Monday, March 23, 2009
One of the highlights of last week’s SXSW show, aside from seeing the Austin Crew again (hi, guys!), was when I spent some time talking to a few of the guys from Rhapsody, just like I did last year. The conversation touched a number of topics, but the one I found most interesting was the changing notion of music ownership. That is, now that most of us are at least familiar with streaming, on-demand music from pick-your-service (Imeem, Pandora, Spotify, Rhapsody, etc.), will people in the future still see music as a “thing” that they’ll own, or more like a service that they’ll tap into whenever the need arises? Will people still cling to a finite number of MP3s on their iPod, or will they prefer to have their music on The Cloud, using a device (say, the iPhone) that can call upon any song at will? A sort of, “Shoot, I wish I had that U2 song on my iPod right now” versus, “Here, let me stream that U2 song for you.” And, if people are becoming more comfortable with this type of music consumption, where does that leave traditional, download-to-own services like iTunes and Amazon MP3? The things we think about!
It’s like this: we’re right about at the point where most of us have a smartphone or other device that has a reasonably reliable, always-on Internet connection. As such, we’re right about at the point where a service—the aforementioned ones, or perhaps some new one—can came along and say, “Oh hai! You know, instead of taking your iPod with you everywhere you go, why not just connect your phone to our service? We have every song in recorded history in our database (“Cloud”), and they’re all yours, provided you pay us $15 per month. Think about it: every song ever, in the palm of your hands. That sure beats listening to the same MP3s over and over again, right?!” That’s a best case scenario, of course. While Rhapsody told me the record labels are now much easier to deal with than they were in the past—there’s still a few music executives yelling, “Go away, Internet!”—, we’re still a little bit away from having Everything Ever at our fingertips. On the technical side of things, that also assumes that our Internet connections are, indeed, sound as a pound (aside: I think that phrase needs to be updated!), something that any iPhone-using SXSW attendee will tell you isn’t exactly the case just yet.
But, for the purposes of this here article, let’s assume that all those problems have been solved. Let’s assume that the mobile Internet is fast, reliable and affordable, and that the record labels have opened up their vaults for placement in The Cloud; no technical issues remain. The only thing we have to confront now is the consumer and her listening habits: will they change? Have they already changed? Does Little Stacy, who’s currently in junior high and listens to music via YouTube and Imeem, portend an adult who won’t think of music in terms of CDs and MP3s, but of something that’s “just there,” for lack of a better term? She won’t have a personal music library, in the form of vinyl, CDs, MP3s, FLACs, or whatever; The Cloud will be her library, on which everything ever recorded will reside. The notion of “not having that album” will be totally alien to her; she has everything, always. No, she doesn’t own any of it—it belongs to the record labels, by way of your Rhapsody and Spotify (or whatever)—but it’s always available to her wherever she goes, so why should she care wether or not she “owns” it? Ownership, in this scenario, will become an antiquated concept, no longer applicable to current conditions, and Adult Stacy wouldn’t have it any other way. Nothing’s stopping Stacy from buying a physical copy of an album on some future whiz-bang format, which includes a super-de-dooper high quality copy of the album, but it would be the exception and not the rule. People still go camping (“roughing it”) even though they have fully decorated master bedroom they can sleep in.
But that describes Little Stacy, our hastily invented character who’s currently in junior high; at most she’s 13-year-old. What about Big Steve, who’s 15 years out of college and works in a spiffy office downtown? He still owns his music—in fact, he’s probably just getting used to buying songs off iTunes and the like—and the idea of songs “being there” is sorta weird to him. What if they’re not there? (Big Steve is a glass-half-empty kind of guy; blame the recession.) And even if the songs were there, why should he pay a monthly fee for an entire library of music he’ll never listen to? How is that better than having an iPod filled with only the songs he likes—he loves Danzig—without any garbage pop music getting in the way? A cynic could say, well, long-term, Big Steve is irrelevant, since he doesn’t buy new music anyway, and besides, it’s his kids whom the music industry will be targeting in a few years anyway. Let him “own” all the music he wants, since it’s only a matter of time till he isn’t even on the music industry’s radar. Of course, that completely ignores the fact that, with his fancy corner office, Big Steve has more disposable income to throw at the music industry (and the services we’ve been talking about) than Little Stacy ever will while she’s growing up. To ignore Big Steve, and all the dollar signs he represents, would be foolish. That’s not to say that Big Steve can’t still buy CDs and MP3s, of course, but the question here is whether or not people, in the future, will be comfortable with not owning music. And as people like Little Stacy use the aforementioned services, they’ll no doubt get used to it; it’ll be just another thing they do, like sending thousands of text messages per month or spending hours upon hours on Facebook.
Specific to Rhapsody, yes, you can now buy MP3s from their online store. (Even disruptive technologies and companies like to hedge their bets.) Whether or not that’s the way forward, or merely something done to placate the Big Steves of the world, is what we’re trying to determine. My guess? I hope they have house music in The Cloud.
My Two Cents:
Cloud computing is certainly inevitable, it is just a matter of how long it will take companies to make the system easy, reliable, and secure, and how long it will take enterprises to adopt the technology on a wide-scale basis. However, as it relates specifically to this article, cloud computing will have an impact on the way we understand and enforce digital media distribution: the argument can be made more more than just music (movies, television, publishing and literature, magazines, software, etc.). hopefully the change is for the better and individuals, enterprises, and governments will embrace the opportunity for the more effective spread of knowledge, media, and other forms of communication.
Sunday, March 22, 2009
Ironically, recently after writing my post on John Maynard Keynes, I was recommended a story from the March 7th-13th edition of the Economist by my father. The article is a book preview/review of "The Life and Times of Raúl Prebisch". Born in 1901, Prebisch was an Argentine economist known for his contributions to what is known as structuralist economics, the most famous of these being his collaborative creation of the Prebisch-Singer hypothesis that outlines the basis of economic dependency theory. The idea behind the theory is that the price of primary products tends to decline relative to those of higher productivity, manufactured goods. Therefore, industrialized nations derived more benefit from trade that developing countries. How is the developing nation supposed to be able to compete in a global market? I had been exposed to some of Prebisch work during my studies, particularly in my Latin American economies course, but I personally had never really followed up on the life of the Argentine policy-maker.
From what I have read, Prebisch experienced a similar cycle of popularity to that John Maynard Keynes. His work initially was received as new and insightful, but then temporarily disregarded after the real-life existence of economies that disproved his theories. Now, he is making a comeback given the capricious conditions the world is facing today. Volatile markets and environments have motivated theorists and one-time critics to the once ridiculed ideas of Raul Prebisch. Professionals have been called upon to recommend macroeconomic decisions as it relates to the national and global economic strategies, and they are willing to consider all options.
Obviously conditions worldwide change exponentially with any news, advancements, predictions, estimates, statistics, and other influential occurrences. The relatively recent integration of the world system lacks the regulation and understanding to effectively function, and the end result is the current crisis whose pressure has built up over the last 30 years or so. Transparency, morality, and knowledge are just some of the many themes to the transition to a new economic future.
As it relates to developing nations and the ideas of Raul Prebisch, to truly understand the dependency theory, one has to apply reforms on a case-by-case basis. Strategies for the improvement of economies obviously differ depending on the advantages, relationships, politics, and a number of other factors that contribute to the growth and success of a nation. Regardless, if an economy lacks domestic, competitive industries, it is going to have to rely on the already developed technologies and industries of the industrialized world based on the trading agreements between the countries. Reliance on this arrangement will not enhance the health of an economy in an ever-increasingly competitive and expansive global market.
The world economy will always need raw materials and other primary products. Nations that are able provide these goods have tremendous advantage. That still does not remove the responsibility to create forms of employment, establish efficient and productive domestic industries, and diversify the methods of national output, especially as population and competition increase worldwide. Regardless, the modern globalization of world trade and relations has re-stimulated interest in dependency theory as economists try to apply thoughtful generalizations to the relationship between developing and industrialized nations.
The reason I like Prebisch is because of his ability to change his opinion, to be flexible. Some even consider him a dangerous radical. At times people thought he was too politically naive. I see that as realism. Politics is tremendously important to the pursuit of effective economics, but does not necessarily have to be considered in every economic analysis. I also admire his preference for reform rather than revolution. There are obviously times for when revolution is necessary, but there is also much more at stake in these cases and when it is all said and done, there is more work that needs to be done to clean up, sometimes even more than when the situation originally arose. Lastly, his stance that a mixed economy is the most ideal, one in which the private sector would play a leading role is critical, especially today. It cannot be the decisions of policy-makers and government to always lead nations through times of crisis or ones of stability. It is up to the individual, to the community, to members of the private sector to outgrow dependence of macro-economic forces.
Raúl Prebisch was an advocate of structural and industrial change in Latin America, but this concept can certainly be applied to other developing nations. He was invited by the United Nations in 1948 to direct the newly formed Economic Commission for Latin America (ECLA), which gave him the chance to preach inward development via what is known as import substitution industrialization as well as regional integration. I personally have always been supportive of cooperative economic theory, but unfortunately politics and other real world factors tend to get in the way of efficient integration.
The Argentine called for "new international economic order," which is very fitting considering the circumstances. He stressed independence of the central bank and fiscal stability, both important policies for any economy. What was forgotten from his formula is that is it the responsibility of economies to cultivate a both a domestic market as well as an autonomous generation of technology and industries as a method of independently creating employment and sustainable growth, rather than relying on the relationships with other economies.
Meet Cambodia's social media elite - the Cloggers Young motivated bloggers spearheading a web-led revolution
Sunday, March 15, 2009
After visiting Cambodia with my family a couple of Christmases ago, I felt a personal connection to this article. This was taken from the site TechRadar and is a brilliant example of how the technological revolution could impact the well-being of societies around the world, regardless of their political, social, and economic barriers.
With its jagged, pot-holed streets and swarms of begging children, visitors are often shocked at the poverty in Cambodia, widely considered Asia's backwater behind Vietnam and China.
Shacks and slums are testament to a third of the population earning less than half a US dollar a day and Transparency International ranks the country, only recently freed from years of civil war, coups and rigged elections, as the 14th most corrupt in the world.
Yet tech-savvy youngsters are bringing a new voice to Phnom Penh's poverty-wrought landscape. Hanging out in cafes and clicking away on their laptops, they comprise a small but growing middle-class of baby-boomers born during the 1980s, after the Khmer Rouge genocide left 2million Cambodians – a quarter of the population – dead. Now they've come of age, and they're wiring Cambodia with it.
They're a tight-knit clique. Led by 26-year-old writer and photographer Bun Tharum, Cambodia's first blogger, a small group formed in 2006 to give workshops on social media. With their efforts, and Cambodia's King-Father Norodom Sihanouk starting his own blog, the group of 30 soon transformed into thousands. Now, they call themselves 'Cloggers' – Cambodian bloggers.
Tharum sees change on the horizon. "After all the hardship our country has experienced, we're trying to bring a new era of innovation," he says. "Blogs are helping break down barriers, get discussions going – something we need to move forward. It's the voice of the new generation."
Reaching the summit
The group reached a peak in popularity when it held the Cloggers' Summit in August 2007, attended by 200 international guests, including editors from Harvard Law School's Global Voices Online project. Attendees discussed social networking with a Cambodian twist, looking at how non-profits – which dominate Cambodia's economy – and students could use it, despite the country's low-bandwidth connectivity.
They hit another success in September with the first annual BarCamp Phnom Penh, an event that saw hundreds from around Southeast Asia attend, including Microsoft. "BarCamp was great for thinking outside the box," Tharum says. "We got Cambodians to start speaking their minds in that untraditional setting, the un-conference."
Much more can be attributed to the city's sudden blogging craze. While less than two per cent of Cambodians have web access on their own computers, Phnom Penh sports a huge mobile web culture. "It's amazing. Farmers are selling their land so they can buy a mobile phone and motorbike," says John Weeks, an American who heads Phnom Penh's popular House 32 web design firm. "You'll see Khmers [Cambodians] wearing sandals and eating street food while talking on their Blackberrys."
Phnom Penh has just been wired with 3G technology, far ahead of neighbouring countries Vietnam and Thailand, giving blogs explosive potential. Yet phones still haven't reached their peak, Weeks insists. "Users aren't afraid of technology. But phones aren't reaching their full potential," he says. "If ordinary Cambodians can overcome the language barrier and literacy barriers, phones have incredible gateway potential that would dwarf the current blog boom."
Huddled around in Phnom Penh's sparkling new KFC – Cambodia's first foreign franchise – the Cloggers whip out cutting-edge phones yet to catch on in the West. One begins texting in a frenzy – he's on Twitter and he's addicted. The others laugh, moving into a discussion of King-Father Norodom Sihanouk, the country's leader and highest profile blogger.
He's revered by older generations, but Cloggers don't share their zest for the monarch. "Young people don't care about the King when we blog," says Sreng Nearirath, a lawyer who blogs her thoughts in My World vs. Real Scary World. "We just blog because we want to talk about our lives and talk with each other." Cambodia, a conservative society, doesn't offer opportunities to open up and discuss your feelings, especially for women. That's what makes blogs so special here.
"Men have dominated technology fields, but we're seeing more and more women speaking their minds through blogs," says Chak Sopheap, a rising voice in Cambodia's women's empowerment movement. "They give us an outlet to gain selfesteem and be more informed about the world."
Sopheap is perhaps Cambodia's most controversial blogger, touching on subjects like trafficking, corruption, forced land evictions and women's rights. Her public profile is brave; most political bloggers in Cambodia, such as the popular "Details are Sketchy" and "KI Media" blogs, are anonymous. "If everyone keeps silent to intimidation, intimidation will gain its position.
"By making our voices heard, we can create change," she insists. She's pursuing a master's degree in international relations in Japan, which she credits for bringing new angles to her blog. "I've learned from a different cultural context about how crucial good governance is," she says, referring to Cambodia's corruption problem.
Wednesday, March 11, 2009
GrandCentral is a phone management service that first launched in 2006 and was acquired by Google for over $50 million in 2007. Since, it hasn’t really been in the news much. Other than a few jabs at their marketing gimmicks and coverage of outages, this project has been low key. This is all about to change as the service prepares for a public launch under a new product name: Google Voice.
The 21 month delay between acquisition and re-launch was, unfortunately, expected. Like most Google acquisitions, the service has been rebuilt from the ground up, a lengthy process that has in the past taken an average of 16 months or so. Now Google is ready to launch this new GrandCentral/Google Voice service.
Some key new features have been added that make the service incredibly intriguing. The basic idea around GrandCentral is “one phone number for all your phones, for life.” Grand Central gives you one phone number that can access all your numbers, (cell, home, mobile, and work numbers); the GrandCentral numbers stay the same, as many of these number change over the course of a user’s lifetime.
Most people have never used the service, because Google froze new accounts following the acquisition. The freeze hasn’t being lifted yet (and we’ve heard there are tens of thousands of people on the wait list). But starting Thursday existing accounts are being given the option of switching to the new service and allow access to the new features. Over the next several weeks Google will begin to let new people in. Some people, impatient to try out the new service, have been paying as much as $650 on Ebay for an account.
The service was free and is still going to be free. Users can purchase credit (much like Skype) to make international calls at rates far below what they normally pay. GrandCentral will also remain solely a U.S. service. Google wants people to use their Google Voice phone number exclusively (and in fact it’s the only way to use it properly).
Google’s added new features and plugged some big holes that limited the original service. A problem with the original service – it didn’t allow text messaging, so you had to tell people your mobile number as well if you wanted to send and receive text messages with them. Now, Google Voice will accept text messages and forward them on to your mobile phone. You can respond to those messages as well. Google is using the existing Gateway technology (which is used by Google Chat) to power this feature.
Google also added a nifty transcription feature (which is using the same subscription service as Google 411) for voicemails. All voicemails are transcribed easily saved into the system and searchable. Users can add notes or tags to voicemails and each transcription details how confident Google is about the success of voice transcription; Google Voice highlights word in lighter color that they are not confident were subscribed properly. And transcription takes about 30 seconds to be seen in the system from the end of a voicemail. All in all, Google may have just revolutionized voicemail.
Google has added new settings that allow users to route calls from specific people straight to voicemail, or your mobile phone, etc, instead of having to state their name and then be forwarded accordingly. The primary user interface for Google Voice is through your phone via an audio menu. But users can also log in to the website to administer the account and view activity. This interface has undergone a makeover - It now looks very much like a comprehensive Gmail inbox with tabs for Voicemail, SMS, Recorded calls, Placed calls, Received calls and Missed calls. And the Google Voice is easily integrated into the list of links to
Google apps at the top left of each application. All SMS and transcribed voicemails are searchable and taggable, which is very useful and will change the way people interact with these messages. Google also says that full integration with Gmail is coming, but won’t say when. If all of one’s email, SMS and transcribed voicemails are able to be organized into a single inbox: this could be life-changing. You can also respond to text messages from the interface and initiate phone calls, which then call your designated phone and then the recipient.
Google Voice also added a conference calling feature allowing conference calls with up to six participants and the ability to record. International calls can also be made through the system at very reasonable rates (about the same as Skype’s international phone rates).
The key to this service seems to be reliability. With previous outages and technical issues (both in Google Voice/Gran Central and Gmail), Google has to assure stability to its users. It always seemed to make sense that Google would one day try and buy Skype from Ebay, but I guess that wouldn’t make any sense anymore considering what type of product they appear to have here.
Over the course of my four years studying as a Global Economics major, I have been told a number of times that there are essentially two broad perspectives to economic theory, with a number of specific variations or the two filling in the gap in between the theoretical divide.
The first and more traditional school of thought is the classical interpretation developed and supported by thinkers such as Adam Smith, David Ricardo, and Thomas Malthus, in which theories on value (or price) and distribution attempt to explain market tendencies. As it relates to prices, three inputs are said to impact the value of goods or services: 1. the level of outputs or "effectual demand," 2. technology and 3. wages. From these assumptions, economists are able to derive the general equilibrium model. This free-market philosophy also supports the idea of the "invisible hand" that guides economics in a natural cycle. The highs of these undulations are periods of growth and expansion, while recessions and depressions are responsible for the troublesome times.
The other economic philosophy that is taught as the prevailing "alternative" to this classic view is the "Keynesian" thinking, which was derived from the more neoclassical school of thought and is based on three essential assumptions: 1. People have rational preferences among outcomes that can be identified and associated with a value, 2. Individuals maximize their own utility while firms look to maximize profits, and 3. People act independently on the basis of full and relevant information.
At core of John Maynard Keynes' economic theory is that markets, whether local, national or global, cannot be viewed as natural systems in which intervention is not only not necessary, but discouraged. He saw markets as inefficient, subject to slowdowns and crisis in which the government should step in to boost demand in the marketplace. A balanced government budget is irrelevant when the private sector is unable to invest sufficiently enough to generate demand, in which case it is the responsibility of the government to increase spending as a method of creating jobs for citizens. More jobs obviously create higher incomes, which then increases the demand for goods and services.
It was back on October 24th, 1929 that the United States stock market crashed, marking the start of the Great Depression, the worst economic crisis the U.S., or the world for that matter, had ever seen or experienced (well, modern period that is). President Roosevelt turned to the policy recommendations of Keynesian thinking and used these theories as the framework for his "New Deal." Public works projects were created in a variety of industries through massive government spending, which temporarily provided jobs to millions of Americans and immigrants. As a result, unemployment began to slow throughout the 1930's, but it wasn't until increased spending as a result of World War II that the economic slowdown was able to rebound. This "success" story influenced most mainstream economists to accept the Keynesian views.
It wasn't until the 1970's that Keynesian thinking began to fall by the wayside amongst theorists. Keynes' models project that inflation and unemployment have an inverse relationship and that the government can control either through monetary policy such as adjustments to interest rates and the money supply or by the way of fiscal policy such as taxation and spending. This theory was essentially disregarded with the existence of 8% unemployment and 16% inflation in the U.S. during the 70's, with countries such as Japan and the United Kingdom experiencing similar conditions. Along came the conservative thinking of Milton Friedman and his view that interest rate and money supply adjustments should always be the primary tools for economic policy. Lower taxes and lower interest rates while letting the pursuit of wealth act as the driver for economic recovery. This philosophy has seen its share of "success" stories as well.
Strangely enough, Keynesian thinking is making a "comeback" due to the current economic crisis and the ineffective nature of monetary policy. Interest rates are essentially zero and can go no lower, while lending remains minimal, economic activity has ceased, and employment figures continue to dive. This is why the White House and their $787 billion dollar stimulus package became the prevailing solution to boost aggregate demand. An unprecedented amount of spending on public-works projects, health care, education, law enforcement, greener and more advanced technology, and a number programs for various industries look to create jobs, boost incomes, and generate demand. Obviously during these tough times, consumers are forced to save money to handle their mortgages, debt obligations, and other basic needs rather than exhibit "normal" consumer spending tendencies.
The issue with I take with the polarized nature of economic thinking, especially as it relates to my educational upbringing in becoming an economist is that I am constantly reminded that even the experts, the analysts, the professionals, the politicians, the professors...nobody seems to know what's really happening or how to fix "it." There are a lot of ideas, opinions, interests, and even opportunities amongst those with and without a voice, but in terms of an effective solution that a broad majority can truly understand and believe it, that "idealism" appears to be absent. Confidence levels continue to fall. Daily waves of economic reports, statistics, and business conditions flood the media outlets and tend to provide little or no inspiration to individuals around the world. In a recent poll (Zogby Interactive), only 27% of likely voters believe the new economic stimulus package will personally benefit them or their families. This can then be broken down by political party, in which 48% of Democrats expect it will help, while only 19% of independents and 7% of Republicans feels the same way. And the poll itself doesn't effectively portray the gravity of voter confidence because how do you define "help" or "benefit." Is it the individual, the family, the community, the nation, the continent, or the planet that will be aided by such a policy, and to what degree?
I find it odd that, at least at my university, economics students are exposed to a fixed number of concepts, models, schools of thought, philosophies...all that were deemed "effective" or "successful" during time periods that are not even remotely comparable or relevant to today's situation. I cannot even begin to count the number of times I have read or heard the phrase, "This is the worst economic situation we have faced since the Great Depression." Anything that we may have "learned" from that time period, or any period for that matter, is not truly comparable to the grave situation we are faced with today. We need new ideas, fresh concepts, and original models (even though I don't even like the idea of models because they often are too general. Generalities tend not to be incredibly useful in solving complex, global situations.) How are up-and-coming students, the world's future leaders, potentially bright minds, or influential professionals supposed to solve a situation that 1. was inherited from a previous generation(s), 2. have not been directly active in the planning or brainstorming of potential solutions, and 3. have only been "taught" or exposed to the archaic theories of the 20th, 19th, and even as late as the 18th centuries. This is a 21st century problem in need of a 21st century solution.
That is not to say that we cannot draw or learn from our previous experiences. Of course we can. History is a repetitive cycle of ups and downs, periods of growth and downturns, peace and war. It is not possible to stumble upon modern, unique, and effective solution without considering the strategies of the past. And it is not going to be a silver bullet solution, but rather a series of well thought out policies, reforms, and ideas that are implemented after the consideration of all beliefs and philosophies. But at the very least we can provide young theorists with the tools, motivation, and experience to re-invent economic theory. This is what has been motivating me as an economist for the past couple years, especially recently because of the increased intensity of the global economic crisis. When studying economics, there are truths, facts, and assumptions. But on a grander scale, there is no truth, no solution; it has yet to be discovered.
During the last economic crisis of this scale and magnitude (but once again, very different in many ways), a British professional argued "We have involved ourselves in a colossal muddle, having blundered in the control of a delicate machine, the working of which we do not understand." This was over 70 years ago, and I think that declaration is still applicable and appropriate today. But then again, this same individual did also famously declare, "In the long run, we are all dead." This man was John Maynard Keynes.
Hopefully the average person in this globalized world is waking up to what is going on and as a cooperative and open-minded society, we are able to create the appropriate solution not only for the short term, but for generations to come.
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