W. P. Carey MBA - Executive Program - Arizona State University

Coffee - The Alternative Fuel

A Canadian engineer/entrepreneur has discovered a method for turning used coffee grounds into firelogs. The product, Java-Log, claims to provide 3 times brighter flame than plain old wood while being 7 times cleaner. A 5lb. log runs around $3.50 and is available at Target.

Outsourcing to a new extreme - the customer

Apple Computer is well-known for its ability to embrace innovation and sell it to the masses. Wired magazine has an article that discusses Apple's latest idea - self-service warranty repair. After talking to a support specialist to diagnose the problem, replacement parts are shipped to the customer. Apple has designed its new iMac G5 with a simple, modular interior to facilitate customer repairs. Industry experts cite customers' increased technological sophistication as well as their desire to minimize time without their computer as a major driver of this trend. (Cost savings to the company are apparently a secondary benefit). Competitors are also experimenting with this model:

The entire PC industry is increasingly moving to do-it-yourself repairs. Almost a third of the repairs to Hewlett-Packard's desktop computers, for example, are performed by HP's customers. The company expects that number to climb to more than 65 percent in the next few years.

The trend means certain savings for manufacturers. "If you're shipping your computer back to fix a mouse, there's a big saving, of course," said HP's Kemp.

But PC companies insist they are making the move toward self-service because customers actually prefer to fix their machines themselves.

Kemp said HP's self-service program was instituted after the company's merger with Compaq in 1999, and has grown quickly. He said it was conceivable that in the future, 85 percent of desktop repairs would be performed by customers, "but there will always be resistance from some people."

As customers' comfort in repairing their computers grows and computer designs become more modular, perhaps the next frontier will be to outsource the assembly of new computers to the customer as well. "Dude, you just built a Dell."

The importance of infrastructure

It's obvious that it isn't enough to have a good agricultural harvest -- you have to be able to get it to market to reap the value. Each year at this time in Brazil the soybean harvest kicks in and trucks begin hauling the beans to ports to ship to the world market. Lines like that at right (click to enlarge) leading to Paranaguá, a port in the southern state of Paranáare, are often as long as 50 miles and the wait in line can be as long at 20 days.

Brazil's ascendancy on the global stage has also exposed deep fault lines at home. Like Paranaguá, almost all of the country's ports are struggling to accommodate the growing flow of goods. With some rare exceptions in more developed states like São Paulo, roads everywhere are worn and riddled with potholes, making the journey from the farm belt to the coast costly and slow. In addition, Brazil's railway network has barely expanded since 1970, when it transported only 50 million tons of cargo a year. This year, some 300 million tons of goods are expected to be shipped by train.

Read the whole article on the importance of infrastructure.

The future of blogs and their influence

Here's an article discussing the ways in which blogs have evolved since the last Presidential election and the ways in which they are likely to influence the dissemination of information. Here is one grass-roots way:

to see the future of blogging, it might be best to look beyond the election. Here are a couple of examples. One is this blog on the Foresight nanotechnology conference last weekend, with "live" accounts of the speeches, powerpoint slides, and even video interviews mixed in. (And although I don't know the blogger, Adam Keiper, he says he was inspired in part by my efforts to promote this sort of thing: "I'm going to try to test the limits and usefulness of liveblogging, or newsblogging, or conferenceblogging (an unwieldy neologism). Professor Glenn Reynolds, the InstaPundit, among others, has pushed the concept of bloggers as news collectors, and I hope to put that idea to the test. So this is a sort of media experiment, too.") I'd call it a success: Equipped with no more than a laptop computer and an inexpensive digital still camera that also shoots video, Keiper provided more comprehensive coverage than most newspapers could have -- and certainly more comprehensive coverage than any actually did. This is the kind of thing I hope to see more of.

Read the whole article.

European Commission in a crisis

José Manuel Barroso, president-elect of the European Commission, has withdrawn his proposed team from being voted on because it was clear that it would not be ratified by a vote of the members of the European Parliament. This puts the Commission in "virgin territory" because it is in violation of its own laws and there are no legal guidelines for what happens next. A coaliation of liberals, socialists and Greens have pledged to oppose Barroso's proposed governing team because of one of the members of that team. Rather than suffer a defeat, Barroso withdrew from the vote, leaving the current governing group in place on a care-taker basis, whatever that means.

The delay means that Romano Prodi’s administration will continue on a caretaker basis, ”for as long as it is necessary”, the Dutch presidency of the European Union said on Wednesday. The next meeting of the European parliament will take place in mid-November.

Josep Borrell, president of the parliament, said both Commission and Parliament were now “exploring political virgin territory” because the vote delay was in breach of EU rules and regulations.

Doing business globally

There are many logistical challenges at very fundamental levels -- how to make monetary exchanges in remote areas, for example. Currency differences, access to mail or land-lines or ATM's or banks, communicating orders ... all of these fundamentals of business transactions needs to be in place. Christopher Rodrigues, chief executive of Visa International, believes they are manageable with a single device: the cell phone. It goes where land-lines and mail trucks don't and it allows transfer of all the information necessary to conduct business. Mr. Rodrigues used China to illustrate the growing importance of wi-fi transactions:

In the next four years, 100 million cell phones will be used in India. That number should reach 500 million in China within three years. "What we are seeing," said Rodrigues, "is a global shift from paper-based transactions to electronic payments." The benefits of electronic transactions include lowering transaction costs (by reducing the costs of handling cash and reconciling payments), moving economic activity from the informal to the official economy (by mainstreaming more individuals into the banking system) and improving financial transparency. Indeed, the World Bank has cited effective and efficient payment systems as vital elements for economic development in emerging countries.

Read the whole article about the conference on global business at which Mr. Rodrigues and others spoke.

Protecting artists

The recording industry and the Motion Picture Association of America believe that going after illegal file-sharers is not protection enough for their copyrighted material. They are sponsoring and supporting a new bill that would move responsibility for illegal file-sharing to those who provide the means for doing this: internet service providers, computer manufacturers and system software developers. Their argument is that by making ISPs and computer makers liable for illegal file transfers, there will be greater protection for artists who will then be encouraged to create more art; developers of other types of intellectual property will likewise be better protected.

The Inducing Infringement of Copyrights Act of 2004, known as the Induce Act, would hold any individual or corporation liable for infringement that "intentionally aids, abets, induces or procures" copyrighted material for illegal use. Mitch Bainwol, chief executive of the Recording Industry Association of America, wrote in a letter to the Senate that "the need for the bill has never been clearer. This legislation is essential for the legitimate online entertainment services forced to compete on an unfair playing field."

Academics who work in this area suggest that the problem isn't so much illegal file-sharers, though that is somewhat of a problem, but rather a business model that is out of date:

[Professor] Fader suggests that the content industry has turned to the courts and now Congress to protect a business model that is changing as a result of new technology. "Imagine if the horse-and-buggy manufacturers had legal loopholes to prevent the development of the automobile. They would use it, but would society be better off?"

The recording industry might engender more sympathy if it had made a better effort to incorporate some form of digital distribution in its business model, he adds. "It has never even run an experiment. It wants to have legislators come in to help it avoid the need to ever do so."

Professor Hunger of the Wharton School thinks the music industry is too slow in taking advantage of new technology:

the music industry must come up with new business models. For example, the Internet could allow the industry to slash its distribution costs. "Instead of putting out CDs and shipping them on trucks, they can send them directly at a very low cost. That does suggest a very different business model than charging $15 or $20 for a CD. It might be a much more attractive way to do things. Stuff that is easy to distribute wants to be free. Given that force, I think [the recording industry] needs to come up with a new model for generating revenue."

The movie industry was very much opposed to VCR's and videotape recording of movies when that technology was new -- now it is one of their largest markets. It isn't that technology needs to be stopped, which is the recording industry's strategy; it needs to be exploited.

The value of "brand name" college education

An earlier post discusses the latest approach to ranking colleges. An investment in a degree from highly-ranked colleges seems to many a good idea because of the lifetime of benefits that may be reaped. But this popular notion doesn't fit with research that has been done on how much a degree from a well-known school actually impacts a person's chances of lifetime success. How much does a college "brand name" degree really matter?

Research suggests that attending a prestigious school doesn't make a person more likely to be successful professionally (as measured by income). Princeton University economist Alan Krueger and Stacy Berg Dale of the Andrew Mellon Foundation unraveled some myths about the importance of brand-name degrees in a 1999 study when they found that students who were accepted to elite universities but chose instead to attend less-selective schools did as well in adult life as their peers who'd attended top-tier institutions. In other words, it is the quality of the students selected for admission to elite schools, not what happens within the ivied walls, that made the difference.

Read this interesting and lengthy article on the value -- and burden -- of a degree from a "prestigious" college.

WaPo best blogs awards

The Washington Post ran a "readers' Choice" award voting for best blogs in about ten different categories. If you're thinking of trying out new blogs, you may want to check their list of winners as a starting set.

The new iPod

Apple's next generation iPod was unveiled today: it costs $499 and $599 for the 40 GB and 60 GB models, respectively. The larger one holds 25,000 wallet-sized photos that can be displayed on a TV by cable or up to 15,000 songs -- these can be combined using iPod Photo to create slideshows.

The slogan Mr. Jobs chose for the new device was "all of your songs and photos in your pocket."

Apple is taking a different tack than others in the digital memory market:

In focusing on still pictures, Mr. Jobs showed he was moving in a direction different from competitors in the consumer electronics industry, which have been adding video capabilities to hand-held devices. Mr. Jobs disagreed that video was a must-have feature in new devices. "Our competitors are saying it's video," he said, "but they're too big to fit in your pocket."

Apple also introduced the new Black iPod featured in their U2 commercial; it costs $349.