Author: Ben Debski

Left by the side of the road

Posted on by Ben Debski

The idea of the electric car has captured the imaginations of innovators – including Henry Ford and Thomas Edison – for over a century. Celebrities, pundits and political leaders alike have cast these vehicles as the apotheosis of an environmentally responsible future.

German Chancellor Angela Merkel has proclaimed that there will be a million electric cars on the autobahn by 2020. President Barack Obama has likewise promised a million electric cars in the US – but five years sooner.  Someday, the electric car will, indeed, be a great product – just not now. It costs too much, it is inconvenient and its environmental benefits are negligible (and, in some cases, non-existent).

Many developed countries provide lavish subsidies for electric cars: amounts up to $7,500 in the US, $8,500 in Canada, €9,000 in Belgium and €6,000 even in cash-strapped Spain. Denmark offers the most lavish subsidy of all, exempting electric cars from the country’s marginal 180 percent registration tax on all other vehicles. For the world’s most popular electric car, the Nissan Leaf, this exemption is worth €63,000.

Yet this is clearly not enough. In Denmark, there are still only 1,224 electric cars. In Germany, car sales totalled 3.2 million in 2011, but only 2,154 were electric. The numbers have forced Obama and Merkel to reconcile their projections with reality. The US Department of Energy now expects only about 250,000 electric cars on America’s roads by 2015 – 0.1 percent of all cars. Merkel recently admitted Germany will not get anywhere near one million electric cars by 2020.

An unhealthy life
No one should be surprised. According to an analysis by the US Congressional Budget Office, a typical electric car’s lifetime cost is roughly $12,000 higher than a gasoline-powered car. Recent research indicates electric cars may reach break-even price with hybrids only in 2026 and with conventional cars in 2032, after governments spend €100-150bn in subsidies.

Costs and subsidies aside, electric cars have so far proven to be incredibly inconvenient. A BBC reporter drove the 778km (484 miles) from London to Edinburgh in an electric Mini, and had to stop eight times to recharge – often waiting six hours or more. In total, he spent 80 hours waiting or driving, averaging just 10km per hour – an unenviable pace even before the advent of the steam engine.

Electric cars also fail to live up to their environmental billing. They are often sold as “zero emissions” vehicles, but that is true only when they are moving. For starters, the manufacturing process that produces electric cars – especially their batteries – requires an enormous amount of energy, most of it generated with fossil fuels.

A life-cycle analysis shows that almost half of an electric car’s entire CO2 emissions result from its production – more than double the emissions resulting from the production of a gasoline-powered car.

Moreover, the electricity required to charge an electric car is overwhelmingly produced with fossil fuels. It then emits about half the CO2 of a conventional car for every kilometre driven (using European electricity), but, given its high CO2 emissions at the outset, it needs to be driven a lot to come out ahead.

Someday, the electric car will, indeed, be a great product – just not now

Doing the maths
Proponents proudly proclaim that if an electric car is driven about 300,000km (180,000 miles), it will have emitted less than half the CO2 of a gasoline-powered car. But its battery will likely need to be replaced long before it reaches this target, implying many more tons of CO2 emissions.

In fact, such distances seem implausible, given electric cars’ poor range: the Nissan Leaf, for example, can go only 117km on a charge. That is why most people buy an electric car as their second car, for short commutes. If the car is driven less than 50,000km on European electricity, it will have emitted more CO2 overall than a conventional car.

Even if driven much farther – say, 150,000km – an electric car’s CO2 emissions will be only 28 percent less than those of a gasoline-powered car. During the car’s lifetime, this will prevent 11 tons of CO2 emissions, or about €44 worth of climate damage.

Given the size of the subsidies on offer, this is extremely poor value. Denmark’s subsidies, for example, pay almost €6,000 to avoid one ton of CO2 emissions. Purchasing a similar amount in the European Emissions Trading System would cost about €5. For the same money, Denmark could have reduced CO2 emissions more than a thousand-fold.

Worse, electric cars bought in the European Union will actually increase global CO2 emissions. Because the EU has a fixed emission target for 2020, it will offset emissions elsewhere (perhaps with more wind power), regardless of the type of car purchased: 38.75 tons of CO2 from a gasoline car, and 16 tons from the electricity produced for an electric car. But, while EU emissions stay the same, most electric batteries come from Asia, so an extra 11.5 tons of emissions will not be offset.

Killing with kindness
The electric car’s environmental transgressions are even worse in China, where most electricity is produced with coal. An electric car powered with that electricity will emit 21 percent more CO2 than a gasoline-powered car. And, as a recent study shows, because China’s coal-fired power plants are so dirty, electric cars make the local air worse.

In Shanghai, air pollution from an additional million gasoline-powered cars would kill an estimated nine people each year. But an additional million electric cars would kill 26 people annually, owing to the increase in coal pollution.

The electric-car mantra diverts attention from what really matters: a cost-effective transition from fossil fuels to cheaper green energy, which requires research and innovation. Electric cars might be a great advance for that purpose in a couple of decades. But lavish subsidies today simply enable an expensive, inconvenient and often environmentally deficient technology.

(c) Project Syndicate, 2013

Ecuador under the hammer

Posted on by Ben Debski

Ecuador is a watershed nation. It is virtaully spilt in two by the Andes mountain range – to the west the Pacific, to the east the cradle of the Amazon. The country has 8.1m hectares of pristine rainforest, protected by the mountain range on one side and the impregnability of the jungle itself on the other – the Ecudorian Amazon is the deepest part of the rainforest. It is also one of the most biologically diverse patches of land in the world.

Everyday, new species and types of trees are being discovered in the region. Yasuni National Park in eastern Ecuador is estimated to have one of the richest concentrations of species in the world – there are more bird species there than in all of Europe. It would take a team of scientists 400 years to identify the estimated one million species of insects living there. But since 2007, it has been known that as many as one billion barrels of crude oil lie beneath the jungle floor.

And that is where the trouble – and the opportunity – lies. There are already a number of active blocks being explored within the boundaries of the Yasuni National Park, but Ecuador has recently announced plans to auction off up to three million hectares of unspoilt rainforest to Chinese oil explorers. Quite apart from endagering the rich flora and fauna of the region, many tribes – some of which live in complete isolation in the jungle – are susceptible to being removed.

Though the announcement of the auction was met with widespread protests by environmental and indigenous groups, Ecuador finds itself in a difficult situation. Around a third of the population still lives below the poverty line. Ecuador has long known that it is an oil rich country, but has struggled to convert that natural wealth into development.

Oily business
According to the World Bank, although the country grew tremendously during and after the oil boom of the 1970s, poverty has remained widespread. The report does not make for easy reading: “The distribution of wealth is skewed and close to four million Ecuadorians, about 35 percent of the population, live in poverty. Another 17 percent are vulnerable to poverty.” The notion that oil money will be all the cash the country needs to finally emerge from the grips of poverty makes the temptation to drill all the more difficult to resist.

“Ecuador is willing to establish a relationship of mutual benefit; a win-win relationship,” declared Ecuador’s ambassador to China in the opening remarks of a bidding event at a fancy hotel in Beijing. Attending the event were representatives of some of China’s most important oil companies, including China Petrochemical and China National Offshore Oil. It is certainly a ‘win’ situation for petrochemical companies; China’s insatiable thirst for fossil fuels has meant every drilling opportunity is a golden one. And Ecuador has a lot of oil to offer.

But the auction of the blocks has been fraught with contention. Before the final stop in Beijing, Ecuador’s authorities had been on a roadshow to introduce the auction. Events in Houston, Paris and Quito were all met with angry protesters and indigenous activists. The auction has become so controversial that Amazon Watch – the vociferous California-based NGO – has gotten involved, suggesting the deal might be in direct violation of the investment guidelines China issued in late February.

Quantifying the value of the rainforest… is problematic

The document states: “It is advocated that, in the course of active performance of their responsibilities of environmental protection, enterprises should respect the religious belief, cultural traditions and national customs of community residents of the host country, safeguard legitimate rights and interests of labourers, offer training, employment and re-employment opportunities to residents in the surrounding areas, promote harmonious development of local economy, environment and community, and carry out cooperation on the basis of mutual benefits.”

Indigenous concerns
There are seven indigenous groups inhabiting the region who claim they have not been consulted or consented to the developments. For the local inhabitants, the oil developments are incompatible with their way of life. When the auction was announced last October, a group of indigenous associations released an open letter requesting international companies abstain from bidding in the offending blocks. It read: “We demand that public and private oil companies across the world not participate in the bidding process that systematically violates the rights of seven indigenous nationalities by imposing oil projects in their ancestral territories.”

The government has not been sympathetic to the complaints of the native population. “These guys with a political agenda, they are not thinking about development or about fighting against poverty,” said Ecuador’s Minister for Hydrocarbons, Andrés Donoso, in an interview. “We are entitled by law, if we wanted, to go in by force and do some activities even if they are against them. But that is not our policy.” He added Ecuador was not just courting Chinese oil companies, but admitted that – because of their resources – if it came to a bidding war, they would be the likely winners.

Narcisa Mashienta, of Ecuador’s Shuar people, said: “What the government’s been saying as they have been offering up our territory is not true; they have not consulted us, and we’re here to tell the big investors that they don’t have our permission to exploit our land.”

The Ecuadorian authorities are marketing the auction as an opportunity for development. The southeastern Amazon region, just below the national park, is estimated to hold up to 1.6 billion barrels of oil, and the country expects bidding for the 13 blocks currently open to bring in $1-1.2bn. The drilling blocks will be accompanied by vast investments in infrastructure as pipelines and roads are built, generating many jobs. But the indigenous population being displaced maintains the price to pay for this development is too high.

Quantifying the value of the rainforest – both as the rightful territory of its indigenous inhabitants and as a vast natural resource – is problematic. While oil developments will certainly bring opportunities and developments to the country, it is unclear how much of it will filter down to the lower echelons of the population, including the native tribes of the region. It is also important to note that, while there is a wealth of oil in the country, it is a finite resource that will come in lieu of the infinite riches and benefits that can be found in the Amazon.

Ecuador is undoubtedly at a difficult crossroads, but it must remember that foreign investment in oil, though easy and lucrative, is not the only way to bring development.

Can’t we all just get along?

Posted on by Ben Debski

One of the main principles behind mainstream, neoclassical economic theory is that individuals act to optimise their own utility. The definition of utility is somewhat hazy, but basically means whatever is pleasurable or useful. The net result of all this optimising behaviour is maximum utility for society as a whole. Much economic theory is therefore dedicated to tuning this utility machine.

Policymakers also try, quite sensibly, to steer the economy towards things that look like they should be useful. However, there are many examples where an activity’s sheer lack of utility in economic terms can make it, paradoxically, very productive.

Consider, for example, sports events, such as the Olympic Games. The Olympics is often held up as a stellar example of international cooperation, and is a great success by any standards (it has been going for long enough). But no one thinks the activities at its core – running, jumping and so on – are terribly important for society.

Of course, the stakes are high for the athletes, for local politicians, for advertisers, and for things like national pride. But now that we have cars, there isn’t much practical utility in running 100 metres faster than any other human. Economic benefits are a side effect, not central to the enterprise.

This lack of real world relevance is not a handicap – in fact, it is what makes cooperation between countries possible. Competition is intense, of course, but it is relatively safe and friendly, exactly because the real-world stakes are low. It’s a spectacle.

The hero’s quest
Another example of this inverse utility effect comes, perhaps surprisingly, from science. The scientific enterprise is often thought to be driven largely by utilitarian motives. But in many respects, science resembles a sport in its obsession with things that really aren’t that useful.

The scientific equivalent of the Olympics has been the search for the tiny particles that make up matter. As with the Olympics, the quest  goes back to the ancient Greeks.

The venue for the modern version of this quest has switched a few times from one international laboratory to another. The latest record-beating particle – the famous Higgs boson – was recently spotted at the Large Hadron Collider (LHC) near Geneva.

At around £6bn, the LHC budget is similar to that of hosting a typical Olympics Games. The London Olympics involved about 10,000 athletes from over 200 countries; the LHC is the result of the work of around 10,000 scientists from over 100 countries. In the ancient games, champions were decorated with laurel leaves – today, our scientific heroes arenamed laureates.

The boson in question is important because it is evidence of the existence of a kind of energy field that permeates space and is responsible for giving other particles their mass. It is therefore a tremendously useful particle in itself.

Without it, atoms would never have had a chance to form, because everything would be whizzing around very fast. The Olympics would be redundant. However, knowing this is not, in strictly utilitarian terms, a very useful piece of information. It is not something you can take to the bank.

In fact, compared to areas like solid-state physics – which has given us the technology behind computer chips and much consumer electronics – particle physics has a low rate of direct commercial spin-offs.

…now that we have cars, there isn’t much practical utility in running 100 metres faster than any other human

Side effects
This makes sense from a complexity science perspective (as opposed to the reductionist paradigm that has long dominated science), since what counts is the emergent properties at a macro scale – rather than the components at the micro scale, which need not be directly related.

For example, the electron was discovered in the late 19th century using an early accelerator known as a cathode ray tube (later used in TVs). Electrons in the form of electrical current have certainly proved useful in the wiring-up of the planet and this is sometimes held up as an example of a useful application.

However, the discovery of the electron particle did not drive the progress of electrical engineering – rather it was the other way round. The cathode ray tube used to discover the electron was itself powered by electricity.

Accelerator research has led to advances in all kinds of useful things, from superconducting cables to tunnel construction. The most famous spin-off, which has had major economic implications, was the World Wide Web – its HTML language was invented by Tim Berners-Lee while he was at CERN (the organisation that now runs the LHC). But these were side effects, related to the technology used in laboratories rather than the actual physics.

With the boson, the main thing at stake is the shared joy of filling another gap in the puzzle of our understanding of nature. If its discovery had real commercial or military applications, one can bet cooperation would be more difficult.

Peace when it doesn’t matter
There is, of course, Olympic-scale competition between different teams over things like who will be awarded a Nobel Prize, but it is friendly competition around shared goals. The utility-lacking nature of particle physics has been key to its success.

Of course, most scientists probably don’t see it quite this way. They are used to festooning their grant request forms with references to the likely benefits to society of their work. Few would agree with the mathematician GH Hardy, who famously toasted: “Here’s to pure mathematics, may it never find an application.”

And the lack of direct applications does not, of course, mean particle physics is of no value, any more than art or sports or pure mathematics is without value. It is just the sort of value that is not easily captured by economic metrics.

It is a shame the spirit and energy seen in particle physics or sports seems to elude us for things like world peace, conquering climate change or even fixing the euro. Unlike the quest for a particle, these require action and the upsetting of stakeholders. But at least we can draw inspiration from science and sports, while envying their relative freedom from the restraints of utility.

Qatar Solar Technologies: on Qatar’s horizon

Posted on by Ben Debski

Before the discovery of oil and gas, the Bedouin, Hadar and Abd people of the Qatari peninsula lived in houses built predominantly from naturally sourced materials. The stone (hasa), limestone mortar (juss), limewash (nuwra), sand (raml) and earth (turab) all came from the desert; the built-in ventilation grilles on top of the buildings released the heat, the low-set generous windows – along with wind towers harnessing the prevalent northwesterly winds – cooled the houses while the children played in the
abundant sunshine.

Since then, Qatar has developed at an unprecedented rate. In just 40 years, Qatar has become the world’s largest exporter of liquefied natural gas and this small peninsula that juts out into the Arabian Gulf and shares a border with Saudi Arabia, has been transformed into one of the world’s fastest growing economies. Qatar has one of the world’s highest per capita GDPs and its people are witnessing the development of an ultramodern infrastructure at a rapid pace.

Many sectors, such as health, education, transportation and tourism, are being developed with renewed vigour. This includes railway networks, a new international airport and seaport, modern highways and the state-of-the-art Sidra Medical and Research Centre.

The country is relentlessly pursuing a charter of modernisation widely known as the Qatar National Vision 2030, which will put Qatar on the path to becoming a knowledge-based economy with particular regard to social, economic, human and environmental developments – including the use and applications of solar technologies.

Power to the world
The solar power and applications initiatives currently being undertaken in Qatar are vast and cover solar cooling, solar desalination for water and agriculture, and solar use in the oil and gas industries. Simultaneously pioneering research for the use of solar technologies and applications that are suitable for Gulf Cooperation Council’s (GCC) harsh desert environment is being actively pursued.

Programmes being undertaken by the Qatar National Food Security Programme, Qatar Solar Technologies (QSTec), Qatar Foundation, Qatar Science and Technology Park, and other organisations in Qatar will advance these technologies for use across the region and the world.

The technologies and techniques will improve, new patents will be created, costs will decrease and Qatar’s ongoing research into these areas will make a substantial contribution to expanding and developing our knowledge and best practices in this exciting field.

Qatar and QSTec will develop a new industry for the region that will provide solar energy for cities, new employment and entrepreneurial opportunities, sustainable technology solutions to provide fresh water for people, crops and agriculture, and will have a profoundly positive effect on the lives of millions of people.

All countries in the GCC regions have rapidly increasing populations, increasing water and energy needs, are blessed with abundant sunlight, and have some of the world’s highest Direct Normal Irradiation levels. The population of the GCC is forecast to increase to 53.3 million people by 2020 – an increase of 30 percent from 2000 – which greatly impacts electricity and water requirements.

The Economist Intelligence Unit forecasts the GCC’s electricity needs will increase on average by seven to eight percent per year until 2020, and within the faster growing economies this increase could be even higher. With increasing energy demands, we are witnessing a transformation in energy use across the region with an aim to become more sustainable by diversifying the sources of both electrical and thermal energies.

A region blessed with infinite sunlight could do well

Qatar, Saudi Arabia, the UAE and a host of other countries are looking to use solar energy to meet their increasing energy needs, and to provide power for a wide range of applications. Qatar is expecting that by 2020, up to 20 percent of its electricity requirements will be met through solar power.

Energy intensive water desalination will use solar energy to turn the saline waters of the Arabian Gulf into fresh water to meet the increasing domestic needs of the GCC. Until recently, this desalination process relied on hydrocarbons to meet its energy needs, but increasingly solar energy is being used with great success.

In a region where summer temperatures are often over 40°C, air conditioning is essential. In the GCC, the peak electricity demand is in the middle of the day, when the air conditioners are running in homes and offices. This is also the time when solar is most effective. Research is currently being undertaken in Qatar and across the region in a bid to harness the sun’s energy for cooling. When Qatar hosts the first carbon-neutral World Cup in 2022, its stadiums and spectator zones will be cooled using solar energy.

Solar cooling technology is in its infancy, but with this announcement the research and development interest has increased dramatically in Qatar and around the world. The benefits from developing solar cooling technologies and applications are far reaching. Global warming will increase the global demand for air conditioning and, if solar cooling technology can meet this need, the positive impact on our environment and societies will be enormous.

Preparing for the future
QSTec is the realisation of the Qatar National Vision 2030 for the future of Qatar. The aim is to establish a distinctive, 21st century, iconic country that celebrates the special cultural and geographical heritage of Qatar and the Gulf Region, taking into consideration the reduction of harmful environmental effects, preservation of energy and water,  and the reduction of carbon emissions. All this will be achieved while ensuring high environmental quality to our residents, workers and visitors through the application of greener building standards based on sustainable technologies like solar power.

QSTec is leading the way by building a brand new solar industry in Qatar and working to efficiently harness this profound energy source. QSTec is currently building a polysilicon plant in Ras Laffan Industrial City. Polysilicon is the key ingredient in the world’s most efficient solar technologies, and the silicon chips found in our modern electronic devices. Initially, the plant will produce 8,000 tonnes per year (MTPY) of high-quality polysilicon and is designed to expand as demand grows.

Built on 1.2 million square metres, QSTec’s polysilicon plant can expand capacity to 45,000 MTPY and has been designed to seamlessly incorporate solar ingots, wafers, cell and module manufacturing facilities. In the not-too-distant future, QSTec aims to manufacture solar modules in Qatar – made from QSTec’s own polysilicon – for use locally and for export to the rest of the world.

Infinite sunlight and opportunity
The opportunities for innovation and groundbreaking research in Qatar remain promising. Qatar allocates an impressive 2.8 percent of its GDP to research – which is one of the highest government-funded initiatives in the world. As part of its multi-faceted mandate, QSTec aims to develop and export solar technologies and new patents from Qatar to the world – and Qatar is fast becoming a global research centre.

QSTec’s mother company, Qatar Foundation, is home to the world-class Qatar Science and Technology Park, as well as several leading international universities and research institutes. In addition, it also provides funding for high-quality research through the Qatar National Research Fund. Qatar Foundation has an excellent track record of bringing people and organisations together to develop new products, solutions and efficiencies, and QSTec plans to fully utilise these strengths to further contribute to realising Qatar’s National Vision 2030.

QSTec and its partners are continuously exploring opportunities for using solar energy solutions for solar desalination, cooling and hydrocarbon processing. The ultimate goal is to be a major contributor to the evolution of solar technology in the Middle East.

A region blessed with infinite sunlight could do well if it seizes the infinite applications solar technology is generating. One of QSTec’s recent projects was working with Barwa to supply Qatar’s first Passivhaus project with a high efficiency 34-kilowatt solar power system that will enable to house to be powered by the sun.

Open communication
QSTec encourages open communication channels with all businesses and organisations that have an interest in solar technologies and applications. In this regard, QSTec is actively working together with the Qatar National Food Securities Programme, Kahramaa, Barwa, Qatar Electricity & Water Company and Energy City Qatar – to name a few – and is in talks with a number of other key institutions in Qatar and across the world.

We are extremely proud to be working with these organisations to ensure solar power is able to reach every single person in Qatar and provide alternative energy sources to a wide variety of solar applications. QSTec’s collaborations will bring us full circle in solar energy, from the manufacturing of solar technologies and applications, to everyone in Qatar receiving energy from the sun directly into their homes. We look forward to working on many more projects using solar energy.

It is a new and emerging industry in the region, but one that is set to grow within the next decade as countries look to diversify their energy sources to meet increasing domestic power demands. With each new solar project or initiative, a clear message is being sent out that renewable energy is possible and very real. In times ahead, solar power will not be labelled “alternative or renewable energy” – it will simply be called “energy”.

A beacon of progress

Posted on by Ben Debski

Indian healthcare, at the onset of the 80s, was defined by its limitations. There was the limitation of access – of affordability. Clinical excellence was an alien concept, there was a severe manpower crunch, and the brain drain of Indian doctors was more severe than ever. It was in this shaky environment that Apollo Hospitals laid its bedrock. Over three decades, Apollo Hospitals has revolutionised healthcare delivery in India.

Apollo Hospitals has carried the torch of healthcare to distant corners of India, through innovation, technology and commitment. The group’s global leadership emanates from its thought leadership, which began with its mission statement: “Our mission is to bring healthcare of international standards within the reach of every individual. We are committed to the achievement and maintenance of excellence in education, research and healthcare for the benefit of humanity.”

Apollo Hospitals has been a forerunner in integrated healthcare in Asia, as well as globally. The group’s futuristic vision has ensured it a position of strength at every touchpoint of the healthcare delivery chain. A burning desire to make world-class medical facilities available in India spurred Dr Prathap C Reddy, the Founder-Chairman of the Apollo Hospitals Group, to pioneer India’s first corporate hospital – Apollo Hospitals Chennai – in 1983. The organisation today has three decades of rich experience in the healthcare sector and numerous firsts to its credit.

Business with an intrinsic social conscience best describes the Apollo Hospitals model. It evolved from the group’s first act of social responsibility – which was to introduce international quality healthcare in India, at a cost that was a fraction of that in the western world. With patient-centricity at the core, Apollo’s model has grown into an integrated healthcare entity with a presence across pivotal touchpoints in the healthcare delivery chain. Its model includes hospitals, family clinics, pharmacies, cutting edge research programmes, global clinical trials, education, wellness, consulting, business process operations and healthcare IT services.

From the heart
The Apollo story began with the heart. 130,000 cardiac surgeries, and several pioneering milestones later, the tryst continues unabated. Apollo Cardiac Care continues to lead by example. The Apollo Hospitals Centre of Cardiology and Cardiothoracic Surgery is among the largest cardiovascular groups in the world. Cardiac sciences, oncology, neurosciences, orthopaedics, critical care and multi-organ transplantation are the dominant specialities. The focus has led to greater investments in building clinical acumen, prowess and in training health manpower across these domains.

Excellence at Apollo Hospitals is a continuous journey. Diverse as the group may be in its locations and facilities, the zeal to excel is the common thread that binds all its hospitals. Apollo Hospitals continuously strives towards improving its structures and processes to achieve the best outcomes for its patients. This drive to excel in the fast-changing world of medicine leads Apollo Hospitals from one quality improvement initiative to another.

Apollo Hospitals has eight JCI (Joint Commission International) accredited hospitals. The JCI is a US-based accreditation body dedicated to improving healthcare quality and safety around the world. In 2012, Apollo Hospitals’ solid organ transplant programme became the world’s busiest by performing 1,200 solid organ transplants (360 liver and 840 kidneys) in a calendar year.

India may soon become the heart disease capital of the world

Robotics is fast emerging as a major game-changer in modern healthcare delivery. Keeping this in mind, Apollo has set up the Apollo Institute of Robotic Surgery in collaboration with Vattikutti Foundation of Detroit. The facility offers the Da Vinci Si surgical system – the most advanced platform for minimally invasive surgery available. This multi-speciality, multi-modality institute offers robot-assisted surgeries of world-class standards at costs that are just a fraction of what is charged in advanced nations.

A function of the impact
Apollo Hospitals has taken the spirit of leadership well beyond business metrics. It has embraced the onus of keeping India healthy. India may soon become the heart disease capital of the world if the surge of lifestyle diseases goes unchecked. Recognising the risk of heart disease can be significantly reduced, even reversed, the Apollo Hospitals Group had launched the path-breaking Billion Hearts Beating campaign, which empowers Indians through the knowledge of how to fight heart disease. A national multimedia campaign, it continues to spread awareness of the risks associated with heart disease and how they can be combated.

An awareness drive, Billion Hearts Beating seeks to get Indians to address a healthcare epidemic that grows larger by the day. The objective of the campaign is two-fold – to educate the populace about the real threat the nation faces, and to inspire people to take positive action by adopting lifestyle changes. Over 4,500,000 individuals have  already taken the pledge.

Cognisant that no nation can bear the burden if all its people fall ill, and that preventive healthcare can help mitigate the disease burden, Apollo Hospitals pioneered the concept of a ‘master health check’ over 30 years ago and it has since been emulated by many healthcare providers across the country. Over 7.5 million health checks have been performed at Apollo Hospitals. Responsible leadership will continue to epitomise Apollo Hospitals. The group has earmarked huge resources to power the next wave of clinical brilliance through empowered education programmes and extensive research.

Healthcare needs professionals 
Apollo Hospitals pioneered the reverse brain drain in India and slowed the flight of doctors. The group encourages doctors to work together with models such as the cohorting of patients and group practice. It has a continuous review of clinical outcomes, with path-breaking assessment systems such as ACE 25. A keen eye, and accreditation from third parties such as the JCI, NABH and NABL have helped the teams focus on quality and continuous improvements. The organisation has a rigorous system for assimilating all learnings. They are shared, and the template for hospitals is improvised and enhanced regularly.

Medical education definitely needs a boost to align itself with the healthcare of tomorrow. To meet this challenge, a vertical focused exclusively on healthcare education has been created. For post-graduate medical education, Apollo Hospitals offers Diplomate of National Boards programmes across 12 hospitals in 12 super-specialities, and has 205 seats, 600 students and over 440 postgraduate trainees. There are courses with the University of Queensland, University of Sydney, Royal College of General Practitioners, Apollo Hospitals Educational and Research Foundation, and Indira Gandhi National Open University.

Specialised courses for paramedics, nurses, physiotherapists and hospital administrators are a focus area as well. A core goal is to develop skilled human health resources, and the Apollo Hospitals Group currently has eight nursing colleges, three nursing schools, two management institutes, a physiotherapy college and 15 paramedical programmes affiliated to state medical universities under its not-for-profit organisations – Apollo Hospitals Educational Trust, Chennai and Apollo Hospitals Educational Research Foundation, Hyderabad.  Apollo Hospitals Group has also partnered with the National Skill Development Corporation.

The group has been running programmes to train paramedical personnel, including emergency medical technicians and laboratory technicians. Apollo Hospitals Educational and Research Foundation (AHERF) offers a diploma in Family Medicine and a diploma in Emergency Medicine, both of which are certified by the UK’s Royal College of General Practitioners. AHERF receives online support for its programmes from Medvarsity Online Limited. Medvarsity has developed over 1,500 hours of medical content in-house, which is accessible by the medical community anytime and anywhere.

The research division of AHERF undertakes diverse projects in areas covering basic research, epidemiological research, clinical trials and clinical research. AHERF has the largest site management programme in India and has completed over 650 global multi-centric clinical trials. Apollo Hospitals is developing an advanced Knowledge City in Chittoor, Andhra Pradesh. The state-of-the-art centre is being designed to train 2,000 learners at one time. As an integrated facility, it will have simulation labs, classrooms, a hospital, a medical college, and residential facilities, and aims to train 25,000 skilled healthcare workers per year.

Innovative solutions
Across every hospital project the bed configuration is planned to mimic the demographic profile. This is critical as the business model focuses on cross subsidisation – the mix of general ward beds to deluxe beds – to facilitate the economics of the more affluent patient paying for the financially challenged patient. This aspect has kept Apollo Hospitals sustainable, scalable and easily replicable. Apollo Reach Hospitals takes the principle of cross subsidisation to Tier-II and III towns. Apollo Hospitals was the only healthcare organisation in the world to be declared a winner in the G20 Challenge on Inclusive Business Innovation.

Apollo Hospitals has always believed in supplementing commitment with smart thinking and disruptive innovations to create a collaborative ecosystem in which quality healthcare cascades to every individual. Right from the first step of introducing world-class healthcare at a fraction of the cost in the western world, Apollo has forged a rich legacy of social initiatives that help transcend barriers.

A fine example is SACHi (Save a Child’s Heart Initiative), a community service initiative with the aim of providing quality paediatric cardiac care and financial support to children from underprivileged sections of society suffering from heart diseases. SACHi aims to provide early diagnosis, treatment, surgery, post-operative care and financial support to children from economically weak sections of society. Over 60,000 underprivileged children have been screened for cardiac disease and surgeries have been performed on over 5,000. The initiative is driven by the passion of some of the finest paediatric cardiologists and cardiothoracic surgeons in the country.

SAHI (Society to Aid the Hearing Impaired) similarly helps poor children with hearing impairment. The CURE Foundation, meanwhile, is an initiative to create consciousness of cancer prevention, early detection, cure and rehabilitation – especially among the needy. DISHA takes healthcare to remote regions in the country.

Taking years of healthcare prowess outside the finite borders, Apollo Telemedicine Networking Foundation is a healthcare model for a borderless world. With 125 telemedicine centres across nine countries, Apollo views telemedicine not as a specialty, but as a healthcare delivery system (a synergy of clinical administrative and technical systems) that is being used increasingly across the world to deliver high quality healthcare. Apollo understands the needs and challenges of providing super-specialist quality healthcare in remote and rural parts of the country and is now leveraging mHealth (healthcare supported by mobile devices) to make care accessible and affordable.

Who cares about money?

Posted on by Ben Debski

The conflict between intrinsic and extrinsic motivations has been the subject of numerous studies over the decades. Financial rewards are seen as a proven means of spurring motivation, but the relationship between intrinsic and material rewards harbours a natural tension. Several studies go so far as to suggest financial rewards may, in themselves, either suppress or “crowd out” intrinsic pursuits.

At base level, the distinction between intrinsic and extrinsic motivation is simple. Intrinsic, or ‘psychic’, motivation refers to acting on the grounds of something being inherently interesting or otherwise exciting, whereas extrinsic, or ‘material’, motivation is when one is given rewards by an outside party.

The orientation of motivation can thus elicit very different responses in the workplace; responses are too often based upon cultural, social or indeed oppositional factors. The many studies into the effectiveness of either type of motivation – as well as the relationship between the two – have unerringly sought to unravel the interpretable and unique nature of this phenomenon.

Though the differences between and compatibility of alternate dynamics of motivation are often matters of psychological study, an understanding of motivation is now essential in ensuring the effective management of every organisation, from small companies to multinational corporations.

While many companies are yet to depart from the stagnant confines of office cubicles and greying towers, there are those who have dedicated valuable – though no less justified – resources to motivating employees. They are departing from an age-old corporate sensibility and instead focusing on personal freedom.

Intrinsic vs extrinsic
The motivational potency of pay is well-documented. In 1980, authors Locke, Feren,
McCaleb, Shaw and Denny said: “No other incentive or motivational technique comes even close to money with respect to its instrumental value.”

For most, financial reward is the predominant reason for working, in as much as it provides sustenance, security and privilege. The pecuniary aspects of work  (crudely) quantify the ‘worth’ of an individual and therefore provide an air of assurance between employer and employee.

Whereas the motivational by-product of pay is generally agreed upon, the notion of high pay leading to equal levels of satisfaction is debatable. Academic Alfred Kohn, a specialist in human behaviour, went so far as to say: “If a reward – money, awards, praise or winning a contest – comes to be seen as the reason one is engaging in an activity, that activity will be viewed as less enjoyable in its own right.”

This, however, is not to say motivation and reward necessarily ensure job satisfaction. Frederick Herzberg’s motivation-hygiene theory maintains job satisfaction and dissatisfaction are entirely separate entties. While competency, status and personal worth may incite satisfaction, their absence does not elicit dissatisfaction.

…there are virtually no studies that correlate pay level with general job satisfaction

How to foster resentment
Intrinsic motivation is often seen as integral to the process of learning and spurring creativity – inciting a willingness to progress and to develop. Conversely, extrinsically motivated actions can be performed with resentment, resistance and disinterest.

Intrinsic motivation can be offset by material reward undermining a perceived autonomy – as detailed by Richard M Ryan and Edward L Deci, professors of psychology at Rochester University. They suggest extrinsic rewards can often demotivate individuals; material rewards have an inherent tension with senses of well-being and learning. Financial success, moreover, is said to represent a controlled orientation that conflicts with self-acceptance or affiliation.

Deci and Ryan’s hypothesis has support – authors Barry Gerhart and Sara L Rynes similarly conclude: “One curious feature of the pay level/pay satisfaction literature is that there are virtually no studies that correlate pay level with general job satisfaction.”

A study by Tobias Assman on the ‘Incentives for Participation’ outlines the means by which extrinsic motivation can “crowd-out” intrinsic motivation: “External interventions crowd-out intrinsic motivation if the individuals affected perceive them to be controlling. In that case, both self-determination and self-esteem suffer, and the individuals react by reducing their intrinsic motivation in the activity controlled.”

Assman goes on to define the means by which intrinsic and extrinsic motivations can co-exist in spurring “self determination”: “External interventions crowd-in intrinsic motivation if the individuals concerned perceive it as supportive. In that case, self-esteem is fostered and individuals feel that they are given more freedom to act, thus enlarging self-determination.”

A template for motivation
Intrinsic motivation can be seen as both highly indeterminate and utterly unique to the individual, though the components of intrinsic rewards are generally accepted as being loosely split into four steps. Each step requires workers to make a judgement in their line of work:

Worth: This facet entails the perceived importance of a given task. The idea of working on something both fulfilling and valuable can instil a sense of purpose and direction.

Choice: Being allowed a degree of flexibility in performing tasks is integral to an employee’s sense of responsibility.

Competence: Meeting or exceeding personal standards allows a sense of satisfaction and pride in continued working practice.

Progress: A sense of having accomplished something of worth is of an immeasurable importance in eliciting a greater extent of working confidence.

…extrinsically motivated actions can be performed with resentment, resistance and disinterest

Some theorists, such as Steven Reiss of the Ohio State University, have suggested the duality of intrinsic-extrinsic motivation is a hindrance to better understanding the nature of value and self-determination. Reiss argues the motivational by-product of rewards depends upon the reasons for their being given. He said: “If you reward a person for just spending time in an activity, the person will become bored with the activity. If you reward a person for learning a new skill, however, the person is likely to show greater interest in the activity.”

Reiss also writes of the symbolic quality of rewards: “When a reward symbolises
success, for example, intrinsic interest should be enhanced.” Here, Reiss details one such way in which a better understanding of motivation can potentially better working conditions.

The new world
Motivational dynamics such as these have changed dramatically in recent years – predominantly in alignment with the ever-changing requirements and expectations of contemporary society. A greater amount of automation and a tendency towards off-shoring has eliminated many of the US’ highly repetitive and menial jobs.

These changes have paved the way for more responsive and dynamic organisations, requiring employees to use both their judgement and initiative to a much greater extent than was required in the past.

Today’s corporate environment demands sustainable profit-making potential more than ever before. This is achieved by attracting and retaining top talent. Many of the world’s leading corporations offer generous incentive programmes to better motivate employees, ensuring the retention of valuable talent.

Both Larry Page and Sergey Brin, on their founding of Google in 1998, sought to distance the company from the culture of greed typical in many of the world’s leading corporations and instead focus on spurring intrinsic motivation.

In a similar manner, the building of the Googleplex was intended to mirror a college campus mentality, in that the base contained a host of useful facilities and services apart from the working norm. On its completion, then-CEO Eric Schmidt said: “We realise and celebrate that our employees have diverse needs, and that this diversity requires flexible and individually directed support. Our priority is to offer a customisable programme that can be tailored to the specific needs of each individual, whether they enjoy ice climbing in Alaska, want to retire by age 40 or plan to adopt three children.”

Other large corporations have emulated Google’s approach. The online shoe and apparel shop Zappos is distinctive in that it employs a full-time life coach whose purpose it is to direct employees in matters of career development, weight loss and finances. The Amazon subsidiary employees an almost exactly even split of men and women, with women presently holding 51 percent of the managerial positions.

The modern condition
The Ivey Business Journal maintains that, whereas in the past work was generally considered more routine and bureaucratic, offering fewer intrinsic motivations, intrinsic rewards are now a greater part of working life. Workers’ expectations have experienced a marked generational shift. Younger employees demand a greater level of independence – a result of their having been raised in an era of rapid technological change. With their being granted instant access to data and having to adapt to constant technological progression, workers are expected to demonstrate a greater air of independence and a far more diverse means of accomplishing tasks.

Workers have instant access to data and have had to adapt to constant technological progression, so are expected to demonstrate greater independence and more diverse methods of accomplishing tasks. Such is the case with North Carolina-based software developer SAS Institute. CEO James Goodnight says: “We have gone to great lengths to provide a work environment that not only addresses employees’ basic needs, but that also inspires them to use their creative talents.” The leading multinational offers heavily subsidised childcare, onsite healthcare and fitness centres to employees, among many other incentives.

Applicable across industries
Examples of corporations instilling a like-natured company culture are to be seen across a spectrum of industries. NuStar Energy offers a private jet to employees in need of emergency transport, and both Mattel and Hasbro offer employees half-day working hours on Friday, year round.

Though considered gimmicky by some, such means of inciting motivation among employees are crucial in sustaining a productive workforce. Those failing to adhere to such schemes are yet to reap the benefits.

Although extrinsic rewards are an important facet in cultivating the working environment, intrinsic rewards are a healthy and sustainable means of spurring motivation  and, arguably, take greater precedence now than they ever have done in the past.

If employers want to motivate employees, they have to recognise the importance of both intrinsic and extrinsic motivation, acknowledging the validity and consequence of material and psychic rewards in the working environment. It’s not enough for employees to be paid for their time: as the demands placed on them become more complex, so must the rewards. And the stronger the talent, the more important it is you hold onto them.

Agreeing to keep it clean

Posted on by Ben Debski

The global race to establish the most active and profitable clean technology industry is on, with the US and China seen as the major players set to propel sustainable business to the mainstream. However, despite talk of competition between the countries, the two are increasingly looking to collaborate in the development of the industry.

In a 2010 speech at the American Chamber of Commerce in Shanghai, then-US Commerce Secretary and current Ambassador to China Gary Locke said: “In many areas, and especially in clean energy, the interests of China and the US are tied together.”

Both countries have been keen to talk up their enthusiasm for developing cleaner technologies and promote an industry that could transform many aspects of society. But in order for the industry to prove a success, it needs to solve the issues of energy independence, environmental impact and economic growth.

While energy efficiency has moved up the agenda for many governments, the technology is still nascent and will likely take many years to reach maturity. This presents opportunities to get in early, but also significant risks if one backs the wrong horse.

Perhaps because of China and the US’ individual and distinct strengths, the talk of cooperation between the two countries makes a lot of sense. The US has a rich history of research and development, but is somewhat lacking in capital and ready customers, while China lacks the innovative freedom of the US, but has plenty of finance to put towards solving its economy’s heavy demand.

…the interests of China and the US are tied together

Innovation with investment
Although a country that hungrily consumes fossil fuels, the US is also at the cutting edge of innovative new technologies that could create a far cleaner and more sustainable environment.

President Obama has talked up the country’s need to invest in further R&D as a means to transform both the economy and the environment, announcing a hefty boost to spending in his inauguration speech at the beginning of the year.

Recognising the competitiveness of the market and stating that he wanted the US to lead the way in developing clean technologies, Obama said: “The path towards sustainable energy sources will be long and sometimes difficult.  But America cannot resist this transition; we must lead it. We cannot cede to other nations the technology that will power new jobs and new industries, we must claim its promise.”

US firms, however, are struggling to find the necessary capital to get their projects off the ground. It has been speculated there will be as much as a $4.5bn capital shortfall in the US cleantech industry during the next three years, and many firms are looking east to make up the difference.

Money to spend
Conversely, China has plenty of capital to deploy, and a pressing need to address the environmental concerns of an international community that looks upon the rapidly industrialising nation as both an opportunity and a problem.

Although it has dominated the solar manufacturing industry by mass-exporting low-cost crystalline silicon photovoltaic cells and modules – which resulted in the US authorities imposing heavy tariffs on Chinese imports – China’s top-down, restrictive way of conducting R&D means it is not producing the cleantech innovations the US is capable of.

China is beginning to invest seriously in research and development in the hope it can become a leading player in clean technology. Joanna Lewis, Assistant Professor at Georgetown University and author of the book Green Energy in China said: “China is in fact investing in and succeeding in green innovation… which could play a crucial role in the global transition to a low-carbon economy.”

However, the country’s mounting environmental concerns – most notably severe pollution as a consequence of the rapid industrialisation of its major cities – means there is a pressing need to import cleantech products as soon as possible. The best way for this to be done is through healthy collaboration with China’s greatest economic partner and rival.

$420m Investment by Wanxiang Holdings in GreenPoint Energy

Increased collaboration
Cleantech investor Greg Manuel, a former advisor on energy policy to ex-US Secretary of State Condoleezza Rice, recently told Forbes that, although the two countries were only just beginning to collaborate, the potential for mutual benefit was huge: “This emerging pattern of cooperation is still in its early stages. But there is a tremendous vector of opportunity when you look at the innovation delta, capital gap and severe environmental and energy challenges facing large Chinese enterprises with large pools of cash.”

Research by the Pew Charitable Trust shows the US has been successful in exporting high-end cleantech goods to China, with $1.63bn exported in 2011. Michael Liebreich, CEO of Bloomberg Energy Finance and writer of the report’s foreword, said: “The United States and China are inextricably linked as global trade partners, with more than half a trillion dollars in goods passing between them in 2011, the last year for which complete data are available.

“The two countries are the largest and second largest global electricity markets and greenhouse gas emitters, and the leading recipients of clean energy investment; nearly two of every five dollars invested in clean energy worldwide since 2004 has gone to one country or the other.

“They are the two most significant parties in a vocal (and sometimes strident) debate about future national competitive advantage and about the fairness of each country’s trade practices in supporting its clean technology firms.”

Let’s make lots of money
In April, a significant deal was announced that will see Zhongding Group invest $200m towards a manufacturing facility in China, which will help mass-produce the highly efficient motor technology of US company EcoMotor. Such collaboration shows how the proliferation of Chinese capital can help get exciting US technologies off the ground commercially.

According to Forbes, other deals have shown a similar trend for collaboration. Wanxiang Holdings invested $420m into GreenPoint Energy, while also saving battery firm A123 Systems. IGP Energy has signed a joint venture deal with Yankuang Group to create five plants, and steel firm Baosteel has backed carbon conversion firm LanzaTech.

These are technologies that would otherwise not have received significant funding from capital-starved US investors, and the Chinese backing gives them a much greater chance of being adopted by the mainstream.

Diplomatic relations
There have been examples of collaboration in other areas. The Lawrence Berkeley National Laboratory has been working with Chinese researchers on energy efficient technologies, while the China Sustainable Energy Programme in San Francisco actively supports Chinese R&D.

Also in April, Governor of California Jerry Brown – whose state houses much of the US cleantech innovation – visited China to promote business collaboration between the two countries. The trip resulted in the governor signing an agreement with China’s Environmental Protection Minister that would aim to solve China’s serious pollution issues.

A wider announcement by US Secretary of State John Kerry and Chinese State Councillor Yang Jiechi in Beijing saw the two countries promise to work together to solve climate change. Councillor Yang told reporters after the meeting that he was encouraged “to see Chinese and American business communities and people from various sectors being so enthusiastic about cooperation in this area”.

The result of all these new efforts to work together should be the global cleantech industry receiving the sort of capital boost it needs, while maintaining the creative and innovative approach seen in the US. Certainly, it seems these two countries – as they do with many of the world’s major industries – will dominate the way in which clean technology is developed over the coming decade.

Russia’s missing economy

Posted on by Ben Debski

Vladimir Putin is blaming Europe for Russia’s impending economic decline. In a somewhat incendiary address in April, the President issued a stark warning to his cabinet, warning them to brace themselves – and the country – for a recession. The weak economic outlook in Europe is certainly playing a role in the decline of Russia’s own economy, but there are other reasons the country is facing times of turmoil. And it needn’t look any farther than at itself to find the answer.

Economy Minister Andrei Berlousov has warned that quarterly growth might turn negative before the year is out if the government does not intervene. He said: “We are not in a recession yet, but we could end up there.”

The state appears unable to efficiently convert oil revenues into higher growth

During an address held in Sochi – venue for the upcoming Winter Olympics – the President said: “The production decline and crisis developments in the world financial system may affect, and are actually affecting, our own economy as well as we can see, and we must be ready for this. We must be prepared for the fact that the recession and the crisis in the global financial system may affect our economy.”

Running out
Russia has cut its growth forecast for 2013 from four percent to 2.4 percent. If this turns out to be accurate, the country will only just have grown the same as last year. Putin is worried. He recently reversed his position on austerity without warning, deciding to reinstate a controversial former finance minister ousted unceremoniously by former president and current Prime Minister Dmitry Medvedev in 2011.

The shift in policy has exacerbated rumours of a rift between the president and his former protégé, the prime minister. It is not a reassuring picture, politically or economically; the last time Russia found itself with similarly disappointing growth prospects was in 2009, when it ended up contracting almost 10 percent.

Russia’s economy has coasted for years, supported by high commodity prices. Over 90 percent of the country’s exports are natural resources, so, now that oil and gas prices are lagging, the country is deflated. It has grown only 1.1 percent over the first quarter of the year, compared to four percent during the same period last year.

The economy has also been blighted by flailing demand for some of its most valuable commodities. This, in turn, has shone the spotlight on the country’s need for economic modernisation. Deputy Economy Minister Andrei Klepach recently announced the ministry would be cutting its prediction for industrial output to two percent – revised down from 3.6 percent. He added the new figures were “optimistic”.

Depardieu in, Russians out
Even if Gerard Depardieu believes Russia is the place for wealthy Europeans to be, it does not seem to be the popular opinion among the more affluent natives. It has been known for years that Russians have not invested their vast post-Soviet wealth in the fertile lands of Mother Russia.

Cyprus was a notorious destination for Russians stashing the cash: wealthy businessmen and women chose the Mediterranean island as the home for their myriad business ventures – in paper only of course – to take full advantage of the lenient tax code, while the real money was being earned and spent elsewhere.

It meant trouble for Cyprus, of course – the island’s super-inflated financial sector collapsed under its own weight – but it also means trouble for Russia. Most of the wealth once stashed in Cypriot banks was earned in Russia through government contracts, big bonuses, oil deals and so on. The fact that that money is not being spent or invested in Russia itself means it is a drain on the economy.

It has been widely reported that savvy investors pulled their money from those coffers when they smelled danger months ago. Even Cypriot Finance Minister Michael Sarris admitted there had been “substantial outflows” from the island’s banks for weeks prior to the crisis being announced.

Though many oligarchs still base their business on the Mediterranean island, the idea that Russian businesses would have suffered from the involuntary haircut in deposits is somewhat implausible. “You must be out of your mind!” Igor Zyuzin snapped at a Reuters journalist who suggested his New York-listed group Mechel might have suffered from the Cypriot financial collapse.

Deposit drain
While cultural similarities, geographical proximity and good weather made Cyprus the ideal destination for Russian cash, it is by no means the only alternative. Reports have already surfaced of key Russian players moving their investments stateside. Ed Mermelstein – a real estate lawyer in New York who advises Russian clients – told The Guardian many wealthy Russians are turning to the Big Apple.

Explaining why there had been an increase in Russian money in the city, he said: “This past year, we’ve been seeing a shift in investments in the US as a result of the financial state of the European Union. Cyprus had started having the conversations about what it was intending, and that’s been going on for
half a year.”

But a ‘deposit-drain’ is not the only reason for Russia’s faltering finances. Putin is not wrong to attribute the slowdown to weak demand from Europe. Russia is the world’s biggest energy producer, and as such it is more susceptible to investment cuts from Europe. However, Russia’s lack of adequate infrastructure and stunted financial modernisation mean weak demand and low oil prices are only a part of the puzzle.

“Russia’s economy is clearly worse off as a result of lower oil prices. After all, it is the world’s second largest oil producer and oil and gas accounts for 60 percent of total exports,” explains Neil Shearing, from Capital Economics. “We expect growth in Russia to stay extremely sluggish in the 2013-14 period and our forecasts remain well below consensus. But this is largely due to structural factors that have caused trend growth to slow, rather than to the effect of lower oil prices.”

Fiscal stimulus
Even though the Ministry of Economy has suggested it will be continuing to provide fiscal stimulus, it is by no means a permanent solution. Previous increases in spending have left the government stretched thin. The current budget will almost certainly run into a deficit, due in part to low oil prices. In order for the budget to break even in 2013, oil prices will have to rise and stay around the $110 a barrel mark – and considering barrels of crude have been selling for around $90, prospects are dim.

Though Russia is incredibly rich in natural resources, historically it has not been efficient at converting that wealth into investment. In 2009, Russia suffered from tumbling oil prices that reached a nadir of $60 a barrel before rebounding back to $110, but the country was incapable of recovering from the drop. “The state appears unable to efficiently convert oil revenues into higher growth,” says Nadia Orlova, Chief Economist at Alfa Bank. “In contrast to consumption, production growth has weakened markedly. [This] reflects reduced competitiveness.”

Orlova recently predicted government spending will drop to between two and four percent in 2013, “putting economic growth at risk. Adhering to the budget rule would be positive for macro stability but would be a drag on the economy unless the government changes its economic growth model – amending the budget rule may add to growth, but it would tarnish the state’s credibility”.

During the meeting in Sochi, the President discussed the reasons behind the slowdown with the economy ministry. The Russian economy remains a large and convoluted establishment, fraught with red tape and corruption. The country continues to battle with elevated inflation, which is contributing to the slowing of output growth. And slow growth often becomes something of a self-fulfilling prophecy; as the economy slows, investment slows too.

It is simple economic theory, but one Putin is struggling with: an increase in public or private investment spending will inevitably have a more-than-proportionate positive impact on the economy as a whole. Gazprom – the country’s largest producer of oil and gas – is owned by the state and extremely profitable. But none of the money the energy giant produces is ever reinvested in infrastructure – leaving Russia stuck.

While other countries in the increasingly prestigious BRICS club continue to attract foreign investment, it has been estimated $350bn worth of investments have left Russia over the past five years. This, in turn, means the country’s already out-dated infrastructure is suffering. The national road network has not been expanded or updated in 20 years. Klepach has also cut the forecast for investment from 6.5 percent to 4.6 percent.

No easy answer
Though the situation is still not quite as dire as Putin’s tone indicated, it is not going well in Russia. The country is relatively stable – debt is relatively low at 12 percent of GDP and there is an adequate monetary policy in place – and, soon after the Sochi meeting in early April, the Economy Ministry finally found support for its call for fiscal stimulus. It continues to aim for an extra RUB 100bn ($3.2bn) of fiscal spending in this year alone.

Conversely, the same ministry has predicted a brutal slowdown across all sectors of the economy, triggered by the lack of investment. Growth in domestic investment forecast this year has been officially lowered to 4.6 percent, from the initially predicted 7.2 percent. These are not encouraging numbers.

Consumption forecasts have also been downgraded – retail sales growth has been forecast at 4.3 percent for the year, reduced from earlier estimates of 5.4 percent growth. This is an old problem for Russia, which has often seen its most affluent citizens invest their vast wealth abroad. Spending is grinding to a halt – Russians are clutching their wallets with absolute determination.

There is no easy answer to Russia’s problems. While the global situation remains volatile, the Motherland will remain susceptible to dropping commodities prices. The lessons of 2009 teach us damage to economic growth comes not from a decline in oil prices per se, rather, lower oil prices go hand-in-hand with weaker demand for Russian exports overall.

Like other BRICS nations, Russia’s economic establishment is not efficient and it is plagued with deep-rooted malfunctions. Anders Aslund, senior fellow at the Peterson Institute for International Economics in Washington says: “The Russian economy is grinding to a halt because of too much corruption, and Putin is not prepared to face up to it.”

What Russia desperately needs – both to recover from the impending crisis and to survive future toils – is wide-ranging structural reform to support the growth of private investment competition. According to Brian Milner, a senior economics correspondent, issues will only be resolved through “a reduction of the state’s heavy handed interference, privatisation of inefficient state-controlled enterprises and an assault on endemic corruption”.

There is no easy way out of the current wave of weak growth. The best Putin and his government associates can do is start tackling the many shortcomings of their country’s economic machine. It is a tall order and it is unlikely the President will have what it takes to challenge the very business class of oligarchs he helped create, or to relinquish some of his political influence and that of his associates.

The pros and cons of ag-gags

Posted on by Ben Debski

In 2008, a relatively anonymous Californian meatpacker shot to notoriety by issuing the biggest recall of meat in the history of the US. Westland/Hallmark Meat Packing Company recalled 143 million pounds of beef. The order was retrospective for two years, meaning the majority of the offending beef had already been consumed. During that time, the beef had been served in school cafeterias around the country and sold to the general public.

The recall came after the Humane Society of the United States released video footage of the violations compiled by an undercover agent who had taken employment at the company’s site in Chino, California. The footage showed so-called ‘downer’ cows – animals that cannot walk – being forklifted to the slaughter. Downer cows are banned by the US Department of Agriculture for posing an increased risk of E. coli, salmonella and mad cow disease. Despite numerous inspections and audits of the facility by USDA sanitation agents, the shortcomings were not detected before the video was released.

In recent years, whistleblowers have denounced animal abuse and unsanitary farm conditions affecting a number of household name companies, including Tyson Foods, McDonald’s and Yum! (KFC’s suppliers). Ag-gags have been designed to halt the use of deceptive tactics by activists, who primarily target the beef and poultry businesses (worth $74bn and $45bn a year respectively). Monsanto, the world’s biggest agricultural biotechnology corporation, and other agricultural companies have backed the measures.

Risky business
Factory farms are a huge industry in the US; there are four factory-farmed chickens for each American and the number of dairy cows in factory farms doubled between 1997 and 2007 (to 4.9 million animals). Recently, there has been a renewed outcry against what are seen as inhumane farming conditions, and corporations have already started demanding better conditions from their pork suppliers. In February, McDonald’s declared it would no longer accept meat from farms that still used gestation pens – a practice deemed cruel by activist groups.

Media attention to animal welfare has significant, negative effects on US meat demand

Research by Kansas State University and Purdue University has concluded, “as a whole, media attention to animal welfare has significant, negative effects on US meat demand”. Emily Meredith, Communications Director for industry advocacy group Animal Agriculture Alliance maintains videos can be edited or manipulated to promote the agenda of activist groups, and do not reflect the industry as a whole.

“I am not going to deny that there are bad apples just like there are in every industry,” Meredith says. “But the majority of farm families do the right thing every day. These videos are a really unfair portrayal of the industry as a whole.”

But activist groups such as the Humane Society, an NGO that promotes vegetarianism, maintains the public has a right to know if abuses or violations are occurring in meat processing and packaging plants. There are lingering concerns over the condition animals are kept in, and standards of hygiene.

Time enough
Activist groups have maintained that the lack of policing by the USDA means infringements by farmers usually go undetected – as in the Hallmark case – putting animals and humans at risk. As well as the Californian cases, the Humane Society has also used undercover footage to secure convictions for cruelty against a number of Tyson Foods employees at a pig farm in Wyoming.

Each of the dozen or so states that have passed or are in the process of passing ag-gag bills has slightly different provisions for the legislation. Overall, however, the aim is not only to make it a crime to record undercover video at any livestock operations, but also to make it illegal for anyone to obtain a farm job ‘under false pretences’, meaning activists will no longer be able to go undercover into offending operations with the intention of whistleblowing without risking incurring a fine and a hefty jail sentence.

$74bn

Value of US beef industry

Some states have proposed a short statute of limitation for whistleblowers to report their findings to the authorities. In Nebraska, for instance, a recently proposed bill would require cruel treatment to be reported within 12 hours.“[Activists] are trying to promote this legislation as ‘gagging’ when in fact all the legislation mandates that you report the abuse, which really goes to the heart of the issue,” Meredith says. “If you really cared about animal welfare would you even wait a second to report animal abuse? In my mind, you wouldn’t be waiting at all.” But there is something to be said about how long it might take an undercover agent to gather information and establish patterns of abuse.

Making amendments
The proliferation of the bills has raised many questions about whether they might infringe on activists’ freedom of speech – a right enshrined in the American Constitution. Recently, in Florida, a similar ag-gag bill – which prohibited the taking of images at farms without the owners’ permission – was defeated on the grounds that it violated the First Amendment.

California has also recently abandoned a similar bill presented to the state legislature by the California Cattlemen’s Association. The bill would have given investigators and activists only 48 hours to turn in evidence of violations at agricultural facilities, as well as made it a crime to take images at farms and slaughterhouses. The Californian bill was unusual because it would have exempted farm employees from turning in footage of animal cruelty captured on CCTV.

While the slew of undercover reporting has had a negative impact on the image of the industry as a whole, the bills can act in the public’s detriment. It can be argued consumers are entitled to know the reality of the meat products they are eating – even if it might make for unsavoury viewing. There are also the potential benefits exposing violations can bring – they can result in successful prosecution of the offending parties and even the raising of general industry standards, irrespective of the politics of the investigators or activists.

Cody Carlson, a former investigator, says: “When I applied for a job in Iowa in 2009 and they asked me if I had any affiliations to animal protection groups, I would have had to say yes, I wouldn’t have gotten the job and I wouldn’t have been able to expose the conditions that raised questions about the egg industry there. It is exactly what these industries want – they want to shut down the conversation that’s going on about what is happening with the animals we raise for our food.”

Lamborghini at 50

Posted on by Ben Debski

When approaching his 50th birthday, it is not uncommon for a gentleman of certain means to respond to his own mortality by purchasing an expensive sports car. Or so the stereotype goes. Since the brand’s inception in 1963, a Lamborghini has been the vehicle of choice for such gentlemen of means – but the cars are so much more than that.

After the Second World War, Ferruccio Lamborghini, a prodigious engineer, made his fortune selling tractors. He was an avid car collector but was growing increasingly disappointed with his collection of Ferrari sports cars, which he considered mere racing vehicles inappropriately adapted for the road. But when he took up the issue with Enzo Ferrari himself, Lamborghini found himself dismissed. “You may be able to drive a tractor,” said his future rival, “but you will never be able to handle a Ferrari properly.”

Legend has it the dismissal was impetus enough to drive Lamborghini to design his own car – the now legendary 350GTV. The auto-manufacturer to which he gave his name is now renowned for its exclusive, ultra-high-performance vehicles that are as beautiful as they are fast.

In the 50 years since, Lamborghini’s cars have established themselves as icons of design and motoring. As well as producing vehicles that perform to the highest specs, Lamborghini partnered with a number of influential designers to deliver the best-looking sports cars out there. The first ever Lamborghini GTV was a cooperation between Franco Scaglione – already established as a multi-faceted designer – and Carrozzeria Touring, which ensured the car was as beautiful as it was functional. The Miura was a partnership with superstar designer and car stylist Marcello Gandini – who went on to design the iconic Countach a decade later.

The Miura was a real coup for Lamborghini. Ferruccio was adamant that he was not interested in extravagant or futuristic designs, but instead wanted his products to be ultra-fast and flawless road cars. The Miura was the first road sports car to feature the engine mounted transversely behind the ‘cockpit’ – making it faster and much sleeker.

Rumour has it the designers were terrified of bringing the proposals to Ferruccio, believing he might perceive it as the type of extravagance he was vehemently against. The owner is reported to have said: “A car like this should be built because it will attract huge interest in the media, but clearly no more than 50 will ever be sold.” Over 500 Miuras were in fact sold, and the car became an icon in the automobile industry and to enthusiasts worldwide.

Though not entirely accurate when referring to the Miura, Ferruccio’s words have become somewhat prophetic as regards Lamborghini’s business style today. The company spends a lot of time and resources creating vehicles that challenge the boundaries of design and technology. Though not many of them are sold, or even made, they help to build and maintain the company’s reputation and mystique. The recently released plans for the Egoista, for example, have caused a storm of praise and criticism in the media and online, even though the silver single-seater will probably never be manufactured.

Recently, Lamborghini brought all its design in-house and stopped collaborating with partners. It is a departure from the classic creative style Ferruccio insisted upon and many have criticised the move. More importantly, some of Lamborghini’s recent models are futurist and extravagant – the opposite of what the founding father thought they should be. But they are a commercial success and continue to set design standards other sports car manufacturers can only dream of reaching.

Committed to quality healthcare

Posted on by Ben Debski

GMC Hospital, Ajman started operations in 2002 as an integrated, healthcare-delivery component of Gulf Medical University. The hospital is promoted by Thumbay Group, UAE, a business conglomerate comprised of 11 sectors and 2,200 employees, and dealing with 175 nationalities. GMC Hospital is a private teaching institution committed to providing the best possible options for diagnosis of disease and team management of patient care. Its multidisciplinary approach to diagnosis and care ensures a continuum of safe and high-quality care for patients – all services under one roof.

GMC Hospital, being the largest healthcare provider in the region, has many nationally and internationally recognised healthcare professionals, with sophisticated medical technology made available. Since its inception, GMC Hospital has emerged as the premier healthcare organisation in Ajman, offering state-of-the-art technology and advanced medical and surgical services.

175

Nationalities served by GMC Hospital

250

Beds at GMC Hospital

1,200

Outpatients treated each day

GMC Hospital has worked tirelessly to respond to the changing needs of the communities. The result is a health system that provides some of the most advanced procedures and care available anywhere. The root of our success is open collaboration between leadership, staff, physicians and the community. That spirit of teamwork was established as an integral part of our group’s culture from the very start and continues to flourish to this day, reaching beyond our hospital walls into the community.

Our first hospital venture
The GMC Hospital, Ajman is the first university hospital in the UAE, with a capacity of 250 beds housed within ultra-modern facilities that handle 1,200 outpatients a day. The hospital offers various features and services, including: a women’s health centre; a hi-tech laboratory; modern ICU, NICU and CCU facilities; a 24-hour pharmacy; modern digital imaging; an on-call doctor service; fertility centre; accident and emergency; and frequent visits by various doctors from around the globe. Patients of 175 nationalities – ranging from as far apart as Africa, Iran, Afghanistan, Pakistan, the GCC and Western Europe – avail themselves of medical treatment at GMC Hospital, Ajman.

With our unique approach to healthcare – bringing together the best professional expertise and infrastructure – our hospitals at Ajman, Sharjah and Fujairah strive to fulfil their motto of “healing through knowledge and wisdom”. As a part of the strategic expansion plans of Thumbay Group, plans are underway to establish a new hospital in Dubai that should be functional by the last quarter of 2013, and a 300-bed super-speciality teaching hospital on the Gulf Medical University Campus in Ajman by 2015.

In addition to the UAE’s Ministry of Health, GMC Hospital is accredited by various international bodies, and is a member of other eminent organisations, including the Medical Tourism Association, the International Hospital Federation, the Asian Hospital Federation, the Randox International Quality Assessment Scheme, and the International Board of Medicine and Surgery, and holds Temos dental certification. In addition to its existing international accreditations, GMC Hospital is on its way to acquiring teaching hospital accreditation by Joint Commission International.

Escalating medical tourism
The world of healthcare has changed significantly in the past few years. We all know that, while the cost of healthcare has skyrocketed, quality hasn’t risen with it. As a result, many overseas facilities have taken up the slack to provide luxury quality care and surroundings to specifically serve the medical tourism market.

It’s a market that, like all others, is service-driven, where hospitality and healing surroundings combine with superior quality medical care and unquestionably lower costs to create a very real incentive one can’t ignore. Whether it’s dental medical tourism, medical travel for cosmetic surgery, or a specific surgical procedure, the cost differential can be compelling.

Due to cost-effective prices, excellent air connectivity, unmatched expertise, world-class treatment combined with » health tourism – which includes a complete health check-up and optional activities such as local sightseeing and shopping – GMC Hospital, Ajman has become the destination for medical tourism in UAE. It also offers translators, as well as assistance on location, transport and accommodation as and when required.

GMC Hospital has a dedicated International Patient Services team, as well as customer service ambassadors who support our local and overseas patients from the point of enquiry through to admissions and discharge from the hospital. The International Patient Services department includes a complete scope of services for patients visiting the hospital from outside the UAE.

Multilingual staff are available to coordinate all aspects of a patient’s stay, such as: the management of medical consultations and hospital admission; travel and hotel arrangements for patients and their families, including an air ambulance depending on the distance and the condition of the patient; assistance in choosing the right doctor; processing of second medical opinions; and remote consultations via telemedicine, if needed. Being one of the best medical travel facilitators in the region, GMC Hospital helps medical tourists plan their complete medical treatment package.

Over the past few years, the number of medical tourists and international patients visiting GMC Hospital has increased significantly. Due to the plethora of medical services available to patients, along with the assurance of the highest quality care, there have been yearly increases in the number of international patients. In order to attract more tourists, GMC Hospital prepares medical packages that provide patients with all the services and information they need, including length of stay, cost estimation
and recovery period.

More than just a hospital
GMC Hospital, equipped with the most modern facilities, offers the latest techniques and procedures. These state-of-the-art facilities focus on what matters: more effective, efficient and pleasant solutions for patients.

Our mission calls for excellence in clinical care, research and education. Our commitment to this mission drives us to the cutting edge of science, technology and innovation. Having been part of society for over a decade, GMC Hospital is dedicated to improving community relationships in the Middle East and the rest of the world.

The number one differentiator for GMC is the calibre of its faculty. The number of specialties covered and the quality of our medical staff is second to none. Aligned to the achievement of our mission, all the physicians at GMC are committed to the delivery of high quality care.

The advantages for medical travellers visiting GMC Hospital include:

  • no waiting lists;
  • leading medical professionals, many of them internationally renowned;
  • excellent post-operational treatment;
  • personalised care of outstanding quality;
  • English-speaking surgeons;
  • English-speaking medical concierges;
  • treatment results matching those of world-leading healthcare institutions;
  • accommodation for the accompanying persons, with the possibility to share the patient’s ward;
  • assistance with travel issues (documents and visas);
  • the organisation of tourist tours and leisure activities;
  • translation of necessary documents; and
  • the price of a full-service package is much lower than in Western Europe.

The hospital’s mission is shaped by the basic value of “care without compromise”.  Our commitment to the integrity, comfort and well being of the individual – and a “conviction that medical education and research are essential to the provision of the highest quality patient care” – is what makes GMC Hospital a “welcoming and international-standard” institution.

The one trillion dollar war

Posted on by Ben Debski

cyber-crime-statsHoused in the nuclear-safe remains of a long-abandoned military bunker, a select contingent of hackers negotiated the effective slowdown of the internet. The shady – though no less sagacious – group slowed governmental, commercial and personal activity worldwide. While few – if any – were left tending physical wounds, the debacle revealed the unseen structural weaknesses of a platform harbouring – put lightly – world-breaking assets.

These are the circumstances alleged to have involved internet service provider CyberBunker and an internet support service known as the Spamhaus Project. Spamhaus, having blacklisted CyberBunker on account of its suspected distribution of spam, found itself the victim of an unprecedented hacking offensive – otherwise termed a ‘distributed denial of service’ (DDoS) attack.

The consequences have been compared to a “virtual nuclear bomb”, as huge streams of data flooded the site (peaking at 300 billion bits per second) and, in effect, threatened to overwhelm the internet. Testament to the scale of the damage is that Google offered its near-limitless resources for use in combating the DDoS attack. The incident has been referred to as an unnerving indication of the potential influence wielded by cyber criminals.

In the typically theatrical spirit of similar attacks – such as those committed by Anonymous, Lulzsec and Honker Union – images of CyberBunker’s headquarters were subsequently circulated online – as were written details of an attempted SWAT team raid thwarted by the bunker’s blast-resistant doors.

Though the somewhat fabulist debacle appears entirely misrepresentative of the all-too-serious repercussions of the incident, CyberBunker’s cavorting is indicative of the relatively free rein cyber criminals have in manipulating world-leading organisations. They view cyberspace as if it is a parallel universe, in which there are no real-world consequences.

Commercial value
Cyberspace is an anarchic platform – the incidents populating it ranging from acts of protest to invasions of state sovereignty and outright devastation. Cyber crime is a practice adopted by organised groups and amateurs alike. While most operate at street level, a few act under the utmost anonymity for fear of their victims retaliating.

Perhaps the most common mode of cyber crime is copyright infringement. It has opened up a huge number of commercial opportunities to those participating, while crippling the viability of a fair few legitimate enterprises. Reuters claims Chinese piracy and counterfeiting alone costs the US economy billions of dollars a year, and if combatted, could create a further 2.1 million US jobs.

Piracy of this sort is a seemingly intractable problem. It has become embedded in popular culture and has been effectively decriminalised the world over. Though the costs of piracy are near impossible to calculate, it can inflict huge financial penalties on effected parties – Time Warner estimated almost 95 percent of its films watched in China have either been illegally downloaded or resold as counterfeit equivalents.

Nevertheless, the effects of copyright infringement are relatively small fry compared to the gross financial ramifications for the governments, corporations and military organisations being hacked for commercial gain. More advanced hacking groups aim to intercept and retain valuable resources that would otherwise remain undisclosed by holding parties.

This manner of intrusion is typically negotiated by means of board-level directors opening an email and unwittingly permitting hackers access to commercially rich aspects of the company’s network. Hackers have been found to have hidden in companies’ IT systems for as long as four years, discreetly accessing vital and expensive information.

Breaking the bank
Hackers also hit financial institutions through similarly perverse methods of intrusion. Perhaps the most common means is the creation of hundreds of online accounts that are then used to trade money and build up a credit history strong enough to qualify for colossal loans. Credit is then withdrawn, never to be repaid – the registered holders being fictional entities.

Recent hacking breaches have affected a number of western companies, making for a frightening insight into the potential power cyber criminals can have in destabilising – or else spurring – fundamental pillars of the corporate sphere. As a host of US companies – including Apple, Google and Facebook – fell foul of malicious software intrusions in February, security company Mandiant claimed to have pinpointed the source of the attacks as a state-run office building in Shanghai.

The US company claimed those operating from the People’s Liberation Army base had “systematically stolen hundreds of terabytes of data” from over 140 global organisations. The occupants were deemed by Mandiant to number among the most prolific hacking groups in the world “in terms of quantity of information stolen”. Those involved now stand accused of stealing billions of dollars worth of commercial and military assets.

Hacks of this nature have led many to speculate on the existence of organisations whose niche is trading the compromised systems of world-leading organisations. Mark Ward, Technology Correspondent for the BBC, suggests criminals are gathering the details of vulnerable servers from the online community – effectively crowdsourcing a database of IP addresses for sale to the highest bidder. Security firm Trend Micro has said Russia is at the centre of a networked criminal economy in which “any and every cybe crime service is on sale” – a frightening insight into the commercialisation of compromised company networks.

A matter of trust
While organisations have historically been reluctant to report misgivings of this sort – keen as they are to uphold their reputation with customers – many have recently been pressed to publically concede the intrusion of malicious hackers. Ross Parsell, Director of Cyber Security at Thales, says he’s seen a “70 percent increase in interest and conversations” with potential clients regarding the improvement of their security systems over the past 18 months.

A growing readiness to admit these cases is casting a more accurate – though equally disturbing – light on the actual scale and frequency of these attacks. While researchers at the University of Cambridge claim in their report ‘Measuring the Cost of Cyber Crime’ that direct monetary loss to the average UK consumer amounts to a mere £10 a year, the actual costs are at least tenfold; that sum includes recuperation, security measures and a severe loss of consumer confidence in the affected businesses.

In 2011, Sony was forced to spend $171m to recover leaked customer records – a concession that damaged the company’s credibility. A study conducted by the Reputation Institute has since revealed only 67 percent of customers are willing to recommend Sony’s services – a marked decline from 79 percent prior to the incident.

Though hacking is generally an unquantifiable process, cyber crime is thought by the Cabinet Office to cost the UK economy £27bn. The White House believes it costs the global economy $1trn, offering a disturbing glimpse at the grave damage dealt by the practice.

At the brink
Cyber crime has, in the eyes of some, evolved into a form of terrorism and espionage. The UK government ranked the practice a Tier 1 risk to national security. The exponential increase in instances of cyber crime – as well as the increasing costs to affected parties – has resulted in a climate of fear. Many believe the world is now stood on the edge of a ‘cyber war’.

State-sponsored cyber attacks have become increasingly prevalent in recent years. In addition to Mandiant’s discovery of a ‘cyber espionage’ unit in China, The New York Times last year confirmed the US and Israeli governments’ collaboration in attacking Iran’s critical infrastructure – most notably through lesser-known vulnerabilities in Microsoft and Siemens devices and software. Though such attacks appear relatively benign compared to physical warfare, many see cyber war as a genuine and dangerous threat.

While cyber warfare seems like something out of science fiction or general make-believe, the US Department of Defence is nonetheless looking to invest considerable sums in protecting against it. The organisation revealed in April that it is spending $30m on establishing cyber war operations for both the army and air force – primarily to acquire adequate hardware and software tools for hackers.

The new Cold War
The New Digital Age, written by Google’s Executive Chairman Eric Schmidt and Ideas Director Jared Cohen, warns of the potential for “perpetual, permanent low-grade cyber war” in the near future. They liken its potential to the Cold War, saying: “Today, only a small number of states have the capacity to launch large-scale cyber attacks – the lack of fast networks and technical talent holds others back – but in the future there will be dozens more participating, either offensively or defensively.”

However, whereas the world’s foremost superpowers opposed each other in the Cold War, a cyber war would involve emerging economies; developed countries using them as bases or proxies. Schmidt and Cohen claim: “Our increasing entwining of our lives with digital information systems leaves us more vulnerable with each click. And with so many countries coming online in the near future, those vulnerabilities will only expand and become more complicated.”

Although the reasons are complex, the US and China are undoubtedly engaged in a cyber conflict of sorts. Adam Segal of the Council on Foreign Relations says it is “likely to remain below a threshold that would provoke military conflict”. China, though not for lack of notoriety, has yet to depart from mere acts of theft, or inflict terminal or lasting damage on affected parties.

Regardless, technologically advanced nations such as the US and China will doubtless persist in testing the boundaries of cyberspace. The future capabilities of independent cyber criminals are less certain – but if they can slow down the entire internet today, it would be unwise to play down what they might be capable of tomorrow.

cyber-crime
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