THE FOCUSED MIND

When Beijing officials took a closer look at the economic costs of environmental damage in China, they were surprised to learn that such degradation was lowering the country’s overall GDP anywhere from 3 to 10 percent annually.

That realization spurred action, and now China is the world’s leading practitioner of what is called the payment-for-ecosystems-services program – which essentially pays people to do what is good for the environment.  For instance, China pays farmers to reforest their land, hoping to slow soil erosion and the loss of valuable top soil due to poor agricultural practices. As a result of this one practice, Chinese officials, between 2000 and 2010, managed to increase the amount of forested land at the rate of 1.6 percent each year, a pace roughly three times faster than any other country in the world.  Beijing is also paying watchdogs to make sure the paid project actually happens.

Meanwhile, local governments have used the payment approach to protect water sources.  For instance, in some areas, local governments have passed laws that require anyone polluting a river upstream to compensate all those who suffer economic or health losses from that pollution downstream.

China’s program uses a software tool that measures overall costs of, say, cutting down a forest, including such secondary effects as erosion, additional risks of flooding, loss of carbon absorption area and so on.  With that information, Chinese officials are making economic decisions, and that model, which was actually developed at Stanford’s Natural Capital Project, is now being tried in Ecuador, Colombia, Mexico and Costa Rica.

(New Scientist, 6/16/12)

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Four years ago, following the lead of Alabama and Georgia, Louisiana started Louisiana FastStart, a job training program that was free of charge and would prepare a workforce for companies that settled in the state.  Since its founding, FastStart has trained more than 13,500 workers and contracted with more than 60 companies.  Louisiana is one of only two Southern states that posted net job gains from January 2008 to March 2012.  In 2006, according to Chief Executive magazine, Louisiana ranked 47^th among states where companies said they wanted to do business.  In this year’s survey, Louisiana ranked 13^th (up from 27 in 2011).

Louisiana, Alabama, Georgia and South Carolina all placed in the top 10 of the Business Facilities list of the best workforce-training programs with Louisiana on top.  The four states trained a combined 70,000 workers, adding a net total of 26,300 manufacturing jobs from January 2011 to January 2012.

The states’ programs all have a number of things in common including, being offered free of charge, and ensuring that the workforce is adequately prepared to take actual jobs that are already available.  Tax breaks for the companies are usually included as well.

North Carolina is also offering tax breaks for companies to move to the state.  Charlotte recently lured Chiquita from Cincinnati, offering more than $24 million in state and local incentives, as well as the promise of easier travel into and out of Charlotte Douglas International Airport.

As unemployment remains elevated states that offer incentives to attract companies will benefit.  This should also benefit companies looking to open new locations or relocate.  This environment should create increased business for any companies offering or facilitating training programs for states.

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Thor/Forge Books, Macmillian’s science-fiction division, will soon be the first mainstream publisher to open an e-book store.  It will also become the first major house to strip its e-books of anti-piracy software (DRM), allowing books to be read on any e-reading device and shared with friends.  Thor’s move comes on the heels of the March release of the e-editions of the Harry Potter novels, which are also DRM-free, and available exclusively at J.K. Rowling’s Pottermore site.  Additionally, Hachette Book Group and Simon & Schuster are investing in Bookish, a marketing site for the publishing industry that will include an e-book store.

We’ve written about the ways in which producers of other goods are attempting to eliminate the middle man and sell directly to consumers and now some book publishers are following suit.  It appears that the publishers are more afraid of Amazon’s power (60 percent of the e-book market) than they are of piracy.  Can these publishers effectively dent Amazon’s profits, or is it too little, too late?

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The five largest cable operators in the United States (Comcast, Time Warner Cable, Cablevision Systems, Cox Communications and Bright House Networks) recently unveiled a plan to give each other’s high-speed data customers reciprocal access to metro Wi-Fi networks, totaling more than 50,000 hotspots.

In a separate announcement, Comcast said it would let Xfinity Voice customers place free calls over WiFi and other wireless data networks, using mobile devices or PCs.  Additionally, as part of the Voice2go service, customers will be able to forward calls to as many as  four additional phones or devices.

These announcements could have a profound effect on the revenues of mobile wireless providers.  Verizon and other mobile providers are already losing revenue from one source as people have begun moving away from text message plans and towards messaging apps like WhatsApp and Facebook, which provide free texts, but use data. Now the mobile providers may have to deal with the threat of pervasive Wi-Fi.  If other cable operators follow Comcast, mobile customers in those covered areas may not eliminate voice plans altogether, but moving down to the lowest cost-voice plans (fewest minutes) could be a reality.

There is one benefit for mobile providers, however.  If individuals become more adept at switching back and forth between free Wi-Fi and cellular networks, it may relieve network congestion and alleviate the need for further cellular infrastructure buildout.

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A frustrated shareholder of Nomura Holdings suggested that the company, embroiled in an insider trading inquiry, should show its shame by changing its name to Vegetable Holdings.  Beyond amusing, it is an indication of the frustration coming out of many Japanese stockholders.  In a recent survery of 1,000 institutional investors and their plans for shareholder meetings this year, a record 14.5 percent said they intended to vote against the appointment of directors and auditors chosen by the company.

Additionally, Dai-ichi Lide Insurance, Japan’s third-largest life insurer said in April that it was tightening guidelines on exercising voting rights, and would start pushing back against companies that insisted on introducing poison pills or holding back dividends despite ample cash holdings.

We have written about the fundamental shift taking place among Japan’s decades-long business practices.  While this will be a very slow change (as cultural ones usually are), if investors continue to become more active and vocal in Japan, the transition could come more quickly.

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Google’s new wireless Nexus Q media player was designed and manufactured in America.  In recent interviews, Google’s engineers repeatedly stressed the fact that it was a significant advantage to have design close to manufacturing, especially as they closely integrate their software and hardware.  Google engineer Matt Hershenson claimed, “For us it’s really great that we can be at our desk in the morning, have meetings with hardware and software people, and then a subset of that team can be in the factory in the afternoon.  The time it takes from being in the assembly process to being in the living room of a product tester we can measure in hours and not days.”

For the past year we have written about the move of manufacturing back to the United States.  For technology companies, one of the roadblocks to such a move has been finding enough component suppliers nearby.  However, if enough technology companies such as Google begin experimenting with U.S. manufacturing, the component suppliers will soon follow, creating the potential for a virtuous circle.

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The musical group “fun.” enjoyed watching its hit “We Are Young” sit atop Billboard’s Top 100 for six weeks. When the group decided to release the single in the U.K., it learned that 18 different knockoff versions of the song were already selling their and being downloaded off iTunes. It had to rush the song into release ahead of schedule for fear of losing the market completely.

These are not knockoffs like those the software and hardware businesses face; rather these are knockoffs of the original content but by people who make no pretense of being the original musicians. The fashion industry has faced this issue, as lower-priced stores create their own versions of runway fashion, putting the products in stores before the original designers get theirs to market. The idea of “rolling out” any product slowly around the world is anachronistic.

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The percentage of Americans who changed residences between 2010 and 2011 fell to a record low 11.6 percent. That compares with 17 percent in the recession of 1990-1991.

Could we soon see an increase?

The number of homes for sale in the U.S. stood at 2.5 million in April, the lowest number in 6 years. Meanwhile, the number of completed new single-family homes available in April was 46,000, the lowest level since record keeping began in 1973. In California, the number of days a home sits on the market fell to 33 in April from 43 a year earlier.

The extreme pullback of new home construction, coupled with the declining volume of existing homes on the market (due in part to homeowners not putting their homes on the market because prices are “too low”) is helping to create some traction in the housing market, and pricing of both new and existing homes is climbing.

Housing has been affecting job searches. It is unlikely we will see a large reduction in the unemployment numbers until unemployed individuals can more easily sell their houses (and not lose a lot of money) and move to where jobs are available.

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Coach travelers on Singapore-based carrier Scoot Airlines can rent iPads for their flights. Scoot has removed its previous seatback entertainment system, reducing the weight of its four Boeing 777s by 7 percent. The reduced weight has meant reduced fuel usage and has saved the airline money.

This is yet another example of airlines doing whatever they can to save on fuel prices. We expect to see more moves in the transportation market to mitigate one of their biggest expenses. Meanwhile, the market for tablets and the reasons for corporations to purchase them continue to grow.

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Results are in from this year’s Kinder Houston Area Survey, a 30-year old survey of Houston area residents conducted by Rice University. Fifty-one percent of respondents said they would choose a smaller home within walking distance of workplaces and shops, rather than a single-family home with a big yard that would require driving almost everywhere. That figure was up from 39 percent in the 2010 survey, the last year the question was asked. Meanwhile, a majority of respondents said they would prefer that transit taxes, which are currently being diverted to street, drainage, and landscaping projects, be spent on transit projects instead.

Some might assume that the rising expression of desire for transit-oriented communities is coming only from liberal bastions and hipster havens like San Francisco,Boston andPortland, but here we see those desires being expressed by majorities in a metropolitan region as politically and economically diverse as metroHouston. Perhaps,Houston is turning into a land of peace-flag-waving, soy-latte sippers? We doubt it.

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