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Economy and Free software and Politics17 Jun 2013 at 11:02 by Jean-Marc Liotier

On the 13th June, Fleur Pellerin (French Minister Delegate for Small and Medium Enterprises, Innovation, and the Digital Economy) gave a vibrant speech during the inauguration of the Mozilla Foundation’s new office in Paris.

I don’t recall any French politician at minister level so plainly taking side with free software :

Free software is a crucial asset for our economy, in more than one way. First, it enables the struggle against technological dependance upon actors who own our everyday computing tools – it is therefore a true guarantee of digital sovereignty. Furthermore, as we see today and contrary to popular myth, free and open source create jobs. Original business models have been invented and they are important factors in productivity and competitiveness for both private and public sectors who can in this way better control their holdings and concentrate their efforts on their specific value additions. Finally, free software undermines rent-seeking behaviours adverse to innovation, and therefore aids in the emergence of new economic champions.

Will the bold ideas instantly translate into action ? No one expects magic – but with policy laid out so clearly, there is reason to believe that the French government is headed in the right direction.

Let’s take note of those good intentions, keep an eye on the actions that should follow, spread the word that free software is a crucial economic asset and vote for those who understand that !

Africa and Economy21 Sep 2010 at 18:48 by Jean-Marc Liotier

Misguided aid efforts are a favorite gripe of African entrepreneurs, and the ever virulent Magatte Wade never misses an opportunity to hit on self important aid advocates. She declares that “Africans are tired of the charity brand” and she leads by example.

Today, she noticed a recent Wall Street Journal reporting that Edun, the company started by Bono and his wife, is now producing most of its products in China. Edun’s mission is to “encourage trade with Africa” and “celebrate the possibilities and the people of the continent”. I’ll let you appreciate her take on this monumental feat of hypocrisy.

The contrast with a recent New York Times article about IBM betting on growth in 16 sub-Saharan Africa by entering a ten years agreement to supply hardware, software and services to Bharti Airtel. For IBM, Africa is a growth market, not an aid destination.

Now it remains to be seen whether IBM invests in Africa or merely enjoys the open market to sell goods and services produced elsewhere. My experience of European telecommunications consultancies in Africa is that this sort of deal does not involve actual local development beyond token liaison personnel. But countries such as Morocco now feature maturing markets that nurture local suppliers – so it could happen in sub-Saharan Africa too. There is a long way from call center sweat shops to a fully developed information technology industry, but anchor investors such as IBM may trigger the start down that path. We shall see…

Economy and Politics and Technology08 Jul 2010 at 0:36 by Jean-Marc Liotier

Guillaume Esquelisse tipped me about an interesting discussion arising from Andy Grove’s article on the need for US job creation and industrial policy, which highlights the relationship between innovation,manufacturing and trade. Rajiv Sethi summarized its central point : “An economy that innovates prolifically but consistently exports its jobs to lower cost overseas locations will eventually lose not only its capacity for mass production, but eventually also its capacity for innovation“.

Unlike some of the commentators of Tim Duy’s article, I’m not one of those heretics who openly toy with protectionist ideas as a protection against the shameless exploiters of the international trade system. But as Tim Duy warns : “if you scream ‘protectionist fool’ in response, then you need to have a viable policy alternative that goes beyond the empty rhetoric“. So here is a proposal.

I believe that the fix does not lie in the selfish tweaking of trade barriers – that is merely treating a symptom. We need to act much deeper by addressing a foolishly held belief about the fundamental nature of the knowledge economy : underlying the fabless follies of glamorous captains of industry no longer worthy of the title is the fallacious narrative that applies capitalist analogies to the knowledge economy.

Knowledge cannot be hoarded. Like electricity production, knowledge creation is an online process : there are marginal hacks for storing some of it, but to benefit you must be plugged in the grid. As John Hagel III, John Seely Brown and Lang Davison put it : “abandon stocks, embrace flows”. Read their article and let it sink in : knowledge flows trumps knowledge stocks.

This is the same point that Mike Masnick found in Terence Kealey’s “Science is a Private Good–Or: Why Government Science is Wasteful” :

“How many people in this room can read the Journal of Molecular Biology. How many people in this room can read contemporary journals in physics? Or math? Physiology? Very, very few. Now the interesting thing — and we can show this very clearly — is that the only people who can read the papers, the only people who can talk to the scientists who generate the data, are fellow specialists in the same field. And what are they doing? They are publishing their own papers.

And if they try not to publish their own papers… If they say, ‘we’re not going to get engaged in the exchange of information; we’re going to keep out of it and just try to read other people’s papers, but not do any research of our own, not make any advances of our own, not have any conversations with anyone,’ within two or three years they are obsolescent and redundant, and they can no longer read the papers, because they’re not doing the science themselves, which gives them the tacit knowledge — all the subtle stuff that’s never actually published — that enables them actually to access the information of their competitors.”

This is a huge point that fits with similar points that we’ve made in the past when it comes to intellectual property and the idea that others can just come along and “copy” the idea. So many people believe it’s easy for anyone to just copy, but it’s that tacit knowledge that is so hard to get. It’s why so many attempts at just copying what other successful operations do turn into cargo cult copies, where you may get the outward aspects copied, but you miss all that important implicit and tacit information if you’re not out there in the market yourself.

Collecting ideas is easy, but acquiring tacit knowledge takes actual involvement. Tacit knowledge requires doing. This is quite far from being news to the practitioners of knowledge management or to anyone who has ever reflected on what internalizing knowledge actually means… But is is no longer just a self-improvement recipe nor an organizational issue : it has now acquired visibility at the national policy level.

The Chinese are not just mindlessly pillaging out intellectual property : they have also understood the systemic effects of a fluid knowledge economy – take open standards for example. We must now get on with the program and admit that the whole idea of capitalizing intelectual property is a lost cause. Political leaders will soon understand it… Patent trolls are already dead – but they just don’t know it yet.

But we have already advanced far into a de-industrialization process whose only redeeming strategic value is that the Chinese must be laughing hard enough for their gross national product to be slightly negatively affected. Is it too late ?

Economy and Politics28 May 2010 at 17:05 by Jean-Marc Liotier

You may have heard that the Chinese word for “crisis” is composed of two characters representing “danger” and “opportunity”. Well… Forget that – it is wishful folk etymology. And next time you hear a fluffy motivational speech using this handy rhetorical device, expose the scam !

Anyway, I would love to believe that the current crisis is indeed an opportunity. European political integration has been mired in national egoism for so long that I have found myself wondering if we would ever achieve any practical degree of coordination for the things that actually matter to our sovereignty, namely defence and finances for starters.

According to a TNS-Sofres/Logica survey on 26 March 2009, 58% of French people believe that the banks bear the bulk of the responsibility for the crisis. Doesn’t everyone love to pile on the scapegoat ? Let’s get beyond that – we must take responsibility for our complacency !

Two months ago, the IMF chief Dominique Strauss-Kahn reiterated the common wisdom that coordinated economic policy is inseparable from currency union. But so far European Union was a political project without political support. By exposing weaknesses in our institutional framework, the financial crisis may have changed that :

“I don’t like it, but it was probably the only way to force all the governments together, to have more discipline on their budgets and on their deficits and more centralised government of the eurozone”  – Yves Carcelle, Louis Vuitton’s chief executive – interviewed by the BBC.

Will it be enough to force the national governments on that common path ? As Henrik Müller writes for the Spiegel :

“If the monetary union is to survive, member states will have to abandon their egos”.

“The member states must learn to understand themselves as a community that shares a common fate and together they must strengthen democratic control over shared finances”.

Strong democratic control over our common fate… That’s my wish for Europe – a wish that some such as George Friedman greet with scepticism :

“What we have learned is that Europe is not a country. It is a region, and in this region there are nations and these nations are comprised of people united by shared history and shared fates. [..] but in the end, they share neither a common moral commitment nor a common fate”.

I disagree. We are the citizens of Europe – willingly or not we will stand or fall together. This is a common fate and it binds us together with a moral commitment toward our success as a people.

Will the politicians finally accept the need for the deeper transparency and the democracy that will empowers us ? As Dominique Strauss-Kahn told :

“20 years from now, when Europeans look back at the present period, will they see a missed opportunity ? Not to be too emphatic, but what is at stake in the current debates is simply the future of Europe”.

Twenty years is not even what it will take us to repay our irresponsible debts… Lean years are ahead of us – let’s make them count toward a better future for us, as the people of the European Union.

Brain dump and Economy and Free software and Marketing11 Apr 2010 at 10:45 by Jean-Marc Liotier

In the wake of the Ordnance Survey’s liberation of the UK’s geographical information, I just had an interesting conversation with Glyn Moody about the relationship between free digital publishing and the sale of same data on physical substrate.

If computer reading is cheaper and more convenient, can free digital publishing lead to sale of same data on physical substrate ? Free data on physical substrate has market value if the substrate has value on its own or if the data has sentimental value. That is a potential axis of development for the traditional publishing industry : when nostalgia and habits are involved, the perceived value of the scarce physical substrate of digitally abundant data may actually increases. Of course, free data has value on its own – but, as the reader of this blog certainly knows, it involves a business model entirely different to physical items.

Identification of content producers, quality control, aggregation, packaging… This is what a traditional editor does – and it is also what a Linux distribution does. Isn’t it ironical that those the Free software world and the world or traditional publishing have had such a hard time understanding each other ?

Some actors did catch the wave early on. In the mid-nineties, I remember that my first exposure to Free software took the form of a Walnut Creek CD-ROM – at the time there was a small publishing industry based on producing and distributing physical media filled with freely available packages for those of us stuck across tens of kilobytes thin links in the Internet’s backwaters. And there were other before : since time immemorial, the Free software industry has understood that the market role of producing data on physical substrate is distinct and independent from managing the data. As Glyn Moody remarked, it is only a matter of time before the media industry as a whole gets it.

Strangely, the media industry lags at least fifteen years – and probably twenty : even in mainstream publications, the writing has been on the wall for that long. To prove that, here is an excerpts of a 1994 New York Times article by Laurie Flynn “In the On-Line Market, the Name of the Game Is Internet” :

“I think Compuserve as a business is going to change very radically,” said David Strom, a communications and networking consultant in Port Washington, N.Y. “It could be they’re going to become a pipe, an access provider to the Internet, rather than a content provider.”

But Compuserve, like other on-line services, says it will continue to find ways to differentiate its offerings from databases of similar information on the Internet, by providing better search tools, a more organized approach and better customer service.

Compuserve has just released a CD-ROM, to be updated bimonthly, that works with its consumer on-line service to add video clips and music to the service in a magazine-like format. In the first edition, for example, users can view a video clip from a Jimmy Buffett concert and then with a click of the mouse connect to the Compuserve on-line service where they can order the audio CD. All the on-line services are working to add multimedia.

“Compuserve has 15 years experience in organizing that data and making it easy for them to find it and grab it,” Mr. Hogan said. “It’s not just a user interface issue but how content is packaged.”

The history of Compuserve since then shows that they were never able to fully execute that vision. But it shows how long it took for the idea of free data as lifeblood of a multi-industry symbiotic organism to get from visionaries to a mainstream business model.

In the nineties, we had to endure the tired rear-guard debate of “content vs. pipes”. The coming of age of Free data, confirms that the whole thing was moot from the very start. In 1984, Stewart Brand said “Information Wants To Be Free. Information also wants to be expensive… That tension will not go away”. I believe that said tension is most definitely in the process of going away as free data will dominate and feed a system of economic actors who will add value to it and feed each other in the process.

Economy and Geography and Mobile computing and Networking & telecommunications02 Nov 2009 at 20:31 by Jean-Marc Liotier

Valued Lessons wrote :

A lot has been written lately about Google Maps Navigation. Google is basically giving away an incredible mapping application with good mapping data for free. Why would they do such a thing? Most of the guesses I’ve seen basically say “they like to give stuff away for free to push more advertisements”. That’s close, but everyone seems to have missed a huge detail, perhaps the most important detail of all.

Google is an advertisement company, particularly skilled at targeted advertisements. Almost all of their revenue comes from being able to show you ads that you want to see when you want to see them. What does this have to do with maps and navigation? Well, this is going to seem really obvious once you read it, but no one seems to have mentioned it yet, so here it goes:

Google will know everywhere you drive, and when.

Valued Lessons goes on to detail ways Google could use that data to refine the targeted advertisement that represents the lion’s share of Google’s revenue. But there is another reason for pushing Google Navigation…

Now that they have found the way to gather start harvesting the data at a really massive scale they are able to go head to head with all the navigation software editors that have provide traffic information. Here is a nice business model :

  • Get the free version of Google Navigation deployed to as many terminals as possible.
  • Harvest traffic data.
  • Sell traffic data as a premium service. Or just give it away and kill everyone else…

Mobile network operators I know are going to hate this. They make partnerships with the likes of TomTom, only to be entirely bypassed by Google ! I love it.

Let’s take a look at what TomTom wanted to do :

TomTom will use two main sources of information, occasionally complemented by others.

First, travel times deduced from the movement patterns of mobile phones. TomTom has made an agreement with Vodafone NL, allowing us to use (anonymously) the country’s 4 million Vodafone customers as a potential source of information and developed the technology to transform this monitoring information from the mobile network into reliable travel time information.

Secondly, historical FCD (Floating Car Data) from our own customers. Every TomTom navigation system is equipped with a GPS sensor, from which one can determine the exact location of a car.

Yes, Google can do all that too.

The process of obtaining data TomTom has developed results in highly detailed traffic information. In the Netherlands, for example, it means up-to-date travel times per road segment for approximately 20,000 km of road (see figure) and historical information per road segment for all major roads in the country, approximately 120,000 km.

TomTom has developed the technology in-house to calculate travel times across the entire road network, by processing the monitoring data from the mobile telephone network through TomTom’s Mobility Framework software.

And that’s information from before 2007… Imagine what can be done today !

Letting Google know where you go and letting Google mine that data is the reason for Google Latitude too… Latitude does not have the same mainstream appeal as a turn by turn navigation application, but with so many Google Maps customers now using it inside their car we are now talking Google scale !

Economy and Networking & telecommunications19 Oct 2009 at 11:41 by Jean-Marc Liotier

Let’s go out on  a limb and make a prediction. In five years, in dense urban areas, you will get your ADSL at cost, provided you subscribe to your telecommunications operator’s mobile offering.

Three major trends are at play :

  • Cells are getting smaller
  • Radio throughput is increasing
  • ADSL throughput is not going anywhere

Once cell throughput approaches ADSL throughput, the value of ADSL drops to zero. Why bother with ADSL when you have unlimited traffic at decent speeds with no geographical limitations ? In Paris, I seldom bother to even switch on my Android G2′s Wi-Fi networking – now it is all UMTS, all the time.

Why not ADSL for free ? As I can even get full motion video on demand on my mobile communicator, the availability of video services on the ADSL remains an incentive only if I’m interested in high definition. But to some people, high definition is important so ADSL retains some perceived value. In addition, giving away free ADSL access bundled with a mobile subscription would be gross abuse of a dominant position by operators protected behind the barrier to entry that their license affords them – so the worse they can do is selling ADSL at cost. But it is nevertheless tempting to squeeze out the perceived value of ADSL from the consumer’s point of view in order to cut the fixed access pure player’s oxygen supply. Isn’t life so much more comfortable among oligopolistic old pals ? Marginalization of ADSL pure players will be even worse if they are not playing along in the fiber optics arms race.

So the incentives combine :

  • Users want the convenience of permanent unlimited cell access
  • Operators are happy to squeeze out ADSL pure players

As a result, cell traffic increases and leads us to the next step of this self-reinforcing process : femtocells. Spectral efficiency nearing the Shannon limit, antenna diversity, spectral multiplexing and other 3G MIMO techniques can combine to provide the peak throughput that all the shiny marketing pie in the sky presentations promise. But in operations in the field those speeds are not achieved unless you camp under the antenna. For example, LTE 2×2 MIMO is advertised at a peak throughput of 173 Mb/s but actual rates are somewhere between 4 and 24 Mb/s in 2×20 MHz. They drop sharply as distance increases and it gets worse as the cell gets crowded. So there will be strong user demand for small cells – demand theoretically exists until there is one cell per user.

Approximately 60% of mobile usage already takes place indoors, yet providing in-building coverage is a technical problem at the gigahertz frequencies used for Wimax and LTE. This is only set to get worse as the mobile continues to replace the home phone. Research indicates that, as “all you can eat” data packages become commonplace, this number is likely to reach 75% by 2011.

Doug Puley – “The macrocell is dead, long live the network”, 2008

With the user spending more than 60% of his time indoors, there will be a fixed line access nearby. Extension of the access network on top of ADSL and FTTH links is already underway to increase capacity and compress costs by getting the data off the mobile network as close to the user as possible. Femtocells work well on ADSL too. So ADSL will remain useful as a way for mobile operator to shed load from the rest of the access network. And on top of that, ADSL lets the operator reach subscribers in areas not covered by the radio network.

So to mobile operators who offer fixed line access, ADSL could soon be considered as a mere adjunct to their core offering : mobile access. That could add yet more pressure on the game of musical chairs of mobile access frequencies license allocation. Why not attempt to exclude the competition that does not own a mobile network ? That leads us to ADSL access at cost – or slightly below that if the operator is willing to be naughty and deal with the market regulator. It will happen sooner than you think.

By the way, for a wealth of data about 3GPP evolution from UMTS-HSPA to LTE & 4G, you can take a look at this  September 2009 report by Rysavy Research. It provides about all you need to know about it and it is nearly as good as what I get internally from SFR.

Approximately 60% of mobile usage already takes place indoors, yet providing in-building coverage is a technical problem at the gigahertz frequencies used for Wimax and LTE. This is only set to get worse as the mobile continues to replace the home phone. Research indicates that, as “all you can eat” data packages become commonplace, this number is likely to reach 75% by 2011.
Economy and Email and Jabber and Social networking and Technology and The Web17 Oct 2008 at 8:17 by Jean-Marc Liotier

Some people notice I am quite dogmatic about open networks. And they are right : to me, open is everything and the rest is details. But even my zeal has its limits : I don’t gratuitously shove tools in the face of people who can’t use them in practical conditions. I have been advocating jabber among my technically minded friends since 2001 and running my own server since 2003, but it took Google joining the XMPP network in 2006 to actually make it a viable option for pushing open instant messaging to the masses of people I don’t want to support myself. Before that I could understand the necessity for joining proprietary networks and run multiprotocol clients to reach people I could not decently drag to Jabber or IRC. But now I can tell them that getting presence information and instant messenging from me is just a Google account away – and since it is a mainstream service offered by an established and well known service provider they can hardly anymore label me a techno-excentric for using it. So – no I will not join your proprietary instant messaging network.

Today we have the same situation with social networking. And while the technological prerequisites for open microblogging have been almost there for a while, they have not yet cristalized into something that can be fed to the masses. That day will come – and we are all pushing toward it. Until then, I have a Facebook profile. But soon I know that I’ll be able to tell the world that my social networking tool is my blog, or whatever other tools I fancy moving to and from thanks to data portability efforts. And it’ll be easy for others to do the same because interoperable services will blossom at the hands of mass-market providers – maybe even Facebook if they ever reach enlightenment. And when that is about to be ready for massive adoption, you know where I’ll be – and you know where I’ll not be anymore !

To me there is an element of religion in those choices. But the techno-apathetic average user can make the same choices out of pure self-interest. If there are a number of comparable offerings on the market, one of which lets the buyer choose between different suppliers and move between them at will, you can bet that the one-time cost of moving away from the proprietary offering will be more than offset by the future value of the open solution. If we look at the history of technologies, examples of such migrations are plenty. Let’s just take e-mail for example : what is the current weight of closed mail systems ? They still exist, but they are insignificant niches and many of them use e-mail for notification…

Africa and Cycling and Economy13 May 2008 at 18:51 by Jean-Marc Liotier

Urban transport in Africa is chaotic and only getting worse by the year – degrading infrastructure, growing megalopolis and rising energy costs are not helping. I traveled in quite a few African countries and I had the dubious privilege of using public transportation such as the legendary minibuses which are a mandatory part of the African experience. At home in Paris, I mostly ride my bike. I always wonder why bike transportation is not more developed in Africa : it would be practical, sustainable and consistent with the local standard of living while extending business opportunities and access to goods and services – all while using few imported goods and mostly local workforce.

At first glance the bicycle seems ideal transportation for many in Africa cities: most are flat, trip distances are short and money for private motor vehicles and public transit systems is scarce. But generally bicycles are underutilized in Africa” writes David Mozer in “The Bicyclist’s Dilemma In African Cities”. He notes that “a survey of literature by Africa writers indicates that bicycles were a prominent mode of transport during the first half of the twentieth century. But for reasons that are not totally clear the bicycle and bicyclist don’t fare well in the contemporary Africa city. [..] Bicycles are used less in most African urban centers than in many European and North American cities. Africans show a substitution directly between walking and motor transport as income increases“.

The difference with Asia is striking. Ten years ago, at the UNCHS (Habitat) Regional Symposium on Urban Poverty in Asia, A. Rahman Paul Barter noted many differences between bicycle use in Asia and Africa : ” In most Asian cities, bicycles are within reach of many poor households and have been widely used for the last several decades (Replogle, 1992). In Asia, unlike most African and Latin American cities, bicycles are affordable even to many of those for whom public transport is not affordable (Godard, 1997; Howe and Dennis, 1993; Tiwari and Saraf, 1996)“.

The difference may have a lot to do with the presence of a deliberate industrial development policy geared towards the building of a sustainable local cycling manufacture and maintenance industry : the UNCHS paper goes on : “Several Asian countries have successfully pursued policies in the post -World War Two era which enabled a local bicycle manufacturing industry to flourish and for large numbers of affordable bicycles to be available on the local market. The main low-income examples is China but bicycle manufacturing is also significant in India and Pakistan, while earlier Japan and Taiwan also developed very large bicycle industries (Replogle, 1992). In China before 1979 bicycle ownership and production remained something of a privilege but with market reforms bicycle ownership rose steeply (Hook and Replogle, 1996). China has also long provided direct government and employer-based subsidies to workers for the purchase of bicycles (Replogle, 1992). India and China have also managed to become large exporters of bicycles. The lack of a significant domestic bicycle industry and high tariffs on imports in Bangladesh contributes to bicycles being beyond the reach of the poor in Dhaka (Gallagher, 1992). There are some examples of successful credit schemes for the purchase of non-motorised vehicles by low-income people in Sri Lanka and Bangladesh (World Bank, 1996)“.

Why African governments have disregarded the opportunity to develop a home grown light industry consistent with local manpower, local competence, local needs and ressources is a nagging question, especially since such light industry can be the seeds of an economic biotope within which more sophisticated industries can develop in a grassroots fashion.

But practical obstacles and hostile individual attitudes toward cycling are also to blame, most of them catalogued in Rahman Paul Barter’s paper. I had the opportunity to interview locals about them. The objections related to security and afford ability are easily invalidated by the fact that in many African countries light motorcycles are overwhelmingly the popular way to provide individual transportation as soon as it is within economic reach, as anyone who has ridden among the hordes of mopeds can testify.

So what remains is prejudice against human powered vehicles in general and bicycles in particular as a serious mean of transportation. As I have heard from potential users in Africa, riding a bicycle is not recognized as a dignified mean of transportation. Physical exertion being shunned, the bicycle being seen as a child toy unworthy of an adult, cycling being incompatible with the socially accepted role of women… The objections I witnessed in Africa are strangely similar to the ones I hear in Paris. And apparently they are the same elsewhere in the world. A lot of communication work remains to be done everywhere in the world so that cycling becomes a serious choice for transportation. It is sad that even where it makes the most sense and delivers the most positive externalities, cycling still needs propaganda to convince transportation users.

Of course, cycling is not a universal solution. But it is a valid tool which is currently underrepresented in the transportation mix, especially in poor countries where in many situations where it is economically and practically optimal, it is neglected for irrational reasons. I hope that African entrepreneurs will see the opportunity along with micro-credit institutions and ambitious politicians who can foster awareness initiatives.