Your guide to The Economist: Week of June 09, 2007


Innovation: Lessons from Apple
…the magazine lays out your plan for Apple-ish success… 
India’s economy: Goldilocks tests the vindaloo
India’s RBI: to tighten, or not
Climate change: Fresh Air
…hold up, what about China?…
Lawnmowers: It all adds up…California’s state governments subsidize small engine upgrades in the name of environmental protection…

Innovation: Lessons from Apple 
Another article extolling the virtues of Apple and Steve Jobs, but since the Economist sometimes finds itself in the business of teaching, they’ve provided 4 easy to follow lessons for ailing companies (ahem, Microsoft) to learn vicariously through the example of Apple: 

  1. Import clever ideas: “Innovation can come from without as well as within
  2. Pursue simplicity: “[Design] new products around the needs of the user, not the demands of the technology.”
  3. Ignore focus groups: “Listening to customers is generally a good idea, but it is not the whole story.”
  4. Fail wisely

India’s economy: Goldilocks tests the vindaloo
Think your central bank is the only one on the fence concerning monetary policy? Think again. India’s central bank (the RBI) has got a bad case of indecision.  To tighten, or not to tighten –this is their question, and The Economist points out five reasons that tightening shouldn’t be ruled out (we highlight four):

  1. Contrary to the higher cost of food thesis, “the main reason for higher prices is that aggregate demand is growing faster than supply (some call this inflation).”
  2. Capital spending is on fire: from 23% of GDP in 2001 to 29.5% -good for the long-run, “but in the short term higher capital spending boosts demand and adds to overheating.”
  3. India rates have risen by less than the increase in consumer-price inflation, and monetary conditions are still too loose. India has by far the lowest real interest rates among the world’s big economies.”  
  4. Expansion is far more likely to end prematurely if inflation gets out of control and imbalances widen, raising the risk of a hard landing. Controlling inflation is the best way to sustain growth.”

Climate change: Fresh Air
Governments that do not want to do anything about global warming (think they may be talking about our government…) often point to China, which will soon become the biggest source of the greenhouse gases that are heating up the planet. What point is there cutting back on our own emissions, the foot-draggers ask, if our efforts are obscured by a vast and growing cloud of pollution from China?” 

China’s argument is that on a per person basis, their emissions are still far lower than ours (could be a function of socio-developmental-economic inequality rather than prudent policies), and that it’s unfair for the U.S. and other industrialized countries to prevent China from repeating our mistakes (i.e. mucking up the only atmosphere of the only planet that we know we can live on at the moment). The bad-ass child that they are, China would rather be given the opportunity to learn without the prodding –you know to come around when they’re ready.

To their credit, that time may be upon us. China is committed to generating 10% of its electricity from renewable sources by 2010. But, this is by no means just the beginning. In fact, China’s already cut their population down in size, theoretically by a half when the new crop under the one-child policy takes over the demographic charts, and currently stands as a world leader in alternative energy consumption (think wind, solar, heat-water –the stuff the last edition proclaimed to be least price-efficient) and fuel efficiency standards.

China isn’t such a wild child when it comes to emissions reduction and energy consumption on a per person basis, but they sure do have a lot of persons.  And in that case, the country (along with India) will need to commit to adopting even more stringent policies to combat global warming (if we’re still calling it that these days).

Lawnmowers: It all adds up
State officials and the EPA are trying to crack down on small engine usage in the U.S. As it so happens, “
regulators in California estimate that using a chain-saw for two hours produces as much pollution as ten cars each driving 250 miles.” Simple upgrades, which individual districts in California are trying to spur with cash credits for engine trade-ins, are just some of the tactics being employed –others, such as giving up grass in deserts in favor of indigenous plants that consume less water are apparently out of the question for some Americans (read: Southern Californians).* Grass is American. Cacti are Arizonian.
*The author of this rant grew up in Southern California, a place where idiots take their grass seriously, and cities waste water to hydrate grass strips on major roadway medians during drought seasons.  

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