The Ethical Smartphone

Posted on February 25, 2012 by Suhit Anantula

The implied paradox is a head-scratcher, to be sure.

“It seems odd to me that the devices that empower us so much,” Wood says, “should themselves be the products of alienation. But it’s even more interesting to think that they could be one of the first cases that can actually help overcome the gulf between the different worlds of producers and consumers. A demonstrator in Taiwan can film an action at HTC on their smartphone, and upload it to Facebook, where six degrees of separation can see it viewed by half the people on the planet. And if you can’t forget it and do want to find out more, a couple of clicks can make direct contact and link your device with that of people on the other side of the planet, whose existence you’d never given a second thought about before.”

Welcome to the fundamental contradiction of the age of the smartphone. The same gizmos that enable the ultra-efficient globalized exploitation of labor — computers, broadband networks, digital communication devices — are the tools that we must use to address and overcome those inequities. Sounds crazy, but it’s true: If you want an “ethical iPhone,” you’re going to have to use your unethical iPhone to get it.

What I am not sure is whether this is actually global exploitation. With the population of China and India, workers need to have jobs to feed themselves even if they are not comparable to the developed countries standards.

India’s demographic dividend is not possible without a skilled workforce

Posted on February 25, 2012 by Suhit Anantula

From EquityMaster:

China’s one child policy and aging population may just wipe out its biggest competitive advantage – cheap labour. It is the most populous country in the world with 1.35 bn people. But its populace is graying at a fast pace and there are too few babies born. According to government statistics, the proportion of the population aged between 15 and 64 fell to 74.4% in 2011. This was the first fall in ten tears. This Asian giant may face economic stagnation akin to Japan if it fails to adopt certain reforms to compensate for its shrinking workforce. Japan’s demographic dividend disappeared in 1990, and its economy stagnated ever since.

Wages in China have been steadily rising over the years, even rising in double digits. Now they seem to be on a permanent upward trajectory. The standard of living has improved in many parts of the country. An aging population also calls for increased wages to pay for healthcare and other allied expenses. Possibly the only answer to this predicament is for China’s growth engine to completely turn on its head. Rather than simply focusing on a cost advantage it needs to bring something else to the table. It needs to focus on innovation and productivity. Or can another country win the race?

On the other side of the Himalayas, India has a big advantage. India is one of the few countries in the world having a positive birth rate and a huge demographic dividend. Its working-age population mainly consists of youth (15-34 years). As a result its economy has the potential to grow more quickly than many others. But, it may not be doing enough to leverage on this potential.

Currently only about 2% of the Indian workforce has formal training as against an average of 75% in Europe. To bridge this divide the government needs to earnestly focus on skill development. The Prime Minister’s National Council on Skill Development has endorsed a vision to create 500 m skilled people by 2022. But, will this be another target India fails to achieve? Measuring the quality of the training given is another matter altogether.

Is Impact Investing financial returns or non-financial returns quantified?

Posted on February 17, 2012 by Suhit Anantula

From Huffington Post (HT: @AcumenFund):

Investors in these companies will look for a commensurate financial return, as well as measurable social impact on the ground. While some prefer the terms venture philanthropy or social investment, impact investing represents a distinct style of responsible capitalism which has become particularly popular among foundations, endowments and high net worth individual investors.

Industry pioneers, such as the $3 billion Rockefeller Foundation in New York, see impact investing as a way to find solutions to poverty reduction and other social problems; but more importantly to access the private sector capital markets that ultimately hold the wealth required to scale up these solutions globally. While charitable donations by high net worth individuals were down 35 per cent in 2010, according to Bank of America Merrill Lynch and Indiana University, the impact investing sector is expecting steady growth.

In 2010, JP Morgan forecast potential impact investment capital of $400 billion to $1 trillion globally over the next ten years. Much recent activity in impact investing has been effectively direct investing, with the typical venture capital approach sometimes supplemented by grants and capacity building. The Omidyar Network, for example, launched in 2004 by eBay founder Pierre Omidyar, "has invested $450 million in equity and grants to promote microfinance, entrepreneurship, technology and government transparency, mostly in developing countries."

Investment managers such as the Acumen Fund and the Capricorn Investment Group, which manages the Skoll Foundation’s multi-billion dollar portfolio, are active in emerging markets across Asia, Africa and Latin America.

Impact investing does present significant challenges to investors. It can be difficult to obtain basic investment information in emerging markets, and equally hard to monitor and track the performance of small companies and projects. This is compounded by the complexity of trying to quantify the non-financial "impact" of investments: it is not that simple to compare the social benefits of investing in, for example, vaccinations in Ghana versus cleaner burning cooking stoves in India.To help donors and investors tackle this issue, the Global Impact Investing Network (GIIN), a non-profit company supported by the Rockefeller Foundation, has worked with B Lab to develop industry infrastructure aimed at improving information flow and creating a more efficient marketplace.

For me a clear definition is still lacking. Is impact investing expecting financial returns from the investment or will accept non-financial returns expressed in financial terms. I cannot imagine pension funds (reponsible to support employees when retired through pension) investing in areas where they will not get a financial return. What happens to the pensioner?

This is a troubling development like "social innovation". It’s ok if social innovation is confused but "impact investing" will effect real dollars and can put projects on the wrong path.

Recently, I looked at a grant from a prominent foundation in Australia and their definition of social enterprise was any for-profit that does good or a not for profit which has a percentage of its revenues coming from sale or business. Is this the best definition that will filter the right organisations to be funded?

800m mobile subscribers in India but not much money

Posted on February 14, 2012 by Suhit Anantula

 From the latest Equitymaster newsletter.

With over 800 m subscribers (includes GSM and CDMA), India represents a huge telecom market. With the cheapest tariffs, it has seen telecom penetration going up from about 4% in March 2001 to around 71% in March 2011. But the huge surge in the number of subscribers has not translated to huge returns for the network providers. In fact, telecom operators have seen their profitability dwindling down. Hyper competition that led to sharp rate cuts is one big reason for this. As shown in today’s chart of the day, profitability (Earnings Before Interest, Tax, Depreciation & Amortization or EBITDA) per minute has been on the fall for the telecom operators.

How many ports is ideal for the Kimberly in WA?

Posted on February 13, 2012 by Suhit Anantula

From Andrew Bolt:

It’s as Pat Lowe, a co-founder of Environs Kimberley, declared: “We need some places on earth that are not industrialised and we were hoping that the Kimberley would be one of them.”

Keep the vast Kimberley “not industrialised” – and not just its eight national parks? Lock up its diamonds, iron ore, copper, lead, bauxite, zinc, silver, nickel, uranium, coal, tin, mineral sands and petroleum?

What a grandiose and anti-human conceit, yet the Greens repeat it in now opposing a $600 million port in the Kimberley.

The port, near Derby, is proposed by former Labor national president and indigenous businessman Warren Mundine and Perth dealmaker John Poynton to service the huge offshore oil and gas industry.

But, sure enough, West Australian Greens MP Robin Chapple is against it: “It flies in the face of what the Premier has said – that we wouldn’t have any further industrialisation of the Kimberley.”

Excuse me, but someone who thinks the vast Kimberley can’t take another port is irrational.

Let’s compare. Greece is 132,000 sq km, and has 103 ports. Italy is bigger, at 301,000 sq km, and has 134 ports.

Germany is bigger still at 357,000 sq km, and has 98 ports.

The Kimberley dwarfs them all, at 425,000 sq km, yet has just five ports.

A sixth would ruin an almost empty stretch of country bigger than Germany?

That is not a judgment made by reason. It is not a judgment informed by a love of man, but a contempt.

How children fail

Posted on February 7, 2012 by Suhit Anantula

From Wikipedia on John Holt’s book:

When children are very young, they have natural curiosity about the world, trying diligently to figure out what is real. As they become “producers”, rather than “thinkers”, they fall away from exploration and start fishing for the right answers with little thought. They believe they must always be right, so they quickly forget mistakes and how these mistakes were made. They believe that the only good response from the teacher is “yes”, and that a “no” is defeat.

They fear wrong answers and shy away from challenges because they may not have the right answer. This fear, which rules them in the school setting, does their thinking and learning a great disservice. A teacher’s job is to help them overcome their fears of failure and explore the problem for real learning. So often, teachers are doing the opposite — building children’s fears up to monumental proportions. Children need to see that failure is honorable, and that it helps them construct meaning. It should not be seen as humiliating, but as a step to real learning. Being afraid of mistakes, they never try to understand their own mistakes and cannot and will not try to understand when their thinking is faulty. Adding to children’s fear in school is corporal punishment and humiliation, both of which can scare children into right/wrong thinking and away from their natural exploratory thinking.

Holt maintains that when teachers praise students, they rob them of the joy of discovering truth for themselves. They should be aiding them by guiding them to explore and learn as their interests move them. In mathematics, children learn algorithms, but when faced with problems with Cuisenaire rods, they cannot apply their learning to real situations. Their learning is superficial in that they can sometimes spit out the algorithm when faced with a problem on paper, but have no understanding of how or why the algorithm works and no deep understanding about numbers.

What is Social Innovation? Confused mix of everything?

Posted on February 7, 2012 by Suhit Anantula

The current buzzword in the world is everything to everybody as is clear from this video from the Social Innovation Summit 2011. Very confusing.

Some of the terms used in the video

license to operate
bottom of the pyramid
innovation
technology, analytics and data driven
social good
good citizenship
environmental stuff
????

This is my take and it relates more to the process of innovation and the kind of problems you deal with.

Generate Electricity for creating Well Being

Posted on February 6, 2012 by Suhit Anantula

Yes, CO2 may be bad but that is if you have first reached the level of usage in Australia, Kuwait or Norway. However, if you are a poor person in developing countries like India, China and Brazil, you still need a electricity to create well being even if it emits CO2 and consumption of 2,500 kw seems to be the magic number.

I think the focus to reduce CO2 to control the climate (and this is being questioned now by the solar cycle theory) we should not forget the current human beings who need electricity to survive and live a good life.

From HBR:

The greater a country’s electricity consumption, the greater the well-being of its people. Electricity doesn’t cause well- being, of course. But it is a powerful enabler. When people have lights that allow them to study and work after dark, refrigeration to keep foods and medicine fresh, pumps and purifiers to irrigate farmland and produce safe drinking water, and cell phones and computers to connect them with commercial, educational, and health care resources, they can more fully participate in the social and economic activities that drive human development.
A little electricity goes a long way. Note that when annual consumption rises from 0 to just a few thousand kilowatt hours per capita, countries move near the top of the HDI scale. Argentina, with per capita consumption of about 2,500 kWh, has an HDI score approaching that of Canada, whose consumption is seven times higher.

Happiness takes a little magic

Posted on February 5, 2012 by Suhit Anantula

In his words:

“The answer, in the peer-reviewed study of the online habits of girls aged 8 to 12, finds that those who say they spend considerable amounts of time using multimedia describe themselves in ways that suggest they are less happy and less socially comfortable than peers who say they spend less time on screens.”

I owe my livelihood to technology and I love the raw capability it offers us as a tool, but I fear it a bit more than most people do. It’s a tool, but it’s not quite a hammer, because a hammer doesn’t seduce you into sitting around lonely in your underwear for 6 hours at a stretch clicking on youtube videos and refreshing Twitter. I fear technology because I fear that bad feeling I get after a three day XBox binge I go through every year around the holidays. I fear technology not because I think it’s evil, but because it’s too easy to start clicking and never stop, even if the stream of data starts to go from meaningful to useless after the top 5%.

I am fascinated by this study because everything I have been doing in the last year professionally and personally has been to reduce the overage of technology and noise in my life and it has increased my happiness by many fold.
By Brian Lam

World is Green

Exploring the role of entrepreneurship in the social sector

Category Archives: Sustainable business