Portfolio | April 2012

Portfolio

Issue 76 â– April 2012

Exclusive to Emirates First Class and Business Class

SMART CITIES Rio Gets Wired BITTER MEDICINE Austerity Hits Profits A NEW ELDORADO Immigrants Head South

Mario Draghi Banking On Europe

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What Will Keep Business leaders aWaKe at night?

Excerpts from a recent international IT-BPO forum

B

usinesses are recalibrating

based decision-making is going to be

constantly to cope with

the norm ahead with instinct probably

the changed world order –

becoming irrelevant.

economically, socio-politically and Why has data capture and analysis

technologically.

become so important for organizations?

Keshav R. Murugesh, Group CEO,

Whether it’s the floods in Thailand

WNS, recently spoke at an international forum on the challenges that business

or the Middle-Eastern crisis, regional

leaders across the globe would have

developments today have the ability to

to surmount, given that the impact of

disrupt global supply lines and send

technology on businesses is immense. An

shock waves down the economic spine of

excerpt from his session is given below.

the entire world. This means a business leader has to weigh each business decision

Keshav, everyone talks of the

carefully to minimize the effects of

adaptability required from

uncertainties on the organization. Such

organizations to make business

decisions can no longer be made on gut

happen. In this context, what do you

instinct. While data capture in most

think will be the top-most priority

organizations might be robust, data by

of any business leader?

itself is not sufficient to make choices.

Mckinsey recently predicted that by

The top-of-mind need of today’s business leaders is knowledge – how to make more informed choices. Technology

Keshav R. Murugesh Group CEO, WNS Global Services

2018, the US alone would need about half a million analytical resources and another 1.5 million qualified managers to make

has enabled data capture at every

business decisions based on the analysis.

interface an organization has with its

report by MIT Sloane that says that 1

ecosystem – that is sizeable data getting

zettabyte of data will be running across

captured out there. I read a recent

the Internet alone. A zettabyte is equal to

keeps every product and service company

100 million Libraries of Congress! How

on its toes. Every organization today

does one harness all the data? How does

needs and will need data, to understand

one analyze and take decisions based on

the consumer through the prism of

gigantically exploding data sources?

demographic profiles, attitudinal studies

How can one sieve out the chaff and

and socio-cultural parameters to be able

make sense from the rest of it? Insight-

to make the right business decisions.

“Insights will make instinct irrelevant in decision-making.”

The erudite and discerning consumer

Advertisment feature

Like you mentioned, there is an ocean

excellence'. These investments are

of data out there, but how does one

strategic choices and returns can be

capture what is relevant, and most

realized with scale of operations.

importantly, how does one draw business insights from it?

This cannot be overcome by developing enterprise-wide platforms for developing

What route do you see organizations taking in the years ahead?

In the years ahead, analytics will be the

master data. In my opinion, this can be

main weapon with which organizations

solved by determining business needs

will fight competition, win customers and

and developing the right platforms and

drive growth. Analytics will help business

analytical processes which can address

leaders move strongly towards objective,

those business needs.

fact-based decision making.

INSIGHTS The five main challenges business leaders across industries face in harnessing and leveraging data for business insights How do I access data?

Data exists in silos, isolated by the sources that create them, such as sales, marketing, suppliers and finance, and in the Cloud, with little coordination or integration.

The solution would entail various Are you saying that the traditional ways

foundational data-related units (like data

of harnessing data will not work in

warehouses), which will ensure right data

today’s economic conditions?

capture. Above all that will sit the ability

Organizations have traditionally used

to draw insights from the data captured.

an enterprise data warehouse to harness

I would like to call this entire construct

organizational data. However, the

an ‘analytical ecosystem’ that has the

challenges that one faces are either the

power to drive the right decisions.

data is captured by lines of businesses or

These analytical ecosystems can be

silo’d by departments, which in turn, would

custom-built by providers like WNS for

inhibit a one customer view. Moreover, not

an organization leveraging technology and

all data that is used for business decisions

a global resource pool, thereby driving

sits in this warehouse. Data from different

competitive advantage.

sources needs to be synthesized and meta

Industries such as retail and consumer

analysed to drive business decisions. This

goods are the early movers. They are

capability is not available in traditional

challenging providers such as us to

data harnessing systems.

build up such ecosystems with built-

The other route that organizations

in competencies in data management,

have taken so far is to build internal

analytics and insights generation to

and third-party analytics 'centers of

make sense out of the deluge of data. The

“Analytical ecosystems will enable organizations to make the right decisions”

success stories from these industries will drive other industries towards analytics.

The time is ripe for the CXO suite across industries to make some key decisions!

How do I manage the quantity?

The amount of data is mind-boggling and with multiple sources, there comes inconsistency, thereby limiting the usability of data.

How do I know if it is quality data?

Data varies in complexity and cleanliness. Companies need skilled professionals to flesh out what is relevant and synthesize it.

How do I draw business insights from it?

The company could have certain pockets of expertise within the system but with the lack of any best practices, the efforts at drawing business perspectives from the presented data are wasted.

How soon can I harvest the data?

Speed is critical in today’s world and that applies to data application. Data that is not fresh cannot be used in a market that is so dynamic.

www.wns.com

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Cross-industry Solutions: Finance and Accounting, Research and Analytics, Contact Center, Legal Services and Procurement.

Works with more than 200 leading global brands.

23,000 employees working across 25 delivery centers and seven countries.

With its deep research and analytics expertise, industry intimacy, focus on operational excellence and a robust global delivery model, WNS helps leading companies make insight-based business decisions. The recently launched WNS Analytics Decision Engine (WADESM) is an award-winning analytics solution framework for C-suite decision-making.

65

ENTER A DIFFERENT WORLD

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This issue April 2012

Portfolio

Exclusive to Emirates First Class and Business Class

Cover Story 28 Super Mario Mario Draghi took over the helm of the European Central Bank at the most critical time in the common currency’s history. His unprecedented move of injecting more than a trillion euros into Europe’s banking system is credited with staving off disaster. But Europe’s future is very much out of Draghi’s hands.

Features

60

34 Need for Speed As the internet has gotten faster, peoples’ expectations have risen. A mere 250 milliseconds difference between two sites can make the difference in visitor numbers.

38 Going Back to School American women are furthering their studies rather than staying in the weak job market. That could have a huge impact in years to come.

42 Creating a Smarter City IBM has built a citywide system integrating data from some 30 agencies in Rio de Janeiro. IBM hopes that this will be a model for other major cities.

50 A Bitter Pill European pharmaceutical companies are feeling the brunt of austerity measures as governments tighten belts.

46 Apple, America and the Middle Class Apple is a prime example of how American innovation, such as the iPhone, creates manufacturing jobs overseas.

54 The Password Irritant Technology improves in leaps and bounds, but the method for getting into secure accounts has remained the same.

Now efforts are under way to liberate us from passwords.

56 Brazil Absorbs Haitian Immigrants Many Haitians have migrated thousands of kilometres to work in booming Brazil that needs more labour. For the time being, Brazil is welcoming them.

60 A New Model for France?

The German economy has powered far ahead of France’s, and the gap is widening annually. President Nicolas Sarkozy

50

wants the French economy to become more German, but there is opposition.

9

Portfolio

10

Exclusive to Emirates First Class and Business Class

Essentials

65

65 Life Along the Zambezi The Zambezi River winds its way through southern Africa like a lifeline, clustering people along its banks.

70 Mr Zeitgeist Tyler Brule has started not one but two successful culture magazines: Wallpaper and Monocle. And he’s managed to do that by bucking conventional wisdom.

74 The Height of Suspense 70

Nine of the world’s 10 tallest buildings are in Asia and the

78

Middle East – and Hollywood wants to jump off all of them.

78 A New Lease On Life Jean Paul Gaultier’s couture has been consistently brilliant, but his ready-to-wear has been hit or miss.

82 Fighting Poverty With Violins Venezuela’s El Sistema music programme has been

82

extremely successful in helping poor children.

86 Setting the Standard The latest Porsche Carrera S is an amazing combination of power, control and comfort.

88 Other Business Portfolio takes a light-hearted look at the latest business news.

Departments 13 Notebook World business in a nutshell.

19 Observer Spotting and analysing business trends.

26 Column: Phillip Inman Brazil’s Economic Rise

86 Published for Emirates by

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Portfolio

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Notebook

13

reuters

BUSINESS NEWS IN BRIEF

UPS to Buy TNT United Parcel Service will pay $6.85 billion for Dutch peer TNT Express

to seek a buyer.

The deal has raised concerns that

to achieve those synergies.

Europe is UPS’s largest market

in a deal making the world’s largest

smaller companies will find it harder

outside the United States, accounting for

package delivery company the market

to compete. Germany’s Deutsche Post

$6 billion or half of the company’s annual

leader in Europe. The offer ends years of

DHL, the closest rival in Europe, said the

international revenue. Total revenue for

speculation about the future of the Dutch

European Commission should examine

UPS last year was $53 billion, while that

delivery company, which was split from

the proposed takeover thoroughly. UPS

of TNT was around $7 billion.

the Dutch mail company PostNL and

said it was confident the European

UPS carries about $11 billion in debt on

listed last year.

antitrust watchdog would clear the

its balance sheet and could tap credit lines

offer without going into a prolonged

for $12 billion in additional debt. The

investigation.

company has $4.1 billion in cash and $1.3

UPS will also get access to TNT’s stronger networks in the fast-growing Asian and Latin American markets,

UPS said the acquisition will accelerate

billion in marketable securities.

If a third party makes a binding counter

bringing the US company’s global sales up

its global growth strategy by increasing

to over ¤45 billion.

foreign revenue from 26 per cent to 36 per

offer exceeding the UPS bid by eight

cent of the group total. The deal will bring

per cent, TNT or UPS can terminate

for 2012, TNT’s management had come

annual cost synergies of approximately

the transaction, the companies said in a

under intense pressure from activist

¤400 to ¤550 million per year in four

statement. That leaves the door open for

shareholders, including Jana Partners

years, UPS said. It will first spend a pre-

another rival, such as FedEX, to bid, but

and Alberta Investment Management

tax, ¤1.3 billion on “implementation costs”

analysts have said that is unlikely. n

With falling profit and a poor outlook

April 2012

Notebook

14

InterContinental Targets Chinese

Numbers Game

$13.8

billion profits grossed

by Bridgewater pure alpha wins ray Dalio the crown as the world’s most successful hedge fund manager, toppling george soros from the top position. the record profit is Bridgewater’s highest ever and accounts for almost 40 per cent of the $35.8 billion in total that the company has made for clients since its inception 37 years ago.

36

-year-old ekta Kapoor, known for making popular Indian soap operas and Bollywood movies, is ranked as the youngest woman on the Forbes asia power Businesswomen list. Of the 50 women on the list there were 21 from China, taiwan, hong Kong and Macau, eight from India and five from singapore.

The World In Figures

from the gulf of Mexico oil spill. however, Bp still faces a mountain of pollution fines that take a big chunk of its $20 billion spill fund.

reuters

billion bid saw ptt exploration & production, thailand’s only listed oil and gas company, acquire african energy explorer Cove energy. By offering 220 pence for each Cove share, ppt exploration was able to beat the competing bid made by royal Dutch shell by 13 per cent.

graph east

$1.7

Richard Solomons, CEO of InterContinental Hotels Group

InterContinental Hotels Group said it’s launching a new upscale hotel chain in China, as the world’s biggest hotel operator by number of rooms strives to become the chain of choice for increasingly wealthy Chinese travellers.

IHG said the chain, named Hualuxe Hotels and Resorts, taps into the

$22

billion bottled water industry is being shunned by more than 90 schools in the us, including Brown university and harvard university. they have banned the sale or restricted the use of plastic water bottles.

growth of domestic travellers within China, the increase in outbound international travel by Chinese and growing consumer demand for an upscale international hotel brand.

It expects the first hotel to open in late 2013 or early 2014

$100

billion earmarked

by China to bolster its defence budget ranks it as the world’s second biggest military spender after the us. China has had nearly two decades of double-digit annual increases.

getty IMages

$7.8

billion settlement has been agreed

by Bp to resolve more than 100,000 individual and business claims filed against it for losses

and is in contract negotiations for over 20 sites. IHG added the brand can reach over 100 cities in China in the next 15 to 20 years.

The UK-based company, which has around 4,500 hotels and a further 1,200 in the pipeline, plans to more than double the size of its operations in fast-growing economies like China, India and the Middle East in the next few years.

Portfolio

Notebook

15

Germany Transforms enerGy secTor europe’s biggest economy is

renewables such as solar and

undertaking a reconstruction

wind. In order to succeed, the

of its energy market on a

country must experiment with

grand scale. Chancellor angela

untested systems and policies

Merkel is planning to build

and overcome technical

offshore wind farms that will

hurdles threatening the project.

cover an area six times the size

already, the programme is expanding markets for suntech

power lines that could stretch

power holdings, the world’s

from London to Baghdad. the

biggest solar panel maker,

programme will cost ¤200

and Vestas Wind systems, the

global need to upgrade power

germany’s efforts in the

billion ($268 billion), a third of

largest maker of wind turbines.

stations. By 2035, at least $10

industry are sending shocks

annual gross domestic product,

It’s hurting utilities from rWe to

trillion of investment is needed

through european power

according to Berlin’s DIW

eON, which have stepped up

to add 5,900 gigawatts of

markets. When it’s windy and

economic institute.

cost cutting to curb losses from

generation worldwide, more

sunny, turbines and solar cells

closing nuclear stations early.

than five times the capacity of

flood the grid with electricity,

germany is among the

all us utilities, the International

undermining the economics of

energy agency estimates.

natural-gas fired generators.

germany aims to replace 17 nuclear reactors supplying a fifth of its electricity with

first nations to grapple with a

reuters

of New york City and erect

Spain Burns Bridges The Spanish government

to skip town for an extra-long

by moving the holidays to

Tourist Accommodations,

aims to increase productivity

weekend whenever public

Mondays. The two sides, which

estimates some of his members’

by moving some midweek

holidays fall in the middle

rarely agree on anything, say

revenue could fall around

public holidays to a Monday.

three days of a week.

the bridges cost the Spanish

five per cent this year by

economy hundreds of millions

suppressing the three bridges.

Many Spaniards strategically

Spain’s unions and business

deploy paid vacation days as

associations have agreed

of euros in lost production, as

He worries that making it

puentes – literally, bridges –

to suppress three bridges

they result in idle plants and

harder to take bridge-style

half-empty offices.

holidays will strain family ties

While bridges are common in Europe, Spaniards excel

economy if Spaniards end up

at them. Spain’s 14 public

travelling less.

holidays, mostly Catholic in

reuters

Backers of the government

origin, can fall on any day,

plan say bridges inhibit

and Spaniards are guaranteed

Spanish productivity because

a minimum of 22 additional

few people plan meetings or

vacation days. Tour operators,

other work when they think

airlines and restaurants cater

counterparts are likely to be

to bridgegoers with special

on holidays. Supporters also

packages and discounts.

worry that bridges reinforce

Ramón Estalella, the

April 2012

and hurt a key sector of the

negative stereotypes that the

secretary general of the Spanish

Spanish holiday too much and

Confederation of Hotels and

work too little.

16

Notebook DUBAI EVENT NAME: THE BRIDE SHOW WEBSITE: THEBRIDESHOW.COM DATE: 4-7 APRIL, 2012 VENUE: DUBAI INTERNATIONAL EXHIBITION CENTRE Thousands will pack the Dubai International Exhibition Centre for the 15th edition of the Bride Show to take a peek at the latest bridal fashions and wedding trends.

The exhibitors bring a wide range of wedding related products ranging from haute couture designs, evening wear, abayas and sheilas to fashion accessories and beauty products. The event will also feature live fashion shows, marriage guidance counsellors are at hand to advise brides-to-be, and there are plenty of valuable prizes and raffle draws.

EVENT: THE MOBILE SHOW WEBSITE: TERRAPINN.COM/2012/THE-MOBILE-SHOW DATE: 17-18 APRIL, 2012 VENUE: MADINAT ARENA, DUBAI Thinner, lighter, faster and ultra stylish mobiles will be unveiled, with voice and gesture-controlled gadgets and projector phones topping the trends.

Exhibitors benefit from the opportunity to showcase their innovation and capabilities, whilst consumers receive first-hand guidance on the advantages of new phones and services available over networks. Industry heavyweights including ESPN, Wikitude, Samsung, Google, BlackBerry, Nokia and many more will be attending.

DUBAI

United Arab Emirates

EVENT NAME: GETEX 2012 WEBSITE: MYGETEX.COM DATE: 19-21 APRIL, 2012 VENUE: DUBAI INTERNATIONAL CONVENTION & EXHIBITION CENTRE GETEX is Dubai’s leading education event for the promotion and development of teaching and learning standards. More than 500 trade stands will cover the 14,000 square metres of exhibition space offering more than 2,500 study and training options in over 40 countries. Leading academic institutions from the UAE, India, UK, Canada, USA, Malaysia and Turkey will make up the bulk of exhibitors during the three-day show. Students will find top-quality academic choices ranging from regional and international schools to some of the finest universities from around the globe.

EVENT: MIDDLE EAST FILM & COMIC CON WEBSITE: MEFCC.COM DATE: 20-21 APRIL, 2012 VENUE: DUBAI INTERNATIONAL MARINE CLUB, MINA SEYAHI Middle East Film & Comic Con marks the launch of the popular culture and entertainment event in Dubai. The convention spans the latest and greatest from the world of comics, movies, television, toys, anime, manga and video games. From a show floor packed with hundreds of exhibitors to panels and autograph sessions and screening rooms featuring sneak peeks at films and television shows, the festival brings the best of popular culture to Dubai.

EVENT NAME: ARABIAN TRAVEL MARKET WEBSITE: ARABIANTRAVELMARKET.COM DATE: 30 APRIL – 3 MAY, 2012 VENUE: DUBAI INTERNATIONAL CONVENTION & EXHIBITION CENTRE This leading travel exhibition has grown to become the largest showcase of its kind in the Middle East, bringing together more than 2,200 exhibitors and 22,000 attendees. Unlocking business potential for tourism destinations from the Middle East and around the world, the event showcases a diverse range of accommodation options, tourism attractions and new airline routes.

Portfolio

Observer

19

BUSINESS NEWS IN BRIEF

Gregory Joinau-Baronnet (L) set up Jetson Trading in Hong Kong that sells products from his native Bordeaux. Guillaume Fortin (R), another Frenchman, is his sales manager.

French Savoir Faire in Asia As China and other Asian economies boom, French businesspeople are moving east to cater for Asia’s nouveau riche, reports Bettina Wassener.

GreGory Joinau-Baronnet

than 10,000, according to the French

businesspeople are arriving with them,

consulate in the city. In Singapore, it has

with little more than a couple of suitcases.

catering to the Asian nouveau riche with a

approximately doubled to more than

In France, Joinau-Baronnet had been

savoir faire that is changing the face of the

9,200 during the same period. The

a real estate agent specialised in selling

traditionally Anglo-Saxon communities in

French have also been moving to

wine-related property like vineyards. But

Hong Kong and Singapore. (Both cities are

mainland China, Bangkok and southern

business ground to a halt as the global

favoured destinations for their functioning

India, as French brands associated with

financial crisis took hold in 2008. “I

legal systems and access to markets in

luxury, fine dining, wines, banking and

needed to move,” said Joinau-Baronnet, 31.

mainland China and Southeast Asia.)

other industries want French nationals to

In January last year, he got on a plane

© 2012 New York Times News service

As luxury companies storm Asia, French

arrived in Hong Kong about a year ago

The flow of Westerners who flock to Asia

help them market internationally.

“Asia in general, and China in particular,

to a place he knew was booming: Hong

in search of jobs, business opportunities

Kong, which now attracts immigrants from

or adding international experience to the

is booming,” said Arnaud Barthelemy, the

France faster than it does from the United

resume has picked up in the past few years,

consul general of France in Hong Kong.

States, Britain or Germany. He has set up

with the French leading that growth, said

“French companies derive their growth

Jetson Trading, a small business that sells

James Carss, a senior executive at the

from this region,” he said, noting that many

high-end wines and mineral water from

recruitment firm Hudson in Hong Kong.

have subsidiaries or regional headquarters

his native Bordeaux. Guillaume Fortin,

The French community in Hong Kong

in the city.

another Frenchman who arrived last year,

has increased more than 60 per cent

There are still about 10 times as many

joined him as sales manager.

since 2006, and now numbers more

Americans and many more Britons than

April 2012

Observer French in the city, which is a special administrative region of China. But the number of American and British residents is rising slowly: it has increased less than 10 per cent since late 2006. The German community has stayed more or less flat.

The French influx can be heard, seen and felt all over the city. Walk through the bar districts or high-end shopping malls of Hong Kong, and it is likely you will encounter passers-by speaking French – much more likely than it would have been two or three years ago. The French

getty images

20

international school is bursting. Frenchrun restaurants have multiplied.

Pastis, a small restaurant in the Central District of Hong Kong, has been a favoured

Customers shop for watches in a Mont Blanc store in Hong Kong, which is part of the French luxury group Richemont.

not as much of a culture of visiting galleries

hangout for French expatriates since it

Hong Kong’s appeal to shoppers from

opened in late 2009. At least two more

neighbouring China, who benefit from the

as there is in Europe. It takes a lot more

French restaurants have opened in recent

city’s lower taxes on many goods, makes

effort to grab people’s attention.” Despite

months. There is even a café with three

Hong Kong an important location for

the challenges, Malingue said, the gallery is

dusty courts for boules, a lawn game

anyone catering to Chinese consumers.

now doing well.

popular in France, incongruously tucked

It has also helped ensure that the French

away in a basement on Hong Kong island.

community in Hong Kong is one of the

meanwhile, is fierce, as businesses rush

largest in Asia. Fanny Duguet is a case in

to get in on the action. Salaries, if not

point. She moved here with her husband

augmented by increasingly rare benefits

and two young children in August,

for expatriates, do not meet many

dispatched by her employer Richemont,

Westerners’ expectations. Both local

the luxury goods giant, to help with the

and foreign employers generally prefer

company’s expansion in the region.

people with experience in Asia and

In a more independent vein, Edouard Malingue, a 38-year-old art dealer from Paris, decided Hong Kong offered better

Competition in many sectors,

language skills to match, said Carss, the recruitment executive.

In addition, commercial and residential

prospects than Europe or America for a

rents are astronomical. Joinau-Baronnet,

new art gallery. Malingue moved to Hong

for example, is about to open a shop in the

Kong in September 2009 and opened his

Tsim Sha Tsui neighbourhood of Hong

gallery in the financial district a year later.

Kong, which is less popular among the rich

Like other entrepreneurs, he was attracted

than the well-frequented Central District

by the lack of bureaucratic red tape and the

with its luxury stores. Still, the rent on

relative ease of setting up a business.

the small space he had to settle for is four

Hong Kong is not without its challenges,

times what a comparable space would cost

however. Retailers have to work harder

in his native Bordeaux, and twice as much

than in Europe or the United States

as in Paris, he said. But he is undeterred.

to cultivate tastes and habits among

In addition to his new location in Hong

customers who may not know the products

Kong, he is considering a second store in

or lifestyle they represent.

Shenzhen or Guangzhou, just across the

In Hong Kong, Malingue noted, “there is

Chinese border, next year. n Portfolio

THE ORIGINATOR OF CULTURED PEARLS SINCE 1893

ANTICIPATION

THE FINE JEWELLERY ROOM

+44 (0)20 7730 1234 harrods.com

Observer O N E 2 W AT C H TExT: HildA d’sOuzA

Michael Clarke If there’s a CEO who has his work cut out for him, it’s Michael Clarke, who joined Premier Foods from Kraft in September 2011. Clarke took over from Robert Schofield whose 10-year buying spree made Premier Britain’s biggest food producer, but so bloated with debt, while trading poorly, analysts derided it as a basket case.

The maker of Bisto gravy and Hovis bread is grappling with debt of close to one billion pounds ($1.6 billion) which it built up during a spending spree prior to the 2007 credit crunch. Tougher trading conditions and rising costs have since exacerbated its woes and sent its shares crashing.

Clarke has refinanced £1.4 billion of borrowings in return for increasing asset sales to slash the debt. The CEO is now looking at selling some of Premier’s 50 brands and hopes to raise another £300 million this year.

Clarke wants to “draw a line under the performance of 2011” and said lessons had been learned from past mistakes, in particular under-investment in household names. Premier is ploughing £50 million, double last year’s marketing spending, into eight “power brands”. Clarke has also said he’s improved relationships with retailers including Tesco, Morrison’s and Sainsbury’s using, for the first time, an integrated business plan.

“We tried to be all things to all people,” said Clarke. “We tried to chase scale for scale’s sake. After the disposals we’ll be a smaller business in terms of turnover, but a bigger business in terms of profitability.”

Clarke has a long way to go as the group slumped to a £259 million pretax loss in 2011, from profits of £28.5 million the year before. According to analysts, Clarke has precious little time to turn the company around as the financing costs are ratcheting up.

Ore Demand Cools Australian iron ore miners, key beneficiaries of China’s modern-day industrial revolution, indicated demand growth was finally slowing in response to Beijing’s moves to cool its economy.

Chinese demand for iron ore has been the driving force behind years of expansion work by the world’s biggest mining companies.

More than 100 million rural Chinese are projected to settle in towns and cities in the next decade, requiring unprecedented amounts of steel for housing and infrastructure. Last month, however, China cut its 2012 growth target to an eight-year low of 7.5 per cent, fuelling caution about demand for resources.

BHP Billiton, the world’s biggest miner, said it was seeing signs of

getty images

22

“flattening” iron ore demand from China, but it was pushing ahead with ambitious plans to expand production.

Rival Rio Tinto is also sticking with plans to raise capacity from its huge mines in Western Australia’s Pilbara iron ore belt, betting on a soft landing for the Chinese economy.

Rio, BHP and other big miners have been pursuing a strategy of running at full production and expanding capacity in long-life and relatively low-cost commodity assets compared to the selling price of ore, banking on squeezing out higher cost producers.

BHP saw the current floor for global iron ore prices at $120 a tonne. Iron ore has sold for between $130 and $147 a tonne over the last four months, which mega-producers such as Rio Tinto have said is high enough to warrant investment in new mines.

Rio Tinto has mapped out plans to lift its overall annual production of iron ore in Australia to 283 million tonnes in 2013 from 225 million now by digging new mines and expanding existing ones.

Global iron ore demand is set to double to around 3.5 billion tonnes a year by 2030, with Chinese appetite for the steel-making material continuing to drive the market, albeit at a slower pace, according to Perth-based Intierra Resource Intelligence.

Portfolio

Observer Amazon Goes Robotic amazon.com is making its biggest acquisition since the 2009 purchase of Zappos.com, agreeing to pay $775 million for Kiva systems, a maker of robots that move items around warehouses. the takeover of Kiva by the world’s largest online retailer will add to the investments CeO Jeff Bezos has made in the getty images

company’s order-fulfilment centres, as amazon seeks to get a bigger variety of products to consumers faster. amazon spent $4.6 billion last year on warehouses, the company’s largest operating expense at 9.5 per cent of sales, according to its

capacity as more third-party retailers use its fulfilment services,

annual report.

taking advantage of the company’s warehouses and lower

the all-cash deal for closely held Kiva will close in the second

shipping rates. Units sold by outside vendors increased 65 per

quarter. Kiva’s orange robots, which can slide under shelves

cent in the fourth quarter from a year earlier, and made up 36

and bins of products, are used by Quidsi – the company behind

per cent of unit sales.

soap.com and Diapers.com – that amazon acquired for about $545 million last year. the online retailer is under pressure to increase its shipping

amazon’s operating margin is predicted to narrow to 1.6 per cent in 2012 after falling 2.3 percentage points last year, putting stress on the company to bolster profits.

Windows 8 Set For Debut standards. In embracing ARM technology, Microsoft is using the same kind of processors as Apple’s iPad. Still, there will be fewer than five ARM devices in the debut, compared with more than 40 Intel machines.

There will be fewer ARM-based devices in the rollout because Microsoft has tightly controlled the number and set rigorous quality-control standards. The new version of Windows will be the first to use ARM processors, which are most commonly found in smartphones. Windows 7, the current version, only works with Intel’s technology.

The timing will let Microsoft target Christmas shoppers with the new software, which works with touch-screen devices as well as laptops and desktop PCs. The Redmond, Washington-based company, which hasn’t announced timing for the Windows 8 getty images

release, aims to take back sales lost to the iPad and reinvigorate the sluggish PC market. Apple released the third version of the iPad in March, posing an even stiffer challenge to Microsoft.

More than 103 million tablet devices will be sold in 2012, with Microsoft will finish work on Windows 8 mid year, setting the

sales rising to 326.3 million in 2015, according to Gartner. For

stage for personal computers and tablets with the operating

now, Apple remains dominant, accounting for two-thirds of the

system to go on sale around October.

market in 2012, Gartner estimates. The company’s share will

The initial rollout will include devices running Intel and ARM chips, making good on Microsoft’s promise to support both April 2012

drop to 46 per cent by 2015, while Microsoft’s percentage will climb to 11 per cent.

23

Observer The World

Top 10

UK Most Internet-Based Economy

THE WORld’s RiCHEsT COuNTRiEs RANK 1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

COUNTRY Qatar Luxembourg singapore Norway Brunei Uae Usa Hong Kong switzerland Netherlands

GDP (PPP) PeR CAPiTA (US$) 88,222 81,466 56,694 51,959 48,333 47,439 46,860 45,944 41,950 40,973

sOUrCe: FOrBes.COm

getty images

24

The internet contributes to 8.3 per cent of the UK economy, a bigger share than for any of the other G20 major countries according to a study by the Boston Consulting Group (BCG).

WORld’s 10 MOsT ExPENsiVE CiTiEs Rank

Country

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

switzerland Japan switzerland Japan Norway France australia australia singapore germany

City

Wordwide Cost of Living index (New York=100) Zurich 170 tokyo 166 geneva (tied) 157 Osaka Kobe (tied) 157 Oslo 156 Paris 150 sydney 147 melbourne 145 singapore 142 Frankfurt 137

sOUrCe: eCONOmist iNteLLigeNCe UNit

The internet economy was worth £121 billion in 2010, more than £2,000 per person, researchers at BCG said. That made it bigger than the healthcare, construction or education sectors.

The UK also carries out far more retail online than any other major economy. Some 13.5 per cent of all purchases were done over the internet in 2010, according to BCG, and this is projected to rise to 23 per cent by 2016.

The researchers said that the overall UK web economy is particularly fast-growing. They predict it will continue to expand at a rate of 11 per cent per year for the next four years, reaching a total value of £221 billion by 2016. That compares with projected growth rates of 5.4 per cent in the US and 6.9 per cent in China.

WORld’s 10 lEAsT ExPENsiVE CiTiEs Rank

Country

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

Pakistan india iran india saudi arabia Panama Nepal algeria Bangladesh Oman

sOUrCe: eCONOmist iNteLLigeNCe UNit

City

Wordwide Cost of Living index (New York=100) Karachi 46 mumbai 52 tehran 54 New Delhi 56 Jeddah 57 Panama City (tied) 58 Katmandu (tied) 58 algiers 59 Dhaka 61 muscat 63

In 2010, South Korea, China and Japan were behind the UK, with the internet accounting for 7.3 per cent, 5.9 per cent and 5.5 per cent of GDP respectively. In 2016, South Korea and China are expected to remain in the second and third spots respectively, and India is expected to have about the same share of GDP from internet commerce as Japan.

By 2016, the internet is expected to make up nearly one quarter of all UK sales – the highest percentage of any country, and more than twice the projected internet slice of Germany’s economy, which the report projects will be at 12 per cent of GDP. The worldwide internet economy, worth $2.3 trillion (£1.4 trillion) in 2010, will nearly double to $4.2 trillion (£2.6 trillion) by 2016, the report predicts.

Portfolio

New York

The Plaza 5th Avenue at Central Park South NY 10019

Commentary

26

PhilliP Inman

Brazil Now World’s Sixth Largest Economy Brazil has claimed the UK’s spot

deep waters. Reserves are believed to equal

way of action and despite further labour

as the world’s sixth largest economy after

those shared by Norway and the UK in the

protections, a small group of wealthy

official figures showed its economy rose 2.7

North Sea.

families own most of Brazil’s major banks

per cent last year against the UK’s 0.8 per

President Luiz Inacio Lula da Silva

Still, the combination of huge natural

cent. France remains in fifth place behind

brought in social policies to raise the

Germany, Japan, China and the US.

incomes of Brazil’s poorest after his

resources and significant growth in

election in 2001. Dilma Rousseff, his

manufacturing and services has meant

$11,000 per head – remains less than a

handpicked Workers’ party successor,

Brazil is one of the most attractive

third of that enjoyed in the UK, but the

oversees a country where most people are

places for the world’s super rich, and

situation is improving all the time while

considered middle class.

that includes corporations, to park their

The per capita income of Brazilians – at

money. One of the knock-on effects has

western economies largely stagnate.

been to push up the value of the real,

The economic thinktank, the CEBR, predicted last year that Brazil would climb

which has appreciated 40 per cent since

above the UK in 2012 and would itself be

the financial crisis of 2008.

For Brazil’s wealthy it is a boon because

leapfrogged by India and Russia by 2020.

Tim Ohlenburg, of the CEBR, said the high

it increases their wealth and foreign buying

value of Brazil’s currency was a big factor

power. It has also allowed the government

in the country’s burgeoning wealth. “It is a

to embark on a spending spree. But for

bigger economy when measured at current

exporters it is a huge headache. The long-

market exchange rates,” he said.

serving finance minister, Guido Mantega, has railed against the rising value of the

Brazil’s dash for growth can be traced back to the mid 1990s when a string of

currency, which he knows pushes up

privatisations ended the state’s dominance

the price of exports and could put whole

of commercial life. China became a big

industries out of business. Should the

customer, with a particular liking for soya

commodity boom end, the high value of the

beans and iron ore. The US also began to

real could mean the country has little in

invest heavily in the country.

the way of business to fall back on.

Mantega blames the US, UK and

Top of the list of economic attractions is agriculture and the processing of

continental Europe for driving investors

foodstuffs, which account for about a

towards Brazil. He argues that quantitative

quarter of Brazilian GDP and 36 per

easing schemes have cheapened the world’s

cent of exports. In the last 20 years it has become the world’s largest producer of sugarcane, coffee, tropical fruits, and has the world’s largest commercial cattle © 2012 Guardian news & Media

and companies.

herd (50 per cent larger than that of the US) at 170 million animals, according to

Agriculture and the processing of foodstuffs account for 36 per cent of Brazil’s exports. But the 40 per cent appreciation of the Brazilian real is posing a threat to the country’s exports.

Lula gave workers the right to sit on

major currencies, leaving his as one of the few attractive ones around.

However, he is trapped because domestic savings are not sufficient to sustain longterm high growth rates. That means Brazil must continue to attract foreign

pension boards as a way for the low-paid to

investment, especially as the government

Oil is expected to become the next big

exercise control over the country’s growing

plans to cover the cost of oil extraction,

commodity for export, especially if a way

commercial and industrial businesses. But

nuclear power, and other infrastructure

can be found to drill safely in the Atlantic’s

the project has failed to realise much in the

sectors over the next few years. n

official figures.

Portfolio

Profile

28

Portfolio

29

Super Mario

Mario Draghi took over the helm of the European Central Bank at the most critical time in the common currency’s history. His unprecedented move of injecting more than a trillion euros into Europe’s banking system is credited with staving off disaster.

But Europe’s future is very much out of Draghi’s hands, reports Guido Duken.

GETTY IMAGES

April 2012

Profile

30

When Mario Draghi succeeded JeanClaude Trichet as president of the European Central Bank (ECB) on 1 November 2011, politicians, the media, and markets were unsure what to make of the Italian.

Unlike Trichet, who liked to be in total

the European Central Bank is testament

German demands to focus on the ECB’s

control, Draghi veers more towards

to his experience, personality and the

main mandate of ensuring price stability,

quiet diplomacy, consensus building

economic turbulence in the Eurozone.

while at the same time dealing with

and delegation. Yet he has the power to

Although Draghi was frequently

market and political pressure from other

surprise and an economic philosophy

mentioned as a potential successor to

countries to steer Europe out of a debt

that seemingly combines American and

Jean-Claude Trichet, Germany – the

crisis that has engulfed Greece, Portugal,

European values into one.

Eurozone’s largest economy – wanted

Ireland, Spain and even his native Italy.

What is clear is that Draghi’s breadth

the presidency to go to its candidate

At his debut news conference as

of experience – academic, government,

Axel Weber. But Weber dropped out the

ECB president on 3 November, Draghi

private sector and regulatory – gives him

running last year as he didn’t agree with

allayed German fears by saying: “I have

a background few central bankers share.

some elements of ECB policy. Momentum

a great admiration for the tradition of

He earned a PhD in economics from the

started building behind Draghi, and the

the Bundesbank”. But in the very next

Massachusetts Institute of Technology

die was cast when the German newspaper

sentence he emphasised that he would be

(MIT) in 1976 under the supervision of

Bild endorsed him as the “most German

his own man. “As for the future, let me do

Nobel Laureates Franco Modigliani and

of all remaining candidates.”

my work and we will have periodic checks

Robert Solow. From 1984 to 1990 he was

Still, Draghi’s appointment caused

whether I am in sync with that tradition

the Italian executive director at the World

some shock among the notoriously

Bank. In 1991, he became director general

inflation shy Germans, with the Bild

of the Italian Treasury, and held this office

joking that Italy without inflation was

In December, Draghi unleashed a

until 2001. He became known in Italy as

like spaghetti without tomato sauce. Bild

one-two combination that none of his

Super Mario, a moniker he earned in the

did a backpedal later and ran an image of

two predecessors (Trichet and the ECB’s

1990s when, as the Italian economy neared

Draghi wearing a spiked German helmet,

first president Wim Duisenberg) had ever

the brink, he became the acceptable public

saluting him as a German-style central

attempted. Firstly, he did back-to-back

face of his country to foreign investors.

banker. But Bild’s jokes weren’t really a

rate cuts that took the Eurozone’s interest

He oversaw one of the largest European

laughing matter as they highlighted the

rate to a record low of one per cent –

privatisation efforts ever and paved the

deep economic policy division between

risking a rise in inflation. This sent a

way for Italy’s entry into the euro. From

Germany and other European states –

clear message that Draghi’s ECB would

2002 to 2005 Draghi was vice chairman

especially the southern ones.

be decisive and prepared to ignore the

and managing director of Goldman Sachs

Suffice it to say that the 64-year-old

or I deviate from that.”

strong German contingent.

International. In April 2006 he was elected

Draghi took the helm of the Eurozone’s

chairman of the Financial Stability Forum,

most important institution in the midst

Term Refinancing Operations (LTRO),

which became the Financial Stability Board

of Europe’s deepest financial crisis since

that saw the ECB funnel over one trillion

in spring 2009.

World War II. In front of him was a

euros to banks while simultaneously

seemingly impossible mission: satisfying

relaxing the conditions for them to get

That Draghi was elected as president of

Secondly, Draghi unleashed two Longer

Portfolio

31

ECB financing. The cheap three-year

director Christian Lagarde hailed Draghi’s

threatened to engulf Portugal, Ireland,

loans allayed German fears of the ECB

rate cuts and liquidity injections. Some

Spain and Italy. Draghi made it clear

funding governments by buying bonds,

analysts believe that Draghi’s pre-emptive

that two issues needed to be addressed.

but it provided the banks with so much

move indicates an American approach.

“We have to distinguish two stages,” he

cheap money that they could buy sovereign

“He brings this US attitude of being more

said in an interview with the Financial

debt themselves. It was a shrewd political

pre-emptive than has been the case with

Times. “First was the financial crisis, with

move. These loans were ‘quantative

the ECB in the past,” said Domenico

its repercussions for the real economy.

easing’ that both the US Federal Reserve

Lombardi, a former IMF and World Bank

I think we learnt the lessons that we

and the Bank of England with their QE

executive member. “This is what saved

need a more resilient financial system,

programmes had done. The main aim was

the euro,” said Francesco Giavazzi, an

a system where we would have less

to inject enough money into the banking

Italian economics professor who has often

debt and more capital. There has been

system that credit could flow again.

worked with Draghi.

substantial progress in designing new

According to Draghi, the two LTROs

regulatory policies and some progress in

were a necessity. “Our last bank lending

The quesTIon is whether Draghi’s

survey was done between the time the

bold initiatives have done enough to

“The second stage of the crisis is

first LTRO was decided and when it was

stem the European crisis that started

really a combination of a challenging

executed, so it gives only a partial picture

with the spectre of a Greek default and

political phase, where euro area leaders

implementing this new design.

of what is happening. That picture was not positive. Credit was tightening all over the euro area in different degrees of intensity, more dramatically in the southern regions.”

Policymakers including US Treasury secretary Timothy Geithner and

GRAPH EAST

International Monetary Fund managing

European Central Bank president Mario Draghi at a meeting of EU heads of state in Brussels. Draghi has made it clear that governments need to implement economic reforms.

April 2012

“Our last bank lending survey was done between the time the first LTRO was decided and when it was executed, so it gives only a partial picture of what is happening. That picture was not positive.”

GRAPH EAST

Profile

32

Draghi addressing the European Parliament in Brussels. In his last speech he was optimistic that the European economy was heading in the right direction.

“The European social model has already gone when we see the youth unemployment rates prevailing in some countries.

These reforms are necessary to increase employment, especially youth employment, and therefore expenditure and consumption.”

DraghI Is very vocal that Europe’s vaunted social model – which places a premium on job security and generous safety nets – is finished. And that means states need major structural reforms. “In Europe first is the product and services markets reform. And the second is the labour market reform, which takes different shapes in different countries.

In some of them one has to make labour markets more flexible and also fairer than they are today. In these countries there is a dual labour market: highly flexible for

GRAPH EAST

the young part of the population where labour contracts are three-month, sixmonth contracts that may be renewed Greek finance minister Evangelos Venizelos (L) talks to Draghi and German finance state secretary Jorg Asmussen (R). A second bailout has been approved for Greece to prevent the country from defaulting.

for years. The same labour market is highly inflexible for the protected part of the population where salaries follow seniority rather than productivity. In a

are reshaping what I called the fiscal

over,” he said to the Wall Street Journal.

sense labour markets at the present time

“compact,” and a situation where banks and

“Let us look at the positive changes of the

are unfair in such a setting because they

countries face serious funding constraints.

last few months. There is greater stability

put all the weight of flexibility on the

These challenging funding conditions are

in financial markets. Many governments

young part of the population.”

now producing a credit tightening and

have taken decisions on both fiscal

have certainly increased the downside risks

consolidation and structural reforms. We

Europe depends on these reforms. “The

for the euro area economy.”

have a fiscal compact where the European

European social model has already gone

Draghi is adamant that the future of

governments are starting to release

when we see the youth unemployment rates

squarely aimed at addressing these two

national sovereignty for the common intent

prevailing in some countries. These reforms

issues. Draghi is now cautiously optimistic

of being together. The banking system

are necessary to increase employment,

that Europe is moving in the right

seems less fragile than it was a year ago.

especially youth employment, and therefore

direction. “It’s hard to say if the crisis is

Some bond markets have reopened.”

expenditure and consumption. There was

The ECB’s rate cuts and LTROs were

Portfolio

33

a time when (economist) Rudi Dornbusch used to say that the Europeans are so rich they can afford to pay everybody for not working. That’s gone.”

Some critics contend that austerity measures are not the best prescription for European countries with contracting economies. On this issue, Draghi sits squarely in the hard-line camp with Angela Merkel and other German officials.

He is adamant that austerity, coupled with structural change, is the only option GETTY IMAGES

for economic renewal. While government spending cuts hurt activity in the short run, he believes the negative effects can be offset by structural overhauls.

“Overall, we see continued signs of stabilisation in the euro area economy,

Jean-Claude Trichet (L), the former president of the ECB, dealt with the European financial crisis by buying sovereign bonds. Draghi’s approach was to inject more than a trillion euros into the European banking system.

albeit still a low level,” he said recently.

“The situation in the financial markets has clearly improved in response to the ECB’s measures. The improvement is also due to the progress made by euro area governments towards accepting more binding common fiscal rules and by the progress on fiscal consolidation and economic reform in many countries.”

However, he warned that countries and banks needed to use the current phase of financial stabilisation wisely.

GETTY IMAGES

Countries need to progress on economic reforms to boost growth, employment and competiveness, while banks need to strengthen their balance sheets.

The quesTIon is whether the ECB

German chancellor Angela Merkel and Draghi have become unlikely allies. Both take a hard-line approach to austerity measures and stress the importance of economic reforms across Europe.

pumping more than a trillion euros into

loss of competiveness plunge Eurozone

still be called Super Mario in the years to

European banks is a magic bullet or

countries further into an economic slump

come. As far as he’s concerned, the ECB

a disaster waiting to happen. Spanish

– the whole house of cards could collapse.

has bought the politicians and banks

banks used the first LTRO to boost

In total, the ECB’s unprecedented

enough time so that they can get on with

holdings of sovereign debt by 29 per cent

crisis-fighting measures have swelled its

the job of fixing Europe. What Draghi

to ¤230 billion. Analysts say this is a

balance sheet to more than three trillion

can’t solve is the core European problem

pattern of the weakest banks buying the

euros, prompting Bundesbank president

of it being a fiscal union but not a

weakest government bonds, and the more

Jens Weidman to write a letter to Draghi

political one. Will the individual European

bonds banks accumulate, the riskier the

warning that the central bank may be taking

governments and their voters swallow the

situation becomes. If markets conclude

on too much risk. Draghi has indicated he

bitter pill of more open labour markets,

that Eurozone governments are failing to

may share Weidman’s concerns. “The ECB

union busting, the loss of lifetime jobs

implement the needed reforms to break

must go back to normal, classic, central

and the dismantling of social welfare

a vicious cycle - in which poor public

bank policy,” he said.

nets? Europe’s future, and Draghi’s legacy,

finances, weak banks and a disastrous

The jury is still out whether Draghi will

depends on it. n

Internet

34

NEED FOR SPEED

As the internet has gotten faster, peoples’ expectations have risen.

A mere 250 milliseconds difference between two sites can make the difference in visitor numbers and ecommerce sales, reports Steve Lohr.

W

AIT A SECOND. NO,

competitive advantage on the web,” said

sites from the homes of large companies

that’s too long.

Harry Shum, a computer scientist and

to the legions of one-person bloggers.

speed specialist at Microsoft.

Download times on personal computers

Remember when you

were willing to wait a few seconds for

The performance of websites varies, and

average about six seconds worldwide,

a computer to respond to a click on a

so do user expectations. A person will be

and about 3.5 seconds on average in the

website or a tap on a keyboard? These

more patient waiting for a video clip to

United States. The major search engines,

days, even 400 milliseconds – literally the

load than for a search result. And websites

Google and Microsoft’s Bing, are the speed

blink of an eye – is too long, as Google

constantly face trade-offs between visual

demons of the web, analysts say, typically

engineers have discovered. That barely

richness and snappy response times. As

delivering results in less than a second.

perceptible delay causes people to search

entertainment and news sites, like The

less. “Subconsciously, you don’t like to

New York Times website, offer more video

a business opportunity for companies like

wait,” said Arvind Jain, a Google engineer

clips and interactive graphics, that can

Akamai Technologies, which specialises

who is the company’s resident speed

slow things down. But speed matters in

in helping websites deliver services more

maestro. “Every millisecond matters.”

every context, research shows. Four out of

quickly. Akamai, in March, introduced

five online users will click away if a video

mobile accelerator software to help speed

stalls while loading.

the loading of a website or app.

Google and other tech companies are on a new quest for speed, challenging the likes of Jain to make fast go faster. The

On a mobile phone, a web page takes a

The hunger for speed on smartphones is

The US government also recognises the

reason is that data-hungry smartphones

leisurely nine seconds to load, according

importance of speed in mobile computing.

and tablets are creating frustrating digital

to Google, which tracks a huge range of

In February, the United States Congress

traffic jams, as people download maps, video clips of sports highlights, news updates or recommendations for nearby restaurants. The competition to be the

© 2012 NEW YORK TIMES NEWS SERVICE

quickest is fierce.

Trying Your Patience

According to Harry Shum, a Microsoft computer scientist, computer users will visit a website less if its loading time is slower than its competitors by 250 milliseconds, or one-quarter of a second. That is less time than a single eye blink.

People will visit a commerce or

MILLISECONDS

0

news website less often if it is slower

TIME REQUIRED FOR:

than a close competitor by more than

One beat of a hummingbird’s wings

20 ms

A single frame of a projected film

42 ms

250 milliseconds (a millisecond is a thousandth of a second). “Two hundred fifty milliseconds, either slower or faster, is close to the magic number now for

100

200

300

400

(ONE-HALF SECOND)

500

An Internet user to visit a slower-loading site less often 250 ms

The blink of an eye

400 ms

A baseball pitched at 99 m.p.h. to reach the plate

417 ms THE NEW YORK TIMES

N.Y. Times News Service Date: 03/01/12

Portfolio

Internet

35

opened the door to an increase in network

“And that’s an opportunity for us.”

In 2009, a study by Forrester Research

capacity for mobile devices, proposing

The need for speed itself seems to

found that online shoppers expected pages

legislation that permits the auction of

be accelerating. In the early 1960s, the

to load in two seconds or less – and at three

public airwaves now used for television

two professors at Dartmouth College

seconds, a large share abandon the site.

broadcasts to wireless internet suppliers.

who invented the BASIC programming

Only three years earlier a similar Forrester

language, John Kemeny and Thomas

study found the average expectation for

history of the internet. In the 1990s, as

Kurtz, set up a network in which many

page load times was four seconds or less.

the World Wide Web became popular,

students could tap into a single, large

and crowded, it was called the World

computer from keyboard terminals.

Overcoming speed bumps is part of the

Wide Wait. Invention and investment answered the call.

Laying a lot of fibre optic cable for highspeed transmission was the first solution.

“We found,” they observed, “that any

The two-second rule is still often cited as a standard for web commerce sites.

Yet experts in human-computer

response time that averages more than

interaction say that rule is outdated.

10 seconds destroys the illusion of having

“The old two-second guideline has long

one’s own computer.”

been surpassed on the racetrack of web

But beyond bandwidth, the web got faster because of innovations in software algorithms for routing traffic, and in distributing computer servers around the world, nearer to users.

AKAMAI, WHICH grew out of the Massachusetts Institute of Technology’s Laboratory for Computer Science, built its sizable business doing just that. Most major websites use Akamai’s technology today.

The company sees the mobile internet as the next big challenge. “Users’ expectations are getting shorter and shorter, and the mobile infrastructure is not built for that kind of speed,” said Tom Leighton, co-founder and chief scientist at Akamai, who is also an MIT professor.

April 2012

Arvind Jain, a director of engineering at Google, is its resident speed maestro. Google’s internal research shows that if search results are slowed by just 400 milliseconds, people will search less.

Internet

36 The Global Internet Map shows digital information flows between continents. Installing servers closer to users has greatly sped up the internet.

“Speed, Jain said, is a critical element in all of Google’s products. There is even a companywide speed budget; new offerings and product tweaks must not slow down Google services.

But there have been lapses.”

In 2007, for example, after the company A screen at Google’s Mountain View office in California shows the time it takes for various internet requests to load.

added popular new offerings like Gmail, things slowed down enough that Google’s leaders issued a ‘Code Yellow’ and handed

expectations,” said Eric Horvitz, a scientist

He leads a “Make the Web Faster”

out plastic stopwatches to its engineers to

at Microsoft’s research labs.

programme, begun in 2009. He also

emphasise that speed matters.

Google, which harvests more internet ad revenue than any other company, stands to benefit more than most if the

holds senior positions in industry standards groups.

Speed, Jain said, is a critical element in

Still, not everyone is in line with today’s race to be faster. Kurtz, the Dartmouth computer scientist who is the co-inventor

internet speeds up. Jain, who worked

all of Google’s products. There is even a

of BASIC, is now 84, and marvels at how

at Microsoft and Akamai before joining

companywide speed budget; new offerings

things have changed. Computers and

Google in 2003, is an evangelist for speed

and product tweaks must not slow down

networks these days, Kurtz said, “are fast

both inside and outside the company.

Google services. But there have been lapses.

enough for me.” n Portfolio

Education

38

There are now for the first time in three decades more young women in school than in the work force.

Going Back to School American women are furthering their studies rather than staying in a weak job market.

That could have a huge impact in years to come, reports Catherine Rampell.

© 2012 NEW YORK TIMES NEWS SERVICE

WORKeRS aRe DROPPinG OUT OF

Many economists initially thought that

early 20s view today’s economic lull as an

the labour force in droves, and they are

the shrinking labour force – which drove

opportunity to upgrade their skills, their

mostly women. In fact, many are young

down November’s unemployment rate –

male counterparts are more likely to take

women. But they are not dropping out

was caused primarily by discouraged older

whatever job they can find. The longer-

forever; instead, these young women seem

workers giving up on the job market. Many

term consequences, economists say, are

to be postponing their working lives to

of the workers sitting on the sidelines are

that the next generation of women may

get more education. In the United States,

instead young people upgrading their

have a significant advantage over their

there are now – for the first time in three

skills, which could portend something

male counterparts, whose career options

decades – more young women in school

like the post-war economic boom, when

are already becoming constrained.

than in the workforce.

millions of World War II veterans went

For now, at least, many young women

to college through the GI Bill instead of

still feel that the deck is stacked against

for a year and a half,” said Laura Baker,

immediately entering, and overwhelming,

them. “Almost everyone in my programme

24, who started a master’s programme in

the job market.

is female,” said Baker, who hopes a

“I was working part-time at Starbucks

strategic communications last autumn at

Now, as was the case then, one sex

master’s degree will help her get a job

the University of Denver. “I wasn’t willing

is the primary beneficiary. Although

running communications at a non-profit

to just stay there. I had to do something.”

young women in their late teens and

group. “That’s partly because of the Portfolio

programme, but also because as women we feel like we have to be more educated to be able to compete in really any field.”

Women still earn significantly less than men. And in the 2½ years since the recovery officially began, men age 16 to 24 have gained 178,000 jobs overall, while their female counterparts have lost 255,000 positions, according to the Labour Department.

Apparently discouraged by scant openings, 412,000 young women have

“The education gap aside, in some ways young women will already have an advantage over men in the coming decade.

Many of the occupations expected to have the most growth, like home health aides and dental hygienists, have traditionally been filled by women. ”

since the recovery began, meaning they are not looking for work. Among young men, the labour force has been flat since the recovery began, after having fallen during the recession. Today, across all age groups, an unemployed female worker is 35 per cent more likely to drop out of the labour force in the next month than an unemployed male worker.

SOme STUDieS suggest that women are pickier about their job choices than men. Already earning lower pay, women are less willing to work when wages fall further, especially if they are able to rely on an employed (and these days, often newly re-employed) husband. Women are also more reluctant to work night or weekend shifts, according to government data on how Americans spend their time, partly because they have more family responsibilities.

“The jobs out there just aren’t very good, and men seem more willing to take them for whatever reason,” said Jonathan Willis, an economist at the Federal Reserve Bank of Kansas City. “The women are looking at those same jobs and saying, ‘I’ll be more productive elsewhere.”’

Then there are societal influences that affect a person’s willingness to take a lesser job or return to school.

“There is still this heavy cultural there earning money and supporting themselves, and they feel more distressed by losing their breadwinner role,” said April 2012

the Council on Contemporary Families.

“We’ve made much more progress overcoming the ‘feminine mystique’ than this masculine mystique.”

While these roles evolve, community colleges are reporting record enrollment.

Both men and women are going back to school, but the growth in enrolment is significantly larger for women (who dominated college campuses even before the financial crisis). In the last two years, the number of women aged 18 to 24 in

dropped out of the labour force entirely

message that men should be out

Stephanie Coontz, director of research at

Laura Baker, 24, who stopped working a parttime job and started a master’s programme at the University of Denver.

Education

39

Education

40

Women Departing Labour Force

While the number of young men employed has rebounded since the end of the recent recession, employment for young women has not kept pace. The percentage of young women enrolled in school now exceeds that in the labour force.

TOTAL EMPLOYED, AGES 16-24

PERCENTAGE OF WOMEN, AGES 16-24*

Seasonally adjusted

12-month moving average

70%

12 million

65

11

Men

In labour force

60

10

economist at the Centre for American

55

9

Progress, a left-leaning research organisation. “The real question is: Why

50

Women

8

aren’t more men doing that too?”

Enrolled in school

45

The main risk in going back to school is the accompanying student loan debt.

40 7 6 ’00

’05

Tuition increases have been outpacing inflation for years, a trend accelerated by

35

RECESSIONS

“The real question is: Why aren’t more men doing that too? The main risk in going back to school is the accompanying student loan debt. Tuition increases have been outpacing inflation for years, a trend accelerated by state budget cuts.”

state budget cuts.

“Our funding per student has been cut

30 ’10

25 per cent in the last three years,” said

’00

’05

’10

Stephen Scott, the president of Wake Technical Community College in Raleigh,

*Percentages for the two groups add to more than 100 per cent, because an individual may be in school and in the labour force at the same time.

North Carolina, which is one of the

Sources: Bureau of Labor Statistics, via Haver Analytics

risen, and so has tuition. But the students

THE NEW YORK TIMES

fastest-growing community colleges in the country. Consequently, class sizes have – again, mostly women – still pour in. “We now have 6,000 students on a waiting list

N.Y. Times News Service traditional low-income or middle-income Date: 01/03/11 male jobs.”

The education gap aside, in some Jobs in the male-dominated ways young women will already have an Graphic Slug: WOMEN-RAMPELL-BSPR advantage over men in the coming decade. manufacturing industry and in other Size: 3.7x4.8 sectors involving manual labour have Many of the occupations expected to have With been, and still are, in structural decline. the most Story: growth, like(BC--WOMEN-RAMPELL-BSPR--NYT) home health aides school rose by 130,000, compared with a

not understanding what’s happening to

gain of 53,000 for young men.

because we didn’t have the resources to offer more classes,” he said.

Those attending more expensive private schools, like Baker, will have an even tougher time guaranteeing that their educational investment pays off. Including the loans that financed her undergraduate

and dental hygienists, have traditionally

These careers can also be hard to

education at Wartburg College in

been filled by women. That is not to say

maintain indefinitely because youthful

Waverly, Iowa, she will complete her

that men cannot take those positions, but

strength eventually fades. And now many

master’s programme in 2012 owing about

they may not want to.

manufacturing workers do not have

$200,000 in debt.

“Today young girls are told they can do anything, go into any occupation. But if boys express any interest in traditionally

pensions to carry them through when their bodies do break down.

“It doesn’t surprise me that in a poor

“I have to have faith that I will eventually get a good job that pays enough to pay my living expenses and pay back

female occupations, they get teased and

economy women are ramping up their

my loans,” she said, “and hopefully make

bullied,” Coontz said. “Lots of guys are

schooling,” said Heather Boushey, an

me happy in the process.” n Portfolio

Technology

42

Creating a Smarter City IBM has built a citywide system integrating data from some 30 agencies in Rio de Janeiro. IBM hopes that this will be a model for other major cities, reports Natasha Singer.

Portfolio

Technology

43

N

ot far from CopaCabana Beach in Rio de Janeiro is a control room that looks straight

out of NASA. City employees in white jumpsuits work quietly in front of a giant wall of screens – a sort of virtual Rio, rendered in real time. Video streams in from subway stations and major intersections. A sophisticated weather program predicts rainfall across the city. A map glows with the locations of car accidents, power failures and other problems.

The order and precision seem out of place in this easy-going Brazilian city, which on this February day was preparing for the controlled chaos that is Carnaval.

But what is happening here reflects a bold and potentially lucrative experiment that could shape the future of cities around the world.

This building is the Operations Centre of the city of Rio, and its system was designed by IBM at the request of Rio’s mayor, Eduardo Paes, after deadly landslides two years ago. There is nothing quite like it in the world’s other major cities. IBM has created similar data centres elsewhere for single agencies like police departments. But never before has it built a citywide system integrating data from some 30 agencies, all under a single roof. It is the handiwork of an IBM unit called Smarter Cities and, if all goes according to plan, it could lay the groundwork for a multibillion-dollar business.

On this day, Guru Banavar, an IBM executive, stood on the balcony above the control room, watching the scene. “I have Guru Banavar, IBM's chief technology officer of the global public sector, in the command centre that the company designed for the city of Rio de Janeiro.

April 2012

seen better infrastructure in individual departments in other cities,” said Banavar, IBM’s chief technology officer of the global public sector. “But I haven’t seen

Technology

44

this level of integration in other cities.”

For IBM, Rio is a crucible. By 2050, roughly 75 per cent of the world’s population is expected to live in cities.

Many metropolitan areas already use data-collection systems like sensors, video cameras and GPS devices. But advances in computing power and data analysis now make it possible for companies like IBM to collate all this data and, using computer algorithms, to identify patterns and trends. Banavar calls it “sense-making software.”

Running a big city, particularly one as varied as Rio, makes running many companies seem easy. No wonder the market to supply cities with ‘smart’ systems is expected to reach $57 billion by 2014, according to IDC Government Insights, a market research firm. IBM wants a piece of that. It is expanding into the local government market as part of a plan to raise its annual revenue to $150 billion or more, Banavar said. In 2011, the company’s revenue was nearly $107 billion.

Rio is the perfect testbed for IBM's Smarter Cities due to its geographical location, varied terrain and multifaceted society.

The Rio operations centre, which opened at the end of 2010, is part of an effort to gain a toehold in a market with more established players like Cisco Systems. (Cisco calls its local government initiative ‘Smart+Connected Communities’. The company is heavily involved in the Songdo International Business District, a new city in South Korea, where Cisco’s network technologies help commercial buildings control energy consumption, for example.)

But even for a company like IBM, Rio represents a grand challenge. A horizontal city sprawled between mountains and the Atlantic Ocean, it is at once a boomtown, a beach town, a paradise, an eyesore, a

Former IBM CEO Samuel Palmisano (L), and current CEO Ginni Rometty (R), receive a key to the city of Rio de Janeiro from mayor Eduardo Paes. IBM received the honour after the successful launch of the Rio Operations Centre.

research centre and a construction site.

The complex conditions create a kind of hothouse for IBM to expand its local government business. If the company

it and know what to do with it, you are

solutions. Since its start in 2010, Smarter

halfway to smart.”

Cities has become involved in several

At 45, Banavar is the unofficial

thousand projects.

can remake Rio as a smarter city, it can

ambassador for Smarter Cities. He flies

The catalyst for the operations centre

remake anywhere. “Smart is all about

around the world, listening to mayors’

was a torrential summer storm here nearly

information,” Banavar said. “Once you

predicaments and overseeing the IBM

two years ago. Around four that morning,

have the information and understand

teams whose job it is to produce the

Paes started receiving alarming reports.

Portfolio

overall project while farming out some

one evening in February, a fire broke

of the work. Local companies handled

out on Visconde de Piraja, an upscale

construction and telecommunications.

shopping street in the Ipanema district.

Cisco provided network infrastructure

Some Cariocas got out their smartphones

and the videoconferencing system that

and took pictures. Just before 7 pm,

links the operations centre to the mayor’s

Pitty Webo, an actress who lives nearby,

house. The digital screens are from

began alerting her Twitter followers. A

Samsung. “We coordinated everything,”

few minutes later, the operations centre’s

Banavar said. “In our terminology, we call

Twitter feed – operacoesrio – reported

it being the ‘master integrator.”’

that traffic was being diverted.

IBM incorporated its hardware,

Luiza Amoedo, an event planner,

software, analytics and research. It created

joined the crowd gawking at flames

manuals so that the centre’s employees

in an adjacent square. Glass panes

could classify problems into four

cracked and crashed into the street.

categories: events, incidents, emergencies

Fire trucks arrived and a red helicopter

and crises. A loud party, for instance, is an

dropped firefighters onto the roof.

event. People beating up each other at a

Down below, it was chaos. Nobody

party is an incident. A party that becomes

had cordoned off the square or moved

a riot is an emergency. If someone dies

onlookers out of the hail of glass. One

in the riot, it’s a crisis. The manuals also

end of the street was closed to traffic,

lay out step-by-step procedures for how

but on the other side, a traffic officer

departments should handle pressing

redirected cars around the crowd.

situations like floods and rockslides.

IBM also installed a virtual operations

“Rio is too far from being prepared.

Nothing works,” Amoedo sighed. “It’s

platform that acts as a web-based

ridiculous. It’s the year 2012. This should

There were landslides in some favelas,

clearinghouse, integrating information

not be happening.”

with the risk of many more. There were

that comes in via phone, radio, email

flash floods. Cars and trucks were stuck

and text message. When city employees

lot of publicity here and abroad. And yet

in rising water. But Rio did not have a

log on, they can enter information from,

many inhabitants have never heard of the

predetermined location from which the

say, an accident scene, or see how many

centre or, if they have, they’re not really

mayor could monitor the situation and

ambulances have been dispatched. They

sure what it does.

oversee a response. “By then, I realised we

can also analyse historical information

were very weak,” Paes recounted in a phone

to determine, for instance, where car

neighbourhoods more than the favelas.

interview. “That also made me mad.”

accidents tend to occur. In addition, IBM

Others fear that all this surveillance has

So he improvised. He had lived in

developed a custom flood forecast system

the potential to curb freedoms or invade

Connecticut as a teenager and

for the city. Banavar even recommended

privacy. Still others view the centre as a

remembered how some United States cities

that the mayor create the position of chief

stopgap that does not address underlying

declared snow days so they could clear

operating officer to oversee the operations

infrastructure problems.

the streets. In the wee hours, he began

centre, and the mayor agreed.

calling television stations, radio stations

The project cost Rio about $14 million,

The operations centre has received a

Some worry that it will benefit well-off

But IBM is hoping that mayors the world over will develop Rio envy. To that

and newspapers, declaring an emergency

Paes said. If it all works according to

end, the company has just introduced

and urging people to stay home. “We had

plan, it could make Rio a model of data-

a product called the IBM Intelligent

no plans for that, but it worked,” Paes said.

driven city management. “We want to

Operations Centre, which combines a

In the city, 68 people died as a result of the

put Rio ahead of every city in the world

number of the systems that were designed

floods and landslides, but the toll might

concerning operations of daily life and

for Rio into a single product.

have been worse if he hadn’t issued the

emergency response,” the mayor said. But,

warning, he said.

he said, the challenge will be to make the

“Previously, you’d have to buy 12

Paes decided that Rio could do better.

city run more efficiently without watering

different pieces and get services to

IBM approached the challenge like

down the brio that makes Rio Rio. “We

integrate it,” Banavar explained. “Now you

don’t want to be Lausanne or Zurich.”

can do it in one shot.” n

a general contractor, managing the April 2012

Think of it as a smart city in a box.

Technology

45

Chinese workers at Foxconn, the world's largest electronics manufacturing company. Foxconn manufactures the iPhone and iPad for apple.

Apple, AmericA And the Middle Class

© 2012 New York Times News service

Apple is a prime example of how American innovation, such as the iPhone, creates manufacturing jobs overseas. But its not really about wages, report Charles Duhigg and Keith Bradsher.

W

hen President Barack Obama joined Silicon Valley’s top luminaries for

make iPhones in the United States?

Not long ago, Apple boasted that its products were made in America. Today,

asked. Jobs’ reply was unambiguous.

“Those jobs aren’t coming back,” he said.

The president’s question touched upon

dinner in California last February, each

few are. Almost all of the 70 million

a central conviction at Apple. It isn’t just

guest was asked to come with a question

iPhones, 30 million iPads and 59 million

that workers are cheaper abroad. Rather,

for the president. But as Steve Jobs of

other products Apple sold last year were

Apple’s executives believe the vast scale of

Apple spoke, Obama interrupted with an

manufactured overseas.

overseas factories as well as the flexibility,

inquiry of his own: What would it take to

Why can’t that work come home Obama

diligence and industrial skills of foreign Portfolio

reUTers

Manufacturing

46

Manufacturing

47

workers have so outpaced their US counterparts that ‘Made in the USA’ is no longer a viable option for most Apple products.

Apple has become one of the best known, most admired and most imitated companies on earth, in part through an unrelenting mastery of global operations.

Last year, it earned over $400,000 in profit per employee, more than Goldman Sachs, Exxon Mobil or Google.

However, what has vexed Obama as well as economists and policymakers is that Apple – and many of its high-technology peers – are not nearly as avid in creating US jobs as other famous companies were in their heydays. Apple employs 43,000 people in the United States and 20,000 overseas, a small fraction of the more than 400,000 US workers at General Motors in the 1950s, or the hundreds of thousands at General Electric in the 1980s.

Many more people work for Apple’s contractors: An additional 700,000 people engineer, build and assemble iPads, iPhones and Apple’s other products. But almost none of them work in the United

eric saragoza joined apple as an engineer in 1995, but as more work moved overseas, he was laid off. apple believes that ‘Made in the Usa’ is no longer a viable option for many of its products.

States. Instead, they work for foreign companies in Asia, Europe and elsewhere,

pocket, he said. People also carry their keys

own backyard for manufacturing solutions.

at factories that almost every electronics

in their pocket. “I won’t sell a product that

But by 2004, Apple had largely turned

designer relies upon to build their wares.

gets scratched,” he said tensely. The only

to foreign manufacturing. Guiding that

“Apple’s an example of why it’s so hard to

solution was using unscratchable glass

decision was Apple’s operations expert,

create middle-class jobs in the US now,”

instead. “I want a glass screen, and I want

Timothy Cook, who replaced Jobs as chief

said Jared Bernstein, who until last year

it perfect in six weeks.” After one executive

executive last August, six weeks before

was an economic adviser to the White

left that meeting, he booked a flight to

Jobs’ death. Most other US electronics

House. “If it’s the pinnacle of capitalism,

Shenzhen, China. If Jobs wanted perfect,

companies had already gone abroad, and

we should be worried.”

there was nowhere else to go.

Apple, which at the time was struggling,

in 2007, a little more than a month

had been working on a project that

before the iPhone was scheduled to appear

presented the same questions at every

semiskilled workers there were cheaper.

in stores, Jobs beckoned a handful of

turn: How do you completely reimagine

But that wasn’t driving Apple. For

lieutenants into an office. For weeks, he

the cellphone? And how do you design it at

technology companies, the cost of labour

had been carrying a prototype of the device

the highest quality – with an unscratchable

in his pocket. Jobs angrily held up his

screen, for instance – while also ensuring

iPhone, angling it so everyone could see

that millions can be manufactured quickly

the dozens of tiny scratches marring its

and inexpensively enough to earn a

plastic screen, according to someone who

significant profit?

For more than two years, the company

attended the meeting. He then pulled his keys from his jeans.

People will carry this phone in their April 2012

The answers, almost every time, were found outside the United States. In its early days, Apple usually didn’t look beyond its

felt it had to grasp every advantage.

In part, Asia was attractive because the

“Apple’s an example of why it’s so hard to create middle-class jobs in the US now.”

is minimal compared with the expense of

plant, hundreds of pieces of glass to use

buying parts and managing supply chains

in experiments and an army of midlevel

that bring together components and

engineers. It would cost a fortune simply

services from hundreds of companies.

to prepare.

to two things,” said one former high-

Then a bid for the work arrived from a Chinese factory.

ranking Apple executive. Factories in Asia

When an Apple team visited, the

“can scale up and down faster” and “Asian

Chinese plant’s owners were already

supply chains have surpassed what’s in the

constructing a new wing. “This is in case

US.” The result is that “we can’t compete at

you give us the contract,” the manager said,

this point,” the executive said.

according to a former Apple executive.

The impact of such advantages became

The Chinese government had agreed to

obvious as soon as Jobs demanded glass

underwrite costs for numerous industries,

screens in 2007. For years, cellphone-

and those subsidies had trickled down

makers had avoided using glass because it

to the glass-cutting factory. It had a

required precision in cutting and grinding

warehouse filled with glass samples

that was extremely difficult to achieve.

available to Apple, free of charge. The

Apple had already selected a US company,

owners made engineers available at almost

Corning Inc., to manufacture large panes

no cost. They had built on-site dormitories

of strengthened glass. But figuring out how

so employees would be available 24 hours

to cut those panes into millions of iPhone

a day. The Chinese plant got the job.

screens required finding an empty cutting

“The entire supply chain is in China

geTTY images

For Cook, the focus on Asia “came down

Timothy Cook, the new CeO of apple, was the company’s operations expert who moved manufacturing offshore.

geTTY images

Manufacturing

48

More than 70 million iPhones have been sold. apple executives believe that asian supply chains have surpassed the Us. Portfolio

now,” said another former high-ranking

toward the end of Obama’s dinner

in America, much of the employment has

Apple executive. “You need a thousand

last year with Jobs and other Silicon Valley

occurred abroad. Companies have closed

rubber gaskets? That’s the factory next

executives, as everyone stood to leave, a

major facilities in the United States to

door. You need a million screws? That

crowd of photo seekers formed around

reopen in China. By way of explanation,

factory is a block away. You need that

the president. A slightly smaller scrum

executives say they are competing with

screw made a little bit different? It will

gathered around Jobs. Rumours had

Apple for shareholders. If they cannot

take three hours.”

spread that his illness had worsened, and

rival Apple’s growth and profit margins,

some hoped for a photograph with him,

they won’t survive.

It is difficult to estimate how much more it would cost to build iPhones in the United States. However, various academics

perhaps for the last time.

Eventually, the orbits of the men

Before Obama and Jobs said goodbye, the Apple executive pulled an iPhone

and manufacturing analysts estimate

overlapped. “I’m not worried about the

from his pocket to show off a new

that because labour is such a small part

country’s long-term future,” Jobs told

application – a driving game – with

of technology manufacturing, paying

Obama, according to one observer. “This

incredibly detailed graphics. The device

US wages would add up to $65 to each

country is insanely great. What I’m

reflected the soft glow of the room’s

iPhone’s expense. Since Apple’s profits

worried about is that we don’t talk enough

lights. The other executives, whose

are often hundreds of dollars per phone,

about solutions.”

combined worth exceeded $69 billion,

building domestically, in theory, would still

In the last decade, technological leaps

jostled for position to glance over his

in solar and wind energy, semiconductor

shoulder. The game, everyone agreed,

But such calculations are, in many

fabrication and display technologies

was wonderful.

respects, meaningless because building

have created thousands of jobs. But

the iPhone in the United States would

while many of those industries started

give the company a healthy reward.

Manufacturing

49

There wasn’t even a tiny scratch on the screen. n

demand much more than hiring Americans – it would require transforming the national and global economies. Apple executives believe there simply aren’t enough US workers with the skills the company needs or factories with sufficient speed and flexibility. Other companies that work with Apple, like Corning, also say they must go abroad.

“Our customers are in Taiwan, Korea, Japan and China,” said James Flaws, Corning’s vice chairman and chief financial officer. “We could make the glass here, and then ship it by boat, but that takes 35 days.

Or, we could ship it by air, but that’s 10 times as expensive. So we build our glass factories next door to assembly factories,

“This country is insanely great. What I’m worried about is that we don’t talk enough about solutions.”

April 2012

Foxconn is the largest exporter in Greater China and has 13 factories in nine Chinese cities. apple contracts with Chinese industry such as Foxconn because it has easy access to the Chinese supply chain. in addition, employees at Chinese companies are thought to be more flexible, diligent, and skilled than american workers.

geTTY images

and those are overseas.”

reuTers

Industry

50

Vaccination containers pass through a machine for quality control on the assembly line at Novartis, a Swiss pharmaceutical firm.

A Bitter Pill European pharmaceutical companies are feeling the brunt of austerity measures across the continent as governments tighten belts and put new measures in place, reports Stephanie Novak.

Š 2012 New York Times News service

P

domestic market.

rofits at pharmaceutical

from the coverage list, or covered at

companies have been declining or

a lower rate. And price reductions in

showing little growth for the past

Europe can have a ripple effect. Profits

measures, drug companies faced

year as austerity measures across Europe

from sales in emerging markets may also

relatively low resistance from European

lead to cuts in health care spending. Some

fall, because governments in emerging

governments when they set prices and

analysts say this trend could continue

markets refer to the prices set in Europe

introduced products. Countries with

until at least 2014.

to determine their own.

strong industrial bases, like Germany,

Budget cuts mean that many European

That would particularly hurt European

Before the recent wave of austerity

France and Britain, allowed companies

governments are not willing to pay as

pharmaceutical companies, which have

the most flexibility in setting prices.

much for pills. But new laws in some

been quite successful in emerging markets

“The euro crisis is forcing governments

countries are also putting pressure on

in the past five years. US companies,

to restructure how they think about

companies to prove their drugs are

by contrast, do not rely as much on

medications,� said Richard Bergstrom,

effective or risk having them dropped

overseas revenue because of their large

director general of the European Portfolio

reuTers

51

Novartis employees in the flu vaccine facility. Novartis, a largely European company, has announced it will lay off 2,000 workers in the United States this year.

Federation of Pharmaceutical Industries and Associations.

restructuring health care systems.

In the past year, pharmaceutical sales to

of $1.34 billion, down two per cent from 2010. In 2011, net profit for the company’s

pharmacies and hospitals declined 2.2 per

West European market was down 11 per

willing to pay are falling, drug companies

cent in France, 3.1 per cent in Italy and

cent from the previous year.

are recalibrating their strategies and

nearly nine per cent in Spain, according

considering economic factors earlier

to Business Monitor International, a

Monitor International, said the clearest

in the process of developing medicines.

company in London that follows the

way to see the effects of the euro crisis

They are also reducing the number

pharmaceutical industry. Analysts say that

on pharmaceutical companies was in

of new drugs in which they invest

it is difficult to predict how badly profits

job cuts. AstraZeneca plans to cut more

research money.

will be affected in the next fiscal year.

Because the prices governments are

On average, West European countries

Other factors, including expiring patents,

spend eight to 12 per cent of their gross

mean that each company’s profit will be

domestic product on health care – a

affected differently.

proportion that has remained stable

Still, “the austerity measures

despite the crisis, according to the

themselves are going to affect everyone,”

Organisation for Economic Cooperation

Bergstrom said. And the numbers are not

and Development. The pharmaceutical

encouraging.

sector, though, is being hit

Novartis, the Swiss pharmaceutical

disproportionately hard because cutting

giant, posted a seven per cent decline in

prices for pills is a quick way to reduce

net income for 2011 despite a 16 per cent

spending, compared with alternatives

increase in sales. AstraZeneca, based in

like cutting money for hospitals or

Britain, posted full-year revenue for 2011

April 2012

Kaushal Shah, an analyst with Business

“Profits from sales in emerging markets may also fall, because governments in emerging markets refer to the prices set in Europe to determine their own.”

than 7,000 jobs in Europe, in addition to the 21,600 positions it has eliminated since 2007. Novartis, a largely European company, will cut nearly 2,000 jobs in the United States this year. Pfizer cut 6,000 jobs in May. In times of hardship, pharmaceutical companies usually lay off sales representatives and protect research and development departments, which lead drug creation. In this crisis, even reuTers

research and development positions face cuts as companies strive to make these departments more efficient so as to reduce costs while maintaining a pipeline of new

Germany, since January last year, has forced drug companies to prove the added benefit of new medications by comparing them to existing treatments.

products. “2011 is the first year recorded where R&D is down in the industry as a whole,” Bergstrom said.

AS EUROZONE countries lower the prices they pay for pills, the European market will also feel the effects of crossreferencing by governments, looking to pill prices in other countries to help determine what they will pay. Portugal, which cross-references by taking an average of the five cheapest prices of a drug in other countries, is one of many reuTers

Industry

52

nations that do this. Italy, Germany and Spain are among other countries that cross-reference. Adding to the challenge

Swiss pharmaceutical workers demonstrate against job cuts in Basel. The banner reads: ‘You're playing away our future!’

Tighter Budgets, Fewer Prescriptions

Many European governments have looked to save money by reducing health care spending, partly by lowering reimbursement of treatment or shortening the list of reimbursed drugs. Growth is sluggish in the United States and Japan, with the most growth expected to come from developing countries like Brazil.

Pharmaceutical spending by country in billions, 2011 +15% +10 + 5 0 − 5

GERMANY

FRANCE

ITALY

SPAIN

PORTUGAL

UNITED STATES

JAPAN

BRAZIL

$51 billion

$45

$31

$18

$6

$331

$127

$25 +8.7%

Yearly change in pharmaceutical spending* by country

’07

’12

’07

−2.5% (proj.)

−10

Source: Business Monitor International

’12

’07

’12

’07

’12

’07

’12

−3.1% −5.4%

−5.5% −10.2%

+0.8% ’07

’12

+0.7% ’07

’12

’07

’12

*In local currencies.

Note: Spending figures are for retail sales in pharmacies and hospitals of prescription and over-the-counter drugs.

THE NEW YORK TIMES

Portfolio

“What the industry is seeing now is that process is not so automatic; payers are not always willing to reimburse at a higher rate for a newer, better treatment if there is already a treatment available for patients that costs significantly less,” said Matthew Cabrey, senior director of corporate communications for Shire Pharmaceuticals.

Shire, based in Dublin, is the maker of Adderall, a blockbuster drug for attention deficit hyperactivity disorder, or ADHD. reuTers

Five years ago, Shire began studies that compared its drugs with others on the Pharmaceutical companies normally lay off sales staff but protect the research and development departments that lead drug creations. Lat year was the first time that R&D fell across the industry.

market, analysing its amphetamine-based ADHD medications against competing treatments widely prescribed in Europe.

for companies is the need to show newly

to other medicines and therapies already

“Financial conditions have highlighted

cost-conscious governments that their

available, making Germany the first

and accelerated the need to demonstrate

drugs are cost effective.

country in the eurozone to enact such

value for medicines,” Cabrey said.

Germany, Europe’s largest

measures as a major part of changes to

He said that while conducting the extra

pharmaceutical market, has required drug

health care policy. Partly as a result of

tests had not directly increased Shire’s

companies since January 2011 to prove

these changes, the German government

cost of doing business, it had significantly

the added benefit of a new medication

reported saving ¤1.9 billion on drugs in

affected planning. Shire now considers

by producing documentation comparing

2011, three times the savings in 2010,

the economics of pharmaceuticals much

it with other treatments on the market.

Business Monitor International said.

earlier in the development process. That

The German government will now pay

Drug companies worry that actions

can lead to certain medicines not being

in Germany could hurt sales in other

developed if it seems unlikely that the

demonstrate a unique benefit in relation

European markets.

market will recognise their value. n

reuTers

higher prices only for drugs that clearly

Swiss drugmaker Roche struck a cautious note on 2012, as the sector grapples with further European austerity measures.

April 2012

Industry

53

Technology

54

The Password IrrITanT Technology improves in leaps and bounds, but the method for getting into secure accounts has stubbornly remained the same. Now efforts are under way to liberate us from the drudgery of passwords, reports Somini Sengupta.

P

asswords are a pain to

Department is looking for ways to use

proved themselves a worthy opponent:

remember. What if a quick wiggle

cues like a person’s typing quirks to

All those who have attempted to replace

of five fingers on a screen could

continuously verify identity – in case, say,

them have failed.”

log you in instead? Or speaking a simple

a soldier’s laptop ends up in enemy hands

phrase?

on the battlefield. In a more ordinary

works because, as it happens, each person

example, Google recently began nudging

makes the same gesture uniquely. Their

scientists in New York are training their

users to consider a two-step login system,

fingers are different, they move at different

iPads to recognise their owners by the touch

combining a password with a code sent

speeds, they have what he calls a different

of their fingers as they make a caressing

to their phones. Google’s latest Android

“flair”. He wants logging in to be easy;

gesture. Banks are already using software

software can unlock a phone when it

besides, he said, some people find biometric

that recognises your voice, supplementing

recognises the owner’s face or – not so safe

measures like an iris scan to be “creepy.”

the standard PIN. And after years of

– when it is tricked by someone holding up

predicting its demise, security researchers

a photograph of the owner’s face.

© 2012 New York Times News service

Neither idea is far-fetched. Computer

The touch-screen approach of Memon

In his research, the most popular gestures turned out to be the ones that

are renewing their efforts to supplement

Still, despite these recent advances, it

feel most intuitive. One was to turn the

and perhaps one day obliterate the old-

may be premature to announce the end of

image of a combination lock 90 degrees

fashioned password.

passwords, as Bill Gates famously did in

in one direction. Another was to sign

“If you ask me what is the biggest

2004, when he said: “the password is dead.”

one’s name on the screen. In principle, the

nuisance today, I would say it’s the 40

“The spectacularly incorrect assumption

gesture can be used to unlock a device, or

different passwords I have to create and

‘passwords are dead’ has been harmful,

an app on the device that safely holds a

change,” said Nasir Memon, a computer

discouraging research on how to improve

variety of passwords.

science professor at the Polytechnic

the lot of close to two billion people who

Institute of New York University in

use them,” Cormac Herley, a researcher

weak, notably because their users have

Brooklyn who is leading the iPad project.

at Microsoft, the company that Gates

limited memories and a weakness for

founded, wrote in a recent paper. Herley

blurting out secrets. Most people need

has become a monkey on our digital backs

suggested instead that developers try “to

dozens of them, and they tend to pick ones

– an essential key to our many devices

better support the use of passwords” – for

that are so complex they need to be written

and accounts, but increasingly a source of

example, by helping people protect their

down, or so simple they can be easily

exasperation and insecurity.

wireless connections from eavesdroppers.

guessed. Recently, criminals have become

“Passwords,” Herley continued, “have

adept at stealing passwords by sneaking

Many people would agree. The password

The research arm of the US Defence

Despite their resilience, passwords are

Portfolio

Technology

55

malicious software onto computers or tricking users into typing them into an illegitimate site.

Companies like Facebook and Twitter have sought to address the frustration with passwords by allowing their usernames and passwords to open the door to millions of websites, a convenience that brings obvious risks. A thief with access to a master username and password can have access to a host of accounts. rachna dhamija, a California computer scientist turned entrepreneur, sought to combat those weaknesses by breaking up the password. The user first logs in to the service that Dhamija built, UsableLogin, and signs in with her own

Computer scientists in New York are training iPads to recognise their owners through the 'flair' in which they turn a combination lock.

partial password. Behind the scenes, the service verifies that the user is on an authorised device, and pulls the third

stored in its whole form anywhere.”

But even if a user has been authorised

be as simple as “at my bank,” and a million customers could recite the very same

piece from the cloud, generating a unique

at the start of a session, what if someone

phrase and still sound unique, according to

password for any website that the user

else gains access to her computer an hour

Nuance Communications, a company based

wants to log in to – Facebook, for instance.

later? DARPA, the Defence Department’s

in Burlington, Massachusetts, that makes

In other words, one piece of the password

technology research arm, has invited

the technology.

rests with the user, another is stored in her

security researchers to develop ways to

As mobile phones become bodily

device, and a third piece is kept online.

verify a user every instant, based on the

appendages for people worldwide, they

“You take a secret and you spread it

way the individual uses the machine – “for

too are emerging as instruments to verify

across,” said Dhamija, whose service was

example, how the user handles the mouse

identity. Google introduced its two-step

recently acquired by Webroot Software,

and how the user crafts written language

process earlier in 2011. It sends a six-

based in Broomfield, Colorado. “You’re

in an email or document,” it explains on

digit code to an application on a Google

spreading the risk. The password is not

its website.

user’s cellphone to be entered, along with

“The user first logs in to the service that Dhamija built, UsableLogin, and signs in with her own partial password. Behind the scenes, the service verifies that the user is on an authorised device, and pulls the third piece from the cloud, generating a unique password for any website that the user wants to log in to” April 2012

Each of these techniques is driven

a password, when signing onto a Google

by the notion that a password alone

account on a computer or tablet. The code

is an insufficient means to verify

can also be sent as a text message for those

online identity. Think of them as a

who don’t have smartphones, or it can be

fortification: a password plus.

conveyed through a phone call.

Many companies use a smart card or a

The extra step is not mandatory, and

security ‘dongle’ – a small piece of hardware

the company will not say how widely it

that plugs into the computer and functions

has been adopted. But as vulnerable as

as a key – as that second step of verification

passwords are to theft and compromise,

to allow access to internal networks. Today,

Google says, it is increasingly important

biometrics – an individual’s unique physical

for a user’s identity to be verified through

traits – are emerging as an alternative.

another channel – a cellphone, in this case.

“I think we’ll start to see people using

at least a half-dozen banks in the

their mobile devices as their pervasive

United States ask their customers to verify

identifiers,” said Brendon Wilson, a security

who they are by reciting a two-second

researcher at Symantec. “The password will

phrase to a computer over the phone, in

no longer be the final arbiter that you are

addition to punching in their PINs. It could

you. You will see layers on top.” n

Trends

56

Brazil Absorbs Haitian ImmIgrAnts

© 2012 New York Times News service

Many Haitians have migrated thousands of kilometres to work in booming Brazil that needs the labour. For the time being, Brazil is welcoming them, reports Simon Romero.

O

f the odyssey that

Panama and then in Ecuador. That was

I’m told is building everything, stadiums,

delivered him to the town

where his wife gave birth to their son,

dams, roads,” said Saint-Fleur, 27, a

of Brasileia in the Brazilian

Isaac, he said, bouncing the four-month-

construction worker, one of hundreds of

Amazon, Wesley Saint-Fleur could

old infant on his knee and brandishing

Haitians who gather each day around the

only muster a look of exhaustion and

the boy’s Ecuadorean identification card.

gazebo in Brasileia’s palm-fringed plaza.

bewilderment.

Then they continued by bus yet again,

“All I want is work, and Brazil has jobs

through Ecuador and Peru. Next, they

for us.”

Months ago, he boarded a bus in Haiti, before getting on a plane in the Dominican Republic, landing first in

trekked by foot in Bolivia.

“Then we finally got to Brazil, which

Gambling everything, thousands of Haitians have made their way across the Portfolio

57

Haitians sit in the main square of Brasileia. Gambling everything, thousands of Haitians have made their way across the americas to reach small towns in the Brazilian amazon over the past year in a desperate search for work.

Americas to reach small towns in the

foreign labourers but also for growing

crowd eight to a small hotel room or

Brazilian Amazon over the past year in

numbers of educated professionals

wind up sleeping on the streets, almost

a desperate search for work, including

from Europe, the United States and

reliving the misery they had hoped to

a surge of hundreds arriving recently

Latin America.

leave behind. “I cannot allow the sadness

amid fears that Brazil’s government could

Upon arriving in Brasileia and in other

to take over, since opportunity will follow

slow the influx before it overwhelms the

border outposts, the Haitians are often

this hard phase,” said Simonvil Cenel,

authorities here.

given vaccinations, clean water and two

33, a tailor awaiting a visa who leads

meals a day by the authorities. Many stay

animated prayer services for those

rubble of their island homes to remote

for weeks in Brasileia and other towns

stuck in limbo after enduring so much

outposts in the Amazon – say as much

before being granted humanitarian visas

to get here.

about the dire economic conditions

that allow them to work in Brazil.

Their improbable journeys – from the

that persist in Haiti two years after the

But with such a crush of new arrivals,

About 4,000 Haitians have immigrated to Brazil since the 2010 earthquake, often

earthquake as it does about the rising

others have not been so lucky. After

going first through Ecuador, a poorer

economic profile of Brazil, which is fast

travelling thousands of kilometres and

country with lax visa policies. Brazil

becoming a magnet not only for poor

overcoming countless obstacles, some

has made an exception for Haitians in

April 2012

Carvalho said her company quickly

contrast to job-seekers from nations like

Brazilians growing seven times as much as

Pakistan, India and Bangladesh, who

the income of rich Brazilians from 2003

hired 37 Haitians who arrived last year,

arrive via similar Amazonian routes but

to 2009.

to collect trash in Porto Velho and take

are usually expelled.

“We were experiencing a decline in our

it to the city’s landfill. Some make more

workforce because so many Brazilians are

than $800 a month, in a job that includes

period of crisis, and Brazil is in a position

going to work at the two hydroelectric

benefits like health insurance, overtime

to help these people,” said Valdecir

projects,” said Ana Terezinha Carvalho,

and paid holidays. “There weren’t enough

Nicacio, a human rights official in the

the personnel management analyst at

Brazilians, so we were happy to hire the

state of Acre, encompassing Brasileia.

Marquise, a company in Porto Velho.

Haitians,” she said.

“Before getting here, they are at the mercy

The city lies in the upper Amazon

of human traffickers,” he said. “Brazil is

River Basin, where Brazil is employing

500 Haitians now live in Porto Velho and

big enough to absorb Haitians who just

thousands to build two big dams, called

that about 700 are in Manaus, the largest

want jobs.”

Jirau and Santo Antonio.

city in the Brazilian Amazon. Hundreds

“Haiti is recovering from an extreme

The authorities estimate that about

With the number of Haitians sharply increasing, the authorities in Brasileia and Tabatinga, a border city in Amazonas state, have warned of the strains of trying to feed and house the Haitians while visa applications are reviewed. Federal officials have responded by sending tonnes of food for the Haitians, who number more than 1,000 in each border settlement.

“The authorities estimate that about 500 Haitians now live in Porto Velho and that about 700 are in Manaus, the largest city in the Brazilian Amazon.”

reuTers

Trends

58

Haitians work at a plastic factory in Manaus. Most Haitians work in construction and in factories, according to the association of Haitian Workers in Manaus.

dealing with an immigration crisis on its border is a new dilemma for Brazil, which until recently was more concerned with the outflow of its own citizens seeking opportunities in rich industrialised countries than responding to the arrival of thousands of impoverished foreigners.

Though economic growth has recently slowed in Brazil, unemployment remains at a historic low of 5.2 per cent, and many companies have trouble finding enough workers to fill vacancies. Wages have also climbed for those at the lowest rung of the job market, with the income of poor

a Haitian man at a hotel window in Brasileia. He and others hope to gain visas and obtain work in Brazil's booming construction industry.

Portfolio

reuTers

Trends

59

Haitian immigrants wait to receive food at a shelter in inapari, Peru's border with Brazil. Feeding so many immigrants is putting pressure on local governments.

more have made it to São Paulo, Brazil’s

a few weeks in Brasileia’s immigration

economic capital. Companies like

limbo, before moving on. Some, like

Fibratec, a swimming pool manufacturer

Francisco Joseph, 25, make the most of

in southern Santa Catarina state, have

the time here. He buys prepaid cellphone

even sent managers all the way here to

cards across the bridge in the Bolivian city

hire dozens of Haitians.

of Cobija and sells them to fellow Haitians in Brasileia’s plaza at a markup of about

cheap labour, the effort to let Haitians

30 cents a card. He makes as much as

work in Brazil speaks to the country’s

$10 a day.

ambitions of wielding greater regional influence, by attempting to find ways of alleviating problems in the hemisphere’s

“This little bit of money gives me some dignity,” he said.

Others, like Jacksin Etienne, 31,

poorest nation. Since 2004, Brazil has

nurture bigger dreams. A polyglot

sent troops to lead a UN peacekeeping

who glides with ease between English,

mission in Haiti. But there are now more

Spanish, French and Creole, Etienne said

Haitians in Brazil than Brazilian soldiers

he hoped to work as a translator or in a

in Haiti. In September, Brazil announced

hotel. “I want to go straight to São Paulo,

that it would start drawing down its 2,000

the New York of South America,” he said.

troops in the Caribbean nation.

“Brazil’s a rising kind of place, and it

Most of the Haitians hope to spend just April 2012

needs people like me.” n

reuTers

In addition to meeting demand for

Construction of the Santo antonio dam near the Brazilian town of Porto Velho has created a local labour shortage, creating jobs for Haitian immigrants.

A New Model for frANce?

The German economy has powered far ahead of France’s, and the gap is increasing annually. President Nicolas Sarkozy wants the French economy to become more German, but there is opposition, reports Steven Erlanger.

The ancienT Town of SeleSTaT

years of age, the unemployment rate in

characteristic bluntness that the French

in the centre of Alsace boasts the

Selestat is 23 per cent; in Emmendingen,

should become more like the Germans.

extraordinary Humanist Library, dating

it is seven per cent.

In a recent joint television interview with

from the 15th century. But less proudly,

The divergent economic circumstances

Chancellor Angela Merkel of Germany,

Selestat also has an unemployment rate

of these two towns are striking,

he raised Gallic eyebrows by mentioning

of about eight per cent, much higher than

particularly given the cross-border

the word Germany or German at least 15

towns just across the border in Germany.

cultural ties in the region. The reasons

times, or about once a minute. The issue

Emmendingen, a German town of

for the disparities, much debated, have

for Sarkozy is job creation. Unemployment

27,000 that is only slightly larger than

emerged as a focal point of the French

in France is at a 12-year high and rising.

Selestat and barely 32 kilometres away,

presidential campaign.

Germany’s unemployment rate, at 7.4

has an unemployment rate of less than three per cent. Among those under 25

Š 2012 New York Times News service

Economics

60

Fighting for his re-election, President Nicolas Sarkozy of France has said with

per cent, is at its lowest point since reunification in 1991.

A view of downtown Selestat in France. The reasons behind the disparities in the German and French economies have emerged as focal points of the French presidential campaign.

Portfolio

If re-elected, Sarkozy proposes a

campaign for him. But she appeared to

national referendum to approve a more

back off recently when it seemed that her

flexible labour market, featuring a

open support might hurt Sarkozy more

German-style apprenticeship. He wants

than help, by wounding French pride and

to allow more part-time work, like the

making him look like a supplicant.

Germans, and to subsidise more jobs for

Nevertheless, Sarkozy is betting that

youth and raise the value-added tax to

the problems in the French economy,

reduce the cost of social-welfare charges

where youth unemployment is 23 per cent

for employers, as the Germans also do.

nationwide and exports are declining, are

His Socialist opponent, Francois

Economics

61

so profound that voters will overcome

Hollande, rejects most of those ideas,

their deep-seated reluctance and be more

preferring more traditional Socialist

receptive to at least a variation on the

responses like more state spending on

German model. But it is not always clear

education and job creation. Many French

what that would entail, and whether the

admire the Germans but do not want to

French would ever stand for it.

emulate them. “We appreciate their rigor and discipline, but that’s not all there is in

one Thing is abundantly clear,

life,” said Alexandre Boer, 52, who works

however. The German economy has

in Selestat with young people facing long-

powered far ahead of France’s, and the

term unemployment.

gap is widening every year. Germany

Sarkozy and Merkel have had a

has maintained its industrial base and

strained relationship, but it has improved

competitive edge, both technologically

markedly in the pressure cooker of the

and in terms of cost, while France lacks

euro crisis, and Merkel once had plans to

a large sector of medium-size industrial German Chancellor Angela Merkel and French President Nicolas Sarkozy have forged a close relationship. Sarkozy’s reelection campaign is centred on the lagging French economy.

enterprises and depends much more on services. The French share of global exports has steadily fallen, while the German share has steadily risen.

French salaries have increased in real terms while German salaries have fallen, making French workers more expensive and thus less productive and competitive.

French social protections for the unemployed are also much more lavish, especially after the Germans pushed through the so-called Hartz reforms, which largely limited unemployment benefits to 12 months. In France, the duration is 23 months for those under 50 France offers more social protection for the unemployed than Germany, which makes French labour more expensive and is a contributing factor to rising unemployment.

April 2012

and three years for those over 50, many of whom never work again.

In part to pay for those benefits, the cost to business of an hour’s labour is 11 per cent higher in France. But there is

Economics

62

less job security in Germany, and more

on the German side as on the French one,

The mayor of Emmendingen, Stefan

Germans do part-time work. The Germans

said Norbert Mattusch, who works on

Schlatterer, says that “there is a job here

do not have a centrally fixed minimum

cross-border cooperation for the German

for anyone who can count to 10,” but one

wage, as the French do.

Federal Employment Agency in Freiburg.

needs to count in German.

The practical results of these trends

While some Germans cross the border

Salaries on the German side are higher

are visible in these border towns, where

to work in France, few French do the

for similar work, goods are cheaper,

the shape of industry – largely small-to

same, except for seasonal labour at the

the cost of hiring a full-time employee

medium-size metal-working companies or

large amusement park nearby, Europa-

is lower and the relationship between

factories – is similar. For example, there

Park, the largest in Germany and the

German workers and their bosses is more

are 10 times as many job offers a month

third-largest in Europe, which draws

supple and flexible, freer of the centralised

many French-speaking customers.

regulations, ministries and unions

France and Germany, Key Economic Indicators France

Germany

Gross Domestic Product Euros per person, quarterly data

“We have job openings right now for 70 “But the big problem is that the French

BuT while the French may admire

don’t speak German,” so they cannot

German rigor, they are reluctant to make

qualify for the jobs, and young people

some of the same sacrifices, including

here no longer speak the Alsatian dialect,

longer hours and less job security.

once used on both sides of the border.

8,000 4,000 2,000 ’08

’11

Inflation Monthly average +4% +3 +2 +1 0 –1 2005

Boris Gourdial, director of the Freiburg branch of the German Federal

6,000

0 2005

characteristic of France.

drivers of heavy trucks,” Mattusch said.

’08

’10

’12

Unemployment Rate Monthly average

“Salaries on the German side are higher for similar work, goods are cheaper, the cost of hiring a fulltime employee is lower and the relationship between German workers and their bosses is more supple and flexible.”

Employment Agency, said that mentalities were different, despite shared history and proximity. “The French work to live and the Germans live to work,” he said, a cliche that still resonates.

His French colleague, Roxane Pierrel, who runs the employment office in Selestat, smiles politely. She points out that the French have more children than the Germans and more women are in the workforce, which swells the numbers looking for work. But she acknowledges

Helmut Stang works at a machine shop in Emmendingen. Germany’s apprenticeship system is a major factor in the country’s economic competitiveness.

12% 9 6 3 0

2005

’08

’10

’12

Note: Eurostat’s data may be different from data released by each country because of methodology differences.

Source: Eurostat The New York Times

Portfolio N.Y. Times News Service

Economics

63

that the Germans are doing better at job training for young people, especially with a nationwide apprenticeship system that Sarkozy wants to introduce more widely in France. “The systems may be different,” she said. “But all the enterprises on both sides of the border are looking for competence.”

Many laBour experts single out the German apprenticeship system as a major competitive advantage. It takes young people out of the university track at 16 and trains them in industrial skills, as they study for a technical degree and work for a salary. They often get full-time jobs with companies that have invested in training.

Unlike in the rest of France, there is a vestigial apprenticeship system in Alsace, which was at different times a part of

Emmendingen has an unemployment rate of less than three per cent, while Selestat’s is eight per cent.

Germany. But it is closer to a French “alternance” model of vocational training, which also combines education and work, but is less widespread among companies and less popular.

Many French parents and their children still regard a vocational degree or apprenticeship – instead of a university degree – as a sign of stupidity or failure, Pierrel said. “We have to convince young people, since it’s not well accepted in the family,” she said. In France, “it means being a bad student. In Germany, it doesn’t devalue someone.” But she is beginning to see a change, she said. “Companies here are working with schools to promote apprenticeships,” and more young people see the advantage of a salary at a decent job as preferable to unemployment.

Marcel Bauer, the mayor of Selestat and its 21,000 people, also sees a change. He

Looking for work at an employment agency in Selestat. In the under 25 age group, the unemployment rate is 23 per cent.

says he is proud of the local apprenticeship

not consensual,” he said. “German workers

more regional partnership with the

system, which he thinks should be

accept that they must make efforts in a

Germans, including with the mayor of

developed in the rest of France. But unlike

crisis, and work less and earn less to keep

Emmendingen, Schlatterer. Both mayors

in Germany, where the states and localities

their jobs.” But “with us,” he said, “it’s an

speak emotionally of the importance of

can set many of their own rules, in France,

immediate battle and a strike and people

French-German cooperation. “I feel the

he said, “the national Education Ministry

in the streets.”

centre of the European idea is the really

wants to keep all control.”

Bauer, mayor since 2001, has also

close partnership between France and

been promoting more bilingual classes,

Germany,” Schlatterer said. “When France

warfare in France. In general, labour

so local students will learn some

and Germany are close to one another,

relations in France “are confrontational,

German. He has been trying to promote

Europe works.” n

Bauer also bemoans the constant labour

April 2012

65

Essentials

The besT of leisure and lifesTyle

Life ALong the ZambeZi The Zambezi River winds its way through southern Africa like a lifeline, clustering both humans and animals along its banks, reports Graham Simmons.

The 3,540-kilometre-long Zambezi is the fourthlargest river in africa.

April 2012

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Essentials

Travel

I

t may not be the biggest

than 20 per cent of African households

the country lying within the Zambezi

river in Africa, but the Zambezi is

currently connected to the power grid,

River Basin (including the tributary rivers

still mightily impressive. As well

hydropower from the Zambezi could be a

the Kafue and Luangwa). So when heavy

as being a vital water resource

huge stimulus for economic development.

rains occur in the Upper Zambezi, there

for no fewer than nine countries,

Of all the countries along the Zambezi,

is sure to be flooding further downstream.

the Zambezi river has enormous

Zambia is one of the most dependent

Record rainfall in the Upper Zambezi in

hydroelectric potential. With fewer

upon the river, with over 80 per cent of

December 2010 and January 2011 caused major floods downriver in Mozambique,

The Victoria falls, known locally as Mosi oa Tunya (the smoke that thunders), lays claim to being the world’s widest waterfall with a width of 1,708 metres.

with over 23,000 families affected and more than 20,000 hectares of crops damaged. And this year is shaping up to be no better, with severe flooding reported in February 2012 around the town of Kasangula, on the border between Botswana and Zambia.

One question that inevitably arises is whether these floods are due to global warming. The answer is “maybe”.

Commenting on last year’s flood levels John Berry, managing director of Zambezi Travel and Safari Company, was quoted as saying: “We have floods every season, but this is the third year in a row of particularly heavy flooding.”

Whether or not global warming is for real, it’s great to get a handle on the wonders of the Zambezi starting out from Kazangula, some 90 kilometres west of Mosi Oa Tunya (aka the Victoria Falls). Kazangula marks one of the most remarkable borders on earth, with no fewer than four sovereign nations – Namibia, Zambia, Botswana and Zimbabwe – converging right here. And just minutes by road from the “Four Corners” junction, Chobe National Park is an extraordinary nature reserve, home to the world’s biggest concentration of elephants.

Crossing the Zambezi on the lumbering Kazungula ferry (soon to be replaced by a 700-metre-long bridge), I catch a glimpse of Namibia’s Caprivi Strip, a narrow finger of land wedged between Angola and Botswana. The Namibians were more than just a little peeved when the International Court of Justice recently awarded the whole of Chobe National Park to Botswana. Not so peeved are day-trippers from Livingstone in Zambia; Jacqui, a stylish young Zambian resident, Portfolio

Essentials Travel regularly visits the Namibian border

with bewilderment. Livingstone was

his talents to developing a cotton export

town of Katima Mulilo to shop. “Prices

passionate about ending slavery in Africa

trade, convinced that village prosperity

in Namibia are half of what they are in

– so passionate that many considered him

would be the key to ending slavery.

Livingstone,” she says.

just a little unhinged. Coming to Africa as

Livingstone town is too quirky

David Livingstone thought that the

a missionary, Livingstone made just one

Zambezi could be “God’s Highway” to the

convert in eight years; but he then turned

Indian Ocean. But he failed to properly

to be described as “nondescript”. It

survey the route, not realising that the

somewhat resembles a Wild West movie

Cahora Bassa gorge in Mozambique made

set; but instead of guns, the characters

the river unnavigable. The project ended

carry tawdry trinkets and fat wads of

in disaster. If he hadn’t somehow pulled

various currencies. Dealers in bootleg

the greatest publicity stunt of all time in

petrol from Botswana find a ready outlet

being found by the reporter H.M. Stanley,

amongst the taxi drivers of Livingstone, as

Livingstone’s name might have vanished

the Botswana petrol costs around 30 per

from history faster than the water-spray

cent less than the local product.

issuing from Mosi Oa Tunya.

In Livingstone, the name of the Scottish explorer David Livingstone is still remembered with fondness mixed

The bullion bureau changes all known and most unknown currencies in Chirundu, Zambia.

It’s a little weird that Livingstone renamed the world’s widest and possibly most spectacular waterfall the “Victoria Falls”, after a monarch who would sadly never lay eyes on her namesake. The native name for the falls, Mosi oa Tunya (“the smoke that thunders”), is certainly more poetic and evocative. On the Zambia side of the falls, the sound you hear is not that of a thousand simultaneous military tattoos – it’s the thundering cascade of a drenching, two-kilometre-wide stretch of water that plunges down in an ethersplitting roar.

The Victoria Falls are just a threeminute walk from the grounds of the Zambezi Sun resort. I was bewildered

Crossing the Zambezi at Kazangula. botswana is on the left bank, Zambia on the right bank, and namibia in the background.

The Knife edge bridge at Victoria falls. leave your camera at home unless it is waterproof.

by the extraordinary dinner buffet at the Zambezi Sun, which includes such delights as kudu curry, braised crocodile and Nshima, the Zambian staple, made of polenta with a sauce of tomato and onion.

In a totally different category is the Royal Livingstone Hotel. The Royal Livingstone is pure luxe, a director’s cutand-a-half above the Zambezi Sun. But for those on a budget, it may be better to stay in Livingstone town (best choice is the Zigzag; see zigzagzambia.com) and catch a cab to the falls.

Tracks to the falls afford a great variety of views. The Eastern Cascade is impressive, but gives the merest hint of the sheer breadth and power of Mosi Oa Tunya. For the best views, cross the

April 2012

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Travel

suspension bridge (more than likely

the myriad sights and sounds of the river

Egypt’s Lake Nasser claims this honour;

getting waterlogged in the process), and

will be similar – from the trumpeting of

but at 42 kilometres wide by over 290

crest a ridge with a viewing platform. All

elephants on the riverbanks to the gentle

kilometres long, Lake Kariba is still an

the while, the drenching spray seems like

lap of the waves against the boat’s bow as

awesome expanse of water. It certainly

a mixture of water, smoke, steam and the

it rounds the islands in mid-river.

seems to impress the government officials from Lusaka, who flock here on padded

vapours of primordial nature at its wildest Further down the Zambezi from

expense accounts to attend conferences,

Livingstone is the super-scenic Lake

with lake cruises and poolside gatherings

is a cruise along the Zambezi – and

Kariba, which used to be the world’s largest

all part of the package.

after the recent rains, the bush is lush

manmade lake, damming the river just

indeed. Whatever the cruise company,

above the Mozambique border. Nowadays,

and most furious.

From Livingstone, a great option

Lake Kariba is named after a giant rock outcrop believed by the local Tonga people to be the abode of the river god Nyami-Nyami, who is said to have been outraged by the construction of the dam and reacted by causing severe floods. If you can withstand Nyami-Nyami’s wrath, a good place to stay is Siavonga, a little town right on the shores of Lake Kariba.

About 100 kilometres from Siavonga, via the Zimbabwe/Zambia border town of Chirundu, the Lower Zambezi National

elephants cross the Zambezi during the dry season at the same places they’ve used for centuries.

The Zambezi above the falls contains large populations of hippopotamus and crocodile.

“Whatever the cruise company, the myriad sights and sounds of the river will be similar – from the trumpeting of elephants on the riverbanks to the gentle lap of the waves against the boat’s bow as it rounds the islands in mid-river.”

The Zambezi is home to the nile crocodile, which grows up to 5.5 metres in length. swimming is not advisable.

Portfolio

Essentials Travel

The Kariba dam, which was finished in 1959, created the world’s second largest manmade lake. only egypt’s lake nasser is bigger.

Park is the newest of Zambia’s 19 national parks. The Lower Zambezi National Park is divided into two sections, the Chiawa Game Management Area and the National Park Proper. the Chiawa Game Management Area is home to Kanyemba Lodge. Luxury is the word to describe this place – but for such a luxurious abode, prices are surprisingly reasonable. All activities, meals, drinks and transfers to and from Lusaka or Livingstone are included in the tariff.

The manager of Kanyemba Safari Lodge, Riccardo Garbaccio, is Zambian by nationality but of Italian origin. “I was born here in Zambia,” he says. “I never wore shoes until I went to school in Italy at the age of 10. I grew up completely

View from the deck of Kanyemba lodge in the Chiawa Game Management area.

colour-blind, and have never found any is awesome. Boat driver Stafford points

the Zambezi River has a L-O-N-G way to

out the natural wonders of the river, from

go to its mouth at Chinde, on the Indian

didn’t have much of an impact in the

birdlife to hippopotami grazing on the

Ocean. The people of landlocked Malawi

Lower Zambezi. “Most of the rainfall

riverbanks. “In the dry season,” he says,

and Zambia are itching to get access to

was in the upper part of the river,” says

“you can spot lions, leopards and elephants

Chinde Port, but negotiations are dragging

Garbaccio. “By the time it reached us, the

coming right down to the river to drink”.

on seemingly interminably.

racial disharmony anywhere in Zambia”.

Fortunately, the rains of early 2011

river levels had gone way down.”

The range of activities at Kanyemba April 2012

From Kanyemba, it’s just a short distance to the border with Mozambique. From here,

Maybe it’s time to get the river god Nyami-Nyami onside! n

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Mr Zeitgeist Tyler Brule has started not one but two successful culture magazines: Wallpaper and Monocle. And he’s managed to do that by bucking conventional wisdom, reports Alex Williams.

O

n a rainy new york

director of J. Crew. “I travelled with him

Canadian who keeps his perma-stubble

to Japan, and every place we’d walk in,

huddled over a cappuccino

artfully cropped like Tom Ford’s, has gone

they’d say, ‘Oh, Mr Brule, so nice to meet

at Le Pain Quotidien in

outside the publishing establishment and

you!’ And it was all kinds of stores: tech

Greenwich Village, offering a peek at

started two culture magazines regarded as

stores, clothing stores, furniture stores.”

the future: a Heritage G2 tabletop radio

essential in certain design-savvy circles:

designed for Monocle 24, a new radio

Wallpaper and Monocle.

station he is starting.

There is something Teutonic and mid-

And he did so while upending notions of what a media company does.

When was the last time a magazine editor inspired such adulation?

In the world according to Monocle, Brule is the walking cynosure of the good life. In addition to his global media

century about the G2, which is made in

While everyone hailed the iPad as the

Scotland from brushed aluminium and

saviour of print, Brule put out a limited-

company, for which he won Advertising

American walnut. Despite an iPhone

edition newspaper for the slopes of Gstaad

Age’s “editor of the year” award in

dock and OLED screen, it looks like a

and the beaches of Cannes. While retailers

October, he writes a column, Fast Lane,

machine built for breaking bulletins on

rushed online, Brule opened a chain of

in The Financial Times, in which he

the Berlin crisis of 1961.

Monocle boutiques, a micro-extension of

chronicles his adventures as a globe-

the magazine’s shopper-as-curator ethos.

trotting connoisseur, bent on unearthing

Brule, 43, who looked immaculate in a

And while music migrates to the cloud,

the rarefied and idiosyncratic. (He was

custom blue flannel blazer, rolled Edwin

Brule started a radio station, with “an

also a columnist for T: The New York

jeans and Pierre Hardy desert boots

international playlist” that samples sounds

Times style magazine.) In a recent Fast

that seemed box-fresh, despite dodging

“from Seoul to Stockholm.”

Lane column, he regaled readers about a

“It’s an object with provenance,” said

puddles all day. “There’s clearly a design

© 2012 New York Times News service

For the last 15 years, Brule, an Estonian-

Thursday, Tyler Brule

The common thread behind these

dinner at a ryokan, a traditional country

language there which hearkens back

disparate ventures is Brule himself, who

inn, near Karuizawa, Japan. One of the

to the work of the German industrial

embodies the border-agnostic sophisticate

“small luxuries of ryokan life is the total

designer Dieter Rams.”

whom the Monocle brand is built around.

lack of choice when it comes to dining,”

His globe-trotting persona (cocktails-

Brule wrote. “While I’m not always up for

device, which few people under 40

with-Danish-diplomats intellectualism,

an elaborate 17-course kaiseki dinner, I’m

seem to own, holds the key to his media

sleeper-seat jaunts to Taipei) has inspired

nevertheless thrilled that someone’s done

empire’s next phase might strike some as

legions of followers, who hang on his

the thinking for me.”

far-fetched, if not downright delusional.

oracular pronouncements on what’s next.

But then again, Brule has made a career

“There is definitely a cult of Tyler,” said

The idea that a century-old electronic

of defying conventional wisdom.

Jenna Lyons, the president and creative

His discriminating palate has earned him the admiration of fellow tastemakers.

“Tyler is able to suck you into his world Portfolio

Essentials Profile

Brule, whose media empire is growing, is the one to ask if you want to know what’s the next big thing.

April 2012

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tables during meetings,

West Coast snowboarder, a copy writer

but present them standing,

for a hot advertising firm in Stockholm or

with an air of Asian

a grunge kid working in an indie record

deference. The rules are

shop that suddenly got a film deal, there’s

unspoken, but understood.

a degree of affluence all of a sudden.”

BrUle aSpireD to be

sophisticated lifestyle,” he added.

“They need advice on how to live a a network anchorman like

because he lives the life,” said Andre Balazs, the hotelier. “I’ve rarely met

achievement award from the British

and in his early 20s, he

Society of Magazine Editors at 33, making

was a reporter in London

him the youngest recipient ever. Time Inc.

for the BBC and other

snatched up Wallpaper in less than a year,

networks. He landed in

keeping Brule on as editorial director. He

war-torn Afghanistan in

finally left in 2002.

1994, reporting for

Wallpaper, launched in 1996, quickly attracted a cult following among Generation X.

The magazine earned him a lifetime

his idol Peter Jennings,

a German news magazine, where he

Bound by a noncompete clause, he focused largely on Wink Media (now Winkreative), a branding and advertising

nearly died after being shot twice in a

agency that he still runs from Midori

sniper attack.

House. This time, it was the corporate

Back in London to recuperate, he

world that sought out the Tyler Brule

anyone who is more of an embodiment of

ruminated on a saner way to live. His

touch. Among the early big-name clients:

the lifestyle that they espouse.”

epiphany: Wallpaper, a design and

He was hired to rebrand Swissair as Swiss

That lifestyle also invites ridicule.

culture magazine he started in 1996.

International Air Lines with a sleek new

Christopher Fowler, a British writer,

Instead of a voyeuristic peek into the

look that extended to the cabins’ lighting

recently mocked the elitist tone in his

homes of the gentry, Wallpaper created

and crew uniforms.

blog. “Is style guru Tyler Brule the world’s

fantasy interiors with borrowed furniture

most annoying man?” Fowler asked,

and Gucci-suited models.

in a post entitled, “Things You Could

The aesthetic, like Disneyland’s

Wish Upon Tyler Brule.” It is impossible,

Tomorrowland, was a triumph of retro-

he added, “to get through one of his

futurism, of Borge Mogensen chairs and

newspaper columns without being made

shaggy Kasthall rugs. It quickly attracted

to feel physically ill at the level of name-

a cult following among Generation X

dropping he manages.”

entrepreneurs riding the 1990s boom.

But Brule has managed to inspire

Still, journalism was where his heart lay. So in 2007, as the industry spiralled into an identity crisis over its digital

“I call them global nomads,”

cultish devotion partly from the

Brule,

perception that he gets the tiniest details

then 29, explained

right. Employees at the Midori House –

in a 1998 New

the Japanese-inflected name he conferred

York Times article,

on the modernist brick building in the

“Generation

Marylebone neighbourhood of London

Wallpaper.”

that is the headquarters of Monocle –

“Whether they’re a

understand that Brule likes things done a certain way.

Staff members do not drape coats haphazardly from the backs of chairs, but hang them in orderly fashion in a nearby closet. They do not eat at their desks, sprinkling keyboards with crumbs, but dine in groups in the office’s sleek canteen.

They do not fling business cards across

The Heritage G2 tabletop radio was designed for Monocle 24, a new radio station that Brule is starting.

Portfolio

Essentials Profile

Brule in conversation with senior staff members of his magazine, Monocle, at the office in Marylebone, London.

Monocle has a global distribution of around 150,000 copies.

future, he pushed forward with Monocle, a

“His inspiration came from the airport terminal. While waiting for his flight, he would see people grab a copy of The Economist, along with something less cerebral, like GQ. “I thought, ‘Well why can’t we do that?’ Mix it up and add a few things,” he said.”

publication that was a celebration of print in all its sensual pleasures. His inspiration came from the airport terminal. While waiting for his flight, he would see people grab a copy of The Economist, along with something less cerebral, like GQ. “I

For loyal subjects, Monocle was an

Mediterraneo and Monocle Alpino, the

thought, ‘Well why can’t we do that?’ Mix

exclusive club as much as a beach

company’s new seasonable newspapers

it up and add a few things,” he said.

read. That may explain its unorthodox

found in resorts.

business model. To increase circulation,

More than a throwaway periodical,

if wallpaper targeted snowboarders

most magazines sell heavily discounted

Monocle is a status symbol, a prop poking

who had made their first killing, Monocle

subscriptions. Monocle, on the other

out of a Jack Spade carry-on, announcing

targets the same reader after a decade of

hand, charges more: It costs $10 at

that you’re a member of the international

running a multinational corporation. A

newsstands but $130 for a yearly

aesthete class. Trendy stores like J. Crew

worldliness is assumed. Each issue is the

subscription of 10 issues.

Liquor Store and Freemans Sporting Club

size of a Sotheby’s catalogue, printed on

The idea of targeting elites willing to

display it as a chic accessory.

Indeed, new inductees sometimes

upward of nine different paper stocks,

pay that much for a premium product

crammed with extremely niche articles

allowed the magazine to become

order the whole back catalogue to show

about carbon-neutral airlines in Costa

profitable two years ago, despite a global

off on bookshelves, Brule said, like the

Rica and sleek Afghan restaurants in

distribution of about 150,000. That also

Encyclopaedia Britannica for cool kids.

Dubai. Celebrity profiles? Only if you

attracted luxury advertisers like Rolex

This is one reason Brule has no plans for a

count Abubaker Karmos, Libya’s charge

and BMW that not only buy full-page

Monocle magazine app yet: On an iPad, no

d’affaires in Canada, as a star.

colour ads in Monocle, but also in Monocle

one can see you reading Monocle. n

April 2012

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74

Film

The heighT of SuSpenSe

Nine of the world’s 10 tallest buildings are in Asia and the Middle East – and Hollywood wants to jump off all of them, reports Steve Rose.

upwards in Chicago and New York at the

forest of skyscrapers. Yellow cabs crawling

end of the 19th century, inventors like

thrilling cinematic images tall buildings

like ants through the city grid. The hero

Edison and the Lumière brothers were

provide, both inside and out? It is estimated

stands on a ledge 20 floors up, provoking a

realising they might be on to something

skyscrapers have featured in more than

street theatre of police cordons, firetrucks,

with their moving-picture machines.

250 movies. Then there’s their crashingly

news crews and onlookers. Meanwhile, in a

unsubtle metaphorical value. It doesn’t

top-floor office, a corporate villain admires

take a genius to fathom the symbolism at

an architectural model of another shiny

work with, say, the diminutive Tom Cruise

skyscraper. Elsewhere, an acrobatic thief

scaling the world’s tallest building in the

hangs precariously in an elevator shaft,

latest Mission: Impossible, or a rampant

dropping a spanner that goes clanging down

King Kong roaring from the top of the

innumerable storeys to the ground. The

Empire State Building; or San Francisco’s

ominous ping of an approaching elevator

TransAmerica tower looming priapically

spells danger. The hero and villain finally

in the background of Basic Instinct as

meet for a climactic rooftop showdown.

Michael Douglas gets into a lather over Sharon Stone.

These scenes could be from a hundred

For most of the 20th century, it was

Hollywood movies or more, but in fact

© 2012 Guardian news service

Where would the movies be without the

AeriAl shots over MAnhAttAn’s

they’re from just one: Man On a Ledge, an

simple: the home of the movies and the

enjoyably new thriller that at least sets out

home of the skyscraper were the same

its stall in the title. You can guess most of

place. These two distinctly masculine

its plot from those generic snippets, but

enterprises worked together to broadcast

Man On a Ledge is just the latest piece of

America’s virility to the world. But the

proof that movies love skyscrapers and

marriage now has complications. In

skyscrapers love movies. They always have.

metaphorical terms, the attacks of 9/11

In fact, they’re practically twins. The exact

hit the US where it hurt, and the current

date of birth could be disputed, but it’s safe to say that while rising land prices and advances in steel were pushing buildings

The Hollywood love affair with skyscrapers continues in the recently released Man On a Ledge.

financial crisis hasn’t helped.

Where the skyscrapers have gone, the movies have had to follow – and nine Portfolio

Essentials Film

of the world’s 10 tallest buildings are now in Asia.

That recent Mission: Impossible benefited greatly from the use of Dubai’s 163-storey Burj Khalifa (over $500 million at the box office and counting). Dubai hasn’t done badly out of it either. When the Burj Khalifa opened two years ago, the emirate had an image problem as the financial crisis hit home.

But Mission: Impossible seems to have fixed that. According to the movie’s producers, the first time they visited Dubai, they said: “We have to come back here and shoot a movie.” But Dubai was also a hefty financial backer of the film, and using the Burj as a major location appears to have been a condition. So the building, designed

by US architects SOM, not only featured in loving closeups, inside and out, but Dubai also got to hold the world premiere of this

You could say

‘local’ film – bringing Cruise, celebrity

the process of

special guests and the world’s media to

America’s corporate

the Dubai Film Festival.

emasculation began as far back as 1988,

Whenever A new Asian skyscraper is

with Die Hard (surely

completed, it seems, Hollywood rushes to

a high-point in skyscraper

get there and jump off it. In the preceding

movies): although set in Los

Mission: Impossible, Cruise also leapt

Angeles, the film decided to

off a tall building, this time in Shanghai.

rename its hijacked building

Before that, in an indication of how

the Nakatomi Plaza and make it

quickly the gimmick can date, we had

Japanese-owned (in fact, it was

Sean Connery and Catherine Zeta-Jones

the city’s Fox Plaza).

in 1999’s Entrapment, dangling off Kuala

As Die Hard reminds us,

Lumpur’s Petronas Towers, then enjoying a

skyscrapers are movie shorthand for

brief reign as the world’s tallest buildings.

‘faceless corporation’, usually going

April 2012

Tom Cruise did his own stunts scaling Dubai’s Burj Khalifa, the world’s tallest building, in Mission: Impossible – Ghost Protocol.

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Film

“In the 1960s and 70s, architectural groups like the metabolists and Archigram proposed alternatives to the boom in towers, while Britain’s Leslie Martin and Lionel March argued that they don’t solve urban density problems.” hand in hand with overbearing evil. Man On a Ledge is no different: predictably, the ledge he’s on is owned by the chief baddie, the one with a model of a skyscraper (his next one). For good symbolic measure, he also smokes a huge cigar. Yet for all the macho baddies, such movies are invariably on the side of the little man.

The juxtaposition of a lone individual and Comedian Harold Lloyd often made use of skyscrapers in his films. Hanging from a clock in his 1923 movie Safety Last! is a classic cinema moment.

a gigantic edifice often tells you all you need to know about a movie’s intentions.

In the silent era, skyscrapers were something of a fad. There’s the muchimitated image of Harold Lloyd hanging off that clock 10 storeys up in 1923’s Safety Last! Lloyd made a string of highrise movies, such as High and Dizzy, Look Out Below and Never Weaken. In most, his little man rises to the summit, overcoming the emasculating forces of urban life. His myriad successors have done the same.

In 2008’s Oscar-winning documentary Man On Wire, in which French tightrope walker Philippe Petit conquers the Twin Towers, the little-man thrill is the same, albeit enhanced by such an emotionally loaded location. in 2004, the architect Rem Koolhaas wrote: “The skyscraper has become less interesting in inverse proportion to its success. It has not been refined, but corrupted; the promise it once

Skyscrapers often serve as metaphors in films. In 1933's King Kong the king of the jungle meets his match in the urban jungle of Manhattan.

held… has been negated by repetitive banality.” You could say the same thing Portfolio

77

about Hollywood. Just as the high-rise

If there is a crisis, both industries are

the Shard. Looming large over the city,

has nowhere to go except upwards,

in denial. The genre-movie production

Renzo Piano’s 87-storey tower seems

so movies like Man On a Ledge find

line churns on, and the skyscrapers keep

destined to figure in the new era of

themselves stuck on a familiar narrative

going up. There are a few more security

“more commercial” British movies the

track, running from street level up to the

measures beneath the skin of the Freedom

government is calling for. According to

inevitable rooftop showdown.

Tower, which stands where the Twin

the Shard’s marketing agent, they’ve been

Towers once stood, but externally its

receiving filming requests at the rate of

groups like the metabolists and Archigram

generic-looking design says: “Nothing’s

about one a week. So far they’ve turned

proposed alternatives to the boom in

changed”. Upcoming movies like the

them all down, they say, but you can just

towers, while Britain’s Leslie Martin and

rebooted Spider-Man also seek to reassert

picture Colin Firth struggling to express

Lionel March argued that they don’t

the primacy of the New York skyline in

himself to Keira Knightley in its lift, or

solve urban density problems. Koolhaas,

the face of all this competition: Norman

Daniel Craig and Tom Cruise fighting

who was a screenwriter before becoming

Foster’s Hearst Tower is a key location in

it out on the rooftop to see who gets

an architect, presented his own anti-

the movie.

to use it first, James Bond or Mission:

In the 1960s and 70s, architectural

Impossible. Meanwhile, back in real life,

skyscraper in the form of Beijing’s CCTV television headquarters, which effectively

And soMe of that competition is

the next 007 novel has just been released

folds a tower in half and brings it back

now coming from London, thanks to

and its author, Jeffrey Deaver, set a

down to the ground.

its belated stab at high-rise kudos with

significant portion of it in Dubai. n

GeTTY iMaGes

The Shard, a new addition to London’s skyline, is already being bombarded with filming requests.

April 2012

Essentials

78

Fashion

A New LeAse ON Life Jean Paul Gaultier’s couture has been consistently brilliant, but his ready-to-wear has been hit or miss. But now, since Hermes sold its share in his company to the Puig Group, the designer has a newfound enthusiasm, reports Eric Wilson.

Last september, a few days before

known quite what to make of Gaultier; the

his spring fashion show, Jean Paul Gaultier

onetime enfant terrible turns 60 this April.

took a hard look at one of his models. She was

His couture is consistently brilliant and

wearing a hip-length gilet in a navy pinstripe

daring, right up to the provocative collection

fabric over a second-skin bodysuit that gave

he showed in January with models styled to

the illusion of tattoos, both key ingredients

look like Amy Winehouse, barely six months

in a formula of fierce tailoring and devilish

after her death.

streaks that the designer has been perfecting for roughly 35 years.

“I liked it yesterday, but not today,” Gaultier

not, has been hit or miss. The collections he designed for Hermes since 2003 were suitably

told an assistant. “It doesn’t have the charm of

over-the-top in lavishness (think crocodile

the first time.”

for evening), but when he broke ties with the

It was an unusually warm day in Paris, and

house last year, there was a consensus that

Gaultier’s studio, atop the grand headquarters

the relationship had run its course. In May,

he built on the Rue Saint-Martin in 2004,

Hermes sold its 45 per cent stake in Gaultier’s

was boiling. Of the seven or eight outfits

business to the Puig Group, the Spanish

he examined over the course of an hour of

fragrance company that owns Carolina Herrera

fittings, barely one met his expectations. “Take

and Nina Ricci, for ¤16 million, or $23 million

a photo of that one,” he said at one point, “so I

at the time. Puig also assumed about $20

remember it is no good and not to try it again.”

million in debt. Now with a new lease on life,

Watching Gaultier – and this is the interesting thing, as he stands with his face

it may be time for a reassessment.

A few days after the spring show, over lunch

pressed close to a wall of mirrors, watching not

in his showroom, Gaultier was asked if he still

the model, as she moves, but her reflection –

felt appreciated. “Still?” he said, laughing, as

you do wonder if the job still holds the charm

he almost always seems to be.

it once did. In the 1980s and ’90s, he was a © 2012 New York Times News service

But his ready-to-wear, more often than

“Yes, not as much as before, but yes,” he

fashion superstar, designing Madonna’s conical

said. “I am no more the flavour of the month,

bras; makeup and couture skirts for men; and

or the year, or the decade, but it has been 35

that enormously controversial collection for fall

years. I can say in some way I am lucky, when

1993 with coats and hats styled after traditional

I look at the people who were there with me

Hasidic attire, worn by supermodels like Kate

at the beginning, and I am the one who is

Moss and Christy Turlington.

still here. I am still appreciated, but not for

But for some time, the fashion world hasn’t

the same reason as before.”

Portfolio

Essentials Fashion

Jean Paul Gaultier, the former enfant terrible, turns 60 in April.

April 2012

79

Essentials

Fashion

“I am no more the flavour of the month, or the year, or the decade, but it has been 35 years.

I can say in some way I am lucky, when I look at the people who were there with me at the beginning, and I am the one who is still here.

I am still appreciated, but not for the same reason as before.”

‘The Fashion World of Jean Paul Gaultier: From the Sidewalk to the Catwalk’ is a hugely successful exhibition touring North America.

He was talking about designers like Thierry Mugler, Claude Montana and Christian Lacroix or, more recently, John Galliano, whose careers came to unceremonious ends despite their notoriety. Though it had not been entirely obvious to the audience at his show that week, Gaultier’s spring collection was filled with a nostalgia for the way things used to be in fashion, as when his runway models carried numbered cards to identify their outfits, which were described by an announcer in French and English. split-leg sailor pants, mariner stripes, trench coats and a finale of models in lacy lingerie were all reiterations of ideas Gaultier has shown throughout his career.

A model wears a typical Gaultier creation at the Fall 2012 Paris Fashion Week.

Critics didn’t love the gimmicks, but

geTTY images

Also, the tattoo-print body stockings, geTTY images

80

In January, Gaultier was back to his provocative best with models styled like Amy Winehouse barely six months after her death.

the clothes were well received – “one of

175,000 fans. At the Dallas Museum of

the French designer’s most legible and

Art, where the show was exhibited from

effortlessly chic collections,” according to

November through February, nearly

person. But the reaction to the exhibition

WWD. There is good reason to re-evaluate

115,000 people attended, making it one

seems to have energised him as he

Gaultier, thanks in part to the popularity

of the 10 most popular exhibitions in the

considers the future of his company, now

of an exhibition of his designs now

museum’s history. It moved to the de Young

under the management of Puig.

touring museums in North America. It is

Museum in San Francisco on 24 March.

a reminder of his influence.

“I didn’t realise it at the beginning, but I did this profession to get love,” he said. “It

GauLtier, since the beginning of

is like my passport, through that I can open

Gaultier: From the Sidewalk to the

his company in 1976 after sporadic work

the door. It’s through that they like me.”

Catwalk,’ when it was first shown at

with Pierre Cardin, and even since he

the Montreal Museum of Fine Arts last

was a child growing up in a working-class

Gaultier described, for nearly an hour, a

summer, had an attendance of more than

suburb of Paris, has always been a shy

fashion industry “where things are going

‘The Fashion World of Jean Paul

During one visit after his spring show,

Portfolio

81

in a very strange way.” Fashion shows, now covered instantaneously online, seem more about image than clothes, and magazines have so many international editions that it seems as if each brings a small army to his shows. Celebrities who once paid him for dresses now expect to be paid to wear them. The large design houses are expected to churn out more and more clothes. So the old-fashioned narration and preening models in his spring show were a bit of a sendup.

“It’s like a big cake, and there’s not enough people to eat it,” he said.

It was not entirely surprising to see the problems at Gaultier’s company that began in 2005, after an aggressive

Gaultier remains focused on his couture line, although he admits that he barely breaks even despite dresses selling for up to $50,000.

in 2010, from ¤28 million in 2004,

the Thief, His Wife & Her Lover and

according to figures reported by Hermes.

Bad Education, he can be provocative

reuTers

The business could be larger, said Ralph

Gaultier’s Spring/Summer 2012 women’s ready-to-wear fashion show last October was filled with nostalgic elements.

to the point of the impolitic. In

Toledano, who became the president of

October, he told The Telegraph of

Puig’s fashion division in January. Toledano,

London, “Anna Wintour is a lot more

who described Gaultier as the most talented

monstrous than she is described!”

of French designers, is well regarded in the

In Paris, he is the most visible of targets

industry as the former head of Chloe, but he

of anti-fur protesters every season. And

said no two labels are alike.

when he evoked Winehouse for his spring

“You have to see this as the beginning

couture collection, he thrilled the critics, but offended her family.

expansion that initially included plans to

of the beginning,” he said. “I think the

open 200 stores. While annual sales of

company, certainly at the moment, is

Gaultier-branded products like sunglasses

underdeveloped. My goal would be to

change at his company, but that he would

and his popular torso-shaped fragrances

grow it.”

not consider touching the couture line.

Gaultier said that some things may

In a 2009 article in Vanity Fair, Gaultier

have been reported around $700 million over the last decade, those products are

GauLtier is the first to admit that

said he needed just 16 customers for that

mostly licensed to other companies, and

he has little interest in being perceived

collection, with its prices of $50,000 and

the royalties to the designer could not

as a great businessman. While he has

up per dress, to break even. Today? Well,

offset the costly couture operation he

played an important role in popular

he still breaks even.

started in 1997 in addition to the new

culture with his stint as a ‘Eurotrash’

headquarters. The Gaultier company’s

host and by designing wardrobes for

money with couture,” Gaultier said. “I

income was down to about ¤24 million

films like The Fifth Element, The Cook,

don’t earn, but I don’t lose.” n

April 2012

“There are a lot of houses that lose

Essentials

82

Culture

Corrugated tin roofs, ramshackle cinder-block huts, and labyrinthine streets caked with rubble.

And this section of the Sarria barrio is not even bad for Caracas.

But Sarria also plays host to a centre of El Sistema, Venezuela’s programme of social uplift through classical music. So just across the street from such blighted scenes young children with violins, French horns and trumpets filled the spaces of an elementary school recently.

A brass ensemble barked in a corridor open to the Caribbean air. A percussion group rumbled in a dirt courtyard nearby.

In a classroom newly hatched violinists played a G major scale and simple Venezuelan tunes after a week of learning.

At least two choirs were rehearsing.

The contrast was stark but also typical of El Sistema, which was founded in 1975 but became widely known only in the last five years thanks in part to the meteoric rise of its most famous product, the conductor Gustavo Dudamel. Dudamel, 31, became music director of the Los Angeles Philharmonic in 2009 and is now in Caracas with his orchestra for a cycle of the Mahler symphonies.

“It’s my goal to keep going, so I can be a great musician,” said Emily Castaneda, 10, who recently began playing French horn and was producing honourable

Fighting Poverty With violins Venezuela’s successful El Sistema music programme has been extremely successful in keeping children from the snares of poverty, reportss Daniel Wakin.

sounds during a lesson. Or, added Emily,

© 2012 New York Times News service

whose mother is a cleaning woman and who does not know her father, she might

founder, the economist and trained

sense of community, commitment and

become a doctor.

musician Jose Antonio Abreu, was

self-worth. With nearly one-third of

El Sistema’s aim is to address a

classical music. Orchestras and music

Venezuela’s population of 29 million under

depressingly universal problem: how to

training centres around the country were

14, the need is large.

remove children from poverty’s snares,

established to occupy young people with

like drugs, crime, gangs and desperation.

music study and to instil values that

Sistema estimates that it reaches 310,000

The method, imagined by El Sistema’s

can come from playing in ensembles: a

children in 280 teaching locations,

Since the programme’s founding, El

Portfolio

83

Students learn to play scales on the violin as part of the El Sistema programme at a school in Sarria, a neighbourhood in Caracas.

called nucleos, said Eduardo Mendez, the executive director. About 500

goal is to reach 500,000 children by 2015.

The programme has become the envy

number of books and documentaries, countless news reports and a steady flow

orchestras and other ensembles, from

of the music world, inspiring similar

of musicians and educators tramping

preschool groups using paper cutouts of

programmes in many countries and

through showcase nucleos.

instruments to the world-class Simon

attracting influential proponents like

Bolivar Symphony Orchestra, fall under

the conductors Claudio Abbado and

officials adept at playing host to visitors,

El Sistema’s umbrella. Abreu has said his

Simon Rattle. It has prompted a

who receive a warm but fairly controlled

April 2012

The attention has made Sistema

84

Essentials

Culture

A student in a beginners class receives instruction on French horn technique.

Gustavo Dudamel (L), the music director of the Los Angeles Philharmonic, is El Sistema’s most famous product.

welcome, which is usually necessary in dangerous areas. These officials and Sistema fans speak in near mystical terms of Abreu and his programme’s results.

The populist government of Hugo Chavez is also happy with the programme, pouring 540 million bolivars, about $64 million, a year into it. Foundations and donors add various amounts each year as well as gifts of instruments.

The Sarria nucleo, on the city’s northern edge, is housed in a prekindergarten-

Visitors are already being drawn to London’s 200-hectare Olympic Park. In the background is the finished version of Kapoor’s Orbit viewing platform.

through-sixth-grade school of 1,200. In an arrangement with the government it offers after-school activities from 2 to 6

Most of El Sistema’s teachers are products of the programme, which means they are committed to the movement.

pm for 600 children. Sarria embodies

and instruments are free. No child is

others, they feel they are proud of what

many of the principles that seem to make

turned away, teaching is done in groups,

they are doing,” Mendez said.

El Sistema so successful. All instruction

and many of the instructors have passed

“From the time they

start playing and performing for others, they feel they are proud of what they are doing.”

through El Sistema themselves (and

the sarria orchestra was in the final

are thus committed to the movement).

throes of rehearsing for a concert. The

Public performance is ingrained from the

nucleo’s director, Alejandro Munoz, 32,

beginning. The nucleo is within walking

was conducting. He is a stern figure who

distance of the students’ homes.

had already assigned some timeouts to

All performers are given medallions

talkative members. They were playing

that have the image of a violin on one

Handel’s ‘Water Music’ and ‘Alma Llanera,’

side and the motto ‘Tocar y Luchar,’ ‘To

considered an unofficial Venezuelan

Play and to Fight,’ on the other. “From the

anthem that every Sistema orchestra

time they start playing and performing for

player learns. “The main thing in our Portfolio

85

Alejandro Munoz, 32, conducts a class. Public performances are an integral part of El Sistema.

nucleos is the quality,” Mendez said. “We

Jose Antonio Abreau (R) founded El Sistema in 1975. He is pictured with legendary musician Quincy Jones, a supporter of the programme.

teach them with the best quality possible.”

Munoz, a violinist, was himself born in a barrio and passed through a nucleo. “My mother thought it would be a safe place,” he said. He was identified as a conducting prospect and sent to a conservatory.

At Sarria the beginning violin teacher was Ismenia Molina, 51, who was one of the earliest members of the first Sistema orchestra, giving her the aura of a founder.

She has been with El Sistema for 33 of her 51 years. El Sistema also has choirs and programmes to teach instrumentmaking and repair.

Things don’t always run smoothly in the programme. Tensions sometimes arise between Sistema officials and the

crime-ridden neighbourhoods.

One fact sometimes overlooked is

there, suffering several armed robberies and the cleaning out of his house.

administrators of the buildings they use.

that Sistema is also open to people from

The programme’s growth sometimes

middle-class or upper-middle-class

go on to musical careers, but many come

outpaces the supply of teachers and

families. The Sarria nucleo’s founder, for

back and work for El Sistema anyway.

instruments. Parents don’t always

instance, Rafael Elster, had a privileged

Mendez, for instance, is a lawyer. “Once

cooperate in getting children to rehearsals

upbringing. Abreu assigned him to set up

you get touched by El Sistema,” he said,

or lessons. Instruments are stolen in the

the nucleo in 1999, and he spent 10 years

“you will never leave El Sistema.” n

April 2012

The majority of Sistema children do not

86

Essentials

Test Drive

Setting the Standard

The latest Porsche Carrera S is an amazing combination of power, control and comfort, reports Guido Duken.

P

orsche is synonymous

less aluminium than the new model.

the steering wheel. The engine leapt to

with the 911. Sure, the Boxster,

Around 45 per cent of the new car’s shell,

life, but it’s not an overpowering sound

Cayman, Cayenne and

including the floor, roof, doors, and all

thanks to some solid sound insulation.

Panamera have been robust sellers for

structural and exterior sheetmetal forward

Still, there’s that familiar Porsche rumble

the Stuttgart-based firm, but since 1964

of the windshield, are now made of the

from the flat-six engine that indicates

it is the iconic rear-engine 911 that has

lighter material. According to Porsche the

there’s some serious spine-tingling power

been its flagship model.

new 911, despite being bigger, has actually

available. But if you think the Carrera S

shed around five kilos of weight.

leaps off like a scalded cat at a touch of the

I’ve been itching to get my hands on a new 911 for some time. I’ve driven the

Externally the roof and the front fender

accelerator you’ll be disappointed. In fact,

Boxster and Cayenne, but never Porsche’s

humps are lower, which give the 911 a

my first sensation was of being in a luxury

icon. Mind you, having heard stories

wider, more planted on the road stance.

limousine. On the highway the Carrera S

about the tail happiness of previous

The typical Porsche dome lights dominate

is amazingly quiet, with little wind noise

models I also had some reservations.

the front, while the red taillamps are

or tire rumble. But the biggest surprise is

positioned under a furrowed brow

the extremely comfortable ride, which feels

more fuel efficient and slightly lighter than

running around the back. Inside, the

almost too refined for a sports car.

its predecessor. Porsche gives each of its

dominating feature is the sloped, long

projects an internal number so the new

centre console festooned with buttons that

Don’t worry, the Carrera hasn’t

911 is designated 991, while the previous

first appeared in the Panamera. There’s

become warm and fuzzy. When you stamp

generation was the 997. It’s a running joke

slightly more space in the rear seats, but

on the accelerator the 294 kW and 440

in the automotive industry that the Porsche

it’s still really for children only. The whole

Nm of torque erupt in a headrest-slapping

911 design team has the easiest job in the

interior is sporty, functional and has the

manner. My test car was equipped with

world. At first look the new Carrera S does

impeccable finishing you’d expect in a

the optional seven-speed Porsche PDK

look like its forefathers, but the difference

German luxury car.

twin-clutch gearbox and Sport Chrono

The new 911 is longer, lower, wider, faster,

is in the detail.

Nothing has been carried over from the 997’s body shell, which used a lot

Aesthetics are important, but the 911

Package that propels the Carrera S 0-100

is meant to be driven, so I started the

km/h in 4.3 seconds and 0-200 km/h in

Carrera S with the permanent key left of

13.6 seconds.

Portfolio

87

The interior is pure luxury with excellent finishing. The sloped centre console, first introduced in the Panamera, marks a departure for the 911.

is an active roll compensation system that instantly detects when the vehicle begins to roll while cornering, eliminating it almost entirely. According to Porsche, PDCC makes for greater agility in every speed regime, improved cornering and stable load change behaviour. PASM actively and continuously The 911’s red taillights sit under a furrowed brow, which will be rolled out across all Porsche models.

regulates the damping force for each wheel according to the road conditions and driving style. In addition, the suspension is lowered

models. The Boxster you can hammer into

by 20 mm. Judging by my experience, it all

still quite muted, but when you push the

a corner and you always feel you could do

works brilliantly.

‘Sport’ button the new ‘Sound Symposer’

it faster. In fact, with the Boxster you can

pipes in the engine noise. Basically, it’s an

heartily accelerate in even the sharpest

electric steering to boost fuel economy. In

acoustic tube that runs from the intake

corner without playing with your life.

most cars it feels lacklustre, but the Porsche

In normal mode the Carrera S engine is

pipe to the rear parcel shelf and has a

It’s here where the Carrera S really

As with most new cars, the 911 now has

engineers have made the best one to date without sacrificing precision and feedback.

simple membrane in it that vibrates in

astounds as it feels as solid as the Boxster.

concert with intake pulses. The membrane

Engine in the rear? Forget about it. The

So what’s the verdict? The new 911

merely amplifies these pulses for the cabin,

Carrera S is so solidly planted that after

Carrera S is definitely in a class of its

which means you have effective road noise

overcoming the initial shock at its cornering

own. It’s a sports car that’s so comfortable

dampening but still get the engine sound.

ability you become more and more daring.

that you can drive it daily. It also has the

After getting a few kilometres under

And however hard you push, the 911 stays

performance that makes you want to drive

my belt I was ready to attempt some

true, no sliding of the back, no bouncing,

it daily. Critiques? None, unless you think

cornering. Technically, the best place for

just control. I should flag up, however,

that a perfectly sane, safe sports car is a

a sports car’s engine is in the middle, as

that my Carrera S was equipped with the

bad thing!

in the Porsche Boxster. The worst place

optional new active Porsche Dynamic

The Carrera S starts at AED395,600

is at the back as in the 911, which created

Chassis Control (PDCC) and Porsche

($107,800 approximately). The 911, as

the ‘exciting’ midcorner bounding and

Active Suspension Management (PASM

tested, came with $23,000 worth of

corner-exit steering washouts of earlier

is standard in the Carrera S). The former

options. n

April 2012

Essentials

Other Business

An Yanshi, an entrepreneur in southwest

province is close

China, is using panda dung to grow

to several panda

organic green tea which he plans to

breeding centres.

sell at a premium. The first batch of

The fertiliser made

panda dung tea will be sold in lots of

the tea a health

50 grams that will cost some 22,000

boon, An said,

yuan ($3,500) each, a price An said

because pandas only

makes it the world’s most expensive tea.

eat wild bamboo

Most people use about three grams of

and absorb only

tea per cup.

a fraction of the

An defended the steep price, saying

nutrients in their food.

After brewing the first pickings, An

he would channel profits from the initial batches into an environmental fund.

described the tea as fragrant and smooth.

fertiliser as his plantation in Sichuan

said at a weekend event to promote the tea. “I just want to convey to the people of the world the message of

“I thank heaven and earth for blessing

turning waste into something useful,

us with this environmental panda tea,” the

and the culture of recycling and using

41-year-old former teacher and journalist

organic fertilisers.”

Future batches would be cheaper.

An has access to literally tonnes of

reuters

Panda’s Top Brew

Korean Matchmakers Five times as many South Korean women are now getting advanced degrees as in 1995, also become more selective when it comes to marriage. The age at

reuters

and they have

reuters

88

by an average 4.1 years over the past 20 years to

Not a Lawyer Joke

28.9 years, according to Statistics Korea.

Italian lawyers went on strike again in

of Italy's lobbies due both to their political

March looking for better working

influence and their sheer numbers – there

their 30s often use matchmaking agencies to find

conditions and pay. the lawyers were

are some 230,000 lawyers for 60 million

a potential spouse. Overall, the South Korean

protesting against what they call

people, compared to 54,000 in France

matchmaking industry is estimated to be worth

“savage” plans by Mario Monti’s

which has a slightly bigger population.

100 billion won ($88.79 million), according to local

government to increase competition in

newspaper Asia Business Daily. This compares to

their profession.

which Korean women are getting hitched has risen

That means well-educated women nearing

estimates of around 50 billion won in 2005.

Tough economic times are also being felt as

their main gripe was the proposed

the average time taken to resolve a civil case in Italy is nearly seven-and-ahalf years and the average to settle

abolition of minimum fees, which the

criminal cases through a long appeal

marriage becomes a tool to maintain social status.

government says will reduce costs for

process is nearly five years. there is

Some matchmaking sites display the average annual

citizens. they also oppose plans to

a backlog of nine million cases, 5.5

income of its male and female customers, as well as

extend a fast-track conciliation

million of them civil and the rest criminal.

statistics on their professional standing.

procedure for minor civil cases, which

the guilty often escape justice simply

would not require the use of lawyers.

because time runs out due to the statute

Critics say the industry prioritises income, status and materialism over love.

Lawyers are among the most powerful of limitations.

Por tfolio

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