Malaysian Government Critic Faces DDoS Attack

April 12, 2013

Sarawak Report exposed an international propaganda campaign. The attack comes a few weeks before the election, from Buzzfeed

Malaysia’s Prime Minister Najib Razak. Image by Bazuki Muhammad / Reuters

WASHINGTON — A website critical of the Malaysian government is down on Thursday in what its owner says is a denial-of-service attack.

Sarawak Report, run by British investigative journalist and Clare Rewcastle Brown, has been taken offline. So has Radio Free Sarawak, an AM radio program Brown founded.

Brown, whose brother-in-law is former Prime Minister Gordon Brown, wrote on Sarawak Report’s Twitter and Facebook that her sites had been the victims of a denial-of-service attack. She didn’t immediately respond to a request for comment.

Sarawak Report broke the story in 2011 of a London-based public relations and television production firm, FBC Media, being paid to produce propaganda for the Malaysian government, which was aired as editorial content on the BBC and other major international television networks. That effort was part of a covert propaganda campaign that also made its way into the onto American online outlets.

It’s unclear who carried out the attack, though the incident is taking place in a moment of heated political rhetoric: the Malaysian general elections are set to take place on May 5. The governing party led by current Prime Minister Najib Razak has been in power for 56 years, but faces a stiffer challenge this time around from the Opposition, led by Anwar Ibrahim — a main target of the propaganda campaign.

Book Review: ‘Engineers of Victory,’ by Paul Kennedy

February 9, 2013

War Machines

‘Engineers of Victory,’ by Paul Kennedy

By Michael Beschloss
Published: February 8, 2013

The historian Daniel Boorstin once complained to me about the Smithsonian Institution’s decision in 1980 to delete the final two words from the name of its Museum of History and Technology. Boorstin had a point.

Scholars of other fields do often tend to underestimate the influence of technology. Although most of us know that World War II brought us radar, the literature of that titanic conflict is by no means exempt from this phenomenon. For instance, the biographer Joseph P. Lash subtitled his 1976 wartime account of Franklin Roosevelt and Winston Churchill “The Partnership That Saved the West,” in response to which I once heard a British scholar carp, “If Lash is right, then why did all those scientists and intelligence officers and factory workers bother working so hard?”

With this fresh and discursive new work, the Yale historian Paul Kennedy, best known for his widely debated “Rise and Fall of the Great Powers,” published in 1987, calls attention to the way “small groups of individuals and institutions” surmounted seemingly insuperable operational obstacles to enable Roosevelt, Truman, Churchill and Stalin ultimately to grasp the laurels for an Allied triumph.

“Engineers of Victory” achieves the difficult task of being a consistently original book about one of the most relentlessly examined episodes in human history. Unlike most studies of the war, this one is not primarily about politics, generalship or battlefield glories. References to the Big Three are few. Instead, like an engineer who pries open a pocket watch to reveal its inner mechanics, Kennedy tells how ­little-known men and women at lower ­levels helped win the war.

Kennedy concentrates mainly on the European theater and on Allied progress during the period from early 1943, when Hitler’s Admiral Doenitz sank 108 Allied vessels in a single month, provoking fears that England would be starved of essential bunker fuel, to the almost fantastic summer of 1944, when British and American troops scrambled onto Festung Europa. By Kennedy’s telling, a number of concurrent accomplishments spelled the difference between victory and, if not defeat, then, at least, a struggle that might have dragged on past 1945, with countless additional casualties.

The first was ensuring that Allied convoys could cross the Atlantic without being sunk by Germans. As Kennedy acknowledges, this was the first war in which sea power’s success was decided by air power, so part of the solution was cranking out airplanes (especially long-range bombers). But vital too were innovations like the Hedgehog, a forward-firing ship-­mounted mortar (devised by an idiosyncratic British unit called “Wheezers and Dodgers”), and the Leigh Light, which exposed German U-boats that were surfacing at night to recharge batteries so that British bombers could do their deadly work. In contrast with the cadre of popular and scholarly authors who since the 1970s have written, often breathlessly, about glamorous code breakers, Kennedy is skeptical of Bletchley Park’s importance, because the intelligence operation known as Ultra “could do only so much.”

Command of the air over Germany was seized only when American squadrons arrived to augment the Royal Air Force, upend the existing British doctrine of restricting attacks to nighttime and demand pinpoint bombing of specifically identified German military and industrial targets. The zenith of Allied accomplishment in the air, of course, was D-Day 1944, when a previously unimaginable 11,590 planes were sent aloft. “There had been nothing like it in world history,”

Kennedy writes, “nor has there been since. . . . There was no chance for the completely diminished Luftwaffe to do anything except lose more and more of its planes and pilots whenever they rose into the air.” Kennedy goes on to describe how the Allies stopped the ferocious blitzkrieg assaults of 1939 to 1942 by deploying “stronger, tougher and better-equipped forces (with panzers, bazookas, mines, better tactical aircraft)” in concert with the western thrust of the Soviet Army, aided by their T-34-85, which Kennedy calls the “most all-round battle tank” of the war.

Victory in Europe before the summer of 1945 also required the Allies to make hasty progress in perfecting the art of amphibious warfare. After World War I, Kennedy notes, with “a badly defeated and much-­reduced Germany, in a badly damaged and scarcely victorious France and Italy, and in an infant Soviet Union, there were many thoughts of war, but none of them involved the projection of force across the oceans.” The disheartening debacle of the one-day Allied trial effort in August 1942 to breach the Atlantic Wall with a raid against the modest German garrison at Dieppe, France, provided crucial lessons that led directly to the world-­important success on D-Day two years later.

Kennedy shows how wise the Allies were to restrain themselves from invading France until their commanders and troops had gained more experience in amphibious landings and until control of the Atlantic had been secured. He insists that D-Day could have been a rout but for the fact that by mid-1944, British, American and Canadian warriors — from the top down — had transformed their organization into a smoothly functioning apparatus, refined their means of gathering intelligence and designed the now-­famous “bodyguard of lies” that misled the Nazis about when and how the Allies would invade Europe.

Succinctly covering the Pacific theater, Kennedy illuminates some of the main tools that enabled United States forces to make their slow progress across the ocean in order to bomb Japan — new fast carrier groups, new fighters like the F6F and bombers like the B-29, as well as the American submarine service and the 325,000 enlisted members of the Navy’s construction battalions, the “Seabees,” which by the end of the war had erected $10 billion worth of military infrastructure around the world.

While Kennedy rightly elevates the importance of technology and those much-too-­unheralded bands of Allied innovators, on a grander scale he fully appreciates that “the winning of great wars always requires superior organization,” which “will allow outsiders to feed fresh ideas into the pursuit of victory.”

An ingredient badly missing from the centralized systems of imperial Japan and Nazi Germany was the willingness, demonstrated again and again by top Anglo-American military and political leaders, to share power with those of more modest rank who had greater expertise in tackling a particular problem and who were closer to the action. Kennedy notes that even the dictatorial Stalin “began to relax his iron grasp once he understood that he had a team of first-class generals working for him.”

Although occasionally prolix and repetitive, Kennedy’s volume is an important contribution to our understanding of World War II, and it sets a high standard for historians writing about other conflicts by reminding us to keep a close eye on technology. The curious reader may well finish this book and wish that scholars would pay more attention to how much American setbacks in lesser wars like Korea and Vietnam might have been influenced by gaps in our technological mastery.

Michael Beschloss, the author, most recently, of “Presidential Courage,” is writing a history of American presidential leadership in wartime.

http://www.nytimes.com/2013/02/10/books/review/engineers-of-victory-by-paul-kennedy.html?pagewanted=1&_r=0&ref=books

A version of this review appeared in print on February 10, 2013, on page BR15 of the Sunday Book Review with the headline: War Machines.

Nordic Countries: Lessons in Good Governance

February 2, 2013

http://www.economist.com/news/special-report/21570835-nordic-countries-are-probably-best-governed-world-secret-their

LESSONS

The secret of their success: Good Governance and Pragmatism

The Nordic countries are probably the best-governed in the world

CECIL RHODES ONCE remarked that “to be born an Englishman is to win first prize in the lottery of life.” Today the same thing could be said of being born Nordic. The Nordic countries have not only largely escaped the economic problems that are convulsing the Mediterranean world; they have also largely escaped the social ills that plague America. On any measure of the health of a society—from economic indicators like productivity and innovation to social ones like inequality and crime—the Nordic countries are gathered near the top (see table).

Why has this remote, thinly populated region, with its freezing winters and expanses of wilderness, proved so successful? There was a time when most of its population would have unhesitatingly praised their government, which for most of the 20th century meant the social democrats in one of their various national guises. The government had provided the people with cradle-to-grave welfare services, rescuing them from the brutal life of their 19th-century forebears, and stepped in to save the capitalist economies from their periodic crises.

But free-marketers have poked holes in the pro-government explanation and offered a powerful alternative. In the period from 1870 to 1970 the Nordic countries were among the world’s fastest-growing countries, thanks to a series of pro-business reforms such as the establishment of banks and the privatisation of forests. But in the 1970s and 1980s the undisciplined growth of government caused the reforms to run into the sands. Free-marketers put the region’s impressive recent performance down to its determination to reduce government spending and set entrepreneurs free.

Government’s role in improving equality is also being questioned. Andreas Bergh, of Sweden’s Research Institute of Industrial Economics, argues that the compression of Swedish incomes took place before the arrival of the welfare state, which was a consequence rather than a cause of the region’s prosperity—and almost killed the goose that laid the golden eggs.

This special report has supported some of the free-marketers’ arguments. The Nordic countries had got into the habit of spending more on welfare than they could afford and of relying more on a handful of giant companies than was wise. They are right to try to trim their states and make life easier for business. But it would be wrong to ignore the role of government entirely.

The Nordic countries pride themselves on the honesty and transparency of their governments. Nordic governments are subject to rigorous scrutiny: for example, in Sweden everyone has access to all official records. Politicians are vilified if they get off their bicycles and into official limousines.

The Nordics have added two other important qualities to transparency: pragmatism and tough-mindedness. On discovering that the old social democratic consensus was no longer working, they let it go with remarkably little fuss and introduced new ideas from across the political spectrum. They also proved utterly determined in pushing through reforms. It is a grave error to mistake Nordic niceness for softheadedness.

Pragmatism explains why the new consensus has quickly replaced the old one. Few Swedish Social Democratic politicians, for instance, want to dismantle the conservative reforms put in place in recent years. It also explains why Nordic countries can often seem to be amalgams of left- and right-wing policies.

Pragmatism also explains why the Nordics are continuing to upgrade their model. They still have plenty of problems. Their governments remain too big and their private sectors too small. Their taxes are still too high and some of their benefits too generous.The Danish system of flexicurity puts too much emphasis on security and not enough on flexibility. Norway’s oil boom is threatening to destroy the work ethic.

It is a bad sign that over 6% of the workforce are on sick leave at any one time and around 9% of the working-age population live on disability pensions. But the Nordics are continuing to introduce structural reforms, perhaps a bit too slowly but stolidly and relentlessly. And they are doing all this without sacrificing what makes the Nordic model so valuable: the ability to invest in human capital and protect people from the disruptions that are part of the capitalist system.

Getting to Denmark

Most of the rich world now faces the same problems that the Nordics faced in the early 1990s—out-of-control public spending and overgenerous entitlement programmes. Southern Europe needs a dose of Nordic tough-mindedness if it is to get its finances under control. And America needs a dose of Nordic pragmatism if it is to have any chance of reining in entitlements and reforming the public sector.

The Nordics are hardly blushing violets when it comes to advertising the virtues of their model. Nordic think-tanks produce detailed studies in English about how they reformed their states. Nordic politicians fight their corner in international meetings and Nordic consultants sell their public-sector expertise around the world. Dag Detter played a leading role in restructuring the Swedish state’s commercial portfolio in the 1990s, representing more than a quarter of the business sector. He has since advised governments in Asia and across Europe.

Yet it is hard to see the Nordic model of government spreading quickly, mainly because the Nordic talent for government is sui generis. Nordic government arose from a combination of difficult geography and benign history. All the Nordic countries have small populations, which means that members of the ruling elites have to get on with each other. Their monarchs lived in relatively modest places and their barons had to strike bargains with independent-minded peasants and seafarers.

They embraced liberalism early. Sweden guaranteed freedom of the press in 1766, and from the 1840s onwards it abolished preference for aristocrats in handing out top government jobs and created a meritocratic and corruption-free civil service. They also embraced Protestantism—a religion that reduces the church to a helpmate and emphasises the direct relationship between the individual and his God. One of the Lutheran church’s main priorities was teaching peasants to read.

The combination of geography and history has provided Nordic governments with two powerful resources: trust in strangers and belief in individual rights. A Eurobarometer survey of broad social trust (as opposed to trust in immediate family) showed the Nordics in leading positions (see chart below). Economists say that high levels of trust result in lower transaction costs—there is no need to resort to American-style lawsuits or Italian-style quid-pro-quo deals in order to get things done. But its virtues go beyond that. Trust means that high-quality people join the civil service. Citizens pay their taxes and play by the rules. Government decisions are widely accepted.

 

The World Values Survey, which has been monitoring values in over 100 countries since 1981, says that the Nordics are the world’s biggest believers in individual autonomy. The Nordic combination of big government and individualism may seem odd to some, but according to Lars Tragardh, of Ersta Skondal University College, Stockholm, the Nordics have no trouble reconciling the two: they regard the state’s main job as promoting individual autonomy and social mobility. Any piece of Nordic social legislation—particularly the family laws of recent years—can be justified in terms of individual autonomy.

Universal free education allows students of all backgrounds to achieve their potential. Separate taxation of spouses puts wives on an equal footing with their husbands. Universal day care for children makes it possible for both parents to work full-time. Mr Tragardh has a useful phrase to describe this mentality: “statist individualism”.

Nordic people take this attitude to government with them when they go abroad. In the 19th and early 20th centuries some 1.3m people, a quarter of the Swedish population at the time, emigrated, mostly to the United States. America created an entire genre of jokes about “dumb Swedes” and their willingness to obey rules. These dumb Swedes created the best-governed enclaves in America, such as Minnesota. Even today Americans with Nordic roots are 10% more likely than the average American to believe that “most people can be trusted”.

Size isn’t everything

Economists frequently express puzzlement about the Nordic countries’ recent economic success, given that their governments are so big. According to a professional rule of thumb, an increase in tax revenues as a share of GDP of ten percentage points is usually associated with a drop in annual growth of half to one percentage point. But such numbers need to be adjusted to allow for the benefits of honesty and efficiency.

The Italian government, for instance, imposes a heavy burden on society because the politicians who run it are mainly concerned with extracting rent rather than providing public services. Goran Persson, a former Swedish Prime Minister, once compared Sweden’s economy with a bumblebee—“with its overly heavy body and little wings, supposedly it should not be able to fly—but it does.” Today it is fighting fit and flying better than it has done for decades.

Dickens, Austen and Twain, Through a Digital Lens

February 1, 2013

The New York Times

http://www.nytimes.com/2013/01/27/technology/literary-history-seen-through-big-datas-lens.html?pagewanted=1&_r=0&ref=books

Dickens, Austen and Twain, Through a Digital Lens

by Steve Lohr (01-26-13)

ANY list of the leading novelists of the 19th century, writing in English, would almost surely include Charles Dickens, Thomas Hardy, Herman Melville, Nathaniel Hawthorne and Mark Twain.

But they do not appear at the top of a list of the most influential writers of their time. Instead, a recent study has found, Jane Austen, author of “Pride and Prejudice, “ and Sir Walter Scott, the creator of “Ivanhoe,” had the greatest effect on other authors, in terms of writing style and themes.

These two were “the literary equivalent of Homo erectus, or, if you prefer, Adam and Eve,” Matthew L. Jockers wrote in research published last year. He based his conclusion on an analysis of 3,592 works published from 1780 to 1900. It was a lot of digging, and a computer did it.

The study, which involved statistical parsing and aggregation of thousands of novels, made other striking observations. For example, Austen’s works cluster tightly together in style and theme, while those of George Eliot (a k a Mary Ann Evans) range more broadly, and more closely resemble the patterns of male writers. Using similar criteria, Harriet Beecher Stowe was 20 years ahead of her time, said Mr. Jockers, whose research will soon be published in a book, “Macroanalysis: Digital Methods and Literary History” (University of Illinois Press).

These findings are hardly the last word. At this stage, this kind of digital analysis is mostly an intriguing sign that Big Data technology is steadily pushing beyond the Internet industry and scientific research into seemingly foreign fields like the social sciences and the humanities. The new tools of discovery provide a fresh look at culture, much as the microscope gave us a closer look at the subtleties of life and the telescope opened the way to faraway galaxies.

“Traditionally, literary history was done by studying a relative handful of texts,” says Mr. Jockers, an Assistant Professor of English and a researcher at the Center for Digital Research in the Humanities at the University of Nebraska. “What this technology does is let you see the big picture — the context in which a writer worked — on a scale we’ve never seen before.”

Mr. Jockers, 46, personifies the digital advance in the humanities. He received a Ph.D. in English literature from Southern Illinois University, but was also fascinated by computing and became a self-taught programmer. Before he moved to the University of Nebraska last year, he spent more than a decade at Stanford, where he was a founder of the Stanford Literary Lab, which is dedicated to the digital exploration of books.

Today, Mr. Jockers describes the tools of his trade in terms familiar to an Internet software engineer — algorithms that use machine learning and network analysis techniques. His mathematical models are tailored to identify word patterns and thematic elements in written text. The number and strength of links among novels determine influence, much the way Google ranks Web sites.

It is this ability to collect, measure and analyze data for meaningful insights that is the promise of Big Data technology. In the humanities and social sciences, the flood of new data comes from many sources including books scanned into digital form, Web sites, blog posts and social network communications.

Data-centric specialties are growing fast, giving rise to a new vocabulary. In political science, this quantitative analysis is called political methodology. In history, there is cliometrics, which applies econometrics to history. In literature, stylometry is the study of an author’s writing style, and these days it leans heavily on computing and statistical analysis. Culturomics is the umbrella term used to describe rigorous quantitative inquiries in the social sciences and humanities.

“Some call it computer science and some call it statistics, but the essence is that these algorithmic methods are increasingly part of every discipline now,” says Gary King, director of the Institute for Quantitative Social Science at Harvard.

Cultural data analysts often adapt biological analogies to describe their work. Mr. Jockers, for example, called his research presentation “Computing and Visualizing the 19th-Century Literary Genome.”

Such biological metaphors seem apt, because much of the research is a quantitative examination of words. Just as genes are the fundamental building blocks of biology, words are the raw material of ideas.

“What is critical and distinctive to human evolution is ideas, and how they evolve,” says Jean-Baptiste Michel, a postdoctoral fellow at Harvard. Mr. Michel and another researcher, Erez Lieberman Aiden, led a project to mine the virtual book depository known as Google Books and to track the use of words over time, compare related words and even graph them.

Google cooperated and built the software for making graphs open to the public. The initial version of Google’s cultural exploration site began at the end of 2010, based on more than five million books, dating from 1500. By now, Google has scanned 20 million books, and the site is used 50 times a minute. For example, type in “women” in comparison to “men,” and you see that for centuries the number of references to men dwarfed those for women. The crossover came in 1985, with women ahead ever since.

In work published in Science magazine in 2011, Mr. Michel and the research team tapped the Google Books data to find how quickly the past fades from books. For instance, references to “1880,” which peaked in that year, fell to half by 1912, a lag of 32 years. By contrast, “1973” declined to half its peak by 1983, only 10 years later. “We are forgetting our past faster with each passing year,” the authors wrote.

Their work, published last year, focused on what makes spoken lines in movies memorable. Sentences that endure in the public mind are evolutionary success stories, Mr. Kleinberg says, comparing “the fitness of language and the fitness of organisms.”

As a yardstick, the researchers used the “memorable quotes” selected from the popular Internet Movie Database, or IMDb, and the number of times that a particular movie line appears on the Web. Then they compared the memorable lines to the complete scripts of the movies in which they appeared — about 1,000 movies.

To train their statistical algorithms on common sentence structure, word order and most widely used words, they fed their computers a huge archive of articles from news wires. The memorable lines consisted of surprising words embedded in sentences of ordinary structure. “We can think of memorable quotes as consisting of unusual word choices built on a scaffolding of common part-of-speech patterns,” their study said.

Consider the line “You had me at hello,” from the movie “Jerry Maguire.” It is, Mr. Kleinberg notes, basically the same sequence of parts of speech as the quotidian “I met him in Boston.” Or consider this line from “Apocalypse Now”: “I love the smell of napalm in the morning.” Only one word separates that utterance from this: “I love the smell of coffee in the morning.”

This kind of analysis can be used for all kinds of communications, including advertising. Indeed, Mr. Kleinberg’s group also looked at ad slogans. Statistically, the ones most similar to memorable movie quotes included “Quality never goes out of style,” for Levi’s jeans, and “Come to Marlboro Country,” for Marlboro cigarettes.

But the algorithmic methods aren’t a foolproof guide to real-world success. One ad slogan that didn’t fit well within the statistical parameters for memorable lines was the Energizer batteries catchphrase, “It keeps going and going and going.”

Quantitative tools in the humanities and the social sciences, as in other fields, are most powerful when they are controlled by an intelligent human. Experts with deep knowledge of a subject are needed to ask the right questions and to recognize the shortcomings of statistical models.

“You’ll always need both,” says Mr. Jockers, the literary quant. “But we’re at a moment now when there is much greater acceptance of these methods than in the past. There will come a time when this kind of analysis is just part of the tool kit in the humanities, as in every other discipline.”

JON KLEINBERG, a computer scientist at Cornell, and a group of researchers approached collective memory from a very different perspective.

Correction: January 27, 2013

 An earlier version of this article misstated Matthew L. Jockers’s age. He is 46, not 48. It also misspelled the title of the movie known for the line “You had me at hello.” It is “Jerry Maguire,” not “Jerry McGuire.”

A version of this article appeared in print on January 27, 2013, on page BU3 of the New York edition with the headline: Dickens, Austen and Twain, Viewed in a Digital Lens.

Malaysia slides from 21st to 25th Slot in Global Competitiveness Ranking

September 6, 2012

Global Competitiveness Ranking: Malaysia  slides faom 21st to 25th Slot

by Koh Jun Lin (09-05-12)@http://www.malaysiakini.com

Malaysia has dropped from 21st to 25th slot out of 144 countries in global competitiveness, according to the Global Competitiveness Report 2012 – 2013.

The annual report, released by the World Economic Forum (WEF) today, also shows that Malaysia’s ‘technological readiness’ is ranked 51st, maintaining a five-year downtrend.

This was despite the overall score remaining relatively steady at 5.06 points out of a maximum of seven points, compared to 5.08 previously.

“Malaysia and other countries are putting in a lot of initiatives. There are four countries which are faster growing in terms of their competitiveness here, and they are South Korea (ranked 19th), Luxemburg (22nd), New Zealand (23rd) and the United Arab Emirates (24th),” said Malaysia Productivity Corporation (MPC) Senior Director Lee Saw Hoon in explaining the drop in ranking.

Lee was speaking at a press conference at MPC’s headquarters in Petaling Jaya today in conjunction with the release of the report.She also said that the report also “upgrades” Malaysia’s status from an efficiency-driven economy to a country that is “in transition” to an innovation-driven economy.

In the report, the criteria for the latter classification is to have a gross domestic product (GDP) per capita between USD9,000 to USD17,000 and the change entails a shift in the weightage of various performance indicators towards those that promote innovation.

The report also places Malaysia’s competitiveness second to Singapore in the Asean region, and eighth in the Asia-Pacific region.

Low level of technological readiness

With regard to Malaysia’s technological readiness, the report notes three areas that require improvement, namely: international internet bandwidth in kilobits per second per user (ranked 83rd), broadband internet subscriptions per 100 population (68th) and mobile broadband subscriptions per 100 population (64th).

“Its (Malaysia’s) low level of technological readiness (51st) is surprising, especially given its achievements in other areas of innovation and business sophistication and the country’s focus on promoting the use of ICT.

“Lack of progress in this area will significantly undermine Malaysia’s efforts to become a knowledge-based economy by the end of the decade,” the report wrote.

In a press statement today, International Trade and Industry Minister Mustapa Mohamed said there is a discrepancy between perception and what the data shows, and does not reflect Malaysia’s actual condition.

“Towards this end, the government will ensure that consolidated and comprehensive data and information is provided to international data sources such as the International Communications Union and the World Intellectual Property Organisation,” he said.

Mustapa (right) added that the upcoming launch of the 1Malaysia Affordable Broadband Package could be expected to improve the situation.

Meanwhile the report also praised Malaysia’s markets for being “efficient and competitive” and supported by both a well-developed financial sector (ranked 6th) and business-friendly institutional frameworks (28th).

The report further praised the government’s efforts to combat excessive bureaucracy and lack of transparency, saying, “in a region where many economies suffer from lack of transparency and the presence of red tape, Malaysia stands out as particularly successful at tackling those tow issues.”

Regardless, in an opinion poll of 79 business executives in Malaysia conducted as part of the report, respondents still reported inefficient government bureaucracy as the biggest problem for doing business in Malaysia, followed by corruption and an inadequately educated workforce.

A Post-Industrial Future for Penang?

August 28, 2012

by Zairil Khir Johari

The advent of the digital era, characterised by seamless and instantaneous transfer of information and unprecedented levels of global interconnectedness, has seen a paradigm shift in social, political and economic strategies worldwide.

In fact, it is commonly said that the world has entered into “the knowledge revolution or knowledge economy”, which some have argued to be “the latest phase of capitalism”[1]. In this age of knowledge, mobile capital and the easy spread of technology have meant that the production of goods have increasingly shifted to low-cost countries.

“This is a natural progression, especially for developed economies,” notes international investment banker Julian Candiah. “As GDP per capita rises and countries gets richer, a lot of the lower-valued components of the economy have migrated to low-cost countries. We have seen this hand-off many times, first in the 1970s to the South-East Asian Tigers, and then in the 1990s to China, and now to Bangladesh, Vietnam, Cambodia, etc. Even China is now moving up the value chain.”

As developed economies begin to decouple themselves from industrial production, it is suggested that future success would no longer be predicated upon traditional factors such as land, labour and raw materials, but upon the creation of value extracted from knowledge, skills and creativity.

In other words, future jobs in the so-called knowledge economy would require working with our brains and not with our hands. Soft power, and not hard power, would drive the world forward.

So how exactly has this experiment fared?

e-Britain

In 1997, Tony Blair was elected as Prime Minister of Britain on the wave of Cool Britannia and the promise of ushering in a new golden age. Having successfully rejuvenated and remodelled a now centrist, market-embracing Labour Party, the youngest British Prime Minister in nearly two centuries sought to catapult a then lagging Britain into the “forefront of the knowledge economy”.

According to Blair and other deindustrialisation advocates, this new knowledge-driven economy is the “equivalent of the machine-driven economy of the industrial revolution”[2].In other words, future British success would lie in the country’s ability to shift from an industrial economy to one based on services. To borrow Blair’s own words, Britain needed to transform the “workshop of the world” into the “e-commerce capital of the world”.

This premise, though an innovation, was not a new one. Margaret Thatcher had been the first, two decades before, to prescribe deindustrialisation as the cure for what she deemed to be an uncompetitive, manufacturing-based British economy. By articulating the “knowledge economy” in the context of a globalising world driven by ICT, Blair gave the strategy renewed direction.

For over a decade, the government pursued this policy, turning the British economy into the world’s second largest services exporter after the US. This was achieved on the back of creative services such as film, music, fashion and advertising, as well as other traditional services such as finance, computing and ICT. The picturesque vision of a knowledge economy looked set to come true.

Today, more than a decade later, Blair’s vision remains just that. Having experienced the largest deindustrialisation exercise in post-war Europe, in which the industrial share of the economy saw a decline from 30% in the 1970s to about 11% today, one would be hard-pressed to opine that the British economy is in a better shape than it was.

The British used to make cars, ships and engines for the world. They gave all that up to sell culture, tourism and financial advice, only to find that selling things simply cannot provide the same volume of employment that making things can. Unemployment is now at its highest level since 1995, while income inequality has reached a 30-year peak.

The British northeast, once the proud home to numerous factories, warehouses and dockyards, has now become the poster child of a post-industrial wasteland, sprawling with hollow buildings and muddy estates. Not only have the cacophonous activities come to an end, so too have the jobs, apprenticeships, local industries and support services that typically characterise an ecosystem built around making things. Meanwhile, the vacuum left behind remains vivid for a generation of displaced Britons.

Services-driven Penang?

Though it took a while, the same debate has now made its way to Penang’s shores. In recent times, certain quarters have spoken out about the need to reinvent Penang’s traditional economic base. Citing a fast-depleting land bank and competition from more cost-effective neighbours, they argue that the manufacturing sector has reached its zenith.

Their solution? To transform the services sector to replace manufacturing as the next engine of growth. According to them, Penang no longer has a comparative advantage in manufacturing, and should instead focus on building resources and talent in service industries such as tourism, healthcare, ICT and finance. After all, Penang is no stranger to economic change, having evolved from a free port into an industrial beacon. The question is, is it time to change?

Today, manufacturing remains the bedrock of the Penang economy, easily contributing more than half of Penang’s economic output. In the last two years, Penang has etched itself as the top destination in the country for manufacturing investment, notching RM12.2bil in 2010 and RM9.1bil in 2011. Of this amount, RM17.7billion came in the form of FDI, which means that the second smallest state in Malaysia had managed to attract nearly a third of total national FDI. At the rate the trend is going, there is nothing to indicate a need for a realignment of strategies.

This is not to say that an over-reliance in manufacturing is without its pitfalls. In fact, Penang’s industrial, export-dependent economy is necessarily more exposed than other states to shifts in global economic trends. This was the case during the 2008 financial crisis, resulting in a GDP dip of over 10% in real terms (based on constant 2000 prices). In contrast, Malaysia’s GDP only fell by 1.6% during the same period. Manufacturing output in Penang also decreased by 20.2%, double the decline suffered nationally.

Global economic forces are of course hard to resist. That said, Penang managed to bounce back with a real GDP growth of 10% in 2010. And despite this rough patch, Penang’s GDP per capita had actually increased slightly over this period of time. This was achieved because, over the years and more so in recent times, Penang has been able to build up an industrial base that is not merely made up of low-skills and low value-added assembly lines but also cutting-edge technology with leading brands such as Intel, Motorola, Sony, Dell, Honeywell, Bose and National Instruments.

As Candiah says, “The trick is not so much to do ‘manufacturing correctly’, but to do ‘correct manufacturing’. The game must be value-added, high-productivity manufacturing. And to the credit of the folks in charge, they have managed to get it right so far.”

Today, Penang is moving towards high-end manufacturing such as solar panels, LEDs, medical devices and the like. Just last year, Singapore Aerospace Manufacturing opened a facility in Penang to produce precision components for the aviation and aerospace industry. Such value-added industries are exactly the kind that will provide the ingredients needed for Penang to move up the manufacturing value chain.

The myth of the services-based economy

But what about the developed countries that have managed to “graduate” into services-based economies? Singapore, for example, is typically used as an example of a successful former industrial power-turned-services provider. Should that not be Penang’s future direction?

Though widely accepted, the above hypothesis is not entirely accurate. Ha-Joon Chang, a leading Cambridge economist, has frequently pointed out that high income knowledge economies that appear to be services-based are in fact highly industrialised economies. For example, Switzerland, believed to be a post-industrial economy reliant on services such as the banking sector and tourism, in fact ranks as the country with the second highest manufacturing value-add (MVA) per capita[3] in the world. Singapore ranks third. And in the Competitive Industrial Performance Index, Singapore is the world number one.

What most fail to understand is that the success of countries like Switzerland and Singapore is based upon their industrial foundations. And it is from such a foundation that they are able to spin off a services supply chain encompassing research, design, engineering, legal, financial and sales. In other words, one first needs to make a product before one can add value to it and finally, consumerise it. The same trend is also evident in other high income Asian economies such as Japan, Korea and Taiwan.

As the world progresses, there can be no doubt that consumption of technological products will only increase. Economic downturns may temporarily dampen demand, but in the end, more rather than less manufacturing will be needed to cater to the growing market. Instead of reducing manufacturing, the strategy should be to leverage upon the existing base and focus on value-adds through technology, automation and productivity improvement.

Not what you produce, but how you produce

Years after sounding the clarion call for deindustrialisation, the British government is now talking about a “march of the makers”. In last year’s budget speech, the Chancellor of the Exchequer proudly proclaimed that the words “Made in Britain” will once again drive the nation forward.

Meanwhile, the Obama administration has embarked on a manufacturing drive in a bid to revive the lacklustre American economy. In a recent speech by Gene Sperling, director of the National Economic Council, at a conference aptly titled “The Renaissance of American Manufacturing”, it was pointed out that manufacturing is responsible for 70% of R&D in America, despite being only 12% of the economy.

Not only that, manufacturing jobs pay on average 25% higher than non-manufacturing jobs. Sperling then added, as if struck by an epiphany, that manufacturing would be the key to tackling the country’s ballooning trade deficit.

Whether it is too little too late remains to be seen, but the fact is that the US and Britain have finally realised the potential multiplier effect, in terms of jobs and services, that is inherent in manufacturing. What is understood to be a knowledge-based economy is in fact a corollary resulting from a mature industrial base. In other words, manufacturing is a prerequisite for innovation.

Closer to home, it is critical that we learn from the experiences of others before it is too late. To say that manufacturing has peaked is disingenuous. If anything, it holds even more potential today than it did a few decades ago. What is needed is not to replace manufacturing but to create depth and specialisation through innovation and technology. Moving forward, it will be about how we produce rather than what we produce.

“Today, the buzzword is ‘reindustrialisation’,” says the Penang Development Corporation (PDC) Deputy General Manager Iskandar Basha Abdul Kadir. “After playing an integral role in the industrialisation of Penang for 40 years, it is time for the PDC to facilitate the reinvestment and revitalisation that is currently being undertaken by most pioneer plants and facilities in our industrial zones.

“We cannot afford to lie around idly by while the whole world is moving. Besides attracting new, value-added industries, we also need to revitalise and reenergise the ‘old’ ones so they can become ‘new’ again.”

According to Iskandar, the premise for the future of the Penang economy is simple. “If we can successfully add value to our existing manufacturing capacity, then we will set off a chain of events that will produce higher value services and, ultimately, higher paying jobs.”

Penang’s  Intellectual Capital Incubator

---

[1] Rikowski, R. (2003), “Value – the Life Blood of Capitalism: knowledge is the current key”, Policy Futures in Education, Vol.1 No.1, pp. 160-178.

[2] Speech by Tony Blair at the Knowledge 2000 Conference, www.guardian.co.uk/uk/2000/mar/07/tonyblair

[3] A basic indicator of a country’s level of industrialisation. The higher the MVA, the more industrialised the country.

Singapore: Becoming Asia’s Hub for Talent

December 17, 2011

http://www.telegraph.co.uk

The Singapore Government’s intent is to become the hub for talent in Asia. This means it wants to attract the brightest and best people to work there. This may sound like a lofty aim but it is backed up with long-term planning and clear policies.

by Octavius Black (12-04-110

In the ballroom of the Raffles Hotel, Singapore’s Minister for Trade and Industry, Lim Hng Kiang (left), finishes his speech to commemorate the signing of a trade agreement between his country and the UK.

There is healthy applause. The mood is upbeat after his sunny version of what the glorious relationship between our two countries could grow into. Vince Cable takes to the stage to respond.

“When I studied economics at Cambridge in the 1960s”, he begins, and so marks the contrast between one nation looking steadfastly forward with masterful strategic intent and steely determination, and the other, all too often, revelling in nostalgia.

There is an old saying: “It matters not where a man is standing but which way he is facing.” Singapore may have a population smaller than London but after a packed week of 33 meetings, I am left in no doubt both which way it is facing and quite how serious it is about getting there.

The Singapore government’s intent is to become the hub for talent in Asia. This means it wants to attract the brightest and best people to work there. This may sound like a lofty aim but it is backed up with long-term planning and clear policies.

An executive from BP tells me that when he secured his work permit, he was delicately told that while it was officially to work for his esteemed employer, they would happily extend it for five years if he chose to stay and work for anyone else. A senior vice- president at Deutsche Bank was, I’m told, called up by a caring civil servant when, after a tour of duty, he decided to return West. The bureaucrat reminded him exactly how much tax he had paid, thanked him for his contribution and explained that if the banker did decide to stay on a little longer, they would greatly reduce any future tax take.

These may sound like cunning tactics. Indeed, they are. But they are part of a much grander strategy.

I went to visit Chee Wei Kwan(right), who heads up the Human Capital Leadership Institute (HCLI). The HCLI is seed funded by the government to provide intellectual leadership on how to build leadership and manage talent (meaning employees) in Asia. It conducts pan-Asian research on what makes people tick (at work) as well as programmes that bring in worldwide leaders from business, government and academia.

Perhaps most impressive of all is its fledgling alternative to the Harvard Business Review, HQ Asia. The topics range from a Confucian view on talent development to how Asian leaders can make more impact in Western head offices. The first edition went to 4,000 people; the second edition to a cool 11,000 (they had to do a reprint).

I’m even more surprised when I visit Zee Yoong Kang(left), CEO of the learning hub at NTUC, the Singaporean equivalent of the TUC. He tells me the days of collective bargaining are over. Instead, the unions’ focus is to work with the government to build skills that make Singaporeans even more employable; the more they do this the more powerful their lobbying of government and so the more funds they receive. At the moment, the focus is on building the management skills of people in organisations with fewer than 300 employees. The government has lots of money to invest in this area, he assures me.

It’s not just small businesses. Unilever is investing €40m in a vast new corporate university in Singapore. All their leadership development from across the world will be done in just two locations: London and Singapore. The ratio between the two is 40:60. Get the drift? Unilever does. With 3,000 chemistry grads a year in the UK (1,000 of whom are from overseas and so likely to return home) and more than 30,000 a year in China, it’s clear to them where the next generation of soap powder is likely to be invented. They have set up a research and development Centre in China which means, in a few years, the Singapore campus is going to grow even more.

My week in Singapore tells me four things: first, when a government shows clear, long-term strategic intent it can be formidable. The unions are hand in glove with an unequivocally capitalist government and civil servants neatly put their politicians’ policy into delightfully practical action.

Second, that a government that chooses the attraction of top talent as one of its core planks for growth gives a clear message to businesses that don’t.

Third, the nexus of smart people is moving East. This is partly because Asians who go to university in the West are returning home and partly because more smart Westerners are heading East (there are over 30,000 Brits in Singapore). Mainly though, it will be from the colossal investment in learning that Asians are making for themselves.

And my last lesson. My business, Mind Gym, needs to open there fast. This shouldn’t be difficult: as the civil servant told us only half joking, “if it takes you more than two hours to set up your company here, you’re doing something wrong”.

Octavius Black is CEO of Mind Gym. http://www.themindgym.com

Imagined in America But Made in China

October 19, 2011

http://www.nytimes.com/

Op-Ed Columnist

Imagined in America but Made in China: Need for Change

By Thomas L. Friedman
Published: October 18, 2011

Hongkong

After spending last week talking with Hong Kong entrepreneurs about a bill, just passed by the U.S. Senate, to clear the way for tariffs on Chinese exports to America if China doesn’t revalue its currency, there are three things I have to say. One, I really hope the people pushing this bill do not give up. Two, I really hope the people pushing this bill do not succeed. And, three, I really hope no one thinks this legislation will make any sustainable dent in our unemployment problem, which requires much more radical rethinking.

I support this legislation in theory because China needs a wake-up call. I know, China never responds to in-your-face pressure — not immediately. But it began revaluing its currency upward in 2005, the last time the Senate brandished a big stick. The fact is that China’s strategy of using low wages and a cheap currency to build up an enormous export-led growth engine — while using its huge market to lure and compel companies to transfer their next-generation technology to China as well — is now hurting both sides.

China is spending tons of money manipulating its currency downward and, in the process, creating domestic inflation and a real estate bubble, which is weakening its competitiveness. Meanwhile, it is hair-raising to hear stories in Hong Kong about the number of American companies feeling the need to transfer advanced technology to China under pressure from Beijing officials — and being afraid to complain to Washington about unfair trade practices.

Yes, China’s leaders, fearing unemployment, will revalue their currency at their own pace. But if pushing this bill even marginally slows the pace of American firms shifting operations here, and gives others more time to adapt, it will be worth it.

But, Lord in heaven, do not let the House pass this bill. That would trigger a trade war in the middle of our Great Recession. We tried that in 1930. It didn’t end well. Worse, today it would distract us from thinking about the real issue: How do we adjust our labor market to the simultaneous intensification of globalization and the I.T. revolution, the biggest thing happening in the world today? The intensification of globalization means more parts of any product or service can be produced anywhere, and the intensification of the I.T. revolution means more parts of any product or service can be created by machines and software.

I am typing this column on a Dell laptop that says “Made in China” on the bottom. In fact, it was assembled in China — but the design, memory board, screen, casing and dozens of other parts were all made in other countries. And while the machine says “Made in China,” the lion’s share of its value and profit goes to the firm that conceived the idea and orchestrated that supply chain — Dell Inc. in Texas.

We are never going to get those labor-intensive assembly jobs back from China — the wage differentials are far too great, no matter how much China revalues its currency. We need to focus on multiplying more people at the high-value ideation and orchestration end of the supply chain, and in the manufacturing processes where one person can be highly productive, and well paid, by operating multiple machines.

We need to focus on “Imagined in America” and “Orchestrated From America” and “Made in America by a smart worker using a phalanx of smarter robots.” In total value terms, America still manufactures almost as much as China. We just do it with far fewer people, which is why we need more start-ups.

But we also need to stop thinking that a middle class can be sustained only by factory jobs. Thirty years ago, Hong Kong was a manufacturing center. Now its economy is 97 percent services. It has adjusted so well that this year the Hong Kong government is giving a bonus of $775 to each of its residents. One reason is that Hong Kong has transformed itself into a huge tourist center that last year received 36 million visitors — 23 million from China. Their hotel stays, dining and jewelry purchases are driving prosperity here. The U.S. Commerce Department says 801,000 Mainland Chinese visited the U.S. last year, adding $5 billion to the U.S. economy. More Chinese want to come, but, for security reasons, visas are hard to obtain. If we let in as many Chinese tourists as Hong Kong, it would inject more than $115 billion into what is a highly unionized U.S. hotel, restaurant, gaming and tourism industry.

Another idea officials here offer is that the United States invites Chinese firms to invest in toll bridges, toll roads, and rail systems across the United States, in partnership with American companies. They could build them, and operate them for a set number of years, until their investment pays out, and then transfer them to full U.S. ownership. It may be the only way we can rebuild our infrastructure.

Yes, China manipulates its currency and market access. But the reason we are so vulnerable is that we have no leverage. We don’t save; we overconsume; we don’t plan; and we have not invested enough in infrastructure and education. Dealing with a superpower like China without leverage? Let me know how that works out for you.

A version of this op-ed appeared in print on October 19, 2011, on page A29 of the New York edition with the headline: Imagined in America.

Steve Jobs: The Grandmaster of Technology

October 7, 2011

http://www.nst.com.my

Tribute to Steve Jobs from Malaysia: The Grandmaster  of  Technology

2011/10/07
By Azmi Anshar

INSANELY great. A two-word eulogy that fits into the technological utopia that Steve Jobs constructed, expanded and dominated.

A two-word phrase that Jobs concocted in the mid-1980s as a precocious youngster building and pitching the first Macintosh computer that rocked the world and transformed the way we think about work and play.

Without Steve Jobs (left), world history would have been alterably different. Perhaps aircraft, automobiles, ships and other machines relying on computing heft would have operated in a far divergent manner.

The computing that we take for granted now, the part that is our major psychological pleasure and leisure dome, would have been skewed to be less perfect, less convenient and less practical if it was not forcefully articulated by Jobs, especially the manipulating of a graphic interface with the click of a mouse.

Yes, Jobs was responsible for that, in case you didn’t know. Jobs, for being the philosophical perfectionist that he is, assumed the persona of a stubborn ass, ignoring his advisers and marketers for refusing to sell a device that he himself would have rejected.

That’s why in the environment that people operate and play with the iMac, iPod, iPhone and iPad as if these devices were conjoined twins, they may or may not realise that it is a Steve Jobs’ world and we are thankful to live in it.

Jobs was not the perfect human being: he ranted, shouted, screamed, goaded, instigated, cajoled colleagues and critics to the point of hysteria but like all geniuses, they function on a warped timeline, if not an antithetical work ethic. But in life, Jobs was a giant, pioneering new ways of computing, creativity and communications, even if he was a bag of bones battling the cancer diagnosed in 2004.

Here’s the terrible beauty about Jobs’ cancer diagnosis: because he knew he had a limited lifespan, he feverishly worked himself towards imagining the applied science that led to the devices we desperately cannot live without now.

As an experiment, try leaving home without the iPhone and iPad, or any computer or mobile devices of other brand names that Jobs was instrumental in their creation.

Now, you will realise that Jobs is THAT great. Jobs gave peace a chance with his vision. He was an extraordinary mortal even if he died in the most ordinary, mortal way, to a disease that afflicts millions.

He presented a worldview that if people used his product, it evoked a less violent, more productive and evenly divine lifestyle. One might wonder if he had applied that ingenuity, wealth and resources to finding a cure for his disease.

For all our sakes, Jobs must have made one hell of an attempt to beat the cancer, but a cure wasn’t imminent, at least not in his lifetime. Having stated that, Jobs was not the run-of-the-mill CEO deserving an eulogy crafted in a single page, from a single moment.

Like this piece, elucidating what Jobs bequeathed to the world, is woefully inadequate. The earlier biographies may have enlightened us on the complexities of Job’s principles, but you’d want to defer on the overall assessment until his autobiography comes out soon, penned with Walter Isaacson.

Somehow, the deep void that Jobs already etched is devastating, where it should simmer for years after devoting his entire professional life into gifting us with probably the most powerful device ever invented.

Jobs’ supreme legacy is now embedded in the pantheon of great geniuses of the past — Edison, Gutenberg, Picasso and, perhaps, Michelangelo.

The “most famous maestro of the micro”, as TIME aptly portrayed Jobs in a 1982 profile when they chose the computer as the “Machine of the Year”, will be still presciently relevant long after his death.

Will there be another computing eureka with Jobs gone, at least in the perfection that he commanded and determined? The real tragedy will be if there is none.

Where Jobs pitched the Mac with his most famous sales doctrine, we now redirect that precept and bestow it back to him, the “insanely great” visionary whose contributions were a privilege to this world.

The Quest: How Will We Fuel the Future?

September 25, 2011

http://www.nytimes.com

NY Times: SUNDAY BOOK REVIEW

The Quest: How Will We Fuel the Future?

By Fareed Zakaria
Published: September 23, 2011

At the influential TED conference last year, Bill Gates declared that if he were allowed one wish to improve humanity’s lot over the next 50 years, he would choose an “energy miracle”: a new technology that produced energy at half the price of coal with no carbon dioxide emissions. He explained that he’d rather have this wish than a new vaccine or medicine or even choose the next several American presidents.

To help understand the reasoning behind Gates’s thinking, one should read Daniel Yergin’s intelligent new opus, “The Quest: Energy, Security, and the Remaking of the Modern World.”

Yergin, the founder of a leading energy consulting firm, is the author of several acclaimed books, most notably “The Prize,” a monumental history of oil from its discovery to 1990. “The Quest” starts where “The Prize” left off, and at 804 pages it is similar in heft, but in fact a very different kind of book. “The Prize” was grand narrative history, full of characters like John D. Rockefeller and Winston Churchill and driven along by momentous events like World Wars I and II, both of which played a role in making oil the world’s pivotal energy resource.

“The Quest,” which begins with the Persian Gulf war of 1990-91 and goes up to the present, does not have the same kind of material. The world has been through interesting times since 1990, but the events and characters are less striking and too recent to make for a rich dramatic narrative. This book is really trying to answer a question: What will the future of energy look like over the next 50 years? In addressing that issue, Yergin takes on a myriad of other topical questions: Are we running out of oil? Is natural gas the answer? What about shale gas? Is global warming a real danger? Is solar power the answer? He addresses each one of these in a chapter or series of chapters that mix recent history and fair-minded analysis.

Because he tries to confront all these topics — and many more — this book lacks the drama and compulsive readability of “The Prize.” But it is an important book nonetheless, a valuable primer on the basic issues that define energy today. Yergin is careful in his analysis and never polemical. If there is a flaw, it is that he is too cautious in some of his conclusions, shying away from saying outright what his narrative implies.

Despite that, “The Quest” makes it clear that energy policy is not on the right course anywhere in the world and that everyone — on the left and the right, in the developed and the developing world — needs to rethink strongly held positions.

Yergin starts by reminding us of energy’s centrality to the modern age. For most of human history, the labor of men and animals was the sole source of energy, and that placed significant limits on how much energy we could use. Starting in the late 18th and early 19th century, humans harnessed the power of steam and coal to run machines, and the result was an explosion of material abundance.

In 1957 Admiral Hyman Rickover, the great engineer who is known as the father of the nuclear Navy, calculated that a century earlier, in the early years of the industrial age, 94 percent of the world’s energy was provided by the labor of men and animals. Water and fossil fuels made up the remaining 6 percent. By the 1950s, those numbers had reversed, and coal, oil and natural gas supplied 93 percent of the world’s energy. Rickover pointed out that without this energy revolution, most of the material advances of the modern age would be impossible. A car, he said, uses the energy equivalent of the labor of 2,000 men — a jet plane that of 700,000 men.

The trend of ever-increasing energy use is certain to continue. Even if the Western world becomes much, much more energy-efficient, “the rise of the rest” guarantees a massive expansion in the demand for energy. Global G.D.P. is now $65 trillion and may rise to $130 trillion in just two decades. Energy consumption may well increase 30 to 40 percent along with it. The number of cars worldwide will rise from one billion to two billion. How will we find the energy to run them?

On present course, we will find it in fossil fuels. Predictions of the end of oil have, so far, been wrong, and Yergin predicts they will continue to be wrong. Rickover’s 1957 speech, Yergin reminds us, was a warning that the world would run out of fossil fuels sometime after 2000, probably by 2050. In fact, oil production is five times greater than it was in 1957. Coal remains the central source of electricity. For all the talk of the “end of oil,” fossil fuels still make up about 80 percent of the world’s energy mix. And with natural gas, shale gas and new technologies for extraction becoming more important, fossil fuels are likely to play a central role for decades to come.

Unless we shift our ways. Burning fossil fuels has a cost — perhaps an unbearable one. We now have a mountain of evidence that the 30 billion tons of carbon dioxide that humans pump into the atmosphere every year are changing the earth’s climate in ways that will have negative effects for most people. Yergin recounts the making of the scientific consensus that has developed around global warming. His narrative makes clear that there really is no longer a serious debate in the scientific community about the basic facts of global warming, though there is uncertainty about its extent and its effects. (Some scientific studies suggest that things could turn out much worse than the “average” case.) In these chapters Yergin’s somewhat bland and noncommittal presentation is a public disservice. At a time when major presidential candidates like Governor Rick Perry of Texas openly dismiss global warming as a hoax, experts need to speak up.

But the need for lucid thinking exists on the other side of the political spectrum as well. There tends to be a view, perhaps most prominently propagated by Al Gore, that we have — or are on the verge of having — the technologies that will make it possible to wean ourselves from fossil fuels. All that stands in the way of a green future is our cowardice. As Yergin’s book makes plain, that is simply not true. The renewable technologies that are currently being deployed are highly unlikely to provide enough reliable and cheap energy to replace fossil fuels.

Examining each technology carefully and thoroughly — wind, solar, biofuels, nuclear — he points out the difficulties of expanding their reach beyond a niche market. Solar and wind energy, for example, are still very expensive and, perhaps more crucially, intermittent. We need to store the energy they produce for when the sun isn’t shining and the wind isn’t blowing. For that we need battery power on a different scale than we have today. Indeed, according to Bill Gates, if you take the entire world’s battery capacity — every battery everywhere — it can store just 10 minutes of the world’s current energy usage.

Nuclear energy is perhaps the most promising carbon-free technology to scale up, but it too has its problems — huge start-up costs, waste disposal and, of course, the fears of the public about nuclear accidents. The latter are largely irrational — far more people die from oil drilling and coal mining accidents every year than have died in all nuclear accidents to date — but that doesn’t change the political reality that publics everywhere are wary of nuclear power, especially in their backyard.

Politics are an inevitable part of the energy business. Government has a huge role to play because of the public costs and benefits — when you put something into the atmosphere, it affects everyone. But Yergin points out that government decision-making has often been guided by narrow political reasons rather than a broader scientific approach. The huge subsidies for ethanol are an example of government involvement that has clearly caused more harm than good. The truth is that energy is such a complicated area, with so many potential technologies and pathways, that having the government pick a few is probably not very useful. What government can do well is two things: making carbon emissions more expensive through a carbon tax and, crucially, providing much greater support for basic research into green technologies — to take a quantum leap in one or preferably many of them.

This has been a chief concern of Secretary of Energy Steven Chu, but even with the Obama administration’s stimulus money, the United States and the West in general spend abysmally small amounts on basic research while spending too much on subsidizing existing technologies.

The reason Bill Gates wishes for a technology that creates energy at half the price of coal with no carbon dioxide emissions is that he wants a technology so compelling that it is adopted by poor countries as well as rich ones. Coal is plentiful worldwide, and unless the new technology is much cheaper, China and India will never adopt it. And if these two countries — which together are building four coal-fired power plants a week — don’t get off coal, nothing that happens in the West matters, since the levels of carbon dioxide they will pump into the atmosphere will be well above the danger mark. Half the price of coal and no carbon: That’s a tall order, which is why Gates is looking for a miracle. But what he means is a technological miracle of the kind that happens from time to time. The steam engine, the automobile, the computer, the Internet are all miracles. We need something on that order in energy — and fast.

Fareed Zakaria is the host of “Fareed Zakaria GPS” on CNN and an editor at large for Time magazine.

A version of this review appeared in print on September 25, 2011, on page BR14 of the Sunday Book Review with the headline: Fueling the Future.

UNIK’s Technical Advisor resigns

June 10, 2011

By Lee Wei Lian@http://www.themalaysianinsider.com

UNIK, the Prime Minister’s initiative tasked with restructuring the country’s public innovation ecosystem has hit a setback with the resignation of its technical advisor Dr. N Danaraj who was in charge of putting together the National Innovation Policy (NIP).

His resignation earlier this week could come as a blow to UNIK due to the loss of experience as Danaraj has a masters degree in public administration from Harvard, a doctorate from Oxford and was also technical advisor to the National Economic Advisory Council (NEAC), a senior fellow at Khazanah Nasional, and a research fellow at the Malaysian Institute of Economic Research.

His departure, which sources say was due to various disagreements with UNIK CEO Dr Kamaljit Singh over the NIP, comes as several innovation agencies have been privately expressing concern over the UNIK’s chief’s leadership style.

The innovation agencies are understood to be frustrated that their issues over proposed changes to the way federal grants are disbursed have not been adequately addressed and their growing resentment over the uncertainty could hamper UNIK’s efforts to implement initiatives.

Their unhappiness came to a head when they learnt that Kamaljit had proposed a freeze on funding by innovation agencies by July at the Economic Council (EC) meeting earlier this month without consulting them.

Sources say that a decision on the proposed freeze was postponed following objections from several other members of the  EC, which is chaired by the Prime Minister.

Kamaljit is understood to be in favour of implementing a competitive bidding system where both government agencies and ministries that disburse technology related grants such as Biotech Corp, the Ministry of Science Technology and Innovation (Mosti) and the Multimedia Development Corporation (MDeC) bid against each other for the funds which will be put in a common pool, but agencies say it is unfair for agencies under the ministry to bid against the ministry itself.

One industry veteran familiar with the situation said that while some people might appear to “play ball” with Kamaljit because they believe he has the Prime Minister’s ear, the opposition might get more serious if he doesn’t get buy-in from the agencies.

“If you push things through without getting agreement, do you think the agencies will help you?” said the industry veteran. One industry player said UNIK is a good initiative but the main issue is lack of clarity from the top and claimed that the affected parties were being asked to trust Kamaljit without knowing all the details.

“Nobody’s afraid of competition,” said the industry player when asked about competitive bidding. “If we don’t perform, shut us down.”

“But you can’t put parents and children in the same basket and ask them to compete (for grant money budget), that’s not market forces,” he added referring to the concept of agencies competing against their parent ministries.

Some industry observers say however that Kamaljit may be trying to push things through because he feels that things will not get done otherwise.

“UNIK has an ambitious agenda and when you are short of time, you may be forced to step on the toes of those more used to a drawn out consultative process,” said one observer. “That’s why Unik is under the prime minister’s department.”

When contacted, Danaraj confirmed the resignation but declined to comment further.Kamaljit also declined to comment for the story when contacted.

UNIK, which stands for Unit Inovasi Khas or Special Innovations Unit, was established by Datuk Seri Najib Razak to develop and implement strategies to stimulate and support innovation in Malaysia.

Its website states that it is a special-purpose body designed to focus on two core priorities – improving Malaysia’s innovation eco-system and directly cultivating innovation.

Over a period of 18 months, UNIK in its current form, will focus on developing policy in support of an improved innovation eco-system while a statutory body called Agensi Inovasi Malaysia (AIM) will be set up to take over implementation and policy reform. Leading global strategy consultants, The Boston Consulting Group (BCG) were also engaged by UNIK late last year to study the efficiency of funds disbursement in the public sector.

The three key recommendations from the study, which leveraged best practice from Singapore, US and Korea, were for Malaysia to focus funding in strategic sectors where it has comparative advantage, to introduce a performance management system that allows standardised performance comparison on outcomes across funds, and for more comprehensive linkages within the innovation ecosystem — research, entrepreneurs, investors and the private sector.

Illusions of Democracy

May 24, 2011

by Esther Dyson (May 19, 2011)

NEW YORK – The Internet is an extraordinarily powerful tool. It has changed how we do business, how we do politics, and even how we change our leaders – at least some of the time.

But the ease with which we now communicate, the efficiencies we take for granted, can give us a false sense of how easy it is to follow through on some of these changes. Despite the importance of social media in fomenting revolution, and even in deposing deeply unpopular leaders, governing in the real world is not as easy as governing online.

This struck me last week when I listened to one of Egypt’s new online generation talking enthusiastically about the future. His thesis was that once people have tasted freedom, once the oppressive leader is gone, they will naturally live as free people and build a new, democratic society without much central oversight. I wish I could believe that it will all be as easy for Egyptians as running a Facebook group was.

Generally, the Internet is a tool for people whose basic needs are already being met. Members of the upper middle class in any country, including Egypt, often seem to forget that for most people, the value created on the Internet cannot feed, clothe, and house their families.

In centuries past, revolutionaries were farmers or blacksmiths or merchants; now they are Google executives and Facebook friends. The Internet joins the elite of the world. But it also cuts people off from the past and a sense of history. The exciting things that happen online are not the same as what happened offline in countries such as Romania and Kyrgyzstan, let alone in Libya.

In fact, habits are often stronger and more persistent than either insights or presidents. People may want a world free of corruption, but it’s hard to understand how such a world works. When you are starting a new company and you need to get it registered quickly, how can you get the bureaucrat to do his job and move your paperwork along?

In many countries the answer is obvious. And, from the bureaucrat’s point of view, his or her salary might be pathetic, but it comes with a steady stream of facilitation payments. That bureaucrat does not feel corrupt; he plays by the rules he signed on for when he got his job, and he does not want them changed mid-game.

There are many people in this or a similar position, and they all depend on one another to make a corrupt system work. It is difficult for them to understand how it could be any other way. Of course, they know from the media – indeed, from the Internet – about transparency and freedom, but without quite understanding how it works.

I am often reminded of the Russian tech entrepreneur I talked to many years ago, back when the Soviet Union was falling apart. “It’s great!” he said. “Our government is going to set free-market prices just like yours.”

I don’t want to be gloomy. People in the Middle East and other emerging democracies have definitely changed from their recent experiences, and their expectations have been raised. But they need to understand the challenges they face in building a new society.

The Internet may have made this transition seem too easy. In Internet communities, it’s fairly easy to build consensus. Membership is voluntary, and people who don’t like the rules can leave. Or they can be kicked out: there is no requirement for due process.

Moreover, many resources are infinite on the Internet. People aren’t fighting over scarce housing or lucrative jobs. They are befriending one another, sharing information, and accumulating status, points, and experiences.

But in the real world, even online, things aren’t so easy. Consider eBay, a wonderful and mostly successful melding of the online and offline worlds. It has a huge budget devoted to deterring and detecting fraud, and it can simply ban fraudsters. The company’s success makes governance look easy, but that success is misleading. Unlike eBay, a country needs to put its criminals in jail and keep them there; it can’t simply cancel their accounts.

Every society has its bad actors, and it needs an established (and accountable) authority to deal with them. Otherwise, the bad guys will take advantage of the good ones.

What that means is that the newly freed people of the Middle East must toughen their idealism with hard realism. They need to figure out how to negotiate and work with existing power structures – such as the army and the Muslim Brotherhood in Egypt. Like it or not, they cannot do that as a brigade of flower children; they need to pick leaders who can speak for them and negotiate for them. The modernizers need to form a coherent force – and most likely a political party – rather than simply relying on the wisdom (and good behavior) of the crowd to govern the country.

That does not mean that activists should abandon the cause for which they are fighting. But it does mean understanding that even democracy has many rules – ideally rules that a majority has chosen.  But they are mostly not chosen directly; those rules generally reflect compromises among elected representatives who can argue and negotiate in person, reflecting the overall preferences of those who elected them.

That may sound a little too much like the old system, but it doesn’t have to be. Online, if you don’t like the rules, you can simply leave and form a new community. Offline, you need to stay and help to change the rules for everyone.

Esther Dyson, CEO of EDventure Holdings, is an active investor in a variety of start-ups around the world. Her interests include information technology, health care, private aviation, and space travel.

Copyright: Project Syndicate, 2011.
http://www.project-syndicate.org

Singapore: A Study in Elite Rule, Pragmatism and Eclecticism

Kota Kinabalu, SABAH

February 4, 2011

Serious in Singapore: Elite Rule, Pragmatism and Eclecticism

by Thomas L. Friedman (The New York Times, January 29, 2011)

 

The Elite Lee Kuan Yew School of Public Policy

I am in the Gan Eng Seng Primary School in a middle-class neighborhood of Singapore, and the Principal, A. W. Ai Ling, has me visiting a fifth-grade science class. All the 11-year-old boys and girls are wearing junior white lab coats with their names on them. Outside in the hall, yellow police tape has blocked off a “crime scene” and lying on a floor, bloodied, is a fake body that has been murdered. The class is learning about DNA through the use of fingerprints, and their science teacher has turned the students into little C.S.I. detectives. They have to collect fingerprints from the scene and then break them down.

I missed that DNA lesson when I was in fifth grade. When I asked the Principal whether this was part of the national curriculum, she said no. She just had a great science teacher, she said, and was aware that Singapore was making a big push to expand its biotech industries and thought it would be good to push her students in the same direction early. A couple of them checked my fingerprints. I was innocent — but impressed.

This was just an average public school, but the principal had made her own connections between “what world am I living in,” “where is my country trying to go in that world” and, therefore, “what should I teach in fifth-grade science.”

I was struck because that kind of linkage is so often missing in U.S. politics today. Republicans favor deep cuts in government spending, while so far exempting Medicare, Social Security and the defense budget. Not only is that not realistic, but it basically says that our nation’s priorities should be to fund retirement homes for older people rather than better schools for younger people and that we should build new schools in Afghanistan before Alabama.

President Obama just laid out a smart and compelling vision of where our priorities should be. But he did not spell out how and where we will have to both cut and invest — really intelligently and at a large scale — to deliver on his vision.

Singapore is tiny and by no means a U.S.-style democracy. Yet, like America, it has a multiethnic population — Chinese, Indian and Malay — with a big working class. It has no natural resources and even has to import sand for building. But today its per capita income is just below U.S. levels, built with high-end  manufacturing, services and exports. The country’s economy grew last year at 14.7 percent, led by biomedical exports. How?

If Singapore has one thing to teach America, it is about taking governing seriously, relentlessly asking: What world are we living in and how do we adapt to thrive. “We’re like someone living in a hut without any insulation,” explained Tan Kong Yam, an economist. “We feel every change in the wind or the temperature and have to adapt. You Americans are still living in a brick house with central heating and don’t have to be so responsive.” And we have not been.

Singapore probably has the freest market in the world; it doesn’t believe in import tariffs, minimum wages or unemployment insurance. But it believes regulators need to make sure markets work properly — because they can’t on their own — and it subsidizes homeownership and education to give everyone a foundation to become self-reliant. Singapore copied the German model that strives to put everyone who graduates from high school on a track for higher education, but only about 40 percent go to universities. Others are tracked to polytechnics or vocational institutes, so the vast majority graduate with the skills to get a job, whether it be as a plumber or a scientist.

Explained Ravi Menon, the Permanent Secretary of Singapore’s Ministry of Trade and Industry: “The two ‘isms’ that perhaps best describe Singapore’s approach are: pragmatism — an emphasis on what works in practice rather than abstract theory; and eclecticism — a willingness to adapt to the local context best practices from around the world.”

Dean of the Elite Lee Kuan Yew School of Public Policy, NUS

It is a sophisticated mix of radical free-market and nanny state that requires sophisticated policy makers to implement, which is why politics here is not treated as sports or entertainment. Top bureaucrats and cabinet ministers have their pay linked to top private sector wages, so most make well over $1 million a year, and their bonuses are tied to the country’s annual G.D.P. growth rate. It means the government can attract high-quality professionals and corruption is low.

America never would or should copy Singapore’s less-than-free politics. But Singapore has something to teach us about “attitude” — about taking governing seriously and thinking strategically. We used to do that and must again because our little brick house with central heating is not going to be resistant to the storms much longer.

“There is real puzzlement here about America today,” said Kishore Mahbubani, Dean of the Lee Kuan Yew School of Public Policy, “because we learned all about what it takes to build a well-functioning society from you. Many of our top officials are graduates of the Kennedy School at Harvard. They just came back home and applied its lessons vigorously.”

Remarkable Past 10 Years for Tech

December 25, 2010

by Oon Yeoh @http://www.malaysiakini.com

The past 10 years have been a remarkable decade for tech. We’ve seen so many changes in the ICT landscape.

My tech journalism journey began in 2000, the year the dotcom boom hit Malaysian shores. It was a time when everyone wanted a piece of the dotcom pie. I recall a fresh graduate getting a million ringgit in angel funding to start a dotcom.

I recall a top-notch analyst quitting his million-ringgit a year job to start a dotcom. And I recall a university student dropping out to start his own Internet business. Those were the days.

I had been working for a foreign business news organisation, writing about the political and economic situation in Malaysia. So, when the whole country went dotcom crazy, I figured it was time for me to start covering that trend too.

If people could leave their secure and steady jobs to try their hand at dotcoms, I figured I could do so as well, and so I left my foreign media job to become editor of an online publication focusing on the local IT sector. I also maintained a weekly column in the Sun newspaper which gave me access to a mainstream audience.

At the time, the local media’s coverage on technology was largely focused on hardware and gadgets. Yet there was a burning public appetite for all things Internet. So, I decided my journalistic pursuits would be Internet-centric. Since I was writing a column, which by definition is supposed to be opinionated, I made sure I peppered my articles with strong viewpoints.

This formula worked. It was something different and refreshing. A local journalist articulating opinionated viewpoints about Internet business models. Imagine that!

Prevailing despite the odds

Over the past 10 years of covering technology, I got to know many CEOs of tech companies, big and small. The most common trait amongst the success stories is something cliche but true: Persistence.

I’ve seen guys prevail despite the odds. They just kept at it, refusing to give up and always pushing ahead with optimism. Some of the more successful businesses today were mere start-ups or at still a very early stage of their growth when I first got to know about them. Today, they are the greybeards of the industry.

There is also a common trait amongst the ones who didn’t succeed. And that is fear. I’ve met countless technopreneurs who are so afraid people would steal their ideas. It’s like they are afraid of their own shadows. I would also tell these guys two things.

Firstly, if the only competitive advantage you have is that no one knows about your idea, that’s not much of a competitive advantage. Secondly, ideas are a dime a dozen. It’s the execution that counts. The world is full of people with big dreams and lofty ambitions. Very few can actually roll up their sleeves and get down to the business of executing and implementing those ideas.

What I like most about the IT industry is that the people are generally open-minded and collaborative-minded as well. If you have a good idea and you approach them with a proposal to collaborate, more often than not they will say, “Yeah, let’s give it a try!”

I think that’s a really good characteristic of technopreneurs. They are generally very optimistic people.

Some things right, some wrong

In helping technopreneurs, the government has done some things right and some things not so right. Two very big positives are the availability of grants for local technopreneurs and the commitment not to censor the Internet. You’ve got to give credit where credit’s due.

Of course there were some boo-boos too. The whole concept of Cyberjaya and requiring companies to have a presence in Cyberjaya (a policy since loosened) was wrong from the start. The incredibly slow roll out of high speed broadband was also an impediment.

In looking back at the most impactful tech innovations or developments I would say the top five (not in order of importance) are:

1. Peer-to-peer file sharing,
2. Wi-Fi,
3. The rise of blogs,
4. Internet telephony, and
5. Social networking.

Although these are now a common part of our lives, they have all just emerged in the past 10 years. There were also some tech that had great potential but never took off as expected. These include

1. Sony MiniDisc
2. Browsing the web on TV
3. Bluetooth (for anything other than mobile phone earpieces)
4. MMS, and
5. Video conferencing on phone.

What’s it going to be like going forward? I would like to say that I’m bold enough to predict the next 10 years but it would be foolish of me to do so. Instead, I’ll just share what I think are important technological trends to look forward to in the next 10 months (which is a long time in tech terms).

1. iPad publishing (because 2011 is the year of the Tablet)
2. Wireless broadband price war
3. Hybrid cars
4. Social media becoming even more integrated into our lives, and
5. Anything new from Apple!

The FaceBook Effect: A Review

July 14, 2010

The FACEBOOK: Humanity’s Database

Review by David Pogue of The Facebook Effect :The Inside Story of the Company That Is Connecting the World ( by David Kirkpatrick, Simon & Schuster (July 4, 2010)

According to “The Facebook Effect,” Facebook is the second-most-visited Web site on earth (after Google). The average member spends almost an hour there each day. It has more than 400 million active users — over 20 percent of everyone on the Internet — and is growing by 5 percent a month.

But according to David Kirkpatrick, who for many years was a technology editor at Fortune, Facebook is more than big. It’s a “platform for people to get more out of their lives,” a “technological powerhouse with unprecedented influence across modern life” and an “entirely new form of communication.”

No wonder he has written what amounts to two books about it: the first and second halves of “The Facebook Effect.” The first part is a fascinating but flawed corporate history, starring Facebook’s reticent creator, the Harvard dropout Mark Zuckerberg; the second is a thoughtful, evenhanded analysis of the Web site’s impact.

Zuckerberg created Thefacebook.com, as it was originally called, in early 2004, as an extracurricular project while he was at Harvard. Students, he knew, spent hours poring over the “facebooks” kept by each of the Harvard undergraduate houses, as well as the printed campus directory featuring the name and photograph of every freshman. When Harvard lagged in unifying these directories despite pressure from students, Zuckerberg posted his version online and allowed students to add new information of their own.

Thefacebook appealed to college students’ curiosity, social anxieties and hormones, and it was an instant hit. Over the next couple of years, Zuckerberg expanded the site to include other Ivy League colleges, then less elite colleges, then high schools and finally ordinary grown-ups.

Facebook became catnip for big tech companies — Microsoft, Google, Yahoo, Viacom — and the book recounts the feeding frenzy as various executives fell over themselves trying to buy it, despite Zucker­berg’s steadfast refusal to sell. (Microsoft, for one, was finally permitted to buy 1.6 percent of Facebook for $240 million in 2007, which at the time put the value of the company, which had yet to make a profit, at $15 billion.) Kirkpatrick’s is a well-researched, nicely structured account of all the wheeling and dealing. But there are kinks in the storytelling.

Descriptions are repeated multiple times. The details of Zuckerberg’s standard wardrobe — T-shirt, jeans, fleece jacket, rubber Adidas sandals — appear in as many as five places. We’re introduced to other Web-based college social networks at least three times. “Poking,” a friendly Facebook gesture, is described twice. It’s bizarre — like being at a party where some guy tells the same joke over and over in the same conversation.

Kirkpatrick’s writing is low-key but also workmanlike, and punctuated by jarring grammatical constructions (“Everybody carried their stuff themselves”; “every Thefacebook user had their own public bulletin board”). Ouch.

This isn’t the first book about Facebook. One, the sensationalist “Accidental Billionaires” (subtitle: “A Tale of Sex, Money, Genius and Betrayal”), is already being made into a movie. But “The Facebook Effect” is the first to enjoy the participation of the blunt, elusive Mark Zuckerberg.

Kirkpatrick makes a reasonable attempt to remain objective about his subject, noting (repeatedly) Zuckerberg’s taciturn stare and, of course, his slovenly dressing habits. Even so, there’s a good deal of hero worship going on. Zuckerberg is described as a “focused and visionary” leader with “a steely willingness to confront competition” who attracts girls with “his confidence, his humor and his irreverence.” His handwriting, we are told in several places, is “meticulous,” “extremely precise” and “beautiful.”

The author shows even less objectivity in reporting on the lawsuits that have troubled Facebook’s history. One was filed by three Harvard students — the twins Cameron and Tyler Winklevoss (whose name is misspelled “Winkelvoss” throughout) and Divya Narendra — who created an early networking site with Zucker­berg’s help and then watched, aghast, as he withdrew and started his own. (The Winklevosses were “athletic blond über-WASPs” who “couldn’t be more different from the scrawny, nerdy, brainy Jews who founded Thefacebook,” Kirkpatrick observes.) Later, Zuckerberg shut out his handpicked business manager, Eduardo Saverin, who had helped finance the fledgling project and turn it into an actual company.

In a “Note on Reporting,” Kirkpatrick names 128 people he interviewed for this book. Surprisingly (or maybe not), neither Saverin nor the Winklevossesare on the list. Only the Zuckerberg side is told.

An even bigger problem is that Kirkpatrick can’t help inserting himself into the story: distractingly, self-aggrandizingly, almost pathetically. “I was sitting with Zuckerberg in a modest French bistro,” he might say. Or, “I talked to Zuckerberg in his private retreat.” Or, “I sat alone with Zuckerberg for a long interview.” Or, “Zuckerberg even emerged from his shell to solicit advance attention from a journalist, me, whom he invited inside the company for an exclusive story.” Someone should have toned this stuff down.

Much is forgiven, though, as Kirkpatrick moves beyond the fill-in-the-blanks exercise of relating

David Pogue

Facebook’s past and tackles its present and future. When a site becomes this big, this powerful, there are ramifications — personal, cultural, economic and political.

First, the privacy issue. Facebook’s entire purpose is to display personal information about you, so giving you control over it is absolutely essential. Yet Kirkpatrick clearly explains how Facebook has repeatedly made policy and programming gaffes that have exposed information that members thought was private.

He also skillfully tracks the rise of commercialism on Facebook; shrewd marketers can do incredible business on the site. And he handles Facebook’s international expansion adeptly, noting that not all cultures embrace Facebook’s American-­spirited transparency. “When a father in Saudi Arabia caught his daughter interacting with men on Facebook,” he writes in one disturbing account, “he killed her.”

Kirkpatrick is clearly excited about Facebook’s potential. It has become, like Twitter, a way for news to spread, for common goals to be shared, for political movements to take root. Barack Obama, after all, is said to owe his electoral victory in part to a shrewd use of Facebook.

It’s odd, though, that a book this carefully considered completely misses another possible Facebook effect: in an age in which one click establishes a new “friend,” young people may be losing the skills to build real friendships and negotiate real social encounters.

Not long from now, Facebook will be a frighteningly centralized database containing the information of about a half-billion people. Its advertisers already use this data (“You can show your ad only to married women aged 35 and up who live in northern Ohio,” Kirkpatrick notes), but apart from that, nobody can predict what the company will do with our information.

Despite its foibles, “The Facebook Effect” leaves you with a deep under­standing of Facebook, its philosophies and, most startlingly, its power. You come away with a creepy new awareness of how a directory of college students is fast becoming a directory of all humanity — one that’s in the hands of a somewhat strange 26-year-old wearing a T-shirt and rubber Adidas sandals.

*David Pogue writes the State of the Art column for the Business Day section of The Times. He is the author of “The World According to Twitter.”—www.thenewyorktimes.com