THE FOCUSED MIND

In a recent poll of Australians conducted by the Lowy Institute, 39 percent of Australians aged 18 to 29 say democracy is better than other forms of government. While 23 percent believed that “for someone like me, it doesn’t matter what kind of government we have”; another 37 percent said that non-democratic rule can be best.

Are these strange results for a highly developed, Western democracy such as Australia? Or, even in the most-developed nations, is democracy’s supremacy no longer a foregone conclusion, at least among younger adults? Global economic turmoil in developed countries in recent years, while China maintained brisk growth, is leading some to question old assumptions and the next generation to alter expectations. How would similar polls fair in Europe, Canada, or the United States?

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New Jersey’s Governor Chris Christie announced that Amazon will build two large distribution centers, each about one million square feet, in New Jersey. The crux of Christie’s announcement was that the state will now be able to collect sales tax from Amazon on all goods sold in the state.

While the focus of the announcement is on the sales tax, we see an even more intriguing possibility as Amazon builds these distribution centers. Amazon has previously announced the desire to offer same-day shipping, which in part explains the company’s recent purchase of robotics-firm Kiva Systems. Could Amazon be gearing up to launch same-day shipping in the densely settledNew York City metropolitan region? With transportation costs high, we see an increased desire among consumers to avoid driving from big-box store to big-box store to find an item. Amazon appears to be getting ready to service these convenience-oriented customers.

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According to Nikhil Tandon, an endocrinologist at the All India Institute of Medical Sciences, pound for pound, Indians have less lean mass, more body fat and more central fat than white Caucasians. In 2011, India had 62.4 million people with type-2 diabetes. In 2010, the number was 50.8 million.

With more than a twenty percent increase in diabetes in just one year and with a genetic predisposition towards diabetes, the Indian healthcare system will soon be severely impacted by the effects of diabetes. And since 80 percent of Indian health care is paid for privately today, the effects of no treatment should be expected to explode over the next several years.

The U.S. has been facing an obesity crisis for years (and the diabetes issues that can come with it), but could attitudes towards healthier eating now be changing?  In U.S. restaurants, servings of kids’ meals with toys were down 6 percent for the year ended December 2011, from about 1.3 billion servings to 1.2 billion servings – the fourth straight year of such declines.

Is this an ongoing signal that parents are changing their buying pattern to decrease the amount of fast food their children eat, or is this trend capturing the desire of parents to save money by ordering off the dollar menu?

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Navigation system company TomTom recently set up peer-to-peer support for its customers. The company’s users handled 20,000 cases in the first two weeks and saved TomTom around $150,000. The company turned the whole thing into a game, offering “kudos” points for a helpful answer and allowing helpers to “level up.” (Economist, 5/11/12)

As we have recently begun discussing, companies are facing increasingly inpatient and educated consumers with less brand loyalty than ever. In this environment, customer service has become a major brand differentiator. If companies can pass this task effectively to eager consumers, they can get a leg up on the competition. If they can save money in the process then it’s even better.

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Rutgers recently surveyed hundreds of young adults who graduated from college between 2006 and 2011. Only half are working full-time and six-in-ten think they’ll end up less financially successful than their elders. Workers who graduated in 2009, 2010 and 2011 earned a median starting salary of $27,000, or $3,000 less than graduates of previous years. Meanwhile, most recent college graduates said their first jobs don’t help them advance along a career path and that most of the positions didn’t even require a four-year degree. (Los Angeles Times, 5/10/12)

With members of the class of 2012 graduating this week across the U.S., it’s interesting to note the challenging economic times they and their immediate predecessors face. While many have noted that the unemployment rate for *all* college graduates is about half that of the general unemployment rate, it is those in the youngest cohort of college graduates who face disproportionate economic difficulties. Even when accounting for education, the effects of the recent Great Recession have been uneven on different age groups.

According to an estimate by Fidelity Investments, a married couple retiring this year should expect their healthcare expenses throughout retirement to total $240,000. Currently, 42 percent of Boomers have less than $25,000 saved for retirement. (Boston Globe, 5/9/12; Esquire, 4/12)

With respect to that group of recent college graduates mentioned above, those young adults shouldn’t expect a wave of career advancement openings to emerge from the mass-retirement of Baby Boomers any time soon. Too many Boomers remain financially unprepared for retirement, especially considering that housing prices haven’t climbed for a decade. Boomers are likely to stay in their jobs longer than expected and remain the driving force of the U.S. economy.

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Three additive manufacturing companies (3-D printing) are establishing an applied research laboratory with Penn State University. They will establish a manufacturing demonstration center for the Defense Advanced Research Projects Agency (DARPA) to develop and promote direct-digital manufacturing technology. (Aviation Week & Space Technology, 5/7/12)

Now that capabilities in 3-D printing are moving from polymer materials to advanced metals for the defense and aerospace industries, we should expect to see products emerging for many industrial applications.

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The pathogen, H5N1, commonly known as bird flu, has had difficulty spreading efficiently between people. Researchers in the U.S. and Holland exposed ferrets with the virus after four mutations (relatively few) and found that they were able to spread the virus between ferrets isolated in separate cages. This occurred by airborne spread, similar to the way humans spread viruses. (Nature, 5/3/12)

Because of the possibility that this virus could spread from human to human, the U.S. National Science Advisory Board for Biosecurity (NSABB) delayed release of the research until they devised ways to protect the information from potentially being used by terrorists. This is an example of what we have called WWIII, or a world of permeable borders, in which an outbreak of H5N1 virus could develop into a pandemic, unable to be readily contained.

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An Adidas store in Oxford, England, increased sales of its F50 sneaker ($270) five-fold when it tested the Adidas Virtual Footwear Wall. The company subsequently installed the technology in its Lower Broadway, Manhattan (NY) store in March.

The Adidas Virtual Footwear Wall renders products in 3-D on four 46-inch vertically-stacked touch screens. Customers can tap the play button to activate a video showing pro athletes using the product, removing a digital MiCoach tracking device in the shoe sole, plugging it into a computer and evaluating its results. At the end, all colors and styles in stock are displayed. A fitting boot next to the display allows for trying on the style. Only then does the customer need a sales associate to retrieve the desired sneakers from the stockroom. (Chain Store Age, April/May 2012)

At a time when brick-and-mortar stores are struggling to respond to encroachment from digital competition, this new in-store technology may create a bridge to capture today’s online shopper, while also increasing physical store efficiency.

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Fox Broadcasting, Paramount Pictures, Sony Entertainment, Universal Pictures, Warner Brothers and Wal-Mart are unveiling an “Ultraviolet cloud locker system.” After purchasing a DVD released by one of the studios, customers can go to Wal-Mart and pay between $2 and $4 more to have that movie stored digitally in a “cloud locker.” The movie will then be accessible on any device that features the VUDU app or with Internet access. Disney, Apple and Amazon are not participating. (Forbes, 4/27/12)

Even after watching record labels get it wrong for years, m­ovie studios can’t get it right. DVD sales dropped 20 percent between 2010 and 2011, and increases in Blu-ray sales and digital downloading didn’t make up the difference. Expect an increase in piracy, not an increase in consumers spending time and money to get access to watch a movie they have purchased on any device.

On the other hand, in August, Nintendo will sell New Super Mario Bros 2 and other games for its gaming platforms, the 3DS and Wii U, as both direct downloads and physical packages. The company has previously offered high-end games on discs and cartridges, and smaller games via download. Customers can purchase via Nintendo’s eShop online store, or they can buy download codes from traditional game retailers. (Wired, 4/27/12)

Unlike the movie studios, Nintendo understands the changes that Pervasive Computing is bringing. Digital games on smartphones are training individuals to want and expect immediate access, which is changing business and delivery models for traditional game companies. How long will it be before sales of physical games sold at brick-and-mortar stores disappear completely?

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Costco launched a pet medication business last year and rolled it out nationally this month. The new initiative includes a custom, continuing-education program for pharmacists who dispense pet meds as well as a veterinary drug handbook shipped to stores with access to veterinarians who can answer pharmacists’ questions. Meanwhile, U.S. retail sales of pet medications – including sales through retail stores, online retailers and veterinarians – were $6.7 billion in 2011. (Drug Store News, 4/23/12)

While most pet owners continue to buy medications through their veterinarians, and online retailers, including those operated by Target and Walmart, some retail pharmacies are starting to see pet medications as an opportunity. Perhaps they see this opportunity coming from the confluence of some demographic adjustments in the U.S.: Millennials and Gen Y adults are marrying less often than past generations; the birthrate among women of all ages is the lowest in 100 years; and the median net worth of households headed by someone 65 or older is $170,000, 42 percent more than it was in 1984.

Do fewer children among the young and more wealth among empty nesters add up to more pets in Americans’ future and an increased wherewithal to cater to pets’ health needs?

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