Dave Pollard's environmental philosophy, creative works, business papers and essays.
In search of a better way to live and make a living, and a better understanding of how the world really works.



September 30, 2004

FOUR CRITERIA FOR NEW PRODUCT SUCCESS

Filed under: Working Smarter — Dave Pollard @ 13:22
If you’re wondering why you’ve seen so little original thought on these pages of late, it’s because I can’t seem to shake the post-vacation blues. ‘Til they’re gone, I’ll keep relaying good ideas and inspirations from others.

InnovSuccessCriteria It’s been said that there are no new ideas in the world, just unique and clever ways of re-combining and articulating the old ones. A recent article in Strategy & Innovation by Eric Mankin contains no new insight, but a brilliantly simple formula, based on well-established business knowledge, for assessing whether your business concept truly fills an unmet need.

The formula is based on Clay Christensen’s description of what ‘filling an unmet need’ really means:

When a consumer buys a product, they are really ‘hiring’ it to get a job done. Companies are successful when they make it easier for their customers to get done what they were already trying to do.

Mankin says that a product that ‘makes it easier for customers to get done what they were already trying to do’ must meet four criteria:

  1. Lower price than existing alternatives
  2. Greater benefits than existing alternatives
  3. Easy to adopt and use (and no problem switching from what the customer’s using now)
  4. Easy to buy (readily available)

Rate your new product or service according to these new criteria, and you’ll have a pretty good assessment of the likelihood of success of your new business. A lot of cheaply-made, environmentally damaging and wasteful products, like the new cheap disposable toothbrushes, the Swiffer products, and the endless rounds of ‘disposable wipes’ of every description meet criteria 2, 3 and 4 very well, and for buyers who think only of short-term cost, criterion 1 as well, and they have been very successful. The vast majority of new technologies, including Social Networking tools, fail to meet criteria 3 and (because they’re only available to computer users) 4, and are doomed to fail until they simplify adoption and broaden their reach (see diagram above). Clever innovators know the only way around criterion 1 is to develop a product or service that is unique, and has no existing alternatives, which is why great new ideas like TiVo, and the pioneering products from companies like Sony, are initially priced steeply, to recoup the costs of development quickly.

Perception is reality, and skeptics might argue that the purpose of advertising is to convince people that every new product meets these criteria, but I have more respect for the average consumer than that. I believe advertising does nothing more than raise awareness of a new product’s availability. Regardless of the cleverness of the message, most consumers will assess each product on the basis of how well it meets the four criteria above for them personally, and will discount any commercial that tries to do that thinking for them.

The easiest way for entrepreneurs to meet these criteria is:

  • Offer something that is unique — so that you’re not competing with large companies with deep pockets.
  • Do your research, so you know before you start that the benefits that you see in your offering are also appreciated as such by potential customers.
  • Keep the product or service simple, so it ’sells itself’ and can be virally marketed.
  • Be accessible and never keep customers waiting.
  • Be honest about what you can and can’t do — never overpromise or exaggerate.

If more innovators and entrepreneurs had Mankin’s formula in front of them as they developed their products and services, I think the success rate of new innovations would be a lot higher.

Thanks to Innovation Weekly for the link.

September 29, 2004

HOW EUROPE SEES THE US

Filed under: How the World Really Works — Dave Pollard @ 16:30
A recent global survey carried out by Gallup with a consortium of other pollsters paints an interesting picture of the US, as seen by residents of ten European countries: Germany, France, Italy, Netherlands, Poland, Portugal, Slovakia, Spain, Turkey, the UK, and by Americans themselves. Some interesting findings:
  • Two thirds of Americans think their expenditures on defense are too high, whereas only 60% of Europeans think their own defense expenditures are too high.
  • Three fourths of those surveyed in almost every country believe that immigration constitutes a “serious threat” to national security
  • Three fourths of those surveyed in almost every country have a “mostly favourable” opinion of the UN, and about two thirds in every country believe NATO is “still essential” to security
  • 60% of Europeans and 70% of Americans believe that Europeans and Americans share similar values.
  • “In light of Iraq”, two thirds of Americans believe the US and Europe should work in closer partnership, while two thirds of Europeans believe Europe should “take a more independent approach” to foreign and diplomatic affairs.
  • Excluding Germany, about two thirds of Europeans support military intervention to stop a civil war, while a small majority of Germans and Americans would be opposed to such intervention. And while over 80% of Europeans (including Germans) support deploying peacekeeping troops after a civil war, only two thirds of Americans do. This suggests that a significant percentage of Americans who supported the Iraq invasion would oppose using those same troops to keep the peace in another country, which must take some mental gymnastics to reconcile.
  • Excluding Germany, a small majority of Europeans and Americans would support military intervention to remove a government that abuses human rights.
  • A majority of those in Poland, Portugal and Turkey are opposed to continued presence of their country’s troops in Afghanistan, while Slovakians would object to their country sending troops. A small majority of other Europeans, and nearly three fourths of Americans, support their country’s continued presence in Afghanistan.
  • A majority of those in Italy, Poland, Portugal and Slovakia are opposed to continued presence of their country’s troops in Iraq, while the people of France, Germany, Spain and Turkey overwhelmingly support their leaders’ decision not to send troops or (in Spain’s case) to withdraw troops. Continued presence of troops in Iraq is supported only in the UK (52%), Netherlands (59%) and the US (59%).
  • Participation in an international peacekeeping and reconstruction force in Iraq under UN command would be supported by those in every country except Turkey and Poland. However, if the force was under US control, only four European countries (UK, Italy, Netherlands, Portugal) would approve of their country’s participation.
  • By an overwhelming majority in Europe, and by a 2:1 margin in the US, people agree that military action in Iraq has increased, rather than decreased, the threat of terrorism.
  • About two thirds of the people of all countries surveyed except Germany, Poland, Slovakia and Turkey (which would be opposed) would support UN-approved intervention to establish peace in an African nation. Only a slim majority of Americans would support such intervention without UN approval, while all other countries would be opposed,

Except for their opinion of Israel and the US, Europeans and Americans have surprisingly similar opinions of the “institutions and people” of the rest of the world, and both Europeans’ and Americans’ opinions of each other rank second only to their opinion of themselves. Only the Spaniards (mean score 42%) and Turks (28%) had majority unfavourable opinions of Americans.
survey1
Contrast this largely favourable opinion of America’s institutions and people with their approval ratings for Bush:
survey2
The weighted overall European approval rating for Bush is 16%.

I thought this was interesting: Here’s the proportion of people in each country that believe military intervention would be warranted to ensure the supply of oil to their country. What are we to make of this?
survey3
On the pivotal question of the wisdom of invading Iraq, the consensus is overwhelmingly that it was unwise, with the difference between countries being one of degree only. The question was “Was the war in Iraq worth the loss in human life and other costs”. Percentage saying yes:
survey3
This next chart tells an interesting story about each country’s history and culture: Might versus right. Note the strong divergence between Spain and neighbouring Portugal.
survey3
Contrast the last chart with this one, which shows a roughly 50-50 split of opinion in each country, with little difference between countries. The question is “Do you agree that providing economic aid to raise living standards in countries where terrorists are recruited is the most appropriate way to fight terrorism?”:
survey6
I’m not sure what to make of this either. It suggests we have a lot of education to do, anyway.

Finally, here are the issues that voters in each area consider most important in deciding which party to support in their next election:
survey6
There is little difference among European nations in answers to this question, including those nations that have a much longer history dealing with terrorism than the US. To me this suggests that Europeans have moved on to issues that they can really control, while many Americans continue to be victimized by the fear-mongering of the politicians and mainstream media.

Make of it what you will, I thought it was an interesting exercise in gauging The Wisdom of Crowds.

Addendum 8pm: A final question in the survey asked people to place themselves on a political spectrum from extreme left to extreme right (in the US, the wording was “extremely liberal to extremely conservative”), using a  seven point scale, with 4 being centrist/moderate. From left to right, here are the average country self-assessments, and the index of polarization (percentage rating themselves 1, 2, 6 or 7). Overall, and in almost every country, the curve was almost perfectly normally distributed (i.e. a bell curve), with most people calling themselves moderates, and about an equal number of left-of-centre and right-of-centre respondents:


Average (1-7)
Polarization (%)
France
3.8
16
Italy
3.8
18
Germany
3.8
17
Spain
3.9
25
Portugal
3.9
31
Slovakia
3.9
20
Netherlands
4.0
17
UK
4.2
16
US
4.2
27
Poland
4.4
31
Turkey
4.7
37

September 28, 2004

BUYER BEWARE: CONSUMER REPORTS’ TOP 10 SHOPPING TRAPS

Filed under: How the World Really Works — Dave Pollard @ 11:50
consumer reportsConsumer Reports has a useful list of ’shopping traps’ in its annual Buying Guide — a list of the ten most common scams perpetrated by disreputable corporations.
  1. Freebies and cheapies with strings attached: If you’re offered something for ‘zero dollars’ or an unbelievably low price “with the purchase of…”, you’ll probably find that the price of the product or service you have to purchase to get the ‘deal’ is inflated accordingly, so you’re not getting a deal at all.
  2. Gift certificates that expire: A new trend is to put expiry dates on gift cards and certificates. Don’t buy them.
  3. Overpriced ‘extended warranties’, ’service contracts’ and similar product insurance: These add-ons are priced to make a profit for the vendor, and usually cost much more than they’re worth. Consumer Reports only recommends buying reasonably priced warranties for goods with historically high after-warranty repair costs, like laptop computers and lawn tractors.
  4. Credit card insurance: Insurance that pays off your credit cards if you die, become disabled or unemployed is usually priced much higher than regular insurance for the same eventualities. And credit card theft insurance is also a rip-off, since your liability in these cases is usually zero, and rarely more than $50.
  5. Disposition fees: Car leases, mutual fund purchases, mortgage loans and some other agreements now have flat rate or contingent costs that you pay when you sell or at the end of the contract period, or for early termination of an agreement, hidden in the small print. Most notorious are exorbitant back-end per-kilometre charges if you exceed a ridiculously low mileage limit during your car’s lease term.
  6. Loss leaders: The items in the flyer are only priced so low because the average shopper ends up buying other items, unneeded or at prices higher than competitors’, once they arrive. And lots of loss leaders mysteriously go out of stock almost immediately after the start of the sale period. Make a list and stick to it.
  7. Zero percent financing: The actual cost of financing is always built into the price, the service charges, and/or the interest rate you pay if you’re late making even one payment. There is no such thing as a free lunch.
  8. Items “sold separately”: If the price is low, there are likely other items that you need to go with it that are overpriced to compensate. Before you buy, make a list of all the ‘extras’ you need, comparison-shop for them as a package, and avoid the temptation to add to the list impulsively.
  9. Automatic renewals: After a free ‘trial’ period, or at the end of an annual subscription period, many products and services now automatically renew, and charge your credit card, unless you specifically act well in advance of the renewal date to cancel.
  10. Unneeded extras: Once you’re sold on a major purchase, or when you’re at the checkout, with impatient people lined up behind you, the clerk starts asking you if you’d like A, B, and C to go with your new purchase. They know you’ll make decisions too quickly, and they’ll word the extras in glowing terms. If the “extras” are actually essentials, you’ve been had (see scam #8), so cancel the deal and rethink your options. If they aren’t, they’re probably overpriced and you’re better off without them.

September 27, 2004

WHAT ARE THE CHANCES FOR OUR WORLD?

Filed under: Preparing for Civilization's End — Dave Pollard @ 21:11
htstw 2
Recently I summarized my long analysis of How to Save the World in four bullet points:
  1. We need to communicate to everyone in the world a new story of our planet’s destiny, showing them a better way to live than our bankrupt and ruinous ‘civilization’ way.
  2. We need to achieve a huge consensus that overpopulation and overconsumption are the two root causes underlying all the problems we face today, and agree on deadlines and targets for correcting them.
  3. We need to organize six billion people to use their collective wisdom to tell us how to meet these deadlines and targets, and then free them to work in their communities to make it happen.
  4. We need to help each other clear away obstacles to success. That means a lot of humanitarian and peacemaking assistance, helping to build new infrastructure that will work in the new community-based world, redistributing resources from the rich to the poor, and disarming those that will try to establish new wealth and power hierarchies.

It’s a very ambitious goal, but after two years of study I don’t see how anything less that this revolutionary, worldwide program has a chance to save us from social and ecological catastrophe by the end of this century.

I have couched this program as a social and educational one, because it so threatens the established hierarchies of wealth and power (it almost inevitably would mean massive decentralization of power, and the collapse of much of the capitalist economic system) that, as I have argued elsewhere, I don’t see a political and economic program aimed at the same ends standing any chance at all of succeeding.

I’ve also said that I see innovation and technology playing a critical role in achieving these deadlines and targets,  in three ways:

  • Invention of radically new food, shelter, distribution and energy technologies that consume much less resources yet provide the same benefits as today’s wasteful products, services, channels and systems.
  • Invention of much simpler, more effective, less costly voluntary birth control, abortion and suicide technologies.
  • Invention of non-voluntary but non-discriminatory fertility control technologies that would only be deployed if the voluntary ones fail to achieve the agreed upon deadlines and targets.

The idea of this third application of technology “just in case” has distressed many of my readers, but in my opinion if we don’t have this option available the alternatives could be much uglier and highly discriminatory. Likewise, I think we need a coercive “Plan B”, entailing the humane and carefully targeted sabotage of some of the most wasteful attributes of our existing economic system, to be used if and only if social and educational actions fail to achieve agreed upon deadlines and targets for consumption reduction: If you can’t get people to reduce demand, you have to intervene to reduce excess supply. I would hope that no “Plan B” would have to be deployed, but I also think it would be naive not to have one in case it’s needed.

So I got to thinking about the probability of success. Both our instincts and our reasoning ability motivate us to take action when the probability of success is reasonably high, and not to act if it isn’t. I’ve had enough experience in my life (both personal and business) with situations where people are asked to make “leaps of faith” to appreciate that trying to persuade people to do things they don’t think will succeed is an arduous, if not impossible, task. Just take a look at Bush’s efforts to persuade politicians and then the American people of the wisdom of invading Iraq: He argued (dishonestly but very effectively) that the invasion would be quick, easy, and inexpensive, that the Iraqis would welcome Americans with flowers and crowds of joy. If he’d been honest about the probability of success, he would probably have failed to convince either Congress or the people of the wisdom of the invasion.

What do we need to do to increase the probability of success of the 4-step change program above? Well, if we follow the most popular business change model, that espoused by John Kotter in Leading Change, we need to:

  1. Establish a sense of urgency
  2. Form a powerful guiding coalition
  3. Create a vision
  4. Communicate the vision
  5. Empower others to act on the vision
  6. Plan for and create short-term wins
  7. Consolidate improvements 
  8. Institutionalize the change

Kotter argues that you don’t bring about sustained, meaningful change by edict. You need to persuade, enthuse, and engage people in sufficient numbers to change behaviours, beliefs or processes. Miss one of these eight steps, or get them out of order, he says, and you’ll fail. How could we apply these eight steps to the 4-step process needed to save the world? Here are a few ideas:

  • To establish a sense of urgency, we need to communicate to the public the causal connection between overpopulation & overconsumption, and their stressful effects: war, violence, poverty, epidemic disease, mental illness etc. That means countering the prevailing wisdom that these problems are caused by tyrannical governments, interference in ‘free’ markets, and basic flaws and weaknesses in human character. We need to enlist the help of scientists expert in proxemics to argue and provide evidence of this causality.
  • To establish a sense of urgency, we also need to urge the media to cover the true scale and scope of the horrors occurring in today’s world, as unpleasant and unpalatable as that truth is. Since the media are rewarded for pandering to public ignorance and desire for escapism, reassurance and oversimplification (trashy news about celebrities gets better ratings than news about faraway crises), we need to use blogs, alternative media and public discourse to create broad awareness of these unreported crises and hence pressure the major media to catch up.
  • My novel in progress, The Only Life We Know, will present a vision of a better world and a better way to live. Once it, and other compelling visions of alternative ways to live, have been published and broadly communicated, we then need to show that these idyllic visions are achievable if there is broad public will to do so. To do this we need to create Model Intentional Communities as ’short-term wins’ that give these visions substance and demonstrate their viability in the real world.
  • To further convince the public of the achievability of such a remarkable change in our world, we need to draw on the successes from history of similar radical, swift change: The Industrial Revolution, female suffrage, the ending of slavery, and the ending of the Vietnam War.
  • To monitor and show progress, we need to replace the measures of our success. At a global and state level, GDP needs to be replaced by a measure of well being divided by footprint. And at an individual level, we need a simple way to track our personal ecological footprint, perhaps using something like the aggregate of the ESCs (environmental and social costs) of all of our personal purchases and expenditures.

The Kotter model, designed as it is for business, does not translate perfectly to a whole-world change program. As much as a ‘powerful guiding coalition’ for global change would help, it is probably unrealistic to expect global leaders in any sector, who have a vested interest in the status quo, to support the change, let alone guide it. This is going to have to be a mass movement in which the leaders follow (mostly reluctantly) the lead of the people.

The Kotter model also came out before the power of the Internet to galvanize and influence public opinion and organize for change was well established, and before the Wisdom of Crowds successfully repudiated the cult of leadership and the conventional wisdom that the work and advice of experts is more valuable than that of the mass of people on the front lines.

I don’t claim to have all, or even most, of the answers to convincing the majority of the people on this planet of the wisdom of my 4-point program. It’s an iterative process, and many of the ideas that will persuade people of its appropriateness, urgency and viability will come from the people themselves. But let’s suppose we are able to convince a few billion people that:

  • overpopulation and overconsumption are the root causes of the problems plaguing our world
  • there is an urgent need to address these problems
  • the vision is desirable and achievable
  • we all have a responsibility to play our part to solve these problems and achieve the vision

What’s next? Well, once someone is convinced of the merits of making a change, they want to know what to do, precisely and specifically, to achieve it. When it comes to overpopulation, that’s pretty obvious, but in the case of overconsumption, we need to have some standards that will provoke heavy consumers to cut back, and give them some specific ideas how to do it (kind of like an ecological footprint ‘diet plan’), and recognize and reward those who have already achieved that standard.

When you break the problem down into these components, and look at solutions at the individual level, intractable problems start to look a lot more solvable. Maybe the chances for our world, fixed from the bottom up, are better than we thought. Now we only need to convince a few more billion people.

The chart at the top of this post is explained in this article.

September 26, 2004

IMPORTANT STUFF YOU MAY HAVE MISSED

Filed under: How the World Really Works — Dave Pollard @ 13:08
monsanto grass
A test batch of Monsanto’s new genetically modified grass.

A bunch of interesting news and links from the past week or so:

Project Censored list — Project Censored lists the top events of 2003-04 that went unreported in the media. Leading the list are the accelerating gap between rich and poor, and Ashcroft’s corporatist agenda.

US doctors and pharmacists refusing to dispense birth control pills — Members of right-wing religious groups are now arguing that the birth control pill is a form of abortion and urging their members to refuse to dispense it, and arguing that any employment action stemming from this refusal constitutes an infringement on their religious freedoms. So far twelve US states have passed laws protecting their ‘right’ to refuse to provide birth control pills to women, many of whom already have little or no access to abortion services.

Leading economist refutes benefits of outsourcing and offshoring — Paul Samuelson, the economist whose textbooks in the subject most of us studied in university, has refuted what he calls “the popular polemical wisdom” that the benefits of outsourcing exceed its costs. Because of historical distortions in the market, he says, outsourcing and offshoring can bring about large net disadvantage to first-world countries, and most notably to their workers and the environment.

Monsanto unleashes another monster — I reported recently that Colombian cocaine growers have now developed a coca plant that is resistant to Roundup, the Monsanto weedkiller that has been aerial sprayed in massive quantities by the US across much of Colombia in an attempt to eradicate the crop, devastating natural vegetation and helping to ruin that country’s agricultural economy in the process. Now Monsanto, which makes its money by selling patented seeds resistant to the poisons it manufactures, wants to sell a new patented grass, also resistant to Roundup, to golf courses. The move is opposed not only by environmentalists, but by the US Forestry Service and Bureau of Land Management as well. Genes from test batches of the new grass have been found as much as thirteen miles from the test area (as far as the test looked for it), raising fears that the new patented grass will proliferate across the country, supplanting natural grasses and transferring its DNA to new weed species that will be similarly weed-resistant.

TiVo, Replay agree to limits — In a sad acknowledgement of the strength of the entertainment media oligopoly, the makers of personal video recorders have agreed to incorporate new technology that will prevent multiple viewing of recorded pay-per-view programming.

Another great essay from Tony Kushner — As an antidote to the five stories above, Natasha at Pacific Views points out a great essay called Despair Is a Lie We Tell Ourselves. It’s a great remedy for the sense of hopelessness a lot of progressives are feeling these days. Last year I published excerpts from Kushner’s wonderful commencement address to Columbia College.

September 24, 2004

THE MEDICI EFFECT

Filed under: Working Smarter — Dave Pollard @ 11:35
innovationFrans Johansson’s The Medici Effect offers an encouraging recipe for engendering innovation, but it saves its most compelling message for the final few pages. Beginning with a pragmatic definition of innovation (anything that is new, valuable and realized), Johannson argues that most innovations occur in intersections (the ’spaces’ where different disciplines, cultures or specialized domains of knowledge meet. Three factors, he says, are increasing the number of such intersections and hence the opportunities for innovation: (a) increasing human mobility, (b) scientific convergence, and (c) increasing computing power.

Much of the book describes processes and techniques to break down the barriers that prevent us from seeing and entering intersections. These techniques include:

  • getting exposure to different cultures
  • broadening one’s knowledge and learning capacity
  • encouraging curiosity
  • reversing assumptions (e.g. imagining what would happen if a restaurant had no menus, didn’t charge for food, and didn’t serve food)
  • taking different perspectives and points of view (e.g. how would X view this situation)
  • randomly combining concepts (e.g. the craze for Magic The Gathering was generated by combining attributes of gaming with attributes of collectibles)
  • learning to be mentally prepared to see opportunities at the intersection when they present themselves (I am especially appreciative of this point because it is the hardest thing I ever learned to do) — I have written about this before when I described how the learning of how butterfly wings display colour even though they have no pigment has been applied to counterfeir-protecting banknotes
  • undertaking a variety of diverse occupations
  • interacting with diverse groups of people
  • looking for connections in unlikely places
  • producing a continuous, large quantity of ideas
  • striking a learning balance between sufficient depth and maximum breadth of knowledge subject-matter
  • reading prodigiously and listening attentively and openly
  • brainstorming (starting with individual idea generation to prevent groupthink and premature discarding of ‘crazy’ ideas)
  • allowing time for ideas to be properly considered (Johansson dispels the myth that deadlines and time pressure encourage innovation)

Johansson then explains the importance and difficulty of implementating innovations. It is critical, he says, to ‘execute past failures’, to know that no innovation will work perfectly in its first design, and be prepared to fail by being agile enough to turn failed ideas into successful ones, allowing time and resources for trial and error, and staying motivated to persevere and overcome adversity.

Although this is a useful compendium of innovation-stimulating techniques and proven methodologies, I didn’t find any of the ideas in the book especially — well, innovative. But then Johansson delivered the book’s most important message: The need for innovators to be courageous. In my book Natural Enterprise I downplayed the risk of entrepreneurship and explained ways to keep this risk to a minimum. I did this to counter the popular myth that entrepreneurship is necessarily extremely risky and stressful. But Johansson has a point. It takes courage to be an innovator, which is one of the reasons so few great ideas are ever realized in the commercial marketplace.

Being courageous means:

  • a willingness to break free from old-paradigm networks which reinforce old thinking
  • a willingness to give up the security (for what it’s worth) of your present job
  • a willingness to fight knee-jerk defenders of the status quo, who will ‘black-hat’ anything new or threatening
  • a willingness to confront the possible social stigma of ‘failure’ and non-conformity
  • the ability to walk away from unsuccessful ’sunk’ costs and not throw good money after bad
  • the ability to reframe alternatives from risk-averse to risk-accepting
  • the ability to acknowledge your fears and overcome them
  • a willingness to follow your heart

I agree with Johansson that innovators need to look for ideas in the space between disciplines, and that the opportunities for innovation have never been greater. But it is the argument for courage that makes The Medici Effect such a compelling read. I’ll have more to say on this subject in a future post.

September 21, 2004

HEALTH CARE: SIMPLE SOLUTIONS NO ONE WANTS TO IMPLEMENT

Filed under: How the World Really Works — Dave Pollard @ 11:07
bush health care
Canada has an enviable record of providing universal, quality health care at a reasonable price for the last half a century. But, as in every other country, our health care system is facing several strains:
  • Soaring health care costs, driven by astronomical salaries paid to senior medical practitioners by competing private health-care providers in the US
  • Disproportionally high usage of the health care system by Canada’s exploding immigrant population
  • Ageing population needing more health services

The answer of US-worshipping Canadian neocons is two-tier health care. Why, cries John Tory, the new leader of the hapless Ontario Conservative party, shouldn’t Canadians have “choice” in their health care services? This is classic conservative re-framing of public debate. “Choice” in health care means choice for those who can afford it, which means doctors who want to make obscene amounts of money (including many of the best ones) would work for the higher-paying private-tier system and the rest of us would be stuck with long waits and second-class service, just like we face in every other private sector of the economy.

Fortunately, and to the chagrin of the Canadian neocons, the vast majority of Canadian’s aren’t buying this Orwellian deceit. Recent polls say support for a public, single-class health care system is as high as ever.

So what’s a civilized country to do to deal with the three great challenges of 21st century health care bulleted above? I recently listened to a talk show featuring the federal Minister of Health, discussing how these problems should be solved. Caller after caller said the same two things:

  1. Much of the work done by doctors should be transferred to paraprofessionals and to self-diagnosis and self-treatment. Much more information, expert systems and self-service equipment needs to be provided to enable this. [I spoke to two doctors who said they would love to do this, since the majority of the work they do does not require a licensed professional to do it competently -- but that the lawyers wouldn't let them do it.]
  2. There needs to be a massive shift in the health care system from treatment to preventative care.

When the moderator asked the Minister whether he had learned anything from these recurring messages, he ’summarized’ the discussion by saying that better measurement systems were needed to ensure hospitals were operating as efficiently as possible, and that the government was looking into ways to do public-private partnerships without allowing competition or giving up control over pricing and access. The interviewer was incredulous: Had the Minister not heard the two messages that the public had been bombarding him with for the past hour? Of course these things would be considered, he replied, but the first priority was to find ways to increase access without increasing cost. His deafness to these two obvious solutions to the malaise of the system was astonishing.

What one listener of this talk show said about neoncons’ true motivation for wanting two-tier health care was also telling: “The reason rich politicians want a two class system is that they’re embarrassed to have to wait in line for health services the same as ‘ordinary’ Canadians, when their US business colleagues can jump the queue so easily and have their company write off the extra cost as a business expense. They’re also embarrassed that, to jump the queue, they have to fly to the US and pay out of their own pocket”. So in fact there is a choice for the very rich to jump the queue: Pay for treatment in the private US system.

Is Canada’s health care system the best in the world? Far from it. Health care in Canada’s cities is much better than in rural areas. The bureaucracy in much of the system (notably the blood collection system and the ‘walk-in’ clinics) is suffocating, and needlessly so. And because of its zeal to protect jobs in the system, Canada, which ranks first in the world in per-capita patents of medical technology, ranks forty-first in the world in the use of modern medical technology in its hospitals (MRI equipment is as scarce as gold, for example).

But it’s still an excellent system, and one that a two-class health care system won’t improve, at least for 95% of the population. If only the politicians and bureaucrats only had the intelligence and vision to listen to the Wisdom of Crowds and make the two changes (more paraprofessional/self-care, and more prevention instead of treatment) that the public is already starting to make themselves, our system would be the best in the world.

Oh — a word about prescription drug costs: You may have heard that many Americans come up to Canada to buy prescription drugs much cheaper than they can buy them in the US. Now, US municipal and state governments are fighting for the right to buy their drugs from Canada, too (and Kerry wants them to have this right). The funny thing is, the companies selling them are essentially all the same companies, since the Canadian pharmaceutical industry is dominated by the same handful of global corporations as the US industry. Why do these companies charge more in the US than the rest of the world for the same drugs? Not, as the neocons and the pharma industry are telling Americans, because Canadian drugs are inferior (perhaps, it is implied, dangerously so) — they are the identical drugs. They sell them for higher prices in the US because they can. Drug companies charge as much as the market will bear, and in the bloated US health care system where if you have enough money you can buy anything, the market will bear a lot. In the rest of the world money available for drugs is much less, so to sell their products pharma companies lower prices by 30, 50, even 70%, and still make a good margin. This is a case where globalization threatens to backfire on some of the corporations that most benefit from it. Couldn’t happen to a nice bunch of guys.

A GLOBAL IDEA: TAXING ‘BADS’ THROUGH A SECOND CURRENCY

Filed under: Working Smarter — Dave Pollard @ 11:02
handyThis is the first of a series of articles discussing some of the remarkable ideas in a new book called The Global Ideas Book. The book, with a forward by Charles Handy (pictured right) is the brainchild of the UK-based Institute for Social Inventions, and is a compendium of some of the 4000 ideas in the Global Ideas Bank, ideas and germs of ideas submitted by the public for free use and development by others. Described as “part suggestion box, part ideas network and part democratic think-tank”, what impresses me about this collection is the sheer ingenuity of the ideas. Thanks to Nick Temple, one of the book’s editors, for bringing it to my attention. You can buy the book here.

One of several concepts that grabbed my attention immediately is described by its inventor, Bradley Hall, as “A currency created to limit people’s exploitation of the environment”. I had been kicking around the idea of putting some constraint on the ability of the very rich to spend profligately without restriction, and Bradley’s proposition meets that difficult need and more. Basically how it works is this:

  1. Every individual would be given a flat, fixed, non-transferable amount of a new Environment and Social Currency (ESC), say, 10,000 units per month.
  2. A regulatory body would assign an ESC ‘price’ to each product and service sold, reflecting its negative environmental and social costs. So gasoline, for example, would have a high ESC price, while a service that has no negative environmental or social impact would have a zero ESC price. Theoretically, goods and services that actually improve the environment or social welfare could even be assigned a negative ESC price.
  3. Sellers would be required to charge users both its normal market-demand price and its ESC price. So there would be a strict limit, no matter how rich you are, on how much you could damage the environment and social welfare through your purchases. If you’ve reached your 10,000 ESC quota for the month, you’re simply not allowed to buy any more ‘bads’ that month — you’ll have to spend the rest of your money on ‘goods’.

As with any novel idea, its development will need a lot of thought and planning, to minimize bureaucracy (much of it could be done electronically) and minimize the risk of fraud (people buying in the ‘black market’ from vendors who don’t charge ESC). But what appeals to me about it is its extraordinary simplicity and egalitarianism. The fact that it challenges the presumption that money gives you the unlimited right to cause environmental or social damage is just the icing on the cake.

What do you think? Are there some other obvious problems with the idea? Any thoughts on how to implement it and avoid bureaucracy and fraud? Would you welcome it or see it as another undesirable imposition of government?

I’ll be describing some other ideas from the book on these pages in the coming weeks.

September 18, 2004

STIMULATING AND MEASURING CANADIAN INNOVATION — BADLY

Filed under: Working Smarter — Dave Pollard @ 04:20
flagIt is a strange irony that the people who study innovation seem to be rather unimaginative at finding ways to stimulate it and measure it. Two new Canadian studies retread tired old ground in this regard.

First, a Canadian federal government National Summit on innovation came up with these 18 lame ‘priority recommendations’ (I’m paraphrasing):

  1. Strengthen business-university relationships
  2. More university research
  3. More government funding of commercialization
  4. Eliminate capital taxes
  5. Enhance research tax credits
  6. Enhance investment tax credits
  7. Accelerate deregulation
  8. Fund more literacy improvement programs
  9. Teach problem-solving in schools
  10. More student loans
  11. More university student capacity
  12. More training programs for minorities
  13. Facilitate more workplace training
  14. Ease immigration for students and professionals
  15. More encouragement of municipal innovation programs
  16. Improve networks between research organizations
  17. Expand broadband access
  18. More learning investment in rural areas

Most of these brilliant ideas entail throwing taxpayer money at corporations, both directly and through subsidized public sector research that directly benefits private companies. The truth is that a substantial majority of Canada’s largest companies are owned by foreign (mostly US) parents who mostly treat their Canadian operations as low-labour-cost branch plants that distribute products and services designed at head office and built in the third world. Although the research capacity in Canada is comparable to the world’s best, and is cheaper than in the US or Western Europe, there’s no way Head Office is going to move its precious research function to the Canadian boonies. Many, many Canadian subs are housed in shabby, poorly-maintained, cheap premises using machinery and software cast off from Head Office when they upgraded, and run by managers sent to Canada because they weren’t assessed as good enough to run Head Office divisions. If you think that’s harsh, talk to any of the millions of Canadians working for fawning, ineffectual foreign bosses. And despite these disadvantages, many Canadian ‘branches’ significantly outperform their Head Office divisions, largely because their Canadian workforces are smarter, more resourceful, and — yes — more innovative than the Head Office drones.

So the real answer to Canada’s poor innovation performance (according to the following measurements, about which I will talk in a moment) is to take back Canada’s economy — phase in 51% Canadian ownership and Canadian management requirements for all businesses over a certain size. Require profits made in Canada to remain in Canada, by imposing a 100% tax on cross-border distributions. Scrap NAFTA. And if you want to stimulate innovation, invest in the people that live and die by innovation — entrepreneurs. Their profits stay in the community, get reinvested, and create jobs. By all means subsidize those entrepreneurs to do their research at Canadian universities — you better believe that research will be focused on commercial opportunity.

OK, now let’s look at how the Science Council of British Columbia proposes to measure innovation, to determine whether we need more wringing of hands in another Innovation Summit next year over our ‘poor’ performance. You thought the Feds’ list was bad — check this one out:

  1. Percent of population completing university
  2. Science and engineering degrees per 100,000 people
  3. Grade 8 average math and science standardized test scores
  4. Research workforce per 100,000 people
  5. Science workforce per 100,000 people
  6. Percentage of immigrants with university education
  7. Total R&D expenditures as a percentage of GDP
  8. Sectoral R&D expenditure as a percentage of GDP
  9. Business funding as a percentage of university R&D
  10. Scientific publications per 100,000 people
  11. Patents issued per 100,000 people
  12. University technology licensing revenue
  13. Venture capital investment per 100,000 people
  14. Percentage of manufacturers deemed ‘innovative’ by Statistics Canada
  15. New business starts per 100,000 people
  16. Tax rate of people with $80,000 of earned income
  17. Corporate tax rate
  18. Percentage of R&D expenditures tax-subsidized
  19. Total business investment as a percentage of GDP
  20. Percentage of households using the Internet
  21. Percentage of households using home computers
  22. Percentage of establishments in ‘high tech’
  23. Real GDP per labour hour in the private sector
  24. Real GDP per capita
  25. Employment rate
  26. Real average hourly earnings
  27. Total exports per capita

If this is how government measures performance, it’s no wonder people are jaded about government efficiency (though I confess I’ve seen corporate balanced scorecards that are just as bad). This list makes no mention whatsoever of entrepreneurship, which even big corporation defenders like Peter Drucker admit is the main driver of innovation. Even #15 is unrefined — most new business ’starts’ are numbered companies, very often affiliates of existing corporations set up for accounting or tax purposes, or passive investment holding companies. This is no measure of entrepreneurship. And a lot of business investment (#19) is in things like replacement equipment and building premises (in Canada, most often warehouses), so this index will tell you more about the price of real estate than the state of innovation. A more intelligent set of measures, as in the previous list, would include measures of true entrepreneurship — the percentage of GDP generated by independent business (excluding franchises), and the number of graduating students starting new ventures, for example.

Canadians are quite probably the most innovative people (relative to our size) on Earth. Many of the most successful software companies in the world were started by Canadians. We nearly dominate the ranks of the world’s best comedians, female singer-songwriters, and women novelists. We have a disproportionate number of Nobelists. A recent survey found that on average each dollar invested by non-Canadians in a Canadian-invented patent generates $40,000 in revenue for the patent-buyer. We’re world leaders in renewable energy research. I could go on, but that would be bragging, and that wouldn’t be Canadian.

So why do we beat ourselves up over meaningless measures of our innovation ‘uncompetitiveness’? Perhaps because we’re ashamed to admit that we sell ourselves short. We work hard for unappreciative and often rapacious foreign bosses who take the money we earn for them with our ingenuity and run. We have lost control of our own economic destiny, which may lead inexorably to a loss of our political and social autonomy as well. If we spent half the time and energy (and money) trying to stimulate and measure our economic autonomy that we spend trying (not very competently) to stimulate and measure ‘innovation’ we’d be much further ahead — by any measure.

Awfully Personal Question for September 18, 2004

Filed under: _ Uncategorized — Dave Pollard @ 00:03
christinaWelcome to That’s Awfully Personal, an opportunity for blog writers and readers to reveal a little more about themselves than might normally happen during the daily blogging process, and hence get to know each other a bit better. It’s a little like the late, great Friday Five, but more challenging. Each week our Awfully Personal Panel will post one or more new questions for you to answer on your blog, or in the comment space below if you don’t have a blog.

 For more on how That’s Awfully Personal works, please see the How to Play section below. Here is this week’s Awfully Personal Question:

Classic question with a twist. You’re approached by a very rich stranger with an unusual offer. She will contribute half a million dollars to a charity or humanitarian organization of your choosing provided you agree to work for that organization, full time, for the next five years, in a job of your own design, for which she will pay you another half a million dollars. Do you take the deal, and, if so, what’s the organization and what role would you design for yourself in it?

How to Play “That’s Awfully Personal”:

  1. Subscribe to (i.e. join) this Yahoo group to get the weekly question(s) sent to you automatically by e-mail each Friday.
  2. On Saturday, or whenever you get around to it, post one of the questions and your answer to it on your weblog or web site.
  3. Then come back here (you may want to bookmark this site) and click the ‘comment’ button under the question(s) of the week. If it’s your first time, you’ll be asked to enter your e-mail and the URL of your blog or website. Then just note that your answer is up. Other readers will then be able to read it on your site by simply clicking on your name in the comments thread. You can check out other people’s answers at the same time. Or, if you don’t have a blog or website, you can post your answer right in the comment box.
  4. If you have questions or observations about “That’s Awfully Personal”, or would like to become part of our Awfully Personal Panel that selects the weekly questions, e-mail us.
  5. If you have a suggestion for Question of the Week, e-mail us and our Panel will review it and, if selected, they will acknowledge you as the author with a link to your blog. Questions should ideally be challenging, so that the answers will be revealing (when answered honestly). But this isn’t Truth or Dare — we want people to want to answer honestly and to have to think a bit before they do.
  6. “That’s Awfully Personal” was developed when The Friday Five closed down. The questions are more thought-provoking and, well, more personal than most Friday Five questions. If they’re too serious for you, here’s a group that is resurrecting The Friday Five, which you might enjoy instead.
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