
and control their environment. They have the power to dominate, and
ignore their conscience. With great power, comes great responsibility.
Can the USA really take responsibility for their actions?
"One more point - leave out comparisons with Hitler. The circumstances
at that time were much different. The comparison can be turned against
you, because Hitler also felt that his view of the world was the only
"My 20 year old son has just commenced training to be a carpenter and
builder. In some ways I envy him; I can picture him in 2013, going to
work on some building site somewhere in this great country of ours,
still carrying a toolbox, hammer and nails. He will be using new
construction materials and improved designs, but much of his work will
still be by hand, using techniques that are centuries old. He will
have the latest impact-absorbing lightweight hammer, but he will still
have to swing his arm to drive in that last nail. He will be wearing
a hat and the latest 200+, non-stick, non-greasy and fully transparent
sunscreen, but he will be outside, enjoying the sunshine and fresh
air, feeling his body tire as he works through the day, wiping good
honest sweat from his brow, rubbing callouses on his hands, and
knowing that he is doing a good job. At the end of the day he will
look around to see how far he has progressed - he won't need some
electronic gismo to let him know that he has just completed the
framing for the roof or walls. And then, at the end of the job, he
will proudly hand the keys to another young couple as they, too,
start a new phase in their lives.
Ralph Mackiewicz [email@example.com] responded to my challenge
to come up with positive trends in an uncertain world:
"That office in 2013 has terrible Orwellian implications. My son has
chosen his occupation because it is, quite simply, fun! The office of
2013 will give us enormous potential to collect and process
information, but it can so easily be de-humanizing. If it is to
remain an office in which people can work and achieve their potential,
we absolutely MUST ensure that the values of trust, achievement,
potential and human dignity are preserved, and that above all it
retains a sense of FUN!"
"The tech-trends discussed in your eNews are themselves indicative
of continued economic growth, increasing wealth, and improvements
in the quality of life for a great many people. For my part, I don't
think we should define our enjoyment of life or judge our world based
on a tiny group of irrational violent psychopaths or short-term
economic indicators (like stock market indices and economic trends).
"Our world is a dangerous and wondrous place that has produced
tremendous improvement in the human condition for a great many people
during thousands of centuries. I don't see why it can't continue.
I know that there are problems to solve, tragedies to endure, and
justice to dispense. But I'm convinced the world is at its beginning,
not its end."
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