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Εμφάνιση αναρτήσεων με ετικέτα Politics. Εμφάνιση όλων των αναρτήσεων

Δευτέρα 20 Φεβρουαρίου 2012

Big Data - The next big thing to come... or is it already here?


This is the trailer from a movie called "Moneyball", which is based on the true story of how a low budget baseball team was formed from players who were picked according to a statistical analysis of many players. This is an example of "big data" application. Big data is the systematic analysis of enormous amounts of information and extraction of knowledge (or wisdom) from this an analysis.

Data are being recorded more than ever. Internet in all forms, mobile phones, sensors, are recording continuously and in digital - standardized format all kinds of data. Heart beat rate of runners, traffic in the cities, searches in the web, weather, news, emotions (through social media), location of smartphones, and many other details that there is no point to list now. Recoding is not producing any knowledge. This amount of information is not even manageable by humans alone. This is the playground of computerized processors! Humans are inventing algorithms that analyze with the help of computers the available data. Of course within the limits of our current imagination.

Data are stored though and are available for ever, with the new technologies of the "cloud". They will be there for generations to come. Computers are starting to learn! Because simply... they have unlimited time to look into and combine all this information. And they are way faster than humans in analyzing huge amounts of raw data. And when a new algorithm is available they can look back at all the stored data with the new "eye" made available and enrich their knowledge. So the possibilities are only expanding.

This is a trend that cannot be reversed. Simply because our lives are improving through this procedure. Some examples:
  • Less traffic or plane accidents
  • New health procedures, like epidemic analysis and reactions (Personal Monitoring Tech: Invasion of the Body Trackers)
  • More convenience in everyday life (for example, location services and personalized information on demand and in real time)
  • Longer weather forecasts
  • Superhuman fast stock market reactions and complex financial services
  • Better pricing and distribution of products at retail (super markets for example can plan their stock according to weather forecast, or customer behavior analysis!)
  • Urban crime control through analysis of events in correlation to various parameters like historical arrest patterns, paydays, sporting events, rainfall and holidays!
And for all these you do not need to conduct a survey as in the past. Most likely all the data anyone will ever need are there already. You just have to think of the best way to "dig" in them and extract the knowledge you need.

Of course, as written in a very enlightening New York Times article: "Data is tamed and understood using computer and mathematical models. These models, like metaphors in literature, are explanatory simplifications. They are useful for understanding, but they have their limits. A model might spot a correlation and draw a statistical inference that is unfair or discriminatory, based on online searches, affecting the products, bank loans and health insurance a person is offered, privacy advocates warn." But even this kind of problems can be solved much faster than in the past. Remember... data are there for ever and they only get more and more!

The main issue that must be addresses and resolved is access to the available data. I believe that recording is not bad for anyone, as long as the access to the records are open to anyone! This is the only way that true wisdom can be extracted from all this information. This the "Open Data" movement which is affecting all of us!  The Guardian has been encouraging this movement for some time now.  This a society issue and in my opinion it should be ranking very high in our priorities for the future. I would even call it a political issue!


Of course, there’s a major shortage of analytical talent. According to the McKinsey Global Institute (MGI), this is already an issue in the private sector. MGI predicts that in the US alone there will be an annual shortage of graduates in deep analytical fields of 140,000 to 190,000 by 2018. A very good article on this subject is from Linda Rosencrance of the Spotfire Blogging Team "The Promise and Challenge of Using Big Data to Address World Problems".

Big data in the end is all about wisdom and evolution! And obviously this cannot be left to the hands of few or only in the processing power of computers!

Σάββατο 20 Αυγούστου 2011

Consumption and the hijacking of our lives

From the day we are born, some role models are imposed to us and we are trying to be like them. Society accepts those who have a car, own a house in a city, have a phone, a TV, a mobile phone. Society admires people educated to be lawyers, doctors, scientists, engineers, teachers. Trendy clothes and brands have to be worn.

A contrast: What happens when you own a bike? (BBC News - Cycling industry gives economy £3bn boost http://bbc.in/qiwMpM) When you commute either with your own two feet, or with a bike, or using the public transportation for longer distances? How things would be if we did not own the houses we are staying in the cities, but we were renting (maybe as part of the taxes we pay) them from the state according to our income? What if phones and mobile phones were developed under certain standards and specifications and the focus was on the service provided by the operators through them? What if there was only one TV device per house? How about admiring farmers, dancers, painters, musicians, carpenters, palaeontologists and plumbers as much as engineers, mathematicians, doctors and lawyers? What if the clothes were picked according to their functionality and not according to the little label on the chest?

I bet the world would be a much better place! Lets try to imagine:

Houses built according to certain standards by the state. Maintained by the state and demolished and rebuilt  every 50-60 years by the state! Costs covered through taxes we pay. Families would not have to invest from their budget (usually taking 30-40% of the family income) for the housing project. Standards could be observed more closely. Speculation, price inflation and housing market bubbles would be unknown terms! After all, building a house, except for the brief period of the construction, it is not a very productive way to invest ones resources! This model would apply in all cities. Parks and public spaces could be organized better. Long term planning of the community would be much easier. Architecture would have unlimited space to develop new technologies. Energy consumption could be more reasonable, helping the environment. Resources and wealth beyond our imagination which now are being "frozen" in the value of bricks and walls and private swimming pools would be made available for investment to the productive economy!

The commuting vision: People would be able to move around in the cities on safe roads with their bikes or by walking or other human powered vehicles. For longer distances or when the circumstances are not favorable they would be able to use public transportation like trains, trams, electric buses. Accidents costing endless millions to state budget and cause unbelievable personal misery would be reduced! Public health would improve by having less obese citizens and better quality of air. Unreasonable social discrimination based on the kind of vehicle that someone owns would be unknown. Cities would have more public space. State would also save a big chunk of its' budget which goes to maintenance of the roads and for building new ones to accommodate the increasing number of cars and their parking needs. Automotive companies would be focused on engine technologies and not on pointless chassis design projects that offer nothing substantial to our lives. And finally, personal finance resources "blown in the wind" for a new car that is losing it's value as soon as you open the door for the first time, would find better ways of use. Public transportation would require increased budget from the state, but it would be way lower than the requirements for new avenues and their maintenance, or for addressing public health issues, created by the low quality of life in the cities, or by car accidents. 

Singers, dancers, painters, gardeners would be equally important with all the professions. Because the society would have available more free time and more resources to invest in the public welfare and culture. We would prevent the overpopulation in certain professions and allow personalities to develop better, through the education system. Universities and schools could be real cultural centers and not mass production facilities of brains that think in the same way and lose most of their capability to question and improvise!Social discrimination based on ones job title would be reduced, and social value would be attributed mostly to the quality of his / her skills. Excellence in personal level, would be encouraged and rewarded by the society according to the skills and not the perceived value of the profession.

Many more examples could be presented here describing this ideal world. The few, utopic-at-first-sight, cases I described above, highlight some simple imbalances  in our lifestyle. Automotive companies compete on the fields of chassis design and financial solutions (basically loans) for their cars, instead of engineering breakthroughs for the engines that move these cars. People get loans, which will last more than their productive lifetime, to buy bigger and more energy consuming houses than they need. They suppress their creativity and natural predisposition towards the development of skills, in order to be socially accepted. They end up serving non productive positions in multinational companies, without any clear view of the outcome of their day to day work, just because they are socially accepted (probably because of their 6-digit salaries, or collection of credit cards). Because of the intense social focus in certain sectors of economy, value inflation is making this endless pursue of the "dream" even more unobtainable. Consumption without any real need behind it, is the hollow foundation of the development of modern societies.

People need to open their eyes and realize what is the real value of the skills, items, services that they spend their time and resources in their ongoing effort to acquire. We are wasting our lives and resources in pursue of goals that we have not chosen! And we are dragging down with us the whole planet...

(by the way: The housing model described above, has been successfully implemented in Singapore for the past 30 years, the automotive model is the one under which this industry started more than a century ago, and was lost along the way)

Interesting to read: Was Marx Right? - Umair Haque - Harvard Business Review
Interesting to watch: Surviving Progress

Interesting to watch: http://youtu.be/4Z9WVZddH9w

Τετάρτη 3 Αυγούστου 2011

The need for vision and decisions

The European Union is facing a crucial crossroad. I am referring to issues which require action not only from the political leaders, but also from the citizens of the continent. I'm not an economist (in any way). I am just trying to think logically, stay informed and hereby I present a series of personal thoughts and logical conclusions.

Where we stand:
All sides (referring to these which envision a common European future), eventually agree on the need for a more stable foundation for the European Union in order to evolve and be able to compete in the forthcoming international fights. The big test of the near future will be on the global redistribution of access to natural resources (materials, energy, food) and economic influence from west to east (this in a later article).

The majority of production processes have been transferred to Asia due to labor costs initially but also because of the immense growth possibilities offered by the local population. The communities in these areas are upgrading rapidly their living standards, but soon will also begin to feel the pressure from the slow down of the demand for their products. This will be mainly due to a decrease in exports but will also gradually affect domestic consumption in these countries. Also the inevitable appreciation of their currencies will contribute even further to the trend. It is obvious that the present economic crisis in western economies will lead to consumption control affecting both the quantity as well as the origin of goods and energy. This environment will result to an obvious decrease of demand for the products of Asian countries, but also for Russia and Germany.

Historically speaking we can observe a swing between a market economy with state supervision (Bretton Woods 1944 agreement - social welfare state) and unlimited power to the forces of markets (President Nixon and abolition of the gold to dollar ratio in August 1971, Prime Minister Thatcher early 80s). The outcome of this balance was the foundation of euro in the early '90s. The markets (banking, funds, currency and commodities trading) have regained their dominant status, as held before the crisis of 1929, thanks to the almost unlimited trading possibilities to 2nd or even 3rd level financial products. Their tools are based on financial-economical products, processes and services and not on the real economy (Production). This was the foundation of the Euro and pushed the new currency to a frantic race taking advantage of these practices. Cheap interstate  and interbank loans were made available to all member states, with the turn of a switch!

If we step back and look from a distance, then the fact is that the European Union is facing two roads ahead:
  • Insist on testing the tolerance of the Euro as a currency unit for a union of heterogeneous sovereign states. The contradiction in this situation is that even though the Euro was born following the demand of the markets, these same markets are now predicting its' doom! This path assumes that any country unable to comply with the driving forces of the market will be either expelled from the common currency or at least placed under strict economic custody to minimize the influence.
  • Strengthening of the political foundations of the European Union, in order to achieve a centralized governance and backing of the common currency.
    Politics in Europe, since the era of Charlemagne, has been a balance between national or regional interests and efforts to unite the continent. Usually efforts to achieve the later have been resulting to wars.
      The path that was envisioned in the '50s leading to a united Europe, has been followed for 40 years with careful balanced steps, under state supervision. The political dipole of capitalism and communism, as expressed by the two leading formations of USA and USSR as well as the memories of the mistakes of the recent past were casting a shadow on every step in this direction. At the early '90s this procedure was put in fast forward! The new currency was the vehicle for this movement. Circumstances were such that the memories of the last world war were fading out, along with the last generation of politicians who have lived this. Also the political dipole missed the communist side after the diminish of the USSR.
        Basic rules of finance science dictate that a currency is the materialization of uniform policies governing state finance, taxation, labour regulations, social welfare, a central bank and in general common rules for the market. With minor exceptions, none of these principles has been applied in the case of the Eurozone since the day it was conceived and until today. The Euro was conceived as a "market" currency unit. It was the "product" of the markets, since it was obviously giving them the capability to expand their "debt" driven growth. This is the source of what we have gotten used to call the "debt crisis". Individual sovereign state financial problems are just tips of the same big iceberg.
          The result from the EU financial turmoil and the global recession is the slow down in consumption and trade which is normal under these circumstances. These facts are indicating the need for a change in the global balance, political and financial. The need for a "new deal".
            Below you can have a look at the change of trend for the EU trade balance, which is a clear indication of the forthcoming dead end.

            Source: tradingeconomics.com
              Also you can study the report issued by Eurostat for the trade balance of all member states of the union: April 2011 Euro area external trade deficit 4.1 bn euro 15.9 bn euro deficit for EU27
                Let's take a look at the two obvious paths which lay ahead of the European masterminds.
                  Insist on a common currency without the political union
                    To continue in the path of serving the magnified sovereign debts (both state and private) through the markets has become unaffordable for the majority of member states, due to the financial crisis of the banking and finance sector of 2008. The solution chosen back then was to refinance the banks using state funds. So the initial banking problem has transformed to a combined state debt and banking crisis! So nowadays, EU member states are forced to seek financial resources within the union mechanisms in order to serve their deficits. The markets are no longer easy on investing on bonds and are waiting for the big bomb to explode around the corner. And anyway, bonds should stop existing as vehicles to serve the indebted economies.
                      Common census in most member states, is against financial support of the fellow states that are in deficit. And this should be expected.
                        People of surplus countries cannot comprehend the need to transfer funds to other sovereign countries. Actually when presented like that, it cannot be accepted by anyone!
                          This line of thinking is leading to cross country tensions. Especially since state debts and deficit budgets cannot be reversed under the current world financial turmoil. Refinancing these countries will be a problem for many years to come.
                            So the most probable end of this path is the break up of the Eurozone as we know it during the last 12 years.
                              The co-existence of countries with deficits and surpluses within the EU is unavoidable and should be seen as the two faces of the same coin.  It is impossible for all member countries to be functioning with a surplus in the same way that it is impossible within a country, all it's departments to be equally wealthy. The problem is that in the case of the EU there has never been any planning of when, where and how these two conditions would be acceptable for its' members.
                                The evolution of the Eurozone under this senario, of lack of central governance, can be one of the following:

                                • Separate national currencies. This is the least probable scenario because the strong economies of northern Europe will suffer back to back blows in their competitiveness and exports. It will constitute a spectacular cancellation of the path followed since the '50s. I believe that the cost for the European economies to get back to this status, would be exceeding the cost to try to balance the current situation by supporting the deficit economies!
                                • Groups of countries with common currency. The groups would be formed by countries with similar structure and competitive levels. At the same time the peripheral economies would either join a different common currency, or more likely return to national currencies, since their needs are varying in many ways. This is a method to minimize the effect in the financial activity of the surplus countries.
                                • Intermediate situation where national currencies would be introduced but with locked margins of fluctuation to a central currency unit. Much like the situation with the ECU of the '90s. This way, local variations will be possible, while giving at the same time a central reference point for transactions and trading.
                                These 3 scenarios have as common ground that again some regions will be less "healthy" and as a result will encounter difficulties serving their financial needs. Also the markets would have lost their freedom to control at once the economies of a huge trading zone like Europe. It would be a matter of time till some national differences were exploited by political groups, and local conflicts erupt! And there are many causes - excuses for that!

                                It is naive to expect from nations like Greece, Portugal, Spain, Italy, and many more, with a turn of the switch to convert from deficit to balanced economies. These countries do not have even the culture or historical example of a period that their balance sheets were... balanced! It is enough just to look at what was happening with their national currencies in the past, and how many times they have been depreciated. Furthermore we should not forget that most of the production activities have been moved out of their territories and they are not likely to return any time soon (to a large extent the same applies for bigger economies like France or England).

                                It is quite safe to conclude that this scenario has an important factor of instability, and conflict of interests. Especially if we factor in the feelings of nations that had the experience of the eurozone, and then lost it! A violent correction would be very likely. And those in favour of such reshuffling, hoping that after the initial turmoil something better would emerge, should not neglect that this time there are external factors that probably will not make such a "rebirth" so likely. Lets not forget the pending re-arrangement of balances between the West and Asian economies.

                                Expedited completion of the unification process for the EU
                                The second path is about European Unification with common economic, labour, tax and trade policies. I will not get into details by trying to describe these policies since it is a huge subject by itself. What is certain is that they should be designed in an appropriate way to address the forthcoming "new deal" with Asian economies and their strong competition. They will most certainly involve changes in the way citizens of E.U. are consuming. It is utopic to believe that E.U. can keep importing products from Asia and rely on its' financial services system to produce the money to pay the bill.

                                All member countries should agree on a common set of rules. These will be supervised by the central government, since history has taught us that there is no alternative trustworthy method. Local petty political interests have always been undermining the rules at some point. This system should include methods to intervene and reform member states that are not conforming, bur also serve the need to preserve as much as possible from the European lifestyle and quality of life in a realistic way.

                                I must highlight here that we should not define as problematic only the financial deficit of some states, but also: increased private sector debts, the weakening of healthy social structures (like unions), the low birth rate (which is a bomb in the foundations of all the pension funds) and many other issues that need to be addressed on a European level.

                                All these issues must be addressed along with the financial figures which of course are important. Solutions must be provided not only to the economic problems but also to structural deficiencies. So this path involves:

                                1.  Agreement on social, political structures for all members
                                2. Local policies should be sacrificed to the common cause for European prosperity on sustainable foundations
                                3. Supervision of the proper application of the policies by a central government. This applies to all member states, even to the ones that are compliant to the agreed set of rules! No state/country should be considered superior to other.
                                4. Control of the central government by the people of the Union on a regular base through elections. The representation achieved through the elections should be such that would allow every part of the continent to express its' will in the central government.
                                This procedure in order to be accepted by the people of every members state, must be presented as a vision for a common, efficient and realistic future for the whole of Europe. Also the alternative path should be presented very clearly to all. These decisions require daring politicians with high sense of social responsibility in order to resist ethnic reactions and convince for their vision.
                                - Interview of Frank Walter Steinmeier to Bild (BILD-Interview mit SPD-Fraktionschef Frank-Walter Steinmeier - Politik Inland - Bild.de)
                                - Statement of Jean Claud Trichet (Jean-Claude Trichet calls for European finance ministry | Business | The Guardian)
                                - EU's Barroso warns about cost of splitting euro zone | Reuters
                                - The euro zone: Is this really the end? | The Economist

                                Time is a factor that is very pressing at this point and we cannot afford to overlook the reality that Europe does not have sufficient time to proceed with the necessary changes. My estimation is that the margin available to adapt to this new environment is no later than 2015! Also, other international interests are not compatible with this path and will not make it easy for the Union to work out the differences. We should be aware that in the past, when it came to reshuffling of power, it has always been between two (and not three or more) sides. Europe right now appears to be 3rd side in this tug war.

                                Citizens of member states should be presented with the necessary measures not as punishment for the past artificial prosperity, but as a evolution towards the common European future. The only future that can offer feasible possibilities to control our lifestyle and modify this where needed in a way that is as much compatible with our culture, as possible. Because the growth models as well as social and government models, as we know them today will have to be adapted to the new reality. To a large extent it has been based to a series of credit - financial products and anticipations that failed! But it is very important that austerity measures should be accompanied by with realistic and long term viable procedures for transfer of wealth, production and resources to weaker members. It is always better to teach the hungry how to fish instead of giving him ready made meals.

                                Examples in this direction could be, to establish production factories in Greece for aeolian or photovoltaic panels, instead of just covering wide areas of Greece with imported panels!

                                In the European political system, politicians must present the vision and prospects to the people. Politicians are obliged to serve the common interests of the European societies, according to their political beliefs, but also to analyze and adjust their path based on the knowledge they have access to from their position. By presenting the facts and the possibilities they should establish bonds of confidence and inspire the voters. This is the only way that our governments can guide the people and their lifestyles to wise choices. Because it is the duty of the politicians to dictate the lifestyle and guide the society to the path of survival and balance.