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5G: What It Means for You
By   Shlomo Maital
 
     Cell phone users are mainly uninterested in the technologies that drive their smartphones.  Today’s technology is 4G (4th generation), and it began as LTE Long Term Evolution, which was the term used to describe how 3G (3rd generation technology) would evolve into 4th generation.   When your cell phone shows 4G, mostly, it is not really using 4G yet.    However, 5G is already on the way.
    But what is 5G (5th Generation)?  What will it do for us?
    “We think that 5G will have an impact far beyond 3G,” said Ben Timmons, Senior Director, Business Development of Qualcomm Europe. “It’s not going to be about personal communication anymore. It’s much more of a transformational technology that will have a huge impact on an enormous range of industries.”   Qualcomm of course is a major developer of 5G.   But – is this all commercial hype?
       Analysts at HIS Markit note, “Qualcomm is one of the main players in the development and deployment of the technology.  …. the American semiconductor giant has already successfully completed pre-commercial 5G  trials.”  Recently US regulators turned down an attempt by Broadcom to acquire Qualcomm.
      5G is really REALLY fast.  How fast is 5G?   “Samsung says it’s managed to achieve 7.5Gbps, while Nokia claims a more impressive 10Gbps. There’s also Huawei, which has managed 3.6Gbps.” In contrast:  4G at present runs between 5 and 12 Mbps (Megabits per second).  So 5G may be up to a thousand times faster. 
      What will this speed mean?   First – downloading / streaming will be really fast and easy, boosting this content immensely.  Second,  latency.  Latency is the ‘lag’ between, say, requesting a search and getting the answer.  It is now very short,  several hundred milliseconds.  But this is significant, especially when 5G is being used to transmit traffic information to self-driven vehicles.     5G will reduce latency lag to a few milliseconds.  And that difference is huge!
     The transition to autonomous vehicles will take years. Meanwhile, 5G can help cities significantly improve traffic management and traffic flow for self-driven vehicles.  Once 5G is in place,  machine learning and deep learning can use data from individual vehicles to alert drivers, first responders, redesign accident-prone road stretches, and in general make city driving safer and smoother.  However, the lethal mixture of autonomous and self-driven cars during the transition to autonomy will need careful management.   
     You will need a new smartphone that enables you to use 5G.  But don’t buy one just yet.   5G will be implemented during 2019 by AT&T, Verizon, Sprint and others.  But you won’t benefit from the full lightning 5G speed until the American mobile carries upgrade all their key central switching equipment,  perhaps late in 2019 or early 2020. 
       According to Don Clark, who writes the Personal Tech column in the New York Times,* most Americans have never heard of 5G and are unaware of what it does.  This is absolutely fine.  The best technology is the kind that, like sci fi writer Arthur Clark once said, seems like invisible magic.
      Note that China is a major player in 5G.  The Economist worries that carriers who buy 5G network technology from China’s Huawei  may leave the network vulnerable to prying eyes (spying).   This is just another instance of the growing technology war between the US and China. 
• “What 5G will mean when it arrives this year’.  NYT  Wed. Jan 2, 2019.

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Estonia:  Government Services Online On-Demand!
By   Shlomo Maital
  
    Hey, has anybody noticed little Estonia lately?  Time the world took notice.
As the whole world talks about the ‘digital revolution’ and ‘online government services’, Estonia has raced ahead and actually done it, quietly.
 Now they are offering to share what they did with the world.  “We have built a digital society”, Estonia says,  “and so can you.”
   What exactly have they done?
   Well – 21 years ago, it began with e-governance;  then paying taxes online in 
2000;  digital ID’s in 2001; voting online in 2005; public safety in 2007; blockchain in 2007; e-health in 2008; and e-Residency in 2014. 

     Basically – all the services you need from the Estonian government, you can get online.  You can pay your annual taxes, or file your annual return, online, in 20 minutes.  Now you can establish residency.
     I visited Estonia some years ago, on a benchmarking trip with Israeli managers.  I found the visit startling.  It all began with the Soviet Union.  Estonia once belonged to it.  The Russians feared computer science, and so banished computer science to the fringes, to Estonia.   Estonia now leverages that huge advantage.   Some 15 years ago,  a group of Estonians helped create Skype, along with a Swede. 
     Estonia offers to freely share what it knows and what it has done with the world.  I wish my country Israel, called Startup Nation, would visit Estonia and learn seriously what they’ve done.   Instead, my Prime Minister visits Brazil, praises the far right new President Bolsinaro, and plays soccer on the Copacabana 
 Beach. 

    Alas.

Colin O’Brady Crosses Antarctica Solo!

By   Shlomo Maital

 

Colin O’Brady Near the Finish

   33-year-old Colin O’Brady has just completed a 921-mile journey across Antarctica, solo, alone, unaided by wind, pulling a heavy sled with his tent and food. The New York Times calls it “one of the great feats in polar history”.   No-one had done it before unaided.

   A friend of O’Brady, Englishman Louis Rudd, 49, started out at the same time as O’Brady and is also close to the finish. In a gentlemanly act, O’Brady said he will wait for Rudd, then they will fly out together.

     O’Brady survived 932 miles of bad weather, freezing temperatures, mishaps, jagged ice projections and loneliness, for 53 full days, without a day off.

     In his final push, O’Brady completed the final 77.54 miles in one shot, sleepless, for 32 hours – an ultra-marathon tacked on to a regular day’s walk.   O’Brady said, “I just felt locked in for the last 32 hours, like a deep flow state. I didn’t listen to any music – just locked in, like I’m going until I’m done. It was profound, it was beautiful…!”

     What can we take away from this amazing feat?  Rather than think about his suffering, O’Brady said “I was reviewing the entirety of the expedition in my mind, and I was aware I’m going to tell this story for the rest of my life, but I told myself, you’re living this right now – live it!”

       We can learn from those two words – live it!   I see so many people enjoying wonderful experiences, vistas, celebrations ..and focused on taking selfies. Surely photographing these experiences at least somewhat mars the ‘live it’ enjoy it experience.   Let’s live it. Be in the moment, as the mindfulness people tell us. Never mind the selfies. Live it, so that you will be able to relive it, many many times, with sharp memories. Because, you will relive it, and if you really live it while you’re living it, those memories will serve you far better than any selfie.  

     Thanks, Colin! We get it.  

 

Selective Silence: a User’s Guide
By   Shlomo Maital 


 
  In the Jewish Talmud (Ethics of Our Fathers), Rabbi Shimon ben Shatach says, “I have lived all my days among the wise, and found nothing better than silence.”
   Silence?   Nothing better?
   Rabbi ben Shatach spent his days in study with his colleagues.  Talmud study involved dialogue, conversation, debate, argument. 
    Silence?
    It has taken me many years to figure out what he meant.  Here is what I think.
    Selective silence.  Speech, when it is warm, embracing, informative, loving, is of course vital.  There is nothing better than such speech.  The Talmud is built on it.
    But words that are hateful, hurtful, wounding, insulting, humiliating?  Such speech is better transformed into silence.
     But how?
     Here is my modest suggestion.  I affirm that I have used this method and it works.  I wish I had understood it years and years ago. 
      You are about to say angry hurtful words.  Your brain has formulated them.  They exist, those words, they live, they burn in your frontal cortex. 
       Stop.  Listen to yourself SILENTLY say them.  Then stop.  Don’t say them out loud.  Only to yourself. 
        I can think of many occasions, when, had I used selective silence, my life and those around me would have been a whole lot better.
     I’ll bet you can too, dear reader. 
Is this what Rabbi Shimon ben Shatach meant, when he said he found nothing better than silence?  Selective silence?   Silencing hurtful words? 

Finding (and Retaining) Meaning in Life

By   Shlomo Maital

 

The October issue of Monitor on Psychology (APA) has a fine article by Tori Deangelis,  “In search of meaning”.   In it she makes several key points:

  • Almost every problem that’s brought into therapy …is implicitly about the meaning of life. This is from Dr. Clara Hill, a psychology professor and author of Meaning in Life (2018).
  • Psychologists George and Park agree that “people believe their lives are meaningful when three aspects are in place: they feel their lives make sense and have continuity, they are directed and motivated by meaningful goals, and they believe their existence matters to others.

 

         Sense, continuity, goals, value for others…   these components are similar to those that guide startup entrepreneurs.   ‘Make meaning, not money’, is the principle taught by startup expert Guy Kawasaki. Turns out – this is also the recipe for a meaningful life.   Make sense – there is a reason I am alive and I need to find it, matching my passions and skills.   Continuity – I am part of work that began before me and will continue after me. Goals – meaningful ambitious aspirations. Value for others – my life has meaning, and creates value, for others.

               A number of approaches to “meaning therapy” have proven effective. Logotherapy was developed by Victor Frankl, a psychiatrist who survived Nazi death camps and later made his survival technique into a therapeutic method, based on 3 things: kindness or creative work, truth and beauty, and facing life’s difficulties with courage.

         Another approach is story-telling. Shape your life as a story – tell your own story, looking back – and build your own story, looking forward in time. A research finding shows: Those who frame their lives as a journey find more meaning than those who see their lives in a linear, steps-to-a-goal fashion.

     Other research simplifies meaning into two key parts:   close personal connections and purposeful work. Problem is, many challenging jobs, as in high-tech, take a heavy toll on family life and family connections.   In one of my Coursera courses on entrepreneurship, given together with a former very senior high-tech executive, the first of 10 key lessons taught to students is: Take care of your family.   Purposeful work can end up losing meaning if you end up without those around you whom you love and who love you.

   The article ends on a positive note, quoting a wise psychologist: While meaning is a profound human experience, it is in the end based on ordinary, attainable things.

     But, I would add, to find meaning – you have to be aware that it is important and must be sought.

Smoke That Kills, Stoves That Save Lives

By   Shlomo Maital

 

The man in the photograph is Eric Reynolds. Next to him is the stove he invented. It burns cleanly wood pellets. This California-born entrepreneur identified a problem (African villagers burn wood inside their huts, for cooking, and the smoke kills many through respiratory problems), and found a solution. He gives away the stoves, through his company called Inyenyeri,  and funds the business by selling the wood pellets at a reasonable price.   The business model is based on the fact that poor Africans cannot afford large capital expenditures but can afford to buy the wood pellets from time to time.

     His story is told in the Dec. 8 edition of the New York Times.   The article begins: “Eric Reynolds will tell you that he is on the verge of freeing much of humanity from the deadly scourge of the cooking fire. He can halt the toxic smoke wafting through African homes, protect what is left of the continent’s forest cover and help rescue the planet from the wrath of climate change.”

     Some time ago I wrote a blog about an Engineers Without Borders project, by Israeli (Technion) engineers, who used biomass to generate methane, bottle it, and then let the villagers use it for cooking instead of wood smoke. Reynolds has tackled the same problem, in Africa, but has a different solution.

     According to the New York Times article, “He is happy to explain, at considerable length, how he will systematically achieve all this while constructing a business that can amass billions in profit from an unlikely group of customers: the poorest people on earth.   He will confess that some people doubt his hold on reality.”

     We know that C. K. Prahalad, in his book Fortunes at the Bottom of the Pyramid, explained long ago how one can build businesses on the poorest of the poor. So it is indeed possible.  

     Reynolds says, “Profit feeds impact at scale,” …he is now in the midst of a global tour as he courts investment on top of the roughly $12 million he has already raised. “Unless somebody gets rich, it can’t grow.”   More than four decades have passed since Mr. Reynolds embarked on what he portrays as an accidental life as an entrepreneur, an outgrowth of his fascination with mountaineering. He dropped out of college to start Marmot, the outdoor gear company named for the burrowing rodent. There, he profited by protecting Volvo-driving, chardonnay-sipping weekend warriors against the menacing elements of Aspen. Now, he is trying to build a business centered on customers for whom turning on a light switch is a radical act of upward mobility”, the New York Times article noted.

     Reynolds is 66…and qualifies for being one of the world’s many “snow-capped idea volcanoes” (senior grey-haired entrepreneurs).

 

 

Direct Listing: Disintermediation Lives!

Or: Here, Spot!

by Shlomo Maital

 

   Ernest Hemingway hated big pretentious words, called them “two dollar” words, and preferred two-bit words in his writing. And it was very effective.

   I agree. Except for this one exception.   Disintermediation.   17 letters!   It means, removing mediation, go-betweens.   Go-betweens clip coupons, take a slice of the money – a big slice – and run. Israeli farmers get 3 shekels a kilo for avocado, retailers sell them for 18 shekels a kilo. Guess why!?

     The Internet is the great disintermediator. It can link people who need rides with those who can offer them.  Or people who want to buy anything with those who want to sell anything – directly.   Without anybody in between.

     Here is the latest example of disintermediation – but not via the Internet.

     Spotify is a music streaming platform, developed by Swedes, and launched in 2008. It is available widely, has $5 b. in revenue, employs 2,960, has raised $1 b. in venture capital, and has 157 million monthly users. Five out of 8 regular users are young, between 18 and 34.

     Its market cap is $29.5 billion.

     Spotify thinks different(ly). On Feb. 28 2018 Spotify (NYSE symbol SPOT) shares were listed on the New York Stock Exchange. But NOT, not as an Initial Public Offering. Rather, as a DPL Direct Public Listing.

     What’s the difference?

     IPO is a sale of new shares, by a company, on the stock exchange, to raise capital.

     DPL is simply a listing of existing shares, no new ones, not with any intention of raising capital, but simply making shares ‘liquid’ and enabling those who wish to sell ‘existing’ shares on the stock market.   There are no intermediaries, investment banks, underwriters, banks, nobody to clip coupons. Direct from SPOT to you.   Here, Spot! Good boy!   Sit.

     The NYSE stock exchange has far less stringent requirements for DPL than for IPO. DPL is mainly designed for smaller businesses.   But SPOT saw the opportunity. Spotify does not need more capital (it can raise all it wants, at any time). It would like to be listed, and permit those who want to cash out (after a whole decade!) partly, to be able to do so. Hence, DPL.

     DPL is disintermediated. And the trend may catch on. This could be a disruptive technology for Wall Street. Ever since Netscape did its IPO in 1995 and saw its shares soar by ten times, Wall St. has cashed in on IPO’s. The resulting bubble led directly to the 2000-2001 crash that did much damage. DPL does not have the same ‘bubble’ potential – because it simply lists existing shares, without any increase in their supply.

   Of course, those existing share prices could crash too – but somehow it is less likely for a balloon to burst when no air is added (i.e. no more new shares), than when you have a whole bunch of greedy enthusiasts pumping more and more air into it.

     So, Hemingway – OK to say, disintermediation? Or, if you insist:   Dis   …. Inter …… Mediation.

Here, Spot(ify)  !  Sit!  Lie Down!  Good Boy!   List.  Direct.  Well done! 

 Kids Sue Elders: Is This What We’ve Come To??

By   Shlomo Maital

   I recently wrote a column in the fortnightly magazine Jerusalem Report, titled “Waging War on our Children”. The title was a direct quote from Professor Larry Kotlikoff, Boston University. Kotlikoff pioneered economic studies of “intergenerational equity” – how one generation passes on a better (or a worse) economy and society to the younger generation.

   Today, Kotlikoff’s meticulous studies show, it is …worse! Much much worse. Because, when you take the present value of US spending obligations (education, health, pensions), and the present value of US tax revenues, there is an enormous fiscal gap of $200 trillion, or 10 times US GDP.   This is the debt burden the US is dumping on its young people. And this is true of other countries too, including my own, Israel.  (see Kotlikoff.net)

       In the latest issue of NATURE magazine (Nov. 8), I spotted this amazing short article.   American ‘kids’ (young people) are suing the government (older generation), for ruining the climate and leaving them with a bloody mess.

       This is a serious suit. Of course the Trump administration seeks to have it dismissed. But the Supreme Court will debate it seriously.

       Is this where we’re at? Is this how low we’ve sunk? Our kids have to sue us, to get us to do something about the god-awful mess we’ve left them?  

       Hey kids. It’s not just the climate. It’s the toxic volatile divisive angry political situation, the hollowed-out economy (industry sent abroad), the spend-and-borrow society, the crummy schools, and much more.   Broaden your suit. Sue us for the mess in general, not just climate change.   Maybe that will wake us up?!

 Peak America? The Numbers Say, Yes!

By   Shlomo Maital

 

   Writing in the Washington Post, (and on his GPS program on CNN), Fareed Zakharia cites Morgan Stanley expert Ruchir Sharma, who argues that America may at this moment be at its peak of economic and financial power – and heading downward.

   “As Morgan Stanley’s Ruchir Sharma has pointed out, the global economy looks as if it’s at “peak America.” U.S. stocks have outperformed the rest of the world this decade, and that sort of trend rarely lasts. The current recovery is now the second-longest in history, and it is due for a downturn. Interest rates are rising, corporate profit growth is slowing, and budget deficits are surging. Even President Trump seems aware of the likelihood of a dip, which is why he has been preparing the ground for it, blaming the Federal Reserve for raising interest rates.”

   Sharma notes this striking fact: US stock markets have tripled in value since 2010, while all other stock markets in the world have risen by only an average of 50%.

   The last time such an imbalance happened? 1999 (just before the dot.com bubble burst). And before that?   1929.

   Zakharia notes:   “Anywhere one goes in the world these days, leaders talk about the United States’ retreat from the world stage. They note that it began before Trump. Most date it to the aftermath of the Iraq War, spanning the administrations of George W. Bush, Barack Obama and now Trump. And while the Trump administration is bellicose in its policies, especially on trade, they are all in service of a Fortress America mentality that seeks less engagement with the world, politically and economically.”

   And he continues: “Foreign leaders also note that the United States is likely to be increasingly constrained by its mounting budget woes. The Financial Times’s Gillian Tett points out that the U.S. government now spends $1.4 billion a day on its debt, 10 times more than the next major industrialized country does. As interest rates rise and more Americans reach the age of collecting Social Security and Medicare, the federal government will be unable to fund much else. Ezra Klein has quipped that the American government is “an insurance conglomerate protected by a large, standing army,” and that is becoming truer every day.”

   Many in the US and abroad loathe President Trump. They should not, however, gloat when he makes America decline (again)   (MAD).   A world with a declining America will be chaotic, violent and troubled.

     Zakharia: “American retreat will not produce a better world. It will be messier and uglier. To get a glimpse of it, look at the Middle East today. As the United States has withdrawn from its traditional role as the region’s power-broker — maintaining relations with all sides and striving to achieve some degree of stability — Iran, Turkey and Saudi Arabia are all jockeying for influence. The United States has simply subcontracted its policy to Riyadh, encouraging the Saudis’ reckless behavior and resulting in the world’s gravest humanitarian crisis, the war in Yemen, where 12 million people are on the verge of famine.”

 

   

 

 

 

State & City Budgets:

Dangerous Hot Potato

By   Shlomo Maital

      US State and Local Budget Deficit/Surplus, 1960-2016

     Amazon has just announced it will split its new headquarters buildings between Long Island City, Queen’s, and Northern Virginia, and a smaller center in Nashville.   According to CNBC: “The company said it will receive up to $2.2 billion in performance-based incentives from the three areas: $1.5 billion associated with its investment in Long Island City, $573 million in Arlington and up to $102 million in Nashville. The incentives take the form of cash grants and tax credits, and some take effect over time.”

     The announcement highlights an interesting fact. As MIT Dean Lester Thurow noted once, companies once paid taxes to cities, and now cities pay taxes to companies (like the huge grants Amazon received). True, Amazon will invest substantially – but giving over $2 billion to a company whose stock is worth $800 billion? That made $3 billion in profit in 2017?   From city budgets that are already strapped? Amazon’s Jeff Bezos, of course, cleverly strategized by creating a competition among cities over who would give him the best deal.  

   And there is a much deeper problem, too.

   The U.S. federal government recorded a $100.5 billion budget deficit in October, an increase of about 60 percent from a year earlier. That is the gap between what the federal government spent and what it earned in taxes, in just one month!. On a yearly basis, the federal deficit is headed for a record 1 trillion dollars, or over 5 % of US GDP. The cause? Mainly, the massive Trump tax cut passed in 2017. Most of it went to businesses, and they in turn spent it on buying back their shares and on dividends. Very little went to capital investment.

     How will this deficit affect ordinary Americans? The press focuses on the massive $20 trillion US public debt that future generations will have to pay, as the federal government borrows tons of money to pay its bills. But there are deeper reasons for concern.

     Many experts predict an imminent slowdown in the US economy – perhaps, a recession. What happened in the last recession that followed the 2008 financial crash?

     According to Tracy Gordon, Brookings Institute, Washington, “More than in past economic downturns, state and local governments were a prominent casualty of the recent recession. States in particular saw their revenues plunge. Although state taxes have been rebounding, local property taxes have dipped, consistent with a two- to three-year lag between home prices and property tax rolls. These reductions coincide with state cutbacks in local aid, further squeezing local budgets.

       [See Figure: State & Local Government Deficit/Surplus 1960-2016]

   Why is this a potential serious problem? Gordon continues,    

     “These are critical issues because states and localities perform most of the activities we commonly associate with government. They undertake most direct spending on public goods and services (including their expenditures from federal funds), and they bear primary responsibility for investments in education, social services, and infrastructure that directly affect our national economy and quality of life. States and localities are also key economic players, comprising 12 percent of Gross Domestic Product (GDP) and employing 1 out of 7 workers – more than any other industry, including health care, retail sales, and manufacturing.”

   In other words, state, local and city governments supply the things that underpin quality of life – health care, education, transportation, infrastructure. They generate one dollar in every 8 dollars of GDP and employ one worker out of every seven.

     So, here is a scenario that is a cause for worry. The US economy goes into recession in late 2019. The trillion dollar federal budget deficit swells dangerously. The federal government slashes spending where it can – cutting financial aid to state governments. State governments (many are constrained by law to balanced budgets) in turn slash their grants to municipal, local and city governments.

     And these, in turn, slash spending on the things that make life pleasant, or bearable, for most Americans. Potholes? Traffic jams? Dangerous roads?   No money available to fix them.

     This is a dangerous game of ‘hot potato’.   And it’s not a pipe dream. It happened in 2010.   Deficit hot potato passes from the federal government to the state government, which in turn tosses it on to local and city government. The buck stops there, and that hot potato burns our fingers. It happened before – it will happen again.

     On a recent trip to the US, my wife and I made frequent use of WAZE. WAZE kindly told us about every pothole. And there were a whole lot of them.   I don’t recall that feature in other countries.

       Even in good times, city budgets are strained. Seeking re-election, mayors spend their money on the short-term, while costly long-term capital spending is neglected. (Why spend money to help some future mayor, maybe a rival, get elected?).  

       There is a solution. Let state legislatures require cities to build five-year capital expenditure budgets, to accompany the one-year operating budgets. Let the federal government help the states and cities pay for interest costs on debt that finances capital spending. Protect those five-year budgets zealously from ‘theft’ (shifting spending from long-term to short-term).  

       Conservatives will scream, socialism!   Five-year plans are used, for instance, in China. OK – ever looked at China’s infrastructure? Fast trains, brand new airports?

       Hot potato crises for city budgets make no sense. It’s time for a change.

        Half the world’s population now lives in cities. By 2050 that will rise to 75%.   How cities spend their money and raise their revenues will have a huge impact on the wellbeing of the people who live in them. And there is a ‘hot potato’ problem. It’s time to fix it.

Blog entries written by Prof. Shlomo Maital

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