China and Innovation: While You Were Tweeting, the Future Happened

David Firestein, the executive director of the University of Texas’ new China Public Policy Center headlined a recent session of our speaker series, The World Spins, with some advice about competing with China.

“In the end, we’re going to have to step up and compete.  China is not our enemy. But it is our most formidable national competitor.”

Firestein, an Austin native who spent 20 years in China with the State Department and another 10 as a senior vice president at the East-West Institute, has no illusions about what’s at stake.

“It’s like a cage match in wrestling,” he explained, where one wrestler, the United States,

David Firestein, Founding Executive Director, China Public Policy Center; Clinical Professor of Public Affairs
David FIrestein, executive director of the China Public Policy Center: “In the end, we’re going to have to step up and compete.”

follows the rules, and the other, China, uses any- and everything to win. And winning means becoming the first country in history to be a brutally market-oriented authoritarian dictatorship.

In a cage match, tweets and tariffs are a poor match against a singularly focused industrial policy and a bill of rights that says:  Citizen, you stay out of politics, and we, the government, will make you rich.

One battleground:  artificial intelligence and big data

If you’re not reading Jeff Ding’s ChinaAI Newsletter, you should be. Ding, who is a graduate student at Cambridge, shares translations of Chinese policy, strategy and technology. His most recent is a report from boutique private investment firm Rising Investments on China’s Civil-Military Fusion.  The report notes that although applications based on artificial intelligence (big data, internet) need time to developed.

  • AI military applications still need a lot of time: products for the military industry require “high reliability,” so emerging technology like AI will be used as reserves and not be applied until they are mature, and the related technologies for AI (big data, internet) also have a number of security issues.
  • Intelligent weaponry and intelligent robots will have a major impact on the strategy and the tactics of future wars.

China also plans to use the same public-private partnerships that built the American technology sector to achieve its goals.

  • China did not permit non-government capital to enter into national defense industries until 2005. They are still looking for the emergence of a 50-100bn military industry private corporation on the scale of say Lockheed Martin.
  • The goal is to have over 80% of defense industry information construction technology come from private enterprise. China hopes to reach the first wave of peak civil-military fusion in 3-5 years.

Will political turmoil stifle American innovation?

Without the Dept. of Defense we wouldn’t have the Internet or email, much less venture capital and private equity.  Read Andrew Ross Sorkin’s excellent article about the push back against defense contracts among the employees of Silicon Valley technology giants. Sorkin quotes Adam Grant, a professor at the Wharton School and a member of the Defense Innovation Board, an independent federal advisory committee set up under President Barack Obama, said he believed that the partisanship that was contributing to the debate would ultimately stifle innovation.

“I worry that it will stall progress,” said Grant. “Innovation has been fueled for decades by private-public partnerships. It smacks of cutting off your nose to spite your face.”

Meanwhile, Firestein reminded us, China is in that cage match, its eye on the long-term, even as American strategy changes with an election cycle, from tweet to tweet. It’s hard to win a cage match when it’s unclear what winning looks like.

“I think we’re at the beginning of a major transformation and a technology revolution that is, by an order of magnitude, more disruptive than the internet revolution 20 years ago,” Robert Manning, a senior fellow at the Atlantic Council recently told American Public Media’s Marketplace Report.

“If we don’t get wise to these trends that are reshaping our economy and are going to affect the way we work, live and everything else, the future is going to take us by surprise.”

 

 

 

 

 

 

 

 

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Blockchain’s Promise: Trust

Pete Harris stopped by a session of the World Spins to share his take on blockchain, the software technology generally overshadowed by its trendier spawn, bitcoin and the Bitcoin network. Harris, who bears a striking resemblance to Bilbo Baggins, has a relationship to hype similar to mine with spreadsheets. That is, he is clear and takes  sticks to the facts as he sees them. Even so, it doesn’t take long to recognize blockchain’s promise. If it’s possible to transact business based on a series of permanent (i.e. they can’t be changed), transparent interactions, then our trust-starved world may have a chance of recovering its footing.

https_blogs-images.forbes.comjamiemoyfiles201802block-chain-2852998_1920-1200x534 (1)
The blockchain network: can it build trust?  Photo courtesy by Gerd Altmann via Pixabay, courtesy of Forbes

 

“We’ll have to wait and see” 

Harris’ blockchain CV dates from his Wall Street consulting days over a decade ago. These days, having sworn off airplanes, he spends much of his time with the Austin startup community where over 70 young cryptocompanies are  tackling data integrity issues where they find them — finance, healthcare, contracts.

I watched a handful present at Harris’ Monday night meetup. They ranged from Po.et, copyright/intellectual property protection, to GovernanceChain, an accounting network and CityShare, a digital shopping/hospitality network for member cities. Among the more visible is Wanchain, a Chinese nonprofit that’s figuring out to securely connect separate smart contracts, each with its own blockchain, a pivotal step in supporting a currency-agnostic global financial network. Interestingly, Wanchain’s technology is developed in China; the company’s U.S. headquarters is in Austin.

One of the best parts of these presentations is listening to company execs say, “I don’t know,” and “We’ll have to wait and see” — something I hear very often.  But I suppose that’s the beauty of a working with a nascent technology.

Privacy is implicit in the design

Speaking of wait-and-see, someone asked about blockchain’s impact on GDPR, the  European Union’s toughened privacy requirements known as the General Data Protection Rules. With the compliance deadline looming next month, that too is a wait-and-see. But since transactions are permanent, transparent and traceable, the blockchain ledger eliminates the need for centralized control. The integrity of the information is inherent in the software design.

A peek at a mobile citizenry in a digital world 

Today, 10% of the world’s GDP is in block chain. But it’s not all business. In the public sector, tiny Estonia has fashioned itself what the New Yorker magazine labelled a digital republic. Its citizens are free to live and work wherever they please while continuing to  vote, maintain their health, pay taxes using digital IDs.

Curious? Here in Austin, check out the:

World Spins Series Spotlights Thought Leaders on the Cusp of Disruption

I wanted to let you know about a project I’m working on with the World Affairs Council.  Its best described as a salon series showcasing some of the forces re-shaping the world we think we know — climate change, blockchain technology, the shift of global power from military to technological supremacy.  Our new series “The World Spins,”  will bring  people at the forefront of issues that are re-shaping the world we live in:  climate change, national security, blockchain technology, China and innovation. I’m thrilled to have these brilliant people — thought leaders, participants – not observers — share their time with us.  If you’re in Austin, please join us!

NATIONAL SECURITY & CLIMATE CHANGE, Dr. Joshua Busby, an associate professor,

Dr. Joshua Busby, associate professor, LBJ School of Public Affairs, University of Texas at Austin
Military leaders accept climate change as a major risk to our national security. Do we have a policy? Internationally recognized expert Dr. Josh Busby dives into a thorny issue.

the LBJ School of Public Affairs, University of Texas at Austin, has been deeply involved in climate change policy since 2008. He participated in the discussions around Paris Accord, as well as their follow-on sessions, the next scheduled to take place in Poland later this year, as well as managing multi-million dollar grants for the Dept. of Defense. Quick update:  President Trump announced the United States’ intention to withdraw last December.  Former National Security Advisor H. R. McMaster recognized the relationship between the weather and security. He’s out, and former ambassador and Fox News analyst John Bolton is in.  What’s next?   April 12 at 6:30

 

BLOCKCHAIN, Pete Harris, founder of Lighthouse Partners, works with companies who are integrating blockchain technology into their business strategy. Talk about disruption, blockchain promises to dramatically reshape our financial, supply chain and trade relationships.  Think Walmart tracking the safety of sliced papaya from Central America to a store in Iowa. Pete, who consults internationally, is part of the axis of the blockchain

Pete Harris, Lighthouse Partners
Pete Harris, founder and president of Lighthouse Partner, has been talking blockchain and innovation since it was piloted on Wall Street.

community in Austin, Texas, where there are over 70 start ups involved in commercializing this nascent technology into our financial, health care, food safety and transportation ecosystems. A nascent technology, the growing use of blockchain is overshadowed by its trendy subset, bitcoin.  But companies like IBM and Oracle are integrating it into the way their customers do business. Pete founded the hub of Austin’s blockchain innovation, the  Austin Blockchain Collective and chairs a monthly Blockchain for Business Meetup at the Capitol Factory which is free and open to all.   March 29 at 6:30

 

CHINA AND INNOVATION, David Firestein, is the founding director of the new China

David Firestein, Founding Executive Director, China Public Policy Center; Clinical Professor of Public Affairs
David Firestein is shaping how a world-class university uses the resources and relationships of the (other) major world power.

Public Policy Center at the LBJ School.  From his bio: Throughout his career, Firestein has played an active role advancing U.S.-China and U.S.-Asia trade. He has also produced path-breaking thought leadership, scholarship and Capitol Hill testimony on a range of topics, including U.S. arms sales to Taiwan, U.S.-China infrastructure investment cooperation, and the role of national exceptionalism as a driver of major international conflict today. Firestein is native Austinite who speaks Mandarin at near-native level (hard to imagine in a Texan) and has published a book on what else – country music and diplomacy. May 22 at 6:30

 

 

 

If you’re in town, please join us!  All sessions are held at the historic Neill-Cochran House  where you can park right behind the building for free — speaking of a changing world.

Can Tech Companies Protect Privacy — and Still Make Money?

In the early days of the dot-com bubble, I learned that first and foremost, technology companies must deliver value to customers. It’s best to do the right thing by customers in terms of privacy, but profit comes first. Given this, the FTC and Congress need to do more to protect consumers’ personal infomation.

If you Google the phrase “My friend is addicted to _______,” you do not get “opiod” (which is good). You get “phone.”

There is no constitutional right to privacy.  In the 1970’s, the Federal Trade Commission was charged with protecting and regulating privacy rights, but the FTC has hesitated to move decisively. Unlike the Europeans who’ve been quick to cry foul, we’ve maintained a hands-off approach — so far.

Long ago, I took a job on the frontier of the New Economy when a venture-funded start-up hired me to roll out their opt-in personalization offering, a service that would help large brick-and-mortar retailers boost their online  loyalty (and sales) by tailoring web views to shoppers’ traits — gender, geography and shopping habits. It was a great customer service idea, one that has evolved to the point that the Zappos we admire online now haunt us for days.

We took a white-hat approach, jumping into the thick of it. We formed a privacy advisory council, met with Congressional representatives,  influencers and media. We joined and participated in the FTC’s Advisory Committee on Online Access and Security.  When I saw our CEO recently, he reminded me, “We were so far ahead of our time.”

But if you’re big and want (or need) to feed investors and stakeholders, the temptation to step over the line to get ahead is going to be even greater. It gets hard to even see the line when you’re in the rush of generating and executing great ideas.

Postscript:  The Washington Post reports that the FTC has asked Facebook, whose entire business model seems to be built on selling users’ data,  to appear and an expanding Congressional probe is including Google and Twitter. Should be interesting.

Revisiting “Be Nice”: #BeNice2.0

A young performer challenges me to build alliances, broaden my associations with people who are not like me; to be active in pushing for change.

In late July of 2017, I pushed my way into an airless warehouse-turned performance space to be part of an enthusiastic audience for this year’s “Sixty by 60,” the annual fundraiser for the Fusebox Festival, a not-to-be-missed series of glorious international art, dance, opera and all-round inventiveness that happens every Spring in Austin, Texas. For free.

Fusebox’s 60×60 gives performers 60 seconds to say what they want to say.

The piece I remember most vividly featured a young African-American woman wearing a white t-shirt that read in bold, black letters, “Be Nice.”  A small woman, standing in the middle of the stage, she invited the 200 of sweating her sweating audience to pick up the white t-shirts she’d placed on their chairs and wave them over head, joining her in shouting “Be Nice!” to loud music.

The reference to the iconic New Orleans R&B queen Irma Thomas’ white handkerchief was there: Put your backfield in motion, even when your audience waves Confederate flags.

But 2017 brought us a new president, Travis Kalanick, Harvey Weinstein, shootings by and of policemen, fake news, children gunned down in churches, and more.  There is a lot of material to work with during 2018.

Though if it were up to me, a woman raised with the same words, I would make it BeNice2.0 to make it clear we’re done with the old “nice at a price.” We don’t need enemies. We need collaborators, supporters, friends, critics who are willing to listen.

The other thing I like about BeNice2.0 is that it takes us beyond “be kind,” unquestionably a necessary and admirable life rule.  To me, BeNice2.0, suggests a more active, engaging stance. Ask for what you need, point out unfair behavior, propose better approaches. Be active; #BeNice2.0

These amazing times and their cost

I fought my way through Friday night traffic to see my friend Shiva’s daughter perform in their Christmas play, “A Play in a Manger.”  I expected Mary, Joseph and a few shepherds.  What I saw was an hour-long rock-and-roll production built around a plot line of “bigger is not better.”  Mary and Joseph were supplanted by a production manager and a worried production crew and cast, some 20 kids in all.

Everybody got a speaking part, reaching up to the standing microphones like little gold fish getting their supper.).  Shaylee, whose family is from Iran, added what I learned later was an improvised dance number for her part.  The epilogue was this:  “Christmas is not about Walmart or Saks. ipads or iphones.”  That is, it’s not about stuff, because stuff costs a lot of money.

I thought about this when I stopped into my local Wal-Mart for socks and was astounded to find all of the cashiers were gone, erased.  In their place were scanners, waiting for a credit (or debit) card. When I asked the attendant where those workers — mostly women, mostly African-American, mostly over 40 — I got a shrug.

According Fortune, citing a McKinsey Global Institute report released in November, “between 400 million and 800 million workers around the world could be displaced by automation by 2030.”  By comparison, the 2016 population of Texas was 27.36 million.  Think about that — that’s 15 Texas’.

Most affected will be jobs that involve collecting and processing data – everything from accounting to fast food.  The report predicts the pace of displacement will be unprecedented, concluding  “There are few precedents in which societies have successfully retrained such large numbers of people.”

In a recent column, David Brooks had some suggestions for lawmakers to consider, a list that targets practical but oftentimes insurmountable barriers like making it easier for people to:

  • Get to work
  • Get a license
  • Enter fast-growing professions like health care
  • As ex-offenders, navigate the application process

It’s painful to experience the season as one of “haves” and “have nots,”  and easy to turn away we dash through the holiday fully armed.  But here’s hoping each of us has an opportunity to pause and reflect, not just on how very lucky we are, but how we can help those who are less so, navigate these times.

No time for blame

Each of us is tasked with playing the hand we’re dealt. Some of the cards are stacked in our favor; many are not. Nonetheless, it’s a package deal, and the better we understand those cards, the more we’ll be able to accomplish.

I thought about this after reading David Remnick’s sad portrait of Hillary Clinton, in which she blames her gender — among other things — for her loss.  Mrs. Clinton is a super-sized public figure and a role model of tremendous potential.  Perhaps it is a necessary catharsis, but I was disappointed to read that she chose to waste her time.

The New Yorker
What could have been: The cover The New Yorker Had Planned for Hillary Clinton’s victory in the 2016 election. Courtesy of The New Yorker, Sept. 24, 2017

It’s helpful to understand why we fail. But blame is time consuming.  This I know: the faster we lay it aside, the less time we waste. Contrasting the Clinton debacle with Al Gore’s loss to George W. Bush in 2000, Remnick notes that Gore was 52 at the time; Clinton, 69. Gore had time to grieve, move on, make a fortune and win a Nobel Peace Prize.  Clinton is 69. “She will have a hard time finding a similar peace or place in public affairs.”

Oh, gosh I hope not.

The “genderizing’ conundrum

It’s always worrisome when a noun becomes a verb. So let’s step back. The 19th Amendment was passed in 1920. When I was in high school, girls weren’t allowed to learn small engine repair; we were shuffled off to home economics and white sauce. When I left school and took a temporary job with H.Ross Perot’s Electronic Data Systems, I was humiliated by a fellow (male) employee’s passing me a handwritten note warning me that my sleeveless dress was inappropriate because it revealed my arms. I left the job.

Mrs. Clinton, like Texas Governor Miriam “Ma” Ferguson who presided in the 1920’s and 30’s, rose to power on the coattails of her husband. She, like Sherry Lansing in Hollywood, Toni Morrison in literature, and Indra Nooyi and others among the Fortune 50, carved their roles out of a male tradition  There was no can-do legacy. Unlike Athena, the goddess of wisdom, who sprang fully formed from Zeus’ head, confidence is earned, not awarded.

Focus on making the world a better place — starting where you are

So why not focus our time and energy on moving forward? The fields of law and medicine are being transformed by women. I look forward to seeing similar trends in education and politics (you go, Mrs. Clinton). But no question, it’s a slippery slope. Every day I see young women reverting to baby talk, tantrums, behavior that may have worked in middle school, but is cringe-making in the workplace.

We have a limited time to do what we want and need to do. Life tosses storm debris in our way.  I don’t know how many times I said, “I can’t find the job I want until after my mother dies.”  I didn’t want to face the conflict and ultimately wasted precious time blaming absent siblings, geography — and gender — for lost time and opportunity.

It was a waste of time.  Ultimately, we’re shaped by the battles we fight, and its our ability to accept our faults and failures that make us role models.

whining

Navigating Obligations: Keep Working

Rushing to work one morning last week, I listened to Mihir Desai talk about his new book The Wisdom of Finance: Discovering Humanity in the World of Risk and Reward. The topic is bankruptcy; the lesson: Life is chaos, and our task is to navigate through the it.  He kicked off the interview with an anecdote about American Airline’s 2011 bankruptcy filing (when the stock fell 79%):

 The first CEO said for a long time he’ll never go bankrupt, because it was his duty to make sure every obligation gets paid off. Of course, he gets dragged into bankruptcy at the very end, they switch the CEO. The second CEO comes in, restructures all the obligations, guts the pensions. But American Airlines goes on to live another day. So the idea there is, you know, who’s the hero of that story? Is it the guy who said, “I have to stand by all my obligations,” but took the company down? Or the guy who said, “I actually got to manage these conflicting obligations”?

Employees, or many of them, kept their jobs, and shareholders came out way ahead. Maybe the lady wasn’t as advertised, but she was a better option than the tiger.  So it goes with the ways we manage not just our working lives, but our personal ones as well.

Conflicting obligations come at you from all directions  

If it weren't for you
“If it weren’t for you I would have conquered the world by now.”                  

Unexpected interruptions — kids, divorce, illness, death — not to mention layoffs, separations and unplanned early retirement intrude. Financial hardship complicates things.

Living longer + Putting yourself last = Poverty 

Women are particularly vulnerable to the call of obligations. We tend to put others’ needs before our own, although perhaps this trend will shift as we evolve and more men take on caregiving responsibilities.  But as it stands now, Kerry Hanson’s “Money Worries” column is a wake-up call:

Women were 80 percent more likely than men to be impoverished at age 65 or older while women age 75 to 79 were three times more likely to fall below the poverty level than men the same age.

When I turned around after taking time off to care for my parents, I fully expected to step back into a job comparable to the one I’d left. But someone had moved that career ladder. It’s taken years, and a few unplanned twists and turns to accept where I am professionally.  I realize now that if I’d been less focused on doing everything perfectly and more on my future, I’d be in a better position financially.

Health care expanses:  A ticking time bomb 

Changes to health care policy pose a real threat to anyone over the age of 65 who does not have robust retirement savings.  Today 60 percent of the elderly in nursing homes are on Medicaid. Many have spent their savings on assisted living and residential care. Getting old is expensive. According to Hanson, a healthy 65-year old woman retiring in 2016 will pay $300,000 on Medicare premiums and out-of-pocket costs for hearing dental and vision care by the time she reaches 89.  That, of course, is in addition to living and personal care expanses.

Stay in touch with your possibilities 

Do what you need to do to keep a firm footing on that career ladder. But don’t get rattled if something knocks you off.  Expand your thinking and your network.

Desai’s interview closed with a tip of the hat to Martha Nussbaum’s “The Fragility of Goodness” and the example set by the ancient Greeks:

Fundamentally, this is about undercutting the idea that you have to follow duty. Most Greek tragedies are about people who have these conflicting obligations, and it’s a mess, and you have to navigate them. And she says that’s a good life. If you don’t have conflicting obligations, you’re doing something wrong.

So, it is as it’s always been. Keep working. Do your best; take smart risks and most of all, take care of yourself.

 

*  Cartoon is courtesy of Harry Bliss and The New Yorker, March 18, 2016.

Skills are Our Best Renewable Strategy

I recently went to the IBM Amplify conference, which was built around IBM’s cognitive offering, Watson. It was, of course, all about knowledge and skills. Although technology majored, human skills were also a theme, and I raced around trying to keep up.

Girls who code and more

IBM Chairman Ginni Rometty closed her keynote by recognizing three young women from California who excelled in IBM P-Tech six-year high school schools, offering those lucky students jobs as IBM interns.  Skills were visible through partners:  CoffeeBean and its Soical-ID, BlueSky CloudCommerce, Bridge Solutions, Lightwell fulfillment. Rocket Fuel, and SapientRazorfish — all driving, extending, the cognitive technology into their respective sectors.

IBM has deep experience in getting the right skill sets from its people, and Marc Benioff of Salesforce was there to represent a new generation of companies that underscore the value-add of ongoing training and education.

Business and jobs policy 

Benioff — an innovation evangelist — referenced a meeting he and Rometty (among others) recently attended with President Trump:

“I want to thank all the business leaders that have joined us to discuss a subject that’s very important to me: Training our workforce for the 21st century, especially in respect to manufacturing jobs,” CNN quotes Trump as having said during that meeting. “Here in the United States, companies have created revolutionary high tech and online courses.”

More to come in this area, no doubt.

H-1B visa applications out tomorrow

H-1B visa applications are due out tomorrow. The U.S. Citizenship and Immigration Services announced quotas will remain the same despite proposed changes, and some 85,000 applications will be available to tech companies. In the past, the visas have primarily been gone to professionals from India for IT jobs, and although data shows there has been a small impact on tech sectors wages, overall the program has demonstrated it enhances innovation, lowers consumer prices and boosts company profits.

It’s good to know there’s a larger discussion on jobs and skills.  But in the end, each of us is responsible for keeping our own skills up-to-snuff, and making sure elected officials and our professional communities help in any and all ways they can.  Skills are the best renewable strategy we have.  None of us should be sitting on our hands (or laurels).

Coding is Only the Tip of the Iceberg, Ivanka

News that Ivanka Trump plans take coding classes with her five-year old daughter reminded me how important it is for public figures to use role-model power carefully, strategically.  Witness Michelle Obama’s use of fashion as a channel for her message.

I get that women are under-represented in technical fields. I also get that many young women are unprepared to make enough money to buy a car, home, support kids and their own old age. But not everyone is a coder, and the odds are that almost any skill acquired today will be outdated tomorrow.

Jobs are more than coding, and there are more jobs than coding

I’m not minimizing programming skills; they cultivate patience and problem solving ability.  But, coding is not the silver bullet of gender equality. Girls need more than C++.  They need to be able to read and write and think. Companies have layoffs and starts ups fail.  Jobs disappear. Spouses die and family members need care. We age.  Technology is a big part of the way we live, but what about education, health care, finance, dog training?

Case in point:  a young friend, Mary Hill, was in town to celebrate winning a $100,000 in angel funding.  Mary is developing an at-home test for sexually-transmitted diseases, a global market that’s projected to reach $190,000 million by 2022. Mary, I should mention, was raised by a single mom who worked for a state agency.  She went to a public high school, an arts magnet no less,  and nurtured by a very creative family, was able to take it from there. She doesn’t know how to code, but she is definitely a problem solver.

Apprenticeships across industries?

So, here’s hoping Ivanka’s coding will help. Maybe her example will help her dad encourage some big-pocketed businesses — pharmaceutical companies, large banks,  retailers, real estate developers — to invest in some education and training to caulk some of the gaps in our educational system, much like technology companies are doing today with coding sponsorships.  It’s good business and smart investing.