Archive for October 2010

So what can be done about airport security?

October 31, 2010

Wednesday afternoon and Colin Matthews, head of British Airports Authority slams “redundant” security measures at airports. 

I am reasonably optimistic that we can make the passenger experience more comfortable while keeping safety as the principal concern.

That’s nice. But three days later, and it appears that bombs have been flying around the world undetected. Matthews and his supporters are shut up.

Ever since the days of the PLO and Baader-Meinhoff, security services have been trying to keep the bad guys away from the pasengers. You have the feeling that they are often chasing the enemy rather than dictating the terms of the game.

Unfortunately, there are too many people out there who value life very differently than most of us. And that value sinks even further (if possible), when they channel their hatred against a religious or political opponent. Terror – yes, murder – is then a very simple step away.

Are we Israelis too security conscious? Well, I will let the shrinks answer that. What can be stated is that for the past two decades or so, Israel has led the field in security products and services; hardware, software, and intelligence.

This week, Israel is hosting a Homeland Security and Technology Conference. Much of the emphasis will focus on airport security. For example, the container code registration system of HTS is but one tech to figure prominently. “It specializes in image processing and computer vision technologies, mechanisms critical for a wide variety of civilian and security applications,” and is clearly a leader in its field.

But here’s a thought: what if you could stop the 9/11 type people before they get anywhere near a plane? What if this could be done without even talking to them – even eliminating the need for ethnic profiling?

The Economist magazine recently commented on the new skills developed by WeCU, located north of Tel Aviv. Their technology “analyses how people react to images (photographs of known terrorists, say) which may provoke a detectable physiological response in miscreants”.

Now for me, that is really cool. OK – I am biased, as I have know these guys for some years. But WeCu’s solution will probably resolve a lot of the complaints dished up by BAA and other airport managers interested in their higher profits. It will help to move customers along through the terminals without impairing their safety, allowing them to keep their shoes on and retain their precious bottles of water.

Maybe the solution for Matthews et al is to channel some of their resources from publicity and into further technology testing.

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The financial media discovers Gaza

October 29, 2010

Writing 2 weeks ago in the UK newspaper, The Mail on Sunday, Peter Hitchens summarised an extensive visit to Gaza, which he described as “world’s most misrepresented location“.

Hitchens coverage was the first amongst several similar stories in the international, all with a similar theme.

I don’t think it (Gaza) is a paradise, or remotely normal………..There are dispiriting slums that should have been cleared decades ago, people living on the edge of subsistence. There is danger. And most of the people cannot get out. But it is a lot more complicated, and a lot more interesting, than that………

But if you think Israel is the only problem, or that Israelis are the only oppressors hereabouts, think again. Realise, for a start, that Israel no longer rules Gaza. Its (former) settlements are ruins.

Even when, as in Gaza, there is no way out, morality patrols sweep through restaurants in search of illicit beer and women smoking in public, affronting the 14th Century values of Hamas.

Hitchens is going against a decade or so of politically correct wisdom. Two years ago, Time Magazine pleaded: “Please spare a thought for the starving Palestinians of Gaza. There are 1.5 million of them”. In parallel, and industry of NGOs has arisen, although they seem content to criticise Israel but never the excesses of Palestinian rule.

So what is the truth? was there ever hunger? Has Gaza suddenly discovered gold? Has it been wealthy all the time, but nobody really reported the facts? As Hitchens also commented, the truth in the Middle East is rarely what you see on the surface, so let’s dig a bit more.

Go to any IMF or World Bank report on the Palestinian economy  – and Gaza in particular – and you will find a depressing set of economic statistics. Every since September 2000 when Yassir Arafat and the Palestinian Authority launched the Second Intifada, the economy has nose dived.

But if financial growth in Gaza went backwards, then previously it must have achieved a “higher” level from which to fall. And this is where the work of Sebastien Dessus for the World Bank is so valuable. Professionally, he has been tracking the Palestinian economy for over a decade. Note what he says about the period from the onset of Israeli rule to the start of the Intifada.

While real GDP grew by 5.5 percent on average in West Bank and Gaza from 1968 to 2000, it only grew by 4.2 percent in Israel. During the same time, population grew by 2.9 percent in WBG and 2.4 percent in Israel.

Does that put the Palestinians as one of the most successful economies in the last quarter of the twentieth century? Bring on the Intifada, suicide bombings and attacks from Gaza, and the Palestinian population suddenly found themselves without 125,000 jobs in Israel. And these were considered relatively well paid positions. Couple this with Israeli defensive measures – justified and  / or repressive – and you have the recipe for a mega economic dip.

For the Palestinian leadership, the question was did the political uplift justify the financial turmoil, a debate I will not deal with. Certainly, key personalities did not suffer. Fatah strongman, Mohammed Dahlan amassed a personal fortune since his PA career began in the late 1980s, organising youth mobs in Gaza City. Hamas has collected a wealth of taxes from the smuggling industry, leading to “unprecedented social mobility” according to one local source.

And today? As Hitchens writes, life in Gaza is not a picnic, but neither is it a disaster. Further recent evidence?

  • The Financial Times has described the al-Deira luxury hotel, which has remained open despite Israeli measures and the repressive practices of the Hamas government.
  • Mai Yaghi, a local Gaza reporter has detailed how the old smuggling tunnels have a completely new and ironic purpose , because “lifting of restrictions (by Israel) in recent months has seen consumer goods pour into the Hamas-run territory through Israeli crossings, transforming the tunnels that once served as a lifeline for Gaza into its sole export channel.”
  • The EU’s representative to the West Bank, Gaza and UNRWA, Christian Berger, not considered a friend of Israel, has been quoted as saying that the area is “full of consumer goods”. 
  • And if Berger feels that there is not enough ready cash and actual purchases, he should recall that the largest employer in Gaza is the civil service. The Palestinian Authority is still paying the salaries of these 67,000 people, even if many are paid up Hamas officials.

Is Gaza rich? No. It still needs the tons of daily aid, which Israel facilitates. On the other hand, a utube video from an unknown source shows beyond doubt just what multiple resources are available in wide parts of the territory.

And is there a lesson for the future? Look what is happening in the West Bank. Hatred of Israel may still predominate. But much of the violence has been laid to one side. As Time Magazine now observes.

Ramallah’s first five-star hotel, a Mövenpick, is opening this month. Across the West Bank, similar scenes are unfolding. Building cranes pierce the sky. Outside Nablus, new car dealerships sell everything from BMWs to Hyundais. Inside the ancient city, the first movie house to open in 20 years, Cinema City, is hugely popular. Last year the Hirbawi Home Center, a five-story shopping mall selling luxury items like plasma TVs, opened just outside Jenin.

Indeed, the IMF has reported that the Palestinian economy is on track to grow 8% in 2010.

So, the international media have confirmed that Gaza is not an economic prison. One question remains. As Tom Gross, a leading commentator, pondered; why does the BBC, possibly the world’s largest communicator, seem determined to ignore this story?

The next scientific revolution, in the Holyland?

October 26, 2010

“A short history of nearly everything” by Bill Bryson is not just another fun book by the American author. For scientific dummies like me, he somehow manages to explain most simply molecules and rocks and lasers and elements and much more.

For once in my life I have understood these words – all be it briefly, until Bryson starts to develop another new subject. And then I forget what I had just learnt.

But Bryson makes a very interesting point. Many scientists at the beginning of the previous millennium thought that chemistry and physics had reached its limits. One hundred years later – plus an extra atom bomb, moon landing and microelectronics industry later – we have begun to appreciate the meaning of progress.

The past 2 decades have seen amazing changes. Living in Israel, it is a pleasure to be part of the push to achieve more, particularly in communications technology. Just look at 2 “innocent” items in this morning’s economic press.

  • Provigent has been picked as Israel’s most promising start up in 2010. It provides best-of-breed system-on a-chip (SoC) solutions to vendors of broadband wireless equipment. Wireless products will be working quicker very shortly.
  • Modu is to launch the lightest yet mobile phone, which can be customized for personal use.

Go to a mobile conference and Hebrew will be one of the main languages heard.

But where is the next scientific revolution going to come from? Writing in the Harvard Business Review, Tony Hey talks of the “Fourth Paradigm”, following experiment, theory and computation:

….instead of developing programs based on known rules, scientists begin with the data. They direct programs to mine enormous databases looking for relationships and correlations, in essence using the programs to discover the rules. We consider big data part of the solution, not the problem. The fourth paradigm isn’t trying to replace scientists or the other three methodologies, but it does require a different set of skills. Without the ability to harness sophisticated computer tools that manipulate data, even the most highly trained expert would never manage to unearth the insights that are now starting to come into focus.

In the language of a layman, we are talking about predictive models. This can impact on all the sciences; if and when somebody will fall ill, changes in meteorological conditions, money movements, and more.

But there is another factor, which Hey only begins to hint at towards the end of his article. Collaboration; to get the most out of this new approach, the sciences will have to mix, a trend not always present in the twentieth century scientific history

With Google, Siemens, Intel and the like having major r&d centres in countries like Israel and India, that is a step in the right direction. They are looking for a broader (and cheaper) approaches to new issues. As Hey recognizes, sofware powerhouse Microsoft’s health group is another important element in the equation.

For Israel, the encouraging theme is the result of the start up competition mentioned above. The top 10 winners came from a range of new industries – right in to nanotech. This mixing approach – not concentrating on one sector – bodes good news for the future.

Management gurus – bye bye economists?

October 25, 2010

Last week, I wrote about “growing role of biologists in management”. Citing a senior marketing director, the question is what makes people tick? How do our genes or chemical composition affect the way we reach decisions, specifically in the work environment.

As somebody, who was trained as an economist, I have to feel somewhat “threatened”.

So my heart sank just a bit further when I began to read how about many leading firms in Israel have rethought their recruitment policies. It seems that students of philosophy and anthropology are highly sought after these days. They leave universities with an ability to observe across a broad spectrum. These are the people who are destined to become financial advisors for their employers.

What about some training in pricing policy or understanding accounting management? Well, it turns out that Microsoft, the mobile companies and others now provide in-house crash courses.

To quote a partner of McKinsey in Israel, Dr Jonathan Kolodny: “It does not matter if the candidate studied management or philosophy. We  prefer students that have learnt how to think and how to look at situations differently.”

I can’t see too many economists or accountants emerging with such a skill.

Who is right and wrong? Yes, we all know that recruitment is prone to trends. I recall how much used to rest on your answer to the question “where do you see yourself in 5 years time”. Who the xxx knows?

But here is a thought for senior management in the companies mentioned above. If the youngsters are being asked to think, is there a mechanism to listen to, respect and possibly even to accept some of the conclusions of these new members of staff. Or will their thoughts just be rejected by the stuffy voices of experience, seeking to protect their positions in the hierachy?

Maybe the economists will have something to offer here.

FDI and Israel

October 21, 2010

The Israeli economy is continuing to move forward. Recent figures show that GDP will have risen by around 4% during 2010, one of the best performances within the OECD grouping. 

These “good news” items have been matched in the past month by a string of reports, indicating how investor money is returning to the Holyland. Take a look at this short list of examples:

  • Soda Stream is turning to NASDAQ for US$95m.  Similarly, specialist internet TV supplier PeerTV expects to raise between £4.6 million and £6.2 million on AIM in London.
  • The patient monitor developer, EarlySense Ltd., has raised $7 million in funding, led by a Chicago-based venture capital fund.
  • Oversi, a global leader in OTT Internet Video and P2P caching solutions, has secured US$4.9m in funding from several sources, including Cisco.
  • Axerra Networks, a provider of emulation services, has been picked up by DragonWave, Canada for roughly US$15.0m.

Even the socialists of the kibbutz movement are looking to find a total of US$3 billion in new capital.

Any surprise that the Tel Aviv Stock Exchange is looking towards new highs?

Israel’s new range of exports

October 18, 2010

Look closely, and you will find a very new set of Israeli exports floating over to her trading partners.

Sure: For many years, Israel was associated with great agricultural produce and photogenic politicians. Then came the era of hightech, as Intel’s chips are developed in the Holyland and Teva has become one of the globe’s largest generic drug manufacturers.

But the first decade of the new millennium has seen Israeli products become world leaders in many unexpected fields. Just look at the brief list below, based on news items collated over the past few days.

  1. China’s home-electronics giant Haier Group will market Israeli water purification products. With 8,000 shops that should add up to a lot of Yuan changing hands.
  2. MCO Industries in Rehovot has secured a US$50 million deal to sell solar water heaters in America.
  3. And low tech does not get left off the list, as “Israeli falafel chain Falafel Ba’ribua (“square”) aims to follow in the footsteps of Max Brenner and Aroma cafés, and take New York City by storm”.
  4. Staying with the food sector, Israeli startup MySupermarket, UK’s independent grocery shopping and comparison site, has completed a new round of investment of $7.4 million, led by Greylock and Pitango. British internet shoppers will be able to find out on the spot, which supermarket chain offers the best deals.
  5. In Cleantech, Better Places is clearly one of the leading players in developing a non-fuel car.

Etc etc. A series of coincidences? Unlikely. At the end of this month, a large delegation from Korean companies will descend on Tel Aviv, looking for new technologies to purchase. Two of my clients expect to be there. The fields range from internet gaming to biomass.

Meanwhile, Korean steel giant POSCO has just become the 19th multinational to sign an R&D cooperation agreement with the Israeli government. So you could be purchasing something from Merck or Microsoft or Abbott or whoever, but its origins could have been in Jerusalem or Ariel or Eilat.

All amazing stuff. Time to calm down with a juicy piece of fruit….. from your local kibbutz of course.

Management gurus and the biologists

October 17, 2010

If genes “account for a substantial proportion of the differences between individuals“, why do managers tend to treat all people in a similar manner?

Thus posed the Economist magazine in a review of “Born entrepreneurs. How your genes affect your workplace.” The book makes a staggering observation:

Around 40% of the variation between people’s incomes is attributable to genetics.

Of course, there are also a series of environmental factors to take into account. Meanwhile, other studies have taken the argument further.

The influence of genes on leadership potential is weakest in boys brought up in rich, supportive families and strongest in those raised in harsher circumstances. The quip that the battle of Waterloo was won on the playing fields of Eton thus seems to have some truth.

On their own, these comments are fascinating. But a recent article in the Financial Times gave added emphasis to the growing roles of biologists in management. When considering marketing strategies, observed Simon Stewart, marketing director at Britvic, the beverages company:

Traditional research concentrated on the ‘what’. Now we are trying to establish the ‘why’. We are not asking what they think about products and ideas but focusing on what makes them tick.

Did I mention genes previously? Note how Ms Patricia Pineau speaks in her role as head of L’Oréal’s consumer insights team. She wants to “decode” how people make consumer decisions. It appears that the multinationals are increasingly turning to scientists to help them reach conclusions on branding. Bye bye marketing teams?

But less us not ignore the good old chemicals in our body. As I was preparing this blog, I caught my wife reading “Why love matters” by Sue Gerhardt. The author shows and examines how early pathways  – determined by neuroscience and biochemistry – affect the way we respond to stress in adult life.

So the next time you look for a consultant on how to improve the running of your company, will you be calling in your traditional expert or a biologist? As evolutionists would say, times are a-changing.