Friday, August 03, 2007

Corning develops ultra-flexible fiber optics

Another leap into our quantum future...

ROCHESTER, N.Y. — Corning is finding its way around very tight corners to help high-speed Internet service reach high-rise apartments and condominiums.

The world's largest maker of optical fiber said Monday it has developed a new fiber that is at least 100 times more bendable than standard fiber, clearing a major hurdle for telecommunications carriers drawing fiber into homes.

"This is a game-changing technology for telecommunications applications," said Corning's president, Peter Volanakis. "We have developed an optical fiber cable that is as rugged as copper cable but with all of the bandwidth benefits of fiber."

Three Corning scientists invented low-loss optical fiber in the early 1970s. The gossamer-thin strands of ultra-pure glass delivering voice, video and data at the speed of light have replaced copper as the backbone of America's telephone and cable television networks and enabled the phenomenal growth of the Internet.

Current optical fiber doesn't carry light well when it is bent around corners and routed through a building, making it difficult and expensive to run fiber all the way to homes and businesses. The ultra-flexible technology allows the fiber to be bent with virtually no signal loss, Corning said.

Corning said the improvements will enable carriers to economically offer high-speed Internet, voice and high-definition TV service to virtually all high-rise buildings.

In standard fiber, the light signal leaks out at bends or turns and "with two 90-degree turns, the signal is lost," Corning spokesman Dan Collins said. "This design relies on nanostructures that serve as a mirror or a guardrail, and as the fiber is turned or bent, the light doesn't leak out. We have wrapped the fiber around a ball point pen and it retains its effectiveness."

Michael Render, a market researcher in Tulsa, said the new product "would be an important breakthrough" in fiber-to-the-home systems.

More than 1% of North American homes are now directly connected to fiber, but many of them are single-family dwellings, Render said.

"There obviously are a large number of people that live in multi-tenant buildings, and improvements in the way to get fiber to those individual living units could be very significant," he said.

Render said the technology would make it easier to bring fiber "all the way to each individual living room, for example, or at least to each floor," instead of taking it only to the basement and then using existing wiring to reach the living unit.

There are more than 25 million high-rise apartment homes in the United States and more than 680 million worldwide. "The high cost of installation and difficulty in delivering fiber to the home made this market unappealing to most providers," Volanakis said in a statement.

Corning formed a working team with New York-based Verizon Communications in February to tackle the problems of installing fiber in multiple-dwelling buildings. Verizon is the only major U.S. phone or cable company to aggressively draw fiber to existing homes.

"This fiber technology will enable us to bring faster Internet speeds, higher-quality high-definition content and more interactive capabilities than any other platform which exists today," said Paul Lacouture, a Verizon Telecom executive.

Friday, June 08, 2007


An interesting innovation in the wireless energy space...


A clean-cut vision of a future freed from the rat's nest of cables needed to power today's electronic gadgets has come one step closer to reality.

US researchers have successfully tested an experimental system to deliver power to devices without the need for wires.

The setup, reported in the journal Science, made a 60W light bulb glow from a distance of 2m (7ft).

WiTricity, as it is called, exploits simple physics and could be adapted to charge other devices such as laptops.

"There is nothing in this that would have prevented them inventing this 10 or even 20 years ago," commented Professor Sir John Pendry of Imperial College London who has seen the experiments.

"But I think there is an issue of time. In the last few years we have seen an exponential growth of mobile devices that need power. The power cable is the last wire to be cut in a wireless connection."

Professor Moti Segev of the Israel Institute of Technology described the work as "truly pioneering".

Energy gap

The researchers from the Massachusetts Institute of Technology (MIT) who carried out the work outlined a similar theoretical setup in 2006, but this is the first time that it has been shown to work.

"We had a strong faith in our theory but experiments are the ultimate test," said team member Assistant Professor Marin Soljacic.

"So we went ahead and sure enough we were successful, the experiments behave very much like the theory."

The experimental setup consisted of two 60cm (2ft) diameter copper coils, a transmitter attached to a power source and a receiver placed 2m (7ft) away and attached to a light bulb.

With the power switched on at the transmitter, the bulb would light up despite there being no physical connection between the two.

Measurements showed that the setup could transfer energy with 40% efficiency across the gap.

The bulb was even made to glow when obstructions such as wood, metal and electronic devices were placed between the two coils.

"These results are encouraging. The numbers are not far from where you would want for this to be useful," said Professor Soljacic.

Power cycle

The system exploits "resonance", a phenomenon that causes an object to vibrate when energy of a certain frequency is applied.

When two objects have the same resonance they exchange energy strongly without having an effect on other surrounding objects. There are many examples of resonance.

"If you fill a room with hundreds of identical glasses and you fill each one with a different level of wine each one will have a different acoustic resonance," explained Professor Soljacic.

Each glass would ring with a different tone if knocked with a spoon, for example.

"Then if I enter the room and start singing really loudly one of the glasses may explode if I hit exactly the right tone."

Instead of using acoustic resonance, WiTricity exploits the resonance of low frequency electromagnetic waves.

In the experiment both coils were made to resonate at 10Mhz, allowing them to couple and for "tails" of energy to flow between them.

"With each cycle arriving, more pressure, or voltage in electrical terms, builds up in this coil," explained Professor Pendry.

Over a number of cycles the voltage gathered until there was enough pressure, or energy, at the surface to flow into the light bulb.

This accumulation of energy explains why a wine glass does not smash immediately when a singer hits the right tone.

"The wine glass is gathering energy until it has enough power to break that glass," said Professor Pendry.

Human interference

Using low frequency electromagnetic waves, which are about 30m (100ft) long, also has a safety advantage according to Professor Pendry.

"Ordinarily if you have a transmitter operating like a mobile phone at 2GHz - a much shorter wavelength - then it radiates a mixture of magnetic and electric fields," he said.

This is a characteristic of what is known as the "far field", the field seen more than one wavelength from the device. At a distance of less than one wavelength the field is almost entirely magnetic.

"The body really responds strongly to electric fields, which is why you can cook a chicken in a microwave," said Sir John.

"But it doesn't respond to magnetic fields. As far as we know the body has almost zero response to magnetic fields in terms of the amount of power it absorbs."

As a result, the system should not present any significant health risk to humans, said Professor Soljacic.

Future promise

The team from MIT is not the first group to suggest wireless energy transfer.

Nineteenth-century physicist and engineer Nikola Tesla experimented with long-range wireless energy transfer, but his most ambitious attempt - the 29m high aerial known as Wardenclyffe Tower, in New York - failed when he ran out of money.

Others have worked on highly directional mechanisms of energy transfer such as lasers.

However, unlike the MIT work, these require an uninterrupted line of sight, and are therefore not good for powering objects around the home.

Professor Soljacic and his team are now looking at refining their setup.

"This was a rudimentary system that proves energy transfer is possible. You wouldn't use it to power your laptop.

"The goal now is to shrink the size of these things, go over larger distances and improve the efficiencies," said Professor Soljacic.

The work was done in collaboration with his colleagues Andre Kurs, Aristeidis Karalis, Robert Moffatt, John Joannopoulos and Peter Fisher.

Friday, May 11, 2007

Disney sells 24 million TV shows through iTunes Store

Walt Disney this week confirmed it continues to enjoy strong sales of its television shows and films through iTunes.

Company CEO Bob Iger confirmed the company to have sold 23.7 million episodes of its television shows and an additional two million films through Apple's media service.

In November 2006, Iger confirmed Disney to have sold 500,000 films and 12 million television show episodes since such content reached iTunes. Disney hit 1.3 million films sold in February.
Top-selling titles include Cars and Pirates of the Caribbean, Iger observed.

“We continue to view the broadband-enabled internet as an important entertainment medium, and our creative and technological investments in Disney, ESPN, are designed with that premise in mind.”

Iger also confirmed Disney to be satisfied with iTunes prices – the company makes as much from an online sale as it does from a physical one, he explained.

"There are cost of goods that are factored out of the iTunes sale, which allows them to sell at a lower price. That’s their decision and it allows us to take revenue out that is equal to, in terms of a per-click sale, store sales. So, yes, we’re quite comfortable with iTunes," Iger explained.

Thursday, May 10, 2007

Gates sees accelerated decline of traditional media's ad model

Tech reporter Ben Romano of the Seattle Times on Bill Gates and the evolving advertising business...


Microsoft thinks the advertising business model for traditional media — those venues where advertisers still channel most of their spending — will fall apart faster in the coming five years as the kind of interactive, targeted advertising that is defining the Web comes to the fore.
Chairman Bill Gates, speaking to an audience of Microsoft's top advertising customers in Seattle this morning, expounded on this theme. It's something that he's talked about before, but today he described the decline in more certain, and biting, terms.
"We're saying newspapers will go online, and there will be massive innovation that comes out of that. We're saying that TV, the biggest ad market in the world, will completely go online and have the kind of targeting interaction that you only get out on the Web today," he said. "As dramatic as things happening on the Web are, that's actually what all advertising ... will be in the future."
Gates painted a grim picture of the transition.
"I have a lot of friends in the newspaper industry and, of course, this is a tough, wrenching change for them because the number of people who actually buy, subscribe to the newspaper and read it has started an inexorable decline," he said.
With that decline, Gates said, advertisers are shifting their budgets to new areas.
Advertisers will spend about $445.5 billion globally in 2007, according to ZenithOptimedia's most recent quarterly forecast. Of that, online is expected to get 7 percent of the pie compared with newspapers' 28.3 percent. By 2009, online is forecast to grow to 8.7 percent, while newspapers' share dips to 27 percent.
Newspapers aren't the only media that will suffer from this transition, Gates said.
The traditional Yellow Pages are doomed as voice-activated Internet searches combined with on-screen interfaces on smart mobile devices get better and proliferate, Gates said. The company's recent acquisition of voice-technology provider TellMe is accelerating the trend.
"When you say something like 'plumber' the presentation you get will be far better than what you get in the Yellow Pages," Gates said. "After all, we know your location and so we can cluster [results] around that. ... Yellow Page usage amongst people in their, say below 50, will drop to near zero over the next five years."
Microsoft showed off IPTV, its underlying software technology for television delivered over the Internet. Gates said it makes traditional broadcasting obsolete, supplanting the model in which one show is delivered to many viewers who may or may not be interested in it.
"The end-user experience and the creativity and the new content that will emerge using the capabilities of this environment will be so much dramatically better that broadcast TV will not be competitive," he said.
The IPTV model presents opportunities for advertisers to present viewers with messages specifically tailored to them.
"In this environment, the ads will be targeted, not just targeted to the neighborhood level ... but we'll actually know who the viewers of that show are," Gates said.
Microsoft's platform for delivering this kind of targeted advertising across the spread of its Web properties, and now these advancing competitors to traditional media, is called adCenter. Competitors Google and Yahoo! have similar platforms.
Gates said Microsoft is committed to making its platform the best, or one of the best, for selling and buying advertising inventory that targets specific audiences.
Microsoft, which still views itself as primarily a software company, is building tools to make and display the new kinds of interactive advertising that will define this new world. The company's Silverlight online video technology, released in a test version last week, is one such example.
Gates said he will focus on online services, search and advertising in his last 15 months of full-time work at Microsoft before moving next summer to full-time work at his charitable foundation.

Wednesday, May 09, 2007

Comcast CEO shows off super quick modem

Cool annoucement from the cable boys but I still have my money on the fiber guys. Photons trump electrons in the quantum economy...


By RYAN NAKASHIMA, AP Business WriterWed May 9, 7:50 AM ET
Comcast Corp. Chief Executive Brian Roberts dazzled a cable industry audience Tuesday, showing off for the first time in public new technology that enabled a data download speed of 150 megabits per second, or roughly 25 times faster than today's standard cable modems.
The cost of modems that would support the technology, called "channel bonding," is "not that dissimilar to modems today," he told The Associated Press after a demonstration at The Cable Show. It could be available "within less than a couple years," he said.
The new cable technology is crucial because the industry is competing with a speedy new offering called FiOS, a TV and Internet service that Verizon Communications Inc. is selling over a new fiber-optic network. The top speed currently available through FiOS is 50 megabits per second, but the network is already capable of providing 100 Mbps and the fiber lines offer nearly unlimited potential.
The technology, called DOCSIS 3.0, was developed by the cable industry's research arm, Cable Television Laboratories. It bonds together four cable lines but is capable of allowing much more capacity. The laboratory said last month it expected manufacturers to begin submitting modems for certification under the standard by the end of the year.
In the presentation, ARRIS Group Inc. chief executive Robert Stanzione downloaded a 30-second, 300-megabyte television commercial in a few seconds and watched it long before a standard modem worked through an estimated download time of 16 minutes.
Stanzione also downloaded the 32-volume Encyclopaedia Britannica 2007 and Merriam-Webster's visual dictionary in under four minutes, when it would have taken a standard modem three hours and 12 minutes.
"If you look at what just happened, 55 million words, 100,000 articles, more than 22,000 pictures, maps and more than 400 video clips," Roberts said. "The same download on dial-up would have taken two weeks."
Other cable industry executives, including Time Warner Inc. Chief Executive Richard Parsons, News Corp. President Peter Chernin and Viacom Inc. Chief Executive Philippe Dauman, cheered the demonstration during a panel afterward.
Brian Dietz, spokesman for the conference host, the National Cable and Telecommunications Association, said the demonstration was the key technological advance showcased at the conference.
"It's an exponential step forward and we're very excited," Roberts said. "What consumers actually do with all this speed is up to the imagination of the entrepreneurs of tomorrow."

Tuesday, April 10, 2007

Rebel with a Cause: The Optimistic Scientist

Editor's note: Freeman Dyson is professor emeritus of physics at the Institute for Advanced Study, in Princeton. He is a fellow of the American Physical Society, a member of the US National Academy of Sciences, and a fellow of the Royal Society of London. In 2000 he was awarded the Templeton Prize for progress in Religion. He is the author of a new book, "The Scientist as Rebel." Benny Peiser of Liverpool John Moores University recently interviewed Dyson about his views on science, hope and the future.

Benny Peiser: In your book "Infinite in all Directions" (1988) you discuss eschatological questions surrounding the theoretical issue of the end of the universe. As one of a very small number of optimistic cosmologists, you have developed a scientific theory of infinity. You write: "I have found a universe growing without limit in richness and complexity, a universe of life surviving forever and making itself known to its neighbors across unimaginable gulfs of space and time." This hopeful cosmology contrasts sharply with the apocalyptic Zeitgeist. What would you say are the most important intellectual principles and ideas that have sustained your optimism?

Freeman Dyson: My optimism about the long-term survival of life comes mainly from imagining what will happen when life escapes from this planet and becomes adapted to living in vacuum. There is then no real barrier to stop life from spreading through the universe. Hopping from one world to another will be about as easy as hopping from one island in the Pacific to another. And then life will diversify to fill the infinite variety of ecological niches in the universe, as it has done already on this planet.

If you want an intellectual principle to give this picture a philosophical name, you can call it "The Principle of Maximum Diversity." The principle of maximum diversity says that life evolves to make the universe as interesting as possible. A rain-forest contains a huge number of diverse species because specialization is cost-effective, just as Adam Smith observed in human societies. But I am impressed more by the visible examples of diversity in rain-forests and coral-reefs and human cultures than by any abstract philosophical principles.

Benny Peiser: In the first chapter of your new book, "The Scientist as Rebel," you write that the common element of the scientific vision "is rebellion against the restrictions imposed by the locally prevailing culture," and that scientists "should be artists and rebels, obeying their own instincts rather than social demands or philosophical principles."

Contrary to this liberal if not libertarian concept of scientific open-mindedness, there has been growing pressure on scientists to toe the line and endorse what is nowadays called the 'scientific consensus' - on numerous contentious issues. Dissenting scientists frequently face ostracism and denunciation when they dare to go against the current. Has Western science become more authoritarian in recent years or have rebellious scientists always had to face similar condemnation and resentment? And how can young scientists develop intellectual independence and autonomy in a bureaucratic world of funding dependency?

Freeman Dyson: Certainly the growing rigidity of scientific organizations is a real and serious problem. I like to remind young scientists of examples in the recent past when people without paper qualifications made great contributions. Two of my favorites are: Milton Humason, who drove mules carrying material up the mountain trail to build the Mount Wilson Observatory, and then when the observatory was built got a job as a janitor, and ended up as a staff astronomer second-in-command to Hubble. Bernhardt Schmidt, the inventor of the Schmidt telescope which revolutionized optical astronomy, who worked independently as a lens-grinder and beat the big optical companies at their own game. I tell young people that the new technologies of computing, telecommunication, optical detection and microchemistry actually empower the amateur to do things that only professionals could do before.

Amateurs and small companies will have a growing role in the future of science. This will compensate for the increasing bureaucratization of the big organizations. Bright young people will start their own companies and do their own science.

Benny Peiser: In a Winter Commencement Address at the University of Michigan two years ago you called yourself a heretic on global warming, the most notorious dogma of modern science. You have described global warming anxiety as grossly exaggerated and have openly voiced your doubts about the reliability of climate models. These models, you argue, "do a very poor job of describing the clouds, the dust, the chemistry and the biology of fields, farms and forests. They do not begin to describe the real world that we live in." There seems to be an almost complete endorsement of the world's scientific organisations and elites of these models together with claims that they reliably epitomize reality and can consistently predict future climate change. How do you feel belonging to a tiny minority of scientists who dare to voice their doubts openly?

Freeman Dyson: I am always happy to be in the minority. Concerning the climate models, I know enough of the details to be sure that they are unreliable. They are full of fudge factors that are fitted to the existing climate, so the models more or less agree with the observed data. But there is no reason to believe that the same fudge factors would give the right behavior in a world with different chemistry, for example in a world with increased CO2 in the atmosphere.

Benny Peiser: In a chapter about the scientific revolutions in modern physics and mathematics, you describe the deep intellectual confusion in Weimar Germany in the aftermath of the First World War. You portray a society troubled by a mood of doom and gloom, a milieu that was conducive for scientific revolution as well as political upheaval. Unmistakably, the Great War set off a major shift in German thought, from the idea of progress and technological confidence to cultural pessimism and apocalypticism. As we know, the consequences of this mood of despair was calamitous. Do you see any comparison with the gloomy frame of mind that seems to be on the increase among many Western scientists today?

Freeman Dyson: Yes, the western academic world is very much like Weimar Germany, finding itself in a situation of losing power and influence. Fortunately, the countries that matter now are China and India, and the Chinese and Indian experts do not share the mood of doom and gloom. It is amusing to see China and India take on today the role that America took in the nineteen-thirties, still believing in technology as the key to a better life for everyone.

Benny Peiser: One of your most influential lectures is re-published in your new book. I am talking about your Bernal Lecture which you delivered in London in 1972, one year after Desmond Bernal's death. As you point out, the lecture provided the foundation for much of your writing in later years. What strikes me about your remarkably optimistic lecture is its almost religious tone. It was delivered at a time, similar to the period after World War I, when a new age of techno-pessimism came to the fore, reinforced by Hiroshima and Vietnam.

It is in this atmosphere of entrenched techno-scepticism and environmental anxiety that you advanced biological, genetic and geo-engineering as industrial trappings of social progress and environmental protection. At the height of ecological anxiety, in the same year as the Club of Rome proclaimed the "Limits to Growth," you envisaged endless technological advancement, terrestrial progress and the greening of the galaxy, famously predicting that "we shall learn to grow trees on comets."

At one point towards the end of your lecture, you christen your speech a "sermon." Indeed, your entire lecture reads as if it was written for a tormented audience searching for a glimmer of hope. In his book "The Religion of Technology", David Noble claims that the whole history of technological innovation and advancement has been primarily a religious endeavour. Noble claims that even today your ideas of technological solutions to terrestrial problems constitute in essence a religious conviction. How much of your cosmological view of the world has indeed been shaped by Judeo-Christian traditions? And do you see that there is an inherent link between your religious and your philosophical optimism?

Freeman Dyson: It is true that the tradition of Judeo-Christian religion is strongly coupled with philosophical optimism. Hope is high on the list of virtues. God did not put us here on earth to moan and groan. As my mother used to say, "God helps those who help themselves."

I am generally optimistic because our human heritage seems to have equipped us very well for dealing with challenges, from ice-ages and cave-bears to diseases and over-population. The whole species did cooperate to eliminate small-pox, and the women of Mexico did reduce their average family size from seven to two and a half in fifty years. Science has helped us to understand challenges and also to defeat them.

I am especially optimistic just now because of a seminal discovery that was made recently by comparing genomes of different species. David Haussler and his colleagues at UC Santa Cruz discovered a small patch of DNA which they call HAR1, short for Human Accelerated Region 1. This patch appears to be strictly conserved in the genomes of mouse, rat, chicken and chimpanzee, which means that it must have been performing an essential function that was unchanged for about three hundred million years from the last common ancestor of birds and mammals until today.

But the same patch appears grossly modified with eighteen mutations in the human genome, which means that it must have changed its function in the last six million years from the common ancestor of chimps and humans to modern humans. Somehow, that little patch of DNA expresses an essential difference between humans and other mammals. We know two other significant facts about HAR1. First, it does not code for a protein but codes for RNA. Second, the RNA for which it codes is active in the cortex of the human embryonic brain during the second trimester of pregnancy. It is likely that the rapid evolution of HAR1 has something to do with the rapid evolution of the human brain during the last six million years.

I am optimistic because I see the discovery of HAR1 as a seminal event in the history of science, marking the beginning of a new understanding of human evolution and human nature. I see it as a big step toward the fulfilment of the dream described in 1929 by Desmond Bernal, one of the pioneers of molecular biology, in his little book, "The World, the Flesh and the Devil: An Enquiry into the Future of the Three Enemies of the Rational Soul". Bernal saw science as our best tool for defeating the three enemies. The World means floods and famines and climate changes. The Flesh means diseases and senile infirmities. The Devil means the dark irrational passions that lead otherwise rational beings into strife and destruction. I am optimistic because I see HAR1 as a new tool leading us toward a deep understanding of human nature and toward the ultimate defeat of our last enemy.

Benny Peiser: Britain's leading cosmologists seem to be particularly gloomy about the future of civilisation and humankind. The so-called Doomsday Argument seems to have had a significant influence on many Cambridge-based scientists. It has induced among them a conviction that global catastrophe is almost imminent. Martin Rees, for instance, estimates that there is a 50% chance of human extinction during the next 100 years. How do you explain this apocalyptic mood among leading cosmologists in Britain and the almost desperate tone of their pronouncements?

Freeman Dyson: My view of the prevalence of doom-and-gloom in Cambridge is that it is a result of the English class system. In England there were always two sharply opposed middle classes, the academic middle class and the commercial middle class. In the nineteenth century, the academic middle class won the battle for power and status. As a child of the academic middle class, I learned to look on the commercial middle class with loathing and contempt. Then came the triumph of Margaret Thatcher, which was also the revenge of the commercial middle class. The academics lost their power and prestige and the business people took over. The academics never forgave Thatcher and have been gloomy ever since.

Benny Peiser: Finally, let me ask you about your thoughts regarding Britain, the country of your birth, the USA, the country of your choice, and the future of the Western democracies. At the end of your new book you write that "without religion, the life of a country would be greatly impoverished." Perhaps nothing symbolises the glaring differences between Britain and the USA more than the gradual fading of religion in the cultural life of the UK and the profound permeation of religion on public life in the US. Sometimes I wonder whether both extremes may be detrimental to a stable, liberal and open-minded society. In a world of mounting intellectual dogmatism, is there, in your view, a middle way between the Scylla of nihilist despair and the Carybdis of fundamentalist unreasonableness?

Freeman Dyson: I do not agree with your assessment of religion in Britain and the USA. The extremes of religious dogmatism in the USA and of atheistic dogmatism in Britain are greatly exaggerated by the media. In both countries, the average atheist and the average Christian are not dogmatic or unreasonable. So far as I can see, there is about the same variety of beliefs on both sides of the ocean. Certainly we do not need any accurate navigation to find a middle way between the two extremes. Probably ninety percent of the population are somewhere in the middle.

It is also interesting in this connection to observe the similarity, in optimistic mood and rapid material progress, between China and India. Although China is traditionally non-religious and India is traditionally permeated with religion, this does not seem to make much difference. In both countries, rapidly growing wealth and technological progress create a mood of optimism, with or without religion.

Benny Peiser: Thank you.

Freeman Dyson: Thank you.

Editor's note: A longer version of this interview first appeared at CCNet.

Monday, April 09, 2007

Globalisation's offspring

An interesting article from on how the new multinationals are remaking the old.


FOR as long as multinational companies have existed—and some historians trace them back to banking under the Knights Templar in 1135—they have been derided by their critics as rapacious rich-world beasts. If there was ever any truth to that accusation, it is fast disappearing. While globalisation has opened new markets to rich-world companies, it has also given birth to a pack of fast-moving, sharp-toothed new multinationals that is emerging from the poor world.

Indian and Chinese firms are now starting to give their rich-world rivals a run for their money. So far this year, Indian firms, led by Hindalco and Tata Steel, have bought some 34 foreign companies for a combined $10.7 billion. Indian IT-services companies such as Infosys, Tata Consultancy Services and Wipro are putting the fear of God into the old guard, including Accenture and even mighty IBM (see article). Big Blue sold its personal-computer business to a Chinese multinational, Lenovo, which is now starting to get its act together. PetroChina has become a force in Africa, including, controversially, Sudan. Brazilian and Russian multinationals are also starting to make their mark. The Russians have outdone the Indians this year, splashing $11.4 billion abroad, and are now in the running to buy Alitalia, Italy's state airline (see article).

These are very early days, of course. India's Ranbaxy is still minute compared with a branded-drugs maker like Pfizer; China's Haier, a maker of white goods, is a minnow next to Whirlpool's whale. But the new multinationals are bent on the course taken by their counterparts in Japan in the 1980s and South Korea in the 1990s. Just as Toyota and Samsung eventually obliged western multinationals to rethink how to make cars and consumer electronics, so today's young thrusters threaten the veterans wherever they are complacent.

The newcomers have some big advantages over the old firms. They are unencumbered by the accumulated legacies of their rivals. Infosys rightly sees itself as more agile than IBM, because when it makes a decision it does not have to weigh the opinions of thousands of highly paid careerists in Armonk, New York. That, in turn, can make a difference in the scramble for talent. Western multinationals often find that the best local people leave for a local rival as soon as they have been trained, because the prospects of rising to the top can seem better at the local firm.

First, count your blessings
But the newcomers' advantages are not overwhelming. Take the difference in company ethics, for instance, which worries plenty of rich-world managers. They fear that they will engage in a race to the bottom with rivals unencumbered by the fine feelings of shareholders and domestic customers, and so are bound to lose. Yet the evidence is that companies harmonise up, not down. In developing countries (never mind what the NGOs say) multinationals tend to spread better working practices and environmental conditions; but when emerging-country multinationals operate in rich countries they tend to adopt local mores. So as those companies globalise, the differences are likely to narrow.

Nor is cost as big an advantage to emerging-country multinationals as it might seem. They compete against the old guard on value for money, which depends on both price and quality. A firm like Tata Steel, from low-cost India, would never have bought expensive, Anglo-Dutch Corus were it not for its expertise in making fancy steel.

This points to an enduring source of advantage for the wealthy companies under attack. A world that is not governed by cost alone suits them, because they already possess a formidable array of skills, such as managing relations with customers, polishing brands, building up know-how and fostering innovation.

The world is bumpy
The question is how to make these count. Sam Palmisano, IBM's boss, foresees nothing less than the redesign of the multinational company. In his scheme, multinationals began when 19th-century firms set up sales offices abroad for goods shipped from factories at home. Firms later created smaller “Mini Me” versions of the parent company across the world. Now Mr Palmisano wants to piece together worldwide operations, putting different activities wherever they are done best, paying no heed to arbitrary geographical boundaries. That is why, for example, IBM now has over 50,000 employees in India and ambitious plans for further expansion there. Even as India has become the company's second-biggest operation outside America, it has moved the head of procurement from New York to Shenzen in China.

As Mr Palmisano readily concedes, this will be the work of at least a generation. Furthermore, rich-country multinationals may struggle to shed nationalistic cultures. IBM is even now trying to wash the starch out of its white-shirted management style. But today, General Electric alone seems able to train enough of its recruits to think as GE people first and Indians, Chinese or Americans second. Lenovo's decision to appoint an American, William Amelio, as its Singapore-based chief executive, under a Chinese chairman, is a hint that some newcomers already understand the way things are going.

IBM's approach is possible only because globalisation is flourishing. Many of the barriers that stopped cross-border commerce have fallen. And yet, Mr Palmisano's idea also depends on the fact that the terrain remains decidedly bumpy. Increasingly, success for a multinational will depend on correctly spotting which places best suit which of the firm's activities. Make the wrong bets and the world's bumps will work against you. And now that judgment, rather than tariff barriers, determines location, picking the right place to invest becomes both harder and more important.

Nobody said that coping with a new brood of competitors was going to be easy. Some of today's established multinational companies will not be up to the task. But others will emerge from the encounter stronger than ever. And consumers, wherever they are, will gain from the contest.

Green revolutionary

Bob Lane's management philosophy at Deere has helped an American firm to reap a record harvest. From


“I AM not one of those neo-Malthusians,” insists Bob Lane. On the contrary, the boss of Deere believes that technological innovation, not least by his agricultural-equipment firm, will continue to increase the productivity of farmland, thereby enabling the world's ever-growing population to be fed. The past few years have seen important breakthroughs, he says, such as the use of global-positioning satellites to automate ploughing and seeding, reducing wasteful double planting. The latest versions of the famous green John Deere tractor are “sophisticated mobile information factories”, says Mr Lane. “They practically drive themselves, while the driver uses the internet to sell corn.”

Technology is one of three reasons why Mr Lane is extremely bullish. (So are his investors who, before recent stockmarket wobbles, lifted Deere's share price to over three times what it was when Mr Lane took charge in 2000—and some 90% above its previous all-time peak.) The second source of his optimism is the global boom in agriculture, which is leading to record demand for Deere's products, including combine harvesters, balers and seeders, as well as tractors. The firm also makes equipment for forestry, construction and even lawn care. Corn plantings in America are expected to be at record levels this spring, due to the growing demand for corn-based ethanol biofuel. Yet ironically for a firm headquartered in Moline, Illinois, at the heart of America's subsidy-addicted, protectionist farming industry, the strongest source of demand is abroad, as agriculture becomes more mechanised in prosperous developing countries. As Mr Lane puts it, “There are 2 billion more people able to afford to eat.”

Not that global demand is new to Deere. The 170-year-old firm has operated in Europe for over 50 years, and its tractors were exported to Stalin's Soviet Union. A previous boss, the last to come from the founding family, was on the second corporate jet allowed into China after Henry Kissinger's icebreaking meeting with Chairman Mao in 1972. But Deere's business really started to blossom overseas in the 1990s, after Mao's successor, Deng Xiaoping, embraced a version of capitalism, India started to liberalise its economy and Mercosur, the Latin American trade agreement, was signed. Today Deere sells its products in 130 countries and makes them in 16. Half of its workforce is based outside America. Indeed, Deere exports the small, durable tractors it makes in India to America.

Mr Lane is particularly optimistic about demand from Brazil, which is picking up again after some lacklustre growth in the past two years, due to the appreciation of the real. Deere will open a new factory in Brazil this year. In the long run Mr Lane thinks that Brazil is best placed of all the big emerging economies to increase the amount of land put to efficient agricultural use—and not, he insists, as a result of deforestation, as the Amazon is well north of the land he has in mind. “Brazilian society allows the wealthy to own and profit from lots of land,” he says, in contrast to China and India, where rules governing land ownership are holding back the move to efficient large-scale farming.

Mr Lane's third reason for optimism comes from the big changes he has made in how Deere is run. These grew out of his own background, in finance, not farming. He grew up in big cities, including Washington, DC, and did his MBA at the University of Chicago. He first seemed destined for a career in banking, and joined First National Bank of Chicago (now part of JPMorgan Chase), which sent him to Germany, where Deere was his main customer. The firm became his employer when it needed someone to improve the financial strength of its dealers, who were suffering badly during the recession of the early 1980s.

After becoming chief financial officer in 1996, Mr Lane became increasingly conscious that the firm was underperforming. It had great products, reflecting the homespun philosophy of its eponymous founder, who declared: “I will never put my name on a product that does not have in it the best that is in me.” But it was not a great business. Its working practices were old and slow, reflecting a workforce dominated by the UAW, the United Auto Workers. It had too much working capital and too much gear sitting unsold in showrooms. It was, says Mr Lane, “asset-heavy and margin-lean”.

Show me the money
As soon as he became chief executive he set about converting Deere to the pursuit of shareholder value, a philosophy he had embraced at the University of Chicago. All of the firm's 48,000 workers were told that they had to deliver “shareholder value-added”, an “easy-to-understand” measure of profitability Mr Lane devised that involved charging each business unit a cost of capital of 1% of assets a month. Each business unit was required to earn a shareholder value-added profit margin of 20% on average over the business cycle. Financial rewards are linked to this measure, even for the unionised part of the workforce: the UAW ultimately proved open to change.

To get so many people involved in this way is “pretty unique”, says Mr Lane. It seems to be working. Productivity is up by 11% since the new contract took effect. There is far less equipment wasting away at dealerships, thanks to new, lean just-in-time production. The pension-fund shortfall has been fixed. Deere's dividend payout has been doubled and its debt rating has been upgraded. But the big test is whether each business unit can maintain strong performance over an entire business cycle, Mr Lane maintains. “If not, it's just a flash in the pan—it doesn't count,” he says. The average target of a 20% margin is supposed to encompass 28% at the peak of the cycle and no worse than 12% at the trough (compared with zero or worse in the past). The first test may come in the construction division, given the trouble in homebuilding in America, says Mr Lane. Still, if things continue to go well, “perhaps, in the year 2014, we could declare ourselves a great business,” he says.