The inconvenient truth of a flat world

13 07 2010

The infamous gas pedal. Source: Wsj.com

I grew up in a small town lost in the French Pyrénées. The three or four drunks, bolted to their seats in the village’s only bar, were my first encounter with pundits. With all due respect to all the “real” pundits populating the mediasphere, I am just saying that strongly voicing your opinions on various subjects, some of which you barely understand, is ingrained in human nature. We inherently value people with strong opinions and resent the ones unable to provide a clear black/white answer – ask any climate scientist grilled during a congressional hearing! By saying this, I am also guilty of a black & white description of the world. There are of course a lot of exceptions to what I just said; but, underestimating how widespread this phenomenon is would be a great mistake.

Ask Toyota! Read the rest of this entry »

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Small, Gray and Feminine – The future of aging in the US

2 04 2010

Skydiving at 92? (Source: Faded Tribune)

As part of the MIT Future Freight Symposium on March 11th, I attended a talk from Dr. Joe Coughlin of  the MIT Agelab. Dr. Joe Coughlin is a leading expert in demographics and behavioral changes due to aging – I highly recommend his blog disruptive demographics for more data and insights on aging. In his talk, he painted a picture that resembled a “nation of Floridas.” In a nutshell, trends are pointing towards a small, gray and feminine future.

Small

The fastest growing household in America is the single person category. 30% of the Americans above 65 now live alone and this trend will only accentuate, as one out of five baby boomers is currently living alone. While we can expect some of them to downsize and move closer to urban centers for convenience and fun, we foresee that most of them will downsize their habitation in the same neighborhood they grew accustomed to. For your reference, 70% of Americans live in suburban and rural areas. Naturally occurring retirement community in urban centers (NORC) is a currently observed phenomenon but will remain a niche segment.

However, small only applies to the size of their homes; not to their purchasing power. On the contrary, trends show that baby boomers will want to stay active and will want to enjoy life to the fullest. It is then worth noting that older adults control $1.6 trillion in buying power in the US, and that’s expected to increase by 29% over the next five years. Read the rest of this entry »





The inevitable collision between the scientific and public world

14 03 2010

Cover of the latest UNEP report

The scientific community prides itself in its ability to distinguish good from junk science thanks to a thorough and objective peer-review process. While this process has proved successful to foster scientific progress, it has been recently put to test when scientific issues became entangled with public policy debates. From the toxicity of chemicals like aspartame or tobacco in the 1980’s to the recent Climate Gate, more and more scientists get dragged into the public arena where brilliant or simply demagogic rhetoric trumps long and complex discussions about statistical significance. Scientists are ill-equipped to provide opinions when they are in reality accustomed to discuss about facts. As a result, you end in situations like Climate Change where both scientists and public leaders get frustrated at each other, leaving the door open for private and other interests to shape the debate in their favor.

A couple of months ago, MIT organized a conference with Richard Lindzen and other professors from the institution. Richard Lindzen is the A. P. Sloan Professor of Meteorology at MIT and one of the most famous voices against the climate change consensus. He is widely quoted in the conservative reports denying the existence of climate change. However, when one carefully listens to him, it becomes obvious that he does not deny the existence of man-induced climate change. He just argues that the data proving a anthropogenic climate change is not conclusive for lack of statistical significance. In a nutshell, he does not deny nor confirm climate change; he is indecise. During the same conference, Ronald Prinn, the TEPCO Professor of Atmospheric Science at MIT, strongly argued against Pr. Lindzen but finally acknowledged that the only difference between them relied on their different appreciation of the risk. Prinn summarized it well when he said: “My judgement of statistical significance for anthropogenic warming is very much dependent on my belief/fear that we don’t have another planet to go to.” Both were looking at the same data but saw different thing. Read the rest of this entry »





The power of self-fulfilling stories in financial markets

26 02 2010

Soros, the new Citizen Kane? (Credits: mindfully.org)

On December 2009, the euro traded at $1.51. Today, it trades at $1.35. What can explain this 11% downfall in little bit more than 2 months? An avid reader of the Wall Street Journal or the Financial Times will eloquently explain that it just reflects the faster recovery of the US economy out of the crisis vs. Europe, amplified by fears that Greece may default on its sovereign debt. End of story? Not so fast. A closer look will reveal the perfect case study for the power of self-fulfilling stories in financial markets.

Deeply ingrained in our collective subconscious is the fear that we are getting manipulated by higher forces. Not so long ago, people questioned the power of mass media and how Rupert Murdoch or Silvio Berlusconi could bend reality with their editorial lines rather than reporting it. I will argue that hedge fund managers and other leading investment bankers have become the new Citizen Kane, shaping reality with powerful storytelling. Financial markets have slowly but surely built a very advanced language that now allow them to communicate and broadcast complex stories. Puts, call, credit-default swaps and other derivatives constitute the building blocks of their vocabulary. Traders have become the journalists that put those words together, following the editorial line dictated by their fund manager. The assets under management, the equivalent of circulation, provide more or less clout to the fund editorial line. Read the rest of this entry »





Corporate diplomacy – Forget geopolitics, think ecopolitics

12 02 2010

Source: nexus404.com

In 2009, Exxon Mobil and Wal Mart revenues surpassed Sweden’s GDP – the 22nd wealthiest country in terms of GDP. Companies like Google publicly challenged China in a human rights debate more powerfully than any developed country had ever dared to. With the economic clout of a develop country and a time horizon set on quarterly earnings, large corporations turned century-old diplomatic protocols upside down like a bull in a china shop. As I see it, large corporations’ government affairs will soon start to look like a Foreign Affairs Ministry with a clear diplomatic agenda to uphold.

When you start to think about it, it is already the case. Corporations in America leverage lobbying to shape the political environment the same way a diplomatic mission would do in a foreign country. Building on the analogy, the World Economic Forum at Davos is the equivalent of the UN where traditional diplomats come to negotiate with their corporate counterparts. If this is already happening, quid novi sub sole? Well, I expect corporations to become bolder in setting and communicating their diplomatic agenda. By doing so, they will redefine the power map – shifting international relations from geopolitics to ecopolitics.

One may then argue that economics are already driving foreign relations. Diplomacy and companies’ interests tend to go hand in hand. Watch a presidential plane from a Western country land in China and we will see a clique of CEOs mixing with the usual diplomatic aides. The line gets blurred between old-fashioned diplomats and global business leaders. Though now, there is still an implicit deference to the old system with the business world trying to piggy-back on the old diplomatic channels to support their interest. This is where I see a branching point: will corporations still defer to diplomatic channels to make them case or will they develop their own, running the risk of clashing with the traditional diplomatic world? Read the rest of this entry »





Limits to growth? Beware of the next Malthus

12 01 2010

Source: Wikipedia

It is the perennial question. Are we outgrowing the Earth? Since Mathus’ dark predictions, the issue of Earth carrying capacity has been on and off the public agenda. There is clearly no definite answer as people have painted convincing scenarios for both sides of the question. On the on hand, the gloomy scenario depicts an earth suffocating under a booming population requiring more and more resources to attain new standards of wealth. On the other hand, technology optimists believe that game-changing innovations will enable a wealthier larger population (e.g. nuclear fusion, climate engineering, etc.)

It is typical that issues like these quickly evolve from a scientific “consensus building approach” to a heated advocacy debate. I will come back to this in a number of posts as it is symptomatic of society where science, policy and business worlds have collided. Instead of challenging and building on a work-in-progress theory like in any scientific problem, advocates from both sides monopolize the debate and believe that the truth will emerge from the best rhetoric. The main reason for this evolution resides in the inherent complexity of the issue, which leaves a scientific approach short of closing all the critical uncertainties. As a result, you see “religions” come to light as the debate gets parceled around nays-sayers and doomsayers, between right and wrong. Read the rest of this entry »